October 2, 2011

Lawsuit leaves large gas storage fields in Kansas unregulated

CUNNINGHAM — Bill Knox knows to respect natural gas.

CUNNINGHAM — Bill Knox knows to respect natural gas.

He's a former oil- and gas-field worker who helped lay the foundations for a mammoth underground gas storage operation three miles from his home; he lost a friend in a gas explosion in Texas; and he well remembers 10 years ago when gas escaped from underground storage and blew up in Hutchinson, 40 miles northeast of Cunningham, killing an elderly couple.

Knox says it's unsettling to know that because of a federal court decision last year, neither the state nor federal governments are inspecting the gas field near his home, or others holding thousands of times the amount of gas that caused havoc in Hutchinson.

"Any time you've got gas going, you need to have it inspected every now and then," Knox said. "If we get a leak and it's not detected or the pipe gets weak and nobody ever inspects it, we could have an explosion like Hutchinson."

Since the federal district court in Topeka struck down Kansas gas-safety laws last year, 11 underground storage sites with a capacity of more than 270 billion cubic feet of gas have gone uninspected for 18 months, according to state officials.

The state can't inspect them.

The federal government has chosen not to.

As a result, thousands of Kansans live on and around uninspected gas-storage fields that dwarf the system that caused the Hutchinson disaster.

The gas company that sued Kansas says it's not a concern, that internal inspections and policies are enough to ensure public safety.

"We're committed to the safe, reliable and efficient operation of our pipeline systems, related infrastructure, and storage facilities in Kansas and in all areas where we operate," said a statement from Richard Wheatley of the Colorado Interstate Gas Co.

Earlier this year, members of the state House and Senate voted unanimously to ask the federal government to restore the state's authority to regulate interstate gas storage.

Two joint resolutions got snagged in Statehouse scheduling, so the House sent its own unanimous resolution to Washington.

So far, it seems to have been ignored.

"I guess when we have the next field blow up, maybe the feds will figure out they did it wrong," said Rep. Carl Holmes, R-Liberal, chairman of the House Energy and Utilities Committee and vice chairman of a special committee that studied underground storage safety last year.

"Everything was going fine, we had some of the toughest rules in the nation until the feds came in and intervened," Holmes said.

Both Holmes and Senate Energy Committee chairman Pat Apple, R-Louisburg, said they expect to revive the joint resolutions when the Legislature returns to session in January.

When gas escapes

Kansas is Exhibit A for what can happen when gas escapes from an underground storage facility.

In January 2001, gas leaked from an underground salt cavern at Yaggy and flowed seven miles underground to Hutchinson, where it popped up through abandoned brine wells and exploded.

The first explosion destroyed about half a block of downtown businesses and shattered glass for blocks around, but no one was killed.

A day later, gas found another path to the surface and exploded in a mobile home park in east Hutchinson, killing an elderly couple.

It took more than a month for flares to burn off the estimated 143 million cubic feet of gas that escaped from storage.

The downtown businesses were never rebuilt, the mobile home park was closed and the Yaggy field was shut down, although it owners are still slowly drawing down the gas under the supervision of the Kansas Department of Health and Environment.

Following the accident, the Legislature voted to have two state agencies split responsibility for regulating underground storage of hazardous gases and liquids.

KDHE would regulate man-made underground salt caverns like Yaggy, the only salt storage in the state currently holding natural gas.

The Kansas Corporation Commission would regulate "porosity" fields, where high-pressure gas is pumped into depleted oil fields, gas fields and reservoirs and held until it is piped out to customers.

Following last year's court order, the KCC continues to regulate storage fields that do business only within the state.

But according to federal records, those eight fields hold only 12 billion cubic feet of gas, a fraction of the 272 billion cubic feet of capacity in the interstate storage fields the state is no longer allowed to regulate.

"We need to ensure that these (interstate) facilities are operated in a safe manner," said KCC spokesman Jesse Borjon. "They should be regulated to the same standard as the intrastate facilities currently regulated by the KCC."

Federal response

Officials of the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Division, the federal agency responsible for interstate gas transport safety, declined to comment.

A spokeswoman for the agency requested written questions, which went unanswered.

But department records show that DOT considered and rejected federal standards for underground storage after a devastating propane explosion killed two people in Brenham, Texas in 1992 — nine years before Hutchinson's disaster.

