Brian Chastain is the President of Dynamix Engineering and Services Group, which supports businesses in the gas storage, utility services, and energy industries with project management solutions. Dynamix has been helping clients for over 45 years with site maintenance, replacement, and repurposing assets like wellheads and casing production tubing to remain compliant with industry standards. The company’s mission is to help others operate at their peak efficiency while minimizing their environmental impact.
Here’s a glimpse of what you’ll learn:
- What is the PHMSA mega rule, and why should you care about it?
- Who does the PHMSA mega rule affect?
- Brain Chastain explains the considerations for PHMSA mega rule compliance
- Brian discusses some of the mega rule challenges
- Brian talks about the process and the cost of being PHMSA mega rule compliant as a company and the right time to start working on it
- Why your PHMSA compliance program should use a turnkey consultant
- Brian explains the kind of people you will need in the compliance process
In this episode…
Do you have onshore or offshore gathering and transmission lines? If so, it’s crucial that you’re PHMSA mega rule compliant. How do you ensure that you’re compliant and keep up with changes?
The President of Dynamix Engineering and Services Group, Brian Chastain, explains the importance of being PHMSA mega rule compliant, who has to follow the mega rule compliance, and how to determine if your PHMSA plan is documented correctly. If you aren’t compliant, there will be major consequences. So, why wait and risk your business? Tune in and learn how to be PHMSA mega rule compliant.
In this episode of the Project Dynamix Podcast, Brian Chastain, the President of Dynamix Engineering and Services Group, sits down with Dr. Jeremy Weisz, the Co-founder of Rise25, to discuss PHMSA mega rule compliance and why it’s important. Brian explains what the PHMSA mega rule is, the compliance challenges and benefits, and the process and cost of being PHMSA mega rule compliant as a company.
Resources Mentioned in this episode
- Dynamix ESG
- Brian Chastain on LinkedIn
- Dynamix ESG email: info@dynamixesg.com
- Dynamix ESG phone number: 724-716-4111
- Dr. Jeremy Weisz on LinkedIn
- Rise25
- “8 Considerations for PHMSA Mega Rule Compliance”
- National Hemophilia Foundation
Sponsor for this episode…
This episode is brought to you by Dynamix.
At Dynamix we make sure the companies we work with, do NOT make the news
I remember reading an article of a company that got 53 Million fine
Here is what we do..
Basically if you are in the gas storage, utility services, or energy industry, we are your turnkey project management operation
We fix, update and repurpose assets – like well heads, casing, production tubing, site repair and replace.
We bring clients to and above the industry standards.
Dynamix is an engineering and services group on a mission to help companies achieve peak operational efficiencies with the smallest environmental footprint.
We have a team of experts that have been in the field for over 45 years.
To learn more, email info@dynamixesg.com or give us a call at 724-716-4111.
Episode Transcript
Intro 0:04
This is the Project Dynamix Podcast, hosted by Brian Chastain, where he features top leaders in the energy markets to talk about innovation and impact.
Brian Chastain 0:17
Hi, Brian Chastain here hosts of the Project Dynamix Podcast where I feature top leaders in the energy markets to talk about innovation and impact. I have Dr. Jeremy Weisz here on Rise25, who has done thousands of interviews with successful entrepreneurs and CEOs. And we have flipped the script, he will be interviewing me.
Jeremy Weisz 0:29
Brian, I’m excited, we have a couple of great topics to discuss. Among them is the PHMSA mega rule and the compliance with that. And so we’re going to go over 800 line items of the PHMSA mega rule. I’m just kidding, we’re not going to go through over 800. But we’re going to hit the highlights, you’re going to hit the highlights for us. And before we get into it, this episode is brought to you by Dynamix and at Dynamix, I know you make sure companies you work with do not make the news, you’re like the opposite of a PR company that wants their companies to make the news you do not want your companies you work with make the news. And you were telling me an article of a company that got a $53 million fine. Okay and this is what you keep companies from getting and basically so if you’re a guest or as utility services, energy industry, basically you’re a turnkey project management operation, you fix update, repurpose assets, like wellheads casing, production tubing, site repair and replace, and you bring clients to and then above the industry standard. So Dynamix is an engineering and services group on a mission to help companies achieve peak operational efficiencies with the smallest environmental footprint. So your team of experts have been in the field for over 45 years. So you can learn more, you can email info@dynamixesg.com, check out their website, or give them a call 724-716-4111. And so Brian, let’s talk about the PHMSA mega rule and what it is to start.
Brian Chastain 2:14
What it is, it is a rolling fluid legislation that was enacted or started a little over 10 years ago, it’s the result of multiple, catastrophic and sometimes fatal events that have occurred due to transmission pipelines, gathering lines and other like assets. That’s what really stirred and sparked the Mega rule.
Jeremy Weisz 2:48
Why should people care about it?
