HBA-CBW H.B. 1857 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1857 By: Kitchen Energy Resources 3/13/2001 Introduced BACKGROUND AND PURPOSE The changing energy needs of Texas and the nation have prompted some pipeline companies to attempt the conversion of our aging infrastructure of crude oil pipelines to new uses, transporting petroleum products. At present, very little state or federal oversight of such conversions exists. While in some cases such a conversion may be an effective use of existing resources, there are certain risks associated with a spill of petroleum products, which are highly flammable and may contain substances such as benzene and MTBE that merit increased state oversight of such conversions. There is particular concern about the conversion of certain pre-1970 electric resistance welded pipelines. According to the Research and Special Programs Administration of the Department of Transportation, such pipes "exhibit the highest potential risk because of their combination of probability of failure and potential for larger volume releases as evidenced by historical records." Increased susceptibility to longitudinal seam failure is endemic to such pipes, hence these pipes merit thorough examination before being dedicated to a new use, particularly if portions of the pipe will be subjected to higher operating pressures than in the past. Additionally, the state's population growth during the half century since many of these crude lines were built means that they may now be located in highly populated areas where refined petroleum products would be flowing through neighborhoods and next to schools. That same population growth has also increased demand for the state's drinking water resources and the urgency of protecting those resources. House Bill 1857 requires the Railroad Commission of Texas to conduct a public hearing before allowing pre-1970 pipelines to be converted to transport petroleum products and authorizes governmental entities to intervene in such public hearings. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1857 amends the Natural Resources Code to prohibit a person, including a common carrier from transporting a petroleum product in a pipeline system any part of which was constructed before January 1, 1970, and was originally used for transporting crude oil unless the pipeline had begun transporting petroleum products before January 1, 2000, or the Railroad Commission of Texas (commission) holds a public hearing and determines that: _there is no reasonable possibility that public drinking water supplies or state-owned natural resources will be adversely affected by the pipeline; _the operation of the pipeline complies with provisions in the Safe Drinking Water Act to protect wellhead areas within the state's jurisdiction; _the governing body of each political subdivision that has a right-of-way or easement or has an ownership interest in other property that is crossed by the pipeline has given the person the political subdivision's written consent for the pipeline to cross the property and for the pipeline to be used to transport petroleum products; _the person has obtained all necessary easements from the appropriate state agencies, including the General Land Office, Parks and Wildlife Department, Texas Natural Resource Conservation Commission, and the Texas Department of Health; and _the person has obtained liability insurance coverage in an amount sufficient to cover any damages as a result of discharges of petroleum products from the pipeline into public drinking water supplies. The bill authorizes the General Land Office, Parks and Wildlife Department, Texas Natural Resource Conservation Commission, Texas Department of Health, any other state agency the property of which is crossed by the pipeline, and any political subdivision the jurisdiction of which is crossed by the pipeline to intervene in a public hearing conducted by the commission. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2002.