Letter: Pipeline maintenance cost means changes needed

When I was named Chairman of American Midstream in April 2013, one of my first areas of focus was the Midla “Mainline” pipeline, constructed in the 1920s by Standard Oil (now Exxon) to bring gas from the Monroe Field to a refinery in Baton Rouge. The pipeline had operated 50 years beyond its predicted life without having been replaced. Time has taken its toll: Leakage rates are multiples of modern pipelines and rising, and we are down to two from eight lines crossing the Mississippi River. Erosion and cultivation have reduced burial depths, and development has grown up around the pipeline, including two schools, a prison and a planned housing community.

Midla continues to maintain the pipe: we inject anti-corrosives, inspect it weekly from the air and walk it looking for leaks at least annually; and, in higher consequence areas, quarterly. Proactive maintenance that could be accomplished with modern internal monitoring tools is not possible. Rather, it is a case of find a leak and fix it, not predict a leak and prevent it.

The refinery and other large loads in Baton Rouge are now served by other, more modern pipelines. The cost of maintenance has grown, but it is now shouldered by many fewer customers. With safety our No. 1 priority, the logical next step is to simply shut down the Mainline.

Not wanting to leave our customers without natural gas service, we began in May 2013 reaching out to advise customers of the pipeline’s condition and soliciting input on how to best proceed. We commissioned a detailed engineering study that looked at options for partial reconstruction of the Mainline. Additionally, we identified nonpipeline alternatives for assuring that all of our customers continue to receive gas service, including trucking compressed natural gas.

The stark reality is that these alternatives cost more than the current service and the costs would be borne by fewer customers. Despite Midla’s efforts, our customers have not chosen an option or combination of options, nor have they suggested alternatives. The best way to re-open the dialogue is for the FERC to hold a public technical conference in the next two to three weeks, at which Midla’s proposals can be clarified, customers and other stakeholders can raise questions and express their concerns, and Midla can answer them.

We understand the difficulties communities face with the possibility of higher prices. We also remain hopeful that strategic and collegial achievement of our No. 1 priority — assuring public safety — can also spur economic growth. Midla can once again be a win-win, if we work together.

Steve Bergstrom

chairman, American Midstream

Houston