Brian Chastain 2:49
Because if you fall within really the to block, people should care about it, because it directly impacts their day-to-day operation. It impacts budgeting, it impacts safety, it impacts the safety and the environment in which every one of these companies currently operate. And they should really start to pay attention to it now. Because as of 2020, a lot of companies and individuals that had previously been excluded or grandfather, that exclusion has now gone away. So really, I mean, it is critical that people start paying attention to it.
Jeremy Weisz 3:31
So who does it affect?
Brian Chastain 3:33
Right now, anybody that has onshore, it impacts onshore and offshore gathering and transmission. Previously that was specifically set to impact I mean, more you would think, typically people would think like the big operators, the big utility companies, the big huge pipelines, now it has expanded to impact agriculture. So farmers and other like entities, individuals and small LLCs, they have their own transmission and gathering lines, if it is operated within what they call constant, consequential areas, right? They have high consequence areas and low consequence areas. But if you fall within a certain range, then it impacts you. And the trigger really becomes one of those two, right? You have what is commonly referred in reference all the way through the document is your maximum allowable operating pressures. And that’s what it really boils down to is we want to make sure we the regulation is set to ensure that anyone that is operating pipelines, pretty much that it is within a maximum allowable pressure. This was put in place because as you can imagine, the country is our country United States keeps getting old and older and older right every year that goes by a little bit older building infrastructure. We’ve been moving natural gas all over the country for 100 years, right? I mean, decades. So all the way back to really this is from the 1940s. And that’s really what this by the rules have been changed multiple times. But really, who is affected? I mean, I would say that that’s probably the biggest impact, because a lot of companies were previously excluded.
Jeremy Weisz 5:32
So Brian, I was reading one of the articles that your company wrote on your website about considerations for PHMSA mega rule compliance. And one of the things in that article, you talked about PHMSA estimated their role more than 400,000 miles of unregulated onshore gathering lines. In comparison, operators reported 320,000 miles of gas transmission lines in 2019. Can you just break that down for me exactly those numbers and what that the impact what that means, actually,
Brian Chastain 6:05
I mean, the nutshell of what it really means is that there’s we’ve referenced thousands of have lines that were going to be impacted. What we are finding with research, and the more we work in and reach out to potential clients is that there are hundreds of thousands of really on previously unregulated lives that have now come into play. So if the agency is referencing 400,000 miles of unregulated line, well, that’s 400,000 miles of now regulated. It means that it’s going to have to get them to compliance, because they’re going to have to determine the materials of those lines, and determine the max operating pressures of those lines and their consequence area, to where those gathering lines are to determine the frequency of their own internal audits and their yearly requirements to report what they found.
Jeremy Weisz 7:06
What are some of the mega rule compliance challenges?
Brian Chastain 7:11
So one of the biggest challenges is really due to aid. They said, we have gathering and transmission lines. There’s pipelines that are there, decades older than me, and you get to trying to, as you can imagine, well, maybe not, but pipelines, they age just like everything, right? You build a bridge, does it stand forever? Well, these things are underground, and they’re built to last. But if you would think back, I have a hard time keeping up with the receipt from last year. Right? So now, even with technology, you scan in your documents, whatever you keep your records for your business, and you move on? Well, in the 40s, there was no scanner, right? People would have looked at you like you were crazy. So there’s a lot of data that just doesn’t exist. And if for some reason it does exist, it is a reiteration of a iteration of an iteration, right? It’s almost like the kindergarten name. Hey, do you got someone’s handwritten No, like telephone ease? Yeah, exactly. Right.
Jeremy Weisz 8:21
By the time it stops the other end, it’s totally different from what it started with.
Brian Chastain 8:26
So if you can dig out records of any type, from that far back, the chances of them being accurate are pretty slim. So I would say that the two largest challenges for this compliance is going to be data gathering. And then actually testing the, I don’t know the word I’m looking for all of the pipe that you don’t have records for, you have to go in and physically and manually test for materials and integrity. Those are the two biggest things. So if you can imagine 400,000 miles of pipeline, that now is going to be under some version of regulation that was not previously ever regulated in the last year. Now, if I knew that I didn’t have to turn in my records and I didn’t have to meet certain things, and I’m going to be even less likely to keep those records. So really, what it’s going to require is a lot of manpower in there’s no way around it.
Jeremy Weisz 9:26
Talk about that for a second because I see a lot of staffing challenges here. All this.
Brian Chastain 9:31
Well, they’re staffing challenges all across the nation right now. Now, you narrow that all the way down to get yourself to a point where you have the expertise and the manpower that is necessary to complete these tasks going. Same thing so you have the on-site issue of staffing and then you have the back office, the issue of staffing. If this was in consideration of just like the last five years, most people goes could just hit Run Report, and it would probably be done. What we have found working with our clients is that these records are most of them, any records that exist, they’re in art filing cabinets, either handwritten, they’re on carbon copies, or they were previously typed up manually and then shoved into a filing cabinet. So trying to stamp all of that really is a nightmare, because the only way to get it into a computer at this point is you have to assign groups that are able to read sort, scan, and file, according to whichever project it was, whatever project it’s assigned to.
