00:00:00 Speaker 1
This episode of the Energy Pipeline is sponsored by Caterpillar Oil and Gas. Since the 1930s, Caterpillar has manufactured engines for drilling, production, well service and gas compression. With more than 2100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions.

00:00:27 Speaker 2
Welcome to the Energy Pipeline Podcast with your host KC Yost. Tune in each week to learn more about industry issues, tools, and resources to streamline and modernize the future of the industry, whether you work in oil and gas or bring a unique perspective, this podcast is your knowledge transfer hub. Welcome to the Energy Pipeline.

00:00:51 KC Yost
Hello everyone, and welcome to this episode of the Energy Pipeline Podcast. As our guest today, we're fortunate to have Richard Sanders, consultant and manager at RES Services, LLC of Mustang Oklahoma. Welcome to the Energy Pipeline Podcast, Richard, we're thrilled you took time to visit with us today.

00:01:13 Richard Sanders
Thank you, sir. Appreciate being here.

00:01:15 KC Yost
Good to see you. Good to see you. Richard, I believe we met over 30 years ago as instructors at the old Southern Gas Association, Inspector short course. And you know full well I've been leaning on you for regulatory guidance ever since. So for those people who haven't been calling and asking you a question once a month for the last 30 years, can you take a few minutes to share a bit of your background with our listeners?

00:01:40 Richard Sanders
You bet. Like a lot of folks back in the early 60s, struggled to get through school. Once I got out of school, I went to work for Mississippi Valley Gas, which is an Atmos property now. They were a medium-sized distribution company covering facilities in the state of Mississippi. And I was lucky enough to work in all kinds of departments. I worked in general office engineering, I worked in district engineering, I worked in the meter and regulator shop. I did just a little bit of everything, had high pressure mule or stop off work. I was responsible for corrosion requirements when I moved out into the district. So I got a pretty good background of what building pipelines and operating pipelines at inaudible, and I spent about 11 years with them. Then I left that and went to work for the Mississippi Public Service Commission as pipeline safety chief for that program. Started coming to Oklahoma City to the DOT training and found that I could be helpful since I had those field experiences and left the state and went with the federal government as an instructor and ultimately became the director of the training program here in Oklahoma City. So it's been a wonderful career. Lots of good friends, and hopefully we've made it through this regulation as we'll talk about that.

00:03:29 KC Yost
Yeah. Well good, good. Well, thanks for that background. Mississippi Boy makes it good. There you go. So now I know there are 50 titles in the US Code of Federal Regulations and Title 49 addresses transportation. Title, 49's got nine volumes, 12 chapters and almost 1700 parts to it. You and I, for the past 60 years have been living our lives, our professional lives in 10 of these almost 1700 parts, dealing with the design, construction operation, maintenance of pipeline systems, right? 60 years in 10 of these 17 parts. So could you go through these 10 parts and touch base on each one of them, how they pertained to us?

00:04:25 Richard Sanders
Yeah, let me back up. This is step two as we go here, KC, let me ask the question that everybody should have in their mind. Why do we have a federal pipeline safety regulation? And that question is loaded. Right off the bat, the word federal is thrown in there, and if you know anything about the regulations, pipeline safety regulations in Part 192 that we're going to be talking about today, the feds is just one part of it. There are 52 state entities that have pipeline safety regulations, and long as those regulations are equal to or greater than DOT, everything's fine. So as an operator, depending on the type of operation you got, you may have to deal with both. Or if you're an intrastate within the confines of the state, you would deal with the state regulator. So keep that in mind. But that said, the pipeline safety regulations came about August 12th 1968, the Natural Gas Pipeline Safety Act in 1968 was passed. So if you take 1968 and 2024 this year we're in, it's about 55, 56 years on the average. And that's something to keep in mind as we talk through this today because you're going to find there are 134 amendments to this regulation today, which means you've got about 2. 5 rule changes a year. So by no means this is not a state regulation. It is moving on and it is a headache to keep up with in most cases.

00:06:30 KC Yost
Well, dynamic flow is always tougher to model then static flow. So fair enough. I get your point. I get your point.

