As U.S. pipeline operators prepare for a major push to comply with new safety rules for aging pipe, firms that conduct diagnostic tests and bridge service outages are preparing to handle a surge in work while contending with tight labor markets.

The so-called megarule could lead to bottlenecks for pipeline testing and longer-than-anticipated service outages, according to panelists at the LDC Gas Forums Mid-Continent Forum in Chicago. It will also test the capacity of virtual pipeline companies that provide backup service options during planned outages, professionals said during a pair of Sep. 14 panels.

"This new law basically is the most dramatic increase in pipeline safety since the original pipeline safety act of 1968," said Scott Glaeser, who leads the pipeline integrity practice at engineering and construction firm Burns & McDonnell Inc. "All these compliance projects are going to create an incredibly high demand for pipeline integrity engineering, field testing, assessments, construction services."

The Safety of Gas Transmission Pipelines rule requires operators to re-confirm the maximum allowable operating pressure for pipelines, including those previously exempt from modern testing requirements.

The rule will chiefly impact lines built prior to November 1970. These pipes account for 168,000 miles of the nation's roughly 300,000 miles of onshore gas transmission lines, according to the U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA, which issued the rule.

Surge in demand

For a host of reasons, operators will not have to test much of the pre-1970s mileage, and PHMSA gave the industry 14 years to comply with the rule. Some industry watchers say that could mitigate potential bottlenecks and service disruptions.

But Glaeser projected that demand for diagnostic services will ramp up "tremendously" in the coming years, with activity likely peaking in 2023 or 2024. Compliance plans were due in July, and many operators will start executing those plans following the peak winter heating season in 2022, Glaeser said.

PHMSA gave operators six options for dealing with lines subject to the rule, but Glaeser believes that the rule will push most operators towards a couple of compliance pathways. In Glaeser's view, few operators will opt to comply with the rule by lowering a line's operating pressure or replacing portions of the system for which the company does not have verifiable records.

That will direct most operators to run diagnostic tests on pipelines, Glaeser said. Two pathways allow operators to use minimally disruptive inspection tools, but Glaeser noted that the rule is exacting enough that many companies will opt for hydrostatic testing. This inspection method involves pumping water at high pressure through lines to force failures in weak spots, which takes lines completely out of service for several days to a week or more.

"We just won some contracts with a Midwestern utility, and they awarded us six hydrostatic testing projects — large scale ones — and then two complete transmission pipeline replacement projects through high-consequence areas," Glaeser said. "They're telling us this is just the tip of the iceberg."

Bridging the gap

While operators schedule diagnostic testing, there is the risk of unscheduled outages piling up as operators discover potential failure points, Glaeser said. Companies that provide ways to keep gas flowing during integrity testing and outages are preparing to handle the increased volume.

Chesapeake Utilities Corp. sees this as a "big area of expansion" and a motivating factor for its 2018 acquisition of Marlin Gas Services LLC, which operates a fleet of portable compressors, city gates and gas trailers, Chesapeake Business Development Manager Eric Pearson said. In August, Chesapeake CEO Jeff Householder told analysts the company is transitioning Marlin from emergency response deployments to longer-term service agreements supporting pipeline maintenance and other applications.

While large systems with two or more lines running parallel can keep running, so-called virtual pipeline service will be critical to keeping communities at the end of smaller laterals supplied, Pearson said.

That work is a growing part of Stabilis Solutions Inc.'s business, and the company expects it to become bigger, said Steve Stump, senior vice president for sales and marketing at Stabilis, which specializes in liquefied natural gas services. Servicing areas with pipeline capacity constraints is also a growing business, so pressure reductions resulting from compliance with the transmission safety rule could increase demand for services, Stump said.

Tight labor markets

One challenge to meeting increased demand is the national shortage of truck drivers. The market is particularly tight for drivers qualified to haul hazardous materials and capable of meeting stringent background standards, Pearson and Stump said. "To find those drivers, that's even like a needle in a haystack at that point," Pearson said.

Engineering and construction firms are also facing a "real people crunch," Glaeser said, with the biggest challenge to complying with the rule to be securing enough experienced professionals, including pipeline engineers, field supervisors and certified welders.

"There's already tightness in that market for those resources," Glaeser said. "It's going to get a lot worse, and that means it's going to get more expensive to get those people."