Authority over city pipeline in dispute by oil company

Change sought after PSC stepped up inspections

May 23, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

A little-known pipeline in Southeast Baltimore is at the center of a dispute over who should inspect the more than three-mile-long steel underground conduit that travels under two neighborhoods and carries gasoline, kerosene and heating oil from Canton to Erdman Avenue.

Apex Oil Co. says it wants the Maryland Public Service Commission dropped as authority over its pipeline in favor of the U.S. Coast Guard, after state regulators began stepping up safety inspections of two pipelines transporting liquid hazardous materials in Maryland.

The PSC said in a Jan. 17 preliminary report that Apex has:

No leak-detection system.

No formal procedure to detect and repair corrosion.

No formal procedure to test and inspect pressure-control equipment.

Insufficient number of inspections on the pipeline's right of way.

St. Louis-based Apex filed a letter with the Coast Guard seeking jurisdictional change five days after the PSC report was issued. A Coast Guard decision could come in the next week.

"The problem with the federal authority is that they are horribly understaffed. It would basically mean the pipeline won't get inspected," said state Sen. Roy P. Dyson, who co-sponsored legislation last year transferring regulation of intrastate liquid pipelines from the federal Office of Pipeline Safety to the PSC.

"If something awful were to happen, it would travel the entire length of that pipe," he said. "All you would need is a spark. You could have one hell of an explosion if you're not careful."

Tom Depke, general manager of Apex's pipeline, which operates as Petroleum Fuel & Terminal Co., stated that "PF&T is confident regarding the safety and integrity of the pipeline."

"PF&T did not request a jurisdictional change," he wrote in a statement refuting the PSC findings. "PF&T requested clarification after the change from [federal regulators] to the Maryland Public Service Commission."

Pipeline accidents cause fewer fatalities annually than accidents in other forms of transportation, federal officials say, but a single pipeline accident has the potential to injure hundreds and cause millions of dollars in damage.

Near the Northwest Harbor, Apex's pipeline runs under the densely populated Canton and Highlandtown neighborhoods.

Concerns about safety and the pipeline's urban location give the state "every right and every good reason to be looking into it much more closely than we ever have," said Del. John L. Bohanan Jr., co-sponsor of the legislation that gave the state control over intrastate pipeline inspections.

Transferring jurisdiction to the Coast Guard would allow Apex to sidestep more stringent state inspections, said Alex J. Dankanich, manager of the PSC's Pipeline Safety Program.

The PSC said it would probably challenge any decision by the Coast Guard to accept Apex's position on jurisdictional control. Dyson and Bohanan also said they would fight such a ruling. But it's unclear what can be done if the Coast Guard decides that its authority supersedes the state's.

"If the Coast Guard were to take over jurisdiction, they'd have to change our law, and I can't imagine the legislature would allow it," Dyson said.

The Coast Guard has authority to inspect pipelines at marine terminal facilities, according to the Code of Federal Regulations. Its jurisdiction begins at the pier or wharf at which a vessel transferring oil or hazardous material is moored and ends at the first shut-off valve adjacent to the storage tank on shore.

Apex says it can bypass shipping petroleum products into its tanks off the Clinton Street pier by pumping directly from a barge or ship into its pipeline. That, Apex asserts, would place authority for its two city facilities under the Coast Guard.

The fact that the Coast Guard already inspects part of the pipeline gives it the right to decide whether to take over authority of the entire line, Apex maintains.

"It could go either way," said Lt. Charles Roskam, supervisor of port safety, security and waterways management at Coast Guard Activities Baltimore Branch. "It's a complicated facility, which makes it debatable where their first valve could be."

When it comes to pipeline regulations, officials from the Office of Pipeline Safety and the Coast Guard agree that OPS rules are stricter. The Public Service Commission uses OPS pipeline regulations for its inspections.

The Coast Guard inspects Apex's line from the barge to the first shut-off valve at storage tanks near its pier at the Clinton Street terminal. The PSC has jurisdiction over the rest.

Apex would have to designate a shut-off valve at its Erdman Avenue facility - 3.14 miles away - as the terminal's first valve to place the jurisdiction of the entire pipeline with the Coast Guard.

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