00:06:42 Richard Sanders
Can I just kind of launch into why this answered that question? And if I tell you back March 1937, the New London, Texas explosion of a schoolhouse killed 298 children. That's something that shook us. March 1965 in Natchitoches, Louisiana, that was a transmission line explosion that killed 17. January the 13th 1967, New York City, they had to call out 63 fire companies to put out fires that led to seven injuries and 19 families with no homes. So February the 16th 1967, the president sent to Congress a message about his concern with pipelines and need I say more, August the 12th 1968, the Natural Gas Pipeline Safety Act was enacted. A couple of points, and we won't get into the weeds with this, but basically it said as soon as practicable, but no later than three months after the enactment of this act, the secretary shall by order adopt the interim minimum federal safety standards for pipeline facilities. That interim regulation was Part 190. Please do not get Part 190 interim regulations confused with Part 190, as we talk through this, we'll see that there are two different animals. But Part 190 today is the enforcement and regulatory procedures part. So there's certainly a big difference in this. And I have to say since I was around back during that time, working with an operating company that we were running around trying to figure out what we were going to do and how we were going to do it and what was the best way to do it, et cetera. So we were going to a lot of meetings with AGA, SGA, whoever and whatever we could get to, to see what everybody else was going to do. So I can remember like it was yesterday that some folks were going, "Ah, don't worry about this, this thing won't be around four or five years. We'll get another president and we'll get this thing out of here." So I can tell you that didn't hold true.

00:09:28 KC Yost
Yeah, absolutely.

00:09:30 Richard Sanders
But that said, one of the comments that was going on, "What the heck they going to do too?" That was the kind of stuff that we're hearing and talking about and inaudible. Let me assure you, if you go back and look at the original document, there is a section, criminal penalties, general penalties, a person knowingly and willfully violating sections of this title are a regulation prescribed or orders issued under this chapter shall be fined under Title 18, imprisoned for no more than five years or both. Well, thank goodness that's not been enacted very much. There are some cases where there have been fraudulent records doctored that got people in trouble there, but most of the time there's a civil penalty or there's a letter sent to require operator to take corrective action and a time is-

00:10:37 KC Yost
Sure.

00:10:40 Richard Sanders
At the beginning-

00:10:40 KC Yost
So all to be said here, there were a number of accidents, a couple of them there in'66, '67 you mentioned New York City and the challenge there in Natchitoches, Louisiana in that timeframe and of course, I remember the schoolhouse in the 30s, that's where mercaptan started to be required to be put into natural gas so that you could smell that natural gas before it got to its explosive limits. But essentially we had accidents. The president got upset, went to Congress. Congress got upset, put this act together and basically said, "Thou shalt do it." Those who didn't want to go along with it, that the thou shalt do it had a big stick behind it to basically put him into line. So one thing begets another, begets another, begets another. I totally get that. So let's talk about 192 in particular and how it evolved. Now the federal regulators didn't start with a blank sheet of paper and start writing 192. Can you talk about the history of 192 a little bit?

00:12:06 Richard Sanders
You bet. We talked about just moments ago, Part 190 was their interim regulations. Basically... Well, no, basically to it. It was that the industries documents that they had out there that could be pulled together, the GPTC is a term you hear, Gas Piping Technology Group had the old ASME B31. 8 regulations, which didn't have time cycles and stuff in it. That was things that had to be developed in the original Part 192. But that became the interim regulation. ASME B-31 code, if you will, Part 190, and it went through until Part 192 was published. And I mentioned GPTC, a great organization of regulators and industry and general interest people, et cetera, that try to write guideline material for the different requirements within the regulations, whether it's Part 192, 195, 193, et cetera. They are there to help try the right guidance. It's not always inaudible. If you look at it, you'll see that there's a lot of areas never been addressed or they didn't see the need for it, that the regulation was appropriate as is. But you need to be careful. It is not adopted by the regulation and you can sometimes get in conflict between-

00:13:51 KC Yost
I got you. So when 192 was being created, was there a collaboration, a great collaboration between the regulatory people and industry to come up with 192? Or was it all done in a back room somewhere and the regulatory people said, "This is the way it's going to be?"

00:14:18 Richard Sanders
I guess you really could say yes to both of your comments. But yes, it was open to the public. Any and everybody that wanted to participate and talk about what should be done, shouldn't be done, should be incorporated, shouldn't be incorporated, had their opportunity. And Joe Caldwell, Will Jennings are two names that pop up that thank goodness I had the opportunity to know and gain knowledge from when I was getting started out in this. And they worked diligently with industry and the regulators and Congress and the states, et cetera, trying to get this pulled together.

00:15:03 KC Yost
I got you. I got you. So the natural gas regulations were written... 192 was written then 195 was written after that, correct?

00:15:16 Richard Sanders
Absolutely.