In a 1997 advisory bulletin that remains in force, the DOT's Research and Special Programs Administration concluded that "generally applicable federal safety standards may not be appropriate for underground storage facilities."

The bulletin urges states to ensure storage safety, but it does not require gas companies to follow state laws.

Staffers for Sen. Pat Roberts, R-Kan., are gathering information on the situation at the federal level.

"Kansas natural gas producers are the first to be concerned with the safety of gas storage facilities," Roberts said. "I'll work with industry and the state to seek a common-sense solution."

When laws collide

Federal and state laws on gas safety collided in 2009 when Colorado Interstate Gas sued the KCC to stop its inspections and regulations.

Colorado Interstate Gas is a subsidiary of the El Paso Corp., the nation's biggest gas pipeline firm. It operates the Boehm gas storage field in Morton County in southwest Kansas, which can hold 12.7 billion cubic feet of natural gas.

"The lawsuit occurred only after many efforts by CIG to work out an informal arrangement with the KCC that would assist the commission in carrying out its program at our facilities under a comprehensive memorandum of understanding," Wheatley wrote in response to questions from The Eagle.

The statement said the company "respectfully disagreed with the KCC" on the constitutionality of Kansas gas safety laws and whether state government should have a formal role in regulating its storage field.

While acknowledging that the Federal Natural Gas and Pipeline Safety acts put most interstate gas operations under federal authority, the state argued in court filings that Congress left room for the state's "exercise of its historic police power to protect the public from danger."

The gas company argued in its filings that "the regulation of interstate commerce has never been an historic power held by any state."

Both sides fought over the meaning of a Department of Transportation advisory issued in response to the 1992 Brenham disaster.

Part of the bulletin by the DOT's Research and Special Programs Administration appeared to urge states to take action.

The administration, "recognizing the value of underground hydrocarbon storage requirements tailored to a state's particular circumstances, is encouraging state action and voluntary industry action as a way to assure underground storage safety instead of proposing additional federal regulations."

But later, the advisory urges gas storage companies to comply with industry standards and "appropriate state underground storage regulations to the extent feasible."

U.S. District Senior Judge Sam Crow ruled that "appropriate" and "feasible" meant Colorado Interstate Gas is free to ignore state regulations.

Gas companies' response

Opposition to state regulation of interstate storage is not unanimous among gas companies operating in Kansas.

Omaha-based Northern Natural Gas Co., which operates the Cunningham field, "would not have a problem with an inspection," said spokesman Mike Loeffler.

He said the company continues to comply with the KCC requirements, even though the inspections have ceased and the underlying regulations have been overturned.

Cunningham is the closest interstate gas storage field to Wichita, about 60 miles west on the Kingman-Pratt county line.

At 62 billion cubic feet of capacity, it's about 20 times as big as the Yaggy Field that menaced Hutchinson.

Loeffler said his company is "absolutely confident" that a Hutchinson-style accident will not happen at Cunningham.

For one thing, the gas at Cunningham is stored much deeper in the ground than at Yaggy.

And, he said, the gas is covered by a cap of solid rock that keeps it from migrating upward.

The gas field near Cunningham, a rural community of about 560 people, is just a part of the background that people here don't think about much.

"I think we feel safe because we know the people who work out there. It's a small-town thing, I guess," said Dave Steffen, the city clerk, who also runs the Cunningham Courier newspaper.

But the consensus around town seems to be that the storage field should be inspected.

"I'm amazed they're not regulated. Everything else is regulated," said Jeanette Kerschen.

Kerschen and her friend Jane Meyers said they are helping a friend open a small restaurant and the state is inspecting everything from the kind of faucets used to materials in the ceiling tiles.

"That (gas field) is a lot more major," Meyers said.

No matter how carefully it's run, accidents can happen, said Knox, who as a young carpenter helped build foundations for the storage plant in the late 1970s.

His friend and former co-worker, Tab Dotson, was killed in 2005 in an explosion in Wise County, Texas. Dotson was driving a forklift and hit what was believed to be a dead gas well.

Knox's wife, Melva, said regular inspection of gas storage fields seems like common sense.

"It's amazing it has fallen through the cracks," she said. "It's a concern. We've got a grandbaby."

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