ND PSC budget seeks staff for proposed oil pipeline, rail inspection programs

From the Prairie Business Article by Mike Nowatzki

BISMARCK – The North Dakota Public Service Commission is requesting more than half a dozen new employees in its 2015-17 budget to monitor the state’s growing number of oil pipelines and railroad traffic that has increased with oil-by-rail shipments.

The three-member panel voted unanimously Thursday to submit its budget request to the Office of Management and Budget for review. It’ll be revised and incorporated into the governor’s executive budget presented to state lawmakers in December.

Three of the new positions would be dedicated inspectors as part of a state-run hazardous liquids inspection program for intrastate oil pipelines, a proposal that gained steam after an oil pipeline leaked an estimated 20,600 barrels of Bakken crude in a farm field near Tioga in September.

The 2015 Legislature would have to vote to create the program, and the federal Pipeline and Hazardous Materials Safety Administration would have to agree to relinquish inspection duties to the state.

Brian Kalk, chairman of the three-member PSC, said the state-run program could be up and running by late 2016 if the Legislature and PHMSA approve it.

Commissioner Julie Fedorchak said given the growing presence of oil pipelines in North Dakota, “it’s a good idea to have state personnel in charge of that oversight.”

The budget request also includes three employees who would inspect railroad track and motor operations, working in tandem with federal inspectors as part of a proposed state-run rail safety inspection program. Fedorchak said the program could be in place by mid- to late 2015 if approved.

Commissioner Randy Christmann said it’s been hard to predict how many employees will be needed for the programs.

“We’re really trying to aim at something based on projections of where we might be in pipeline activity and rail traffic two, three years down the road,” he said. “So it’s quite a tough target to really define with pinpoint accuracy.”

A half-time position requested for the hazardous liquids program and another half-time position for the natural gas inspection program would be combined into one employee who would oversee both programs. The PSC also is asking for an additional natural gas pipeline inspector and a weights and measures employee to help inspect the growing number of scales being installed in the state.

The PSC’s total budget request is for just more than $24 million, compared with the current two-year budget of about $20.5 million, which includes the reclamation program.

The budget request includes a general fund budget of $9.7 million, which would represent a 37 percent increase over the current two-year general budget of about $7.1 million. Kalk said growth in the state’s infrastructure was the main driver behind the request for more employees.

“The growth of the infrastructure is just really hard to predict,” he said. “Until the growth, the build-out settles out in North Dakota, you’ll probably see this in every commission budget going forward.”

Commissioners also are seeking a $250,000 equity package to keep salaries competitive for employees in high-demand positions. Pipeline safety inspectors in particular have been leaving the PSC because they’re offered more pay – sometimes double – by private industry, Kalk said, noting it takes three years to fully train a PSC pipeline inspector.

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