00:15:16 KC Yost
Was 192 completely finished before 195 was started?

00:15:22 Richard Sanders
I don't think there's any such thing as inaudible. It's always been an ongoing.

00:15:30 KC Yost
All right. All right. I stand corrected. Stand corrected. All right, so what about the process with 195, with the liquids?

00:15:41 Richard Sanders
The process with 195 is essentially the same thing as Part 192, except we're dealing with liquid requirements versus gas. And if you'll let me park it there, I'll cover a little bit more later on to make these things come to sense more. Really what I need to do is back up so that those that might be listening and are new, we're throwing around all these acronyms and I really need to try to clarify that before we start jumping off into Part 192, if I may.

00:16:20 KC Yost
You've got the floor.

00:16:23 Richard Sanders
All right, let's talk about acronyms. You hear the term DOT. What does DOT mean? Well, who knows? Unless you looked at some of this stuff. But DOT stands for US Department of transportation. So if we say DOT is doing a regulation, we're talking about US Department of Transportation. The next one that you hear that gets people all tongue-tied is PHMSA, P-H-M-S-A, acronym for Pipeline and Hazardous Material Safety Administration. We're not going to talk HAZMAT today. Matter of fact, I couldn't. We're going to talk pipelines. So we'll talk about that specific part of PHMSA. And if you look at the pipeline part, Office of Pipeline Safety, OPS, we use OPS instead of having to say Office of Pipeline Safety. So that's some of the acronyms that we'll deal with. But as you well know, looking at the regulations, there are a lot acronyms that I have to keep writing down or referring to. Or when we help develop a pipeline safety program to keep up with the regulations, we would've these acronyms redded. So you could click on it and it would pop up and tell you what that acronym stood for. So acronyms are here to start.

00:18:00 KC Yost
I need that acronym pop up on my computer. Can you arrange that for me please?

00:18:07 Richard Sanders
If you get WinDOT, you got-

00:18:09 KC Yost
All right.

00:18:09 Richard Sanders
All right. If I may, can I jump off into pipeline safety Part 192 or US hit it in that-

00:18:23 KC Yost
Go for it.

00:18:26 Richard Sanders
Okay. As you have said, and we need to let everybody know this, Federal Pipeline Safety Regulations, please keep in mind states, but what regulations did DOT cover? And as you indicated earlier, there are 10 regulations. Part 190 is Pipeline Safety Enforcement Regulatory Procedures, not the inaudible regulation. Part 191 are Transportation of Natural and other Gases by Pipeline Reports. Reports that you're reporting 7100 forms, et cetera. Part 192 Transportation of Natural and other Gases by Pipeline: Minimum Federal Safety Regulations. And if you believe that minimum term, you're wrong. Because if you go in and look at the regulations and changes made, a lot of the regulations are written based on state of the art. So don't get carried away saying we're just doing the minimum. We're doing the maximum in most cases. Part 193, Liquified Natural Gas, LNG. Part 194, Response Plans on Onshore Oil Pipelines. Part 195, Transportation Hazard Liquid Pipelines. Part 196, Protection of Underground Pipelines for Excavator Activity. Part 198, Regulations for Grants to Aid State Pipeline programs. In other words, the state comes to DOT and get funding to have their state programs to do the intrastate facilities. And then Part 199 and Part 40, which is Drug and Alcohol. Again, I don't know anything about it. I don't take it, so I can't talk about it.

00:20:33 KC Yost
Okay. Well, good. So we've got those 10 parts out of the total, almost 1700 that's in Title 49 that... Like I said, we've lived our lives through, 192 and 195 are probably the spots that I've lived most of my life dealing with gas or dealing with liquids, design and operation and maintenance and that type of thing. So do you want to drill down a little bit and talk about 192 a little bit there?

