Underground Natural Gas Storage American Gas Association Virtual

Underground Natural Gas Storage American Gas Association Virtual Operations Conference June 09, 2020 Byron Coy PE Sr. Technical Advisor USDOT / PHMSA “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Summary Timeline 1992/2001/2004 Underground Storage Incidents & Accidents July/Sep - 2015 API Recommended Practices : 1170 & 1171 October - 2015 Aliso Canyon Incident June - 2016 PIPES Act, Section 12 July - 2016 Denver Public Workshop December - 2016 Interim Final Rule Published May - 2017 Revised IOGCC Regulatory Guidance June - 2017 Stay of Enforcement (non-mandatory provisions) February - 2020 Final Rule Published 2 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Underground Natural Gas Storage PHMSA State Partners (CY2020) Washington Inter UNGS: 1 Intra UNGS: 0 ME WA MT Oregon Inter UNGS: 0 Intra UNGS: 1 Montana Inter UNGS: 1 Intra UNGS: 3 Minnesota Inter UNGS: 0 Intra UNGS: 1 SD WI Wyoming Inter UNGS: 5 Intra UNGS: 4 NE WY NV California Inter UNGS: 0 Intra UNGS: 14 VT Utah Inter UNGS: 3 Intra UNGS: 0 UT Colorado Inter UNGS: 6 Intra UNGS: 4 CO CA KS Kansas Inter UNGS: 11 Intra UNGS: 6 IA Illinois Inter UNGS: 6 Intra UNGS: 22 IL MO Pennsylvania Inter UNGS: 42 Intra UNGS: 9 Ohio Inter UNGS: 17 Intra UNGS: 3 IN Indiana Inter UNGS: 4 Intra UNGS: 16 NH NY MI Iowa Inter UNGS: 8 Intra UNGS: 0 Nebraska Inter UNGS: 1 Intra UNGS: 0 New York Inter UNGS: 26 Intra UNGS: 0 Michigan Inter UNGS: 19 Intra UNGS: 30 MN ID OR ND MA CT NJ PA OH MD West Virginia Inter UNGS: 29 Intra UNGS: 3 DC DE VA WV Virginia Inter UNGS: 2 Intra UNGS: 0 Missouri Inter UNGS: 0 Intra UNGS: 1 RI Maryland Inter UNGS: 1 Intra UNGS: 0 Kentucky Inter UGSF: 6 Intra UGSF: 14 KY AZ New Mexico Inter UNGS: 1 Intra UNGS: 1 NM Oklahoma Inter UNGS: 5 Intra UNGS: 8 OK AR Arkansas Inter UNGS: 0 Intra UNGS: 2 M S Mississippi LA Texas Inter UNGS: 3 Intra UNGS: 29 TX AK Tennessee Inter UGSF: 0 Intra UGSF: 1 NC TN SC Alabama Inter UGSF: 1 Intra UGSF: 1 Inter UGSF: 9 Intra UGSF: 2 GA AL Louisiana Inter UNGS: 13 Intra UNGS: 5 PR FL Alaska Inter UNGS:0 Intra UNGS: 4 Number of UNGS Facilities (green text) UNGS Intrastate 60105 Certification HI UNGS Intrastate 60106 Agreement States with no UNGS facilities In Service Underground Natural Gas Storage (UNGS) counts as reported by operators to PHMSA on Annual Reports as of July 2019. Inspection agreement information updated April 2020. Underground Natural Gas Storage Facilities in 31 States

Facilities & Their Wells Number of Facilities % of Facilities Number of Wells % of Wells Facilities to be Inspected by PHMSA 302 80 14,590 85 Facilities to be Inspected by States 79 20 2,592 15 Totals 381 17,182 4 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Federal Inspection of Facilities and Wells CY’s 2018 - 2020 Facilities Wells 2018 Inspections 41 2100 2019 Inspections 52 5500 2020 Inspections Planned 70 2600 Totals 163 10200 5 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Federal Inspections in CY-2020 Number of Inspections 70 60 50 40 30 20 10 0 1-Jan 20-Feb 10-Apr Confirmed Planned Goal 30-May 19-Jul 7-Sep Confirmed and Proposed “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.” 27-Oct 16-Dec

