Oil and Gas Transportation: Department of Transportation Is Taking Actions to Address Rail Safety, but Additional Actions Are Needed to Improve Pipeline Safety
Highlights
What GAO Found
Increased oil and gas production presents challenges for transportation infrastructure because some of this increase is in areas with limited transportation linkages. For example, insufficient pipeline capacity to transport crude oil has resulted in the increased use of rail, truck, and barge to move oil to refineries, according to government and industry studies and publications GAO reviewed. These transportation limitations and related effects could pose environmental risks and have economic implications. For instance, natural gas produced as a byproduct of oil is burned—a process called flaring—by operators due, in part, to insufficient pipelines in production areas. In a 2012 report, GAO found that flaring poses a risk to air quality as it emits carbon dioxide, a greenhouse gas linked to climate change, and other air pollutants. In addition, flaring results in the loss of a valuable resource and royalty revenue.
Due to the increased oil and gas production, construction of larger, higher-pressure gathering pipelines (pipelines that transport products to processing facilities and other long-distance pipelines) has increased. However, these pipelines, if located in rural areas, are generally not subject to U.S. Department of Transportation (DOT) safety regulations that apply to other pipelines, including emergency response requirements. Historically, gathering pipelines were smaller and operated at lower pressure and thus posed less risk than long-distance pipelines. But the recent increase in their size and pressure raises safety concerns because they could affect a greater area in the event of an incident. In 2011, DOT began a regulatory proceeding to address the safety risks of gathering pipelines, but it has not proposed new regulations. Although states may regulate gathering pipelines, an association of state pipeline regulators' report on state pipeline oversight shows that most states do not currently regulate gathering pipelines in rural areas.
Crude oil carloads moved by rail in 2012 increased by 24 times over that moved in 2008. Such an increase raises specific concerns about testing and packaging of crude oil, use of unit trains (trains of about 80 to 120 crude oil cars), and emergency response preparedness. Crude oil shippers are required to identify their product's hazardous properties, including flammability, before packaging the oil in an authorized tank car. DOT has issued safety alerts on the importance of proper testing and packaging of crude oil. However, industry stakeholders said that DOT's guidance on this issue is vague and that clarity about the type and frequency of testing is needed. In July 2014, DOT proposed new regulations for crude oil shippers to develop a product-testing program subject to DOT's review. Additionally, unit trains, which can carry 3 million or more gallons of crude oil and travel to various locations through the country, are not covered under DOT's comprehensive emergency response planning requirements for transporting crude oil by rail because the requirements currently only apply to individual tank cars and not unit trains. This raises concerns about the adequacy of emergency response preparedness, especially in rural areas where there may be fewer resources to respond to a serious incident. Also in July 2014, DOT sought public comment on potential options for addressing this gap in emergency response planning requirements for transporting crude oil by rail.
Why GAO Did This Study
Technology advancements such as horizontal drilling and hydraulic fracturing (pumping water, sand, and chemicals into wells to fracture underground rock formations and allow oil or gas to flow) have allowed companies to extract oil and gas from shale and other tight geological formations. As a result, oil and gas production has increased more than fivefold from 2007 through 2012. DOT oversees the safety of the U.S. transportation system.
GAO was asked to review oil and gas transportation infrastructure issues. This report examines (1) overall challenges that increased oil and gas production may pose for transportation infrastructure, (2) specific pipeline safety risks and how DOT is addressing them, and (3) specific rail safety risks and how DOT is addressing them. GAO analyzed federal transportation infrastructure and safety data generally from 2008 to 2012 or 2013 (as available), reviewed documents, and interviewed agency, industry, and safety stakeholders, as well as state and industry officials in states with large-scale shale oil and gas development.
Recommendations
DOT should move forward with a proposed rulemaking to address safety risks—including emergency response planning—from newer gathering pipelines. DOT generally concurred with the recommendation and stated that it is developing a rulemaking to revise its pipeline safety regulations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation |
Priority Rec.
To address the increased risk posed by new gathering pipeline construction in shale development areas, the Secretary of Transportation, in conjunction with the Administrator of the Pipeline and Hazardous Materials Safety Administration, should move forward with a Notice of Proposed Rulemaking to address gathering pipeline safety that addresses the risks of larger-diameter, higher-pressure gathering pipelines, including subjecting such pipelines to emergency response planning requirements that currently do not apply. |
Technology advancements such as horizontal drilling and hydraulic fracturing have allowed companies to extract oil and gas from underground shale formations. In 2014, GAO reported that, as a result of increased oil and gas production from shale development, construction of larger, higher-pressure gathering pipelines (pipelines that transport hazardous liquids and natural gas to processing facilities and other long-distance pipelines) has increased. However, these pipelines, if located in rural areas, are generally not subject to U.S. Department of Transportation (DOT) safety regulations that apply to other pipelines, including emergency response requirements. Historically, gathering pipelines were smaller and operated at lower pressure and thus posed less risk than long-distance pipelines. But the recent increase in their size and pressure raises safety concerns because they could affect a greater area in the event of an incident. In 2011, DOT began a regulatory proceeding to address the safety risks of gathering pipelines, but-as of August, 2014-had not proposed new regulations. To address the increased risk posed by new gathering pipeline construction in shale development areas, GAO recommended that the Secretary of Transportation, in conjunction with the Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA), should move forward with a Notice of Proposed Rulemaking to address gathering pipeline safety that addresses the risks of larger-diameter, higher-pressure gathering pipelines, including subjecting such pipelines to emergency response planning requirements that currently do not apply. In 2018, GAO confirmed that PHMSA has moved forward on regulations for natural gas gathering pipelines and hazardous liquid gathering pipelines. For natural gas, PHMSA issued a Notice of Proposed Rulemaking in that would (1) require all gas gathering pipeline operators to report pipeline data and (2) extend emergency planning requirements to large-diameter gathering pipelines in rural areas. For hazardous liquids, PHMSA issued a Notice of Proposed Rulemaking that would require all operators of hazardous liquid gathering pipelines to submit annual reports, accident reports, and safety-related condition reports; data from these reports will inform PHMSA on which gathering pipelines may need further regulation. However, all large-diameter, high-pressure hazardous liquid pipelines that function as gathering pipelines are already subject to federal requirements-including emergency planning requirements-because these pipelines are large enough to be classified as standard hazardous liquid pipelines, rather than as gathering pipelines. By moving forward on these gathering pipeline rulemakings, PHMSA has taken steps to improve the safety of an expanding pipeline network.
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