00:21:14 Richard Sanders
Yes, yes. Let's do that. We're going to focus on the code of federal regulation CFR-49, Part 192. A funny thing, I've been in this for 60 years and CFR, I still get hung up. I look at CFR, what the heck does that inaudible? I just said it. Code of Federal Regulations, CFR-49, Part 192. So again, I don't have any problems when somebody gets wrapped around the axle on an acronym, we'll get it solved, but you're going to have to deal with it. Part 192, Transportation of Natural Gas by Pipeline: Minimum Federal Safety Requirements. I set it earlier, say it again because it's important, current as of Amendment 192, 1, 3, 4. There are 134 amendments. And actually if you go in and look at the details on these, you may see a 134 A, B, or C. That's where they have to go in and clean up, fix or something that got published in the federal register. And they have to do a legal process to make changes and fixes. And again, I will state that's August 1st 2023. I didn't go. I probably should have gone in this morning and looked, but I don't think there have been any more amendments until 134. You get amendments on all these other regulations I'm talking about, like Part 195, Liquid Regulations. They've got the same process going on and you can look and see what those have been and look at the details of it and see what regulations sections it covers. I told you about 1968 to date, and there are 2. 5 changes, so keep that in mind. It's fluid. Within Part 192, there are seven retroactive sub parts, and if you've got old facilities pre-1968, you've got to deal with retroactive or if there are new regulations being published that are retroactive, any pipeline facility you got in operation has to comply. So that's A, which is the general requirements I, which is corrosion control, which gets us a lot of headaches. K operating, L and M is operating and maintenance. And I have those highlighted on my brain because whether I'm doing regulations or whether I'm doing engineering design work or whether I'm doing litigation or what have you, L and M seems to pop up. And if you stop and think, operating and maintenance is basically what we do with these pipelines. So L and M, the 600 and 700 series, you need to be familiar with and understand. Then we have O and P that's added to that requirement. Those are retroactive. Then there are nine non-retroactive sub-parts, B, C, D, E, F, G, H, J, N, that are in the regulations. For me, in my code book, I have the retroactive sub-part black and I have the others red. And you go to A, which is general, B, which is materials, C, which is pipe design. D is designed a pipeline components. E is welding. And so you just go down through the list until you get where you want to. If you want to go to corrosion, you go to I and you get that. If you want to go to operations, you go over to the 600 series.

00:25:33 KC Yost
So Richard, a couple of thoughts here if you don't mind. One, if something is retroactive, there is a timeframe for the operating company to modify the system to be in compliance with the new regulations, right?

00:25:55 Richard Sanders
That is correct. And an example of it... Good point and I appreciate it, KC, is back when the regulations came in, MLOP, Maximal Level Operating Pressure was a key to try to find out what these systems were being operated at and what they should be operated at and how they were tested when they were tested, etc. And DOT had to give a warning as you indicated that between 1965 and 1970, you need to go back and look at your facilities and find out what their MLOP was. I was with an operating company when that came out. And that was a headache and a nightmare because the lack of paperwork, the fact of common practices doing tests to pressure them up to make sure that everything was functioning properly, etc. So you had a window of opportunity to go back and whatever it was operating at, set that as your MLOP or find test records and other pertinent information to establish an MLOP. You had systems that were tested for 60 pound systems but no records, etc. And the only thing you could find was the existing pressures out at the regulator stations and all and a 60 pound system system may go to 20 pounds. So it behooved you to figure it out if at all possible.

00:27:38 KC Yost
So if someone is sitting back and trying to understand what is retroactive and not retroactive, is there a table or something that is out there that specifies that or do you just have to look at the regulation when it comes out and understand what sub-part it belongs to, to determine whether it's going to be retroactive or not?

00:28:04 Richard Sanders
You kind of have to figure it out. Like I said on the MLOP stuff, that's written into the regulation and specifically talks about pre-regulation, post-regulation type stuff. So reading that, you know you've got to do it. And I'll be honest, when I left back in 2011 on the regulatory side, we still were coming up on systems that had never had the MLOP established correctly. And the sad story here is you have no MLOP, so you're at the mercy of the regulators to help you establish what that's going to be. So that should have been done correctly and there should be record keeping. Of course, nowadays, you can't do anything without records, but good records on your MLOPs on these systems. So it was critical and it's still critical. If you make a purchase of somebody else's facility and you don't do good due diligence on establishing inaudible and pressure testing and updating, etc, you're in trouble. They can put you in jeopardy just by picking those and inaudible up. So please be careful.

00:29:25 KC Yost
I made a good living off of due diligence studies over the years, Richard. So it's always good. Always good. Good points. Good points. Hey, we're getting close to time. Are there other points that you want to get across, say in the next two, three, four minutes?