Inspections & Question Sets Total Inspection Count Planned Questions Completed Questions 2018 41 4,797 4,702 2019 53 5,610 5,604 Total 94 10,407 10,306 7 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Inspection Outcomes Satisfactory Results Average SAT Percent per Inspection 2018 2019 81.9 % 82.9 % 8 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Inspection Outcomes Concern Results Inspection Year Average CONCERN Percent per Inspection 2018 2019 15.0 % 15.0 % 9 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Inspection Outcomes Unsatisfactory Results Inspection Year Average UNSAT Percent per Inspection 2018 2019 1.19 % 1.23 % 10 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Individual Inspections with Highest Shortfalls # Planned Start Year Questions Percent CONCERN’s 2019 133 82.7 2018 121 81.0 Planned Start Year #Questions Percent UNSAT’s 2019 52 13.5 2019 106 7.5 2019 106 7.5 2019 106 6.6 2018 121 81.0 2018 111 40.5 2019 106 6.6 2018 106 39.6 2018 88 5.7 11 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Common Findings Annular Gas Not monitoring for the presence of annular gas No established threshold pressure at which action must be taken Not evaluating each occurrence that exceeds operator-defined threshold Emergency Response Plan Does not account for all required events Accidental Release Natural Disaster Equipment Failure Third Party Damage No program for periodic effectiveness testing 12 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Common Findings Risk Model does not include third party wells or P&A wells Preventive &Mitigative measures are not identified Construction Notifications have not been made No Blow-Out Contingency Plan 13 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Highest Percentage of Concern’s Top 5 Content Areas Annular Gas Monitoring Threshold Limits & Exceedances Evaluation Threats & Hazards Interactions & Exclusions, Threat Evaluation Third Party Wells Documenting data requests, evaluation of 3rd Party data Well Integrity Evaluations Documenting mechanical integrity of each well Risk Assessments Periodic review & improvement cycle, effectiveness, applying results 14 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Highest Percentage of Unsat’s Top 5 Content Areas Annular Gas Monitoring Threshold Limits, & Exceedance Evaluation Blowout Contingency Plans Plan in place, review & update process Emergency Plan, Periodic review for effectiveness Well Maintenance & Inspections Visual inspections, master valve testing, valve maintenance, signage Risk Assessments Review of results, accurate representation of risk 15 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Compliance Actions in 2018/2019 Proposed Notice of Amendments Items citing 192.12(e) Establish and follow written procedures for operations, maintenance, and emergency preparedness requirements 16 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Compliance Actions in 2018/2019 Proposed Warning Letters Items citing 192.12(d) Operations, maintenance, integrity demonstration and verification, monitoring, threat and hazard identification, assessment, remediation, site security, emergency response and preparedness, and recordkeeping requirements Items citing 192.12(e) Establish and follow written procedures for operations, maintenance, and emergencies implementing the requirements 17 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Enforcement Actions 01-01-18 thru 02-03-2020 Enforcement Initiated Cases Proposed NOA Items Proposed Warning Items 2018 7 19 4 2019 14 28 9 2020 YTD 7 9 7 Totals 28 56 20 18 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Construction Notifications Regulation 191.22(c)(1) Construction of a new UNGSF Maintenance involving plugging or abandonment, or that requires a workover rig and costs 200,000 or more for an individual well, including its wellhead 60 days before the event occurs (or commences) If 60-day notice is not feasible because of an emergency, notify PHMSA as soon as practicable 19 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Construction Notifications Oct-2016 thru Apr-2020 Activities Notifications Intrastate 188 Interstate 267 Total 455 New Well 36 Workover 330 P&A 140 Integrity 77 Total 583 Wells Impacted 2438 A notification can include multiple activities 20 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Construction Notification Timing After Work Started 37 When Work Started 7 1-29 Days in Advance 61 30-59 Days in Advance 70 60-89 Days in Advance 216 90 Days in Advance 64 191.22(c)(1) If 60-day notice is not feasible because of an emergency, notify PHMSA as soon as practicable Notation in records “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.” 21

Construction Notification Duration 0 or Blank 58 1 - 7 Days 26 8 – 14 Days 26 15 – 29 Days 40 30 – 59 Days 85 60 – 179 Days 103 180 Days 117 22 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Final Rule Restored Non-Mandatory Provisions for Recommended Practices Narrowed Scope for Construction Notifications Roles and Responsibilities must be defined 23 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Final Rule March 13, 2024 : Complete the baseline risk assessments of all reservoirs/caverns, and 40% of wells/wellheads March 13, 2027 : Complete baseline risk assessments on all its wells/wellheads Seven year assessment interval Salt Caverns must follow RP-1171 Risk Management, Section 8, as applicable 24 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

191.3, Incident An event that results in an emergency shutdown of an LNG facility or a UNGSF Activation of an emergency shutdown system for reasons other than an actual emergency within the facility does not constitute an incident 25 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

191.23(b)(5) Safety-Related Condition (b) A report is not required for any safety-related condition that (5) Exists on an UNGSF, where a well or wellhead is isolated, allowing the reservoir or cavern and all other components of the facility to continue to operate normally and without pressure restriction. 26 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

After the Final Rule Revised Inspection Question Set Revised FAQ’s Reformed TQ Inspector Training Classes Workshop Initiation of Annual UGS Conference “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Changes prompted by Final Rule FAQs 191 192 IA Questions Current Count Edit or Delete Create New Current Count Edit or Delete Create New 3 2 1 14 11 0 18 18 4 462 400 10 Preliminary Analysis “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

PHMSA : Web Links http://www.phmsa.dot.gov Resources/Technical Resources/Underground NG Key Documents Locations Major Incidents Pictures & Diagrams State Participation Technical Reports https://www.phmsa.dot.gov/forms/pipeline-forms https://www.transportation.gov/regulations “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”

Contact Information Byron Coy PE Sr. Technical Advisor USDOT / PHMSA [email protected] 609-771-7810 “To protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.”