00:29:47 Richard Sanders
Well, the regulations we talked about, retroactive, non-retroactive, they're appendix. There's A, B, C, D, and E appendix... Excuse me, health appendix, probably one talking for 192 that comes up inaudible of pipeline materials. There's a section there and the qualification of welders for low stress level pipe. A lot of people don't know what that means, but if you are welding at 20% specified minimum yield strength, which is the inaudible calculation, that first time I ever saw it was in high school and I wished I'd have paid attention back then and I wouldn't have struggled getting through it once I got out in the industry. But that requirement is for low stress level pipe, you can't qualify welders to do that. But most companies' distribution, transmission gathering, jurisdictional gathering, etc, use API or ASME API 1104 type welding procedures. And I guess if you're qualifying welders under that, why not do all of it that way and be done. But there is a section for small operators, etc, that they could use C as a qualification requirement. But you need only look at API or ASME requirements and it's pretty apparent that you'd be better off using one of the industry standards instead of this appendix. But keep that in mind, if you will. I talked about GPTC, good place to go get assistance and some guidelines on what you might need to be doing or addressing, etc. But keep in mind it's not the law. And they may conflict occasionally, not often, but they may. The other thing is regional facilities. I told you we got the central regional office, which is in Kansas City. They have 11 states that they're responsible for. The eastern region office is in Trenton, New Jersey. They have 15 states up in the New England area that they take care of. Western region, Ontario, Canada. They have 12 states that they work out of the western side. We have the southern regional office in Atlanta, Georgia. They have nine states taken in Florida and Mississippi, etc. Then the southwest regional Houston office, which takes care of course, Texas, Louisiana, Oklahoma, that kind of stuff. So you can get access to all of this kind of information on DOT's website. Good luck trying to negotiate through there. It's out there, you just have to work with it to get it done. I mentioned WinDOT, I have to give it credit for the work I do. When I was with the regulators, particularly in the training, there was so much information that got to be covered and training and stuff that you just... I had three inaudible volumes of information and I'd spent half a day thumbing through it trying to find what you asked the question on. So we had all the paperwork and we knew how it linked up and all, but we didn't have the computer savvy and all to make it easy. So I could get to a regulation, I could look at amendments, I could look at interpretations, I could look at advisory notices, etc, from that one location and I could go back and forth without losing where I was working. So it is an excellent piece of software that we generated and then turned it over to Dave Bull and Dave Holtzman to develop that. I have to say this, there are several other organizations that have these regulations, so they're easy to get to with all the interpretations and etc with them. So certainly you can get guidance there, but I don't know how you negotiate the regulations without these electronic helpers.

00:34:32 KC Yost
Well, you provided great clarification for me on a number of instances when we needed to get clarification about a certain portion of a regulation and you actually pulled out, I guess using WinDOT to find evaluations that had been done or reasoning and deduction on why a certain Class X is accepted, but Y is not accepted and good responses and clarifications over the years. So that database is always available as well, right?

00:35:22 Richard Sanders
Yes. DOT has all that stuff out there and their industry organizations have provided just that. I was in the throes of helping develop WinDOT and they did it exactly as we said we wanted it and we provide it to the federal and state folks and that's what they use. And it's an excellent too. I'm not saying you can't get it done elsewhere. That's just my inaudible.

00:35:54 KC Yost
Got you. Got you. All right, great stuff. Anything else you want to add, Richard?

00:36:03 Richard Sanders
No, other than if we want to continue this, you need only look at the areas that we did at a hundred thousand foot level and know we could do weeks on months and months if not years of these types of sessions. And I think it's important for you to get with those that decide to look at this stuff and come up with questions and let's segregate them into pockets so that we can do 30 minutes on it if need be and if need be, there might be a want for a PowerPoint presentation or something with this information. I don't know about those out there, but I have a hard time writing this stuff down or getting it and listening, so it's nice to have it pre-done and then let me-

00:36:57 KC Yost
I understand. I understand. Okay. All right. Well, thanks Richard for taking the time to visit with us today and thanks-

00:37:06 Richard Sanders
My pleasure.

00:37:07 KC Yost
And thanks to all of you for listening, tuning into this episode of the Energy Pipeline Podcast sponsored by Caterpillar Oil and Gas. As Richard said, if you have any questions of him or of me or of anyone, if you have any comments or ideas for podcast topics, feel free to email me at kc.yost@oggn.com. I also want to thank my producer Anastasia Willison-Duff and everyone at the Oil and Gas Global Network for making this podcast possible. Find out more about the other OGGN podcasts at OGGN.com. Tongue twisted today. This is KC Yost saying goodbye for now. Have a great week and keep that energy flowing through the pipeline.

00:37:57 Speaker 2
Come back next week for another episode of the Energy Pipeline, a production of the Oil and Gas Global Network. To learn more, go to OGGN.com.