Jeremy Weisz 10:42
Yeah, I remember, Brian ate a receipt in my wallet. And that’s not even a carbon copy. I think I pulled it out six months later, it was blank, like the writing just rubbed off. So I can’t imagine these documents that are decades old, I pulled it out like there was support, there was something on here at one point.
Brian Chastain 11:00
So we’ve covered records that are as far back as the 50s, and 60s, and most of them are electric. I mean, you really got to sit there, you have to know the context of the writing, so that you can put it together with the help of the client, if you are lucky, you will find someone that had previously worked on that is going to know how to go where to go. But the end result is going to be a lot of manual testing, to fill in the gaps of what was not there.
Jeremy Weisz 11:31
So talk about the process and then the cost. Because if I’m a company listening this I’m like, how is this going to work? And this sounds like it could be a serious, serious cost.
Brian Chastain 11:42
It is. So the process really starts with kind of a discovery period, we like to ask the questions. So the first thing that we’re going to do is ask for any well records that you have kind of like a spot check is like, okay, so you have this section of pipe, and you think that it may or may not fall within that category. most of the companies that we’re working for, they already know, yes, we fall within the bins of regulated impact area. Let’s say that they did, the first thing we’re going to do is start pulling records. And we’re going to determine how close are they to interstates? How close are they to houses that are or eventually will be habit building. So office buildings, all of those things, determining your consequence area is going to be step one, because that’s going to determine the frequency of your testing in this going to determine how this not the severity, but the depth of what you’re required to do. So from that point, we begin kind of compiling our own record of your asset, so that we can say, okay, this is where you fall, right? You are a type ABC within this category. And this is your risk exposure. Now, where time and money come into play is as of right now companies have 14 years, which sounds like forever, you have 14 years to get 100% compliant. The problem with being 100% compliant to a fluid legislation is that every year that goes by, it’s actually getting strict. Maybe not every year, but every time they revamp it, every time they go in and they make edits or changes. Previously, the mega rule said that so many things were anything earlier than the 70s had been grandfathered in. Right? So any operating pressure that a pipeline or gathering transmission line and operated that max pressure before 1971 that became their threshold. So they were never required to go back in the form of physical maximum pressures, testing. They took that out this time. So that’s the other things like okay, well, I got 14 years That sounds fantastic. I got 14 year, but when you look at the scale, and then the staffing and then the workforce, it’s going to be needed to go out perform the testing and the material analysis, then 14 years, well, it might as well be 14 days in or at a minimum probably 14 months. Because there’s just trying to search the records of hundreds of thousands of miles pipeline, right. And then getting crews out there to go test the different material types every time that think about it this way. So I had a leak in the house. When I had a leak in the house. I didn’t just go in there and tear all of the plumbing out because I had a leak. We cut out the bad piece that was leaking and we replaced it with a new current patch, or repair. Well, they’ve been doing that for decades. So instead of you just saying, okay, well, this is my line, and it’s been in the ground since the 70s. And I’ll just test spring here, and it’ll be good to go. That’s not the case. Because anytime and every time that had been any sort of risk or leak or damage to it, it was just updated, it was put back into service. So you’ve gotten multiple materials over multiple decades, and most of those things are, a lot of the materials are not being used in. A lot of the manufacturers, a lot of the contract companies, what you find is they don’t, they’re not in business anymore, or they’ve been acquired and merged and moved into another company, and then that spills into just as much as our clients. Because as you can imagine, a lot of these clients have grown, but they’ve grown through acquisitions, they’ve grown through mergers, they’ve grown through management changes, I mean, just call it every 10-year lifecycle of these different companies that have either purchased or built or manufactured. And that really just goes back again, to the data management, because this rule requires that you submit the proof and the records. That’s where the cost comes in. If you wanted to put someone on your project, and it did take 14 years, you can imagine how expensive that is.
Jeremy Weisz 16:32
Brian, timetable, we talked about some of the timeframes, right? And, this can’t be like the night before the test, you are cramming, right. I mean, this takes a long time, what should people think about as far as timetable to start to work on this?
Brian Chastain 16:50
I would say the time to start working on this was yesterday, last year, five years ago. Right now, the first thing that needs to be done is you got to get a plan, you have to have a plan, the agencies themselves, right? They have delayed or whatever state the enforcement as of right now, for the required procedures being documented. So that deadline was actually July of 2020. Now, because of these last two years, and some pushback from the industry, in the I think the kind of the light bulb realizations of the daunting task that has been pushed into this, tends a gave everybody kind of a what you just referred to it night before Christmas, let’s just say that PHMSA gave them an extension on their project, the first thing that has to happen is you need to build a plan. And if you don’t have a plan in place, then you are operating. PHMSA is allowing for companies to operate with a stay or a halt to the enforcement, which just says, okay, I don’t have the plan. But what I have is a plan to a plan. Right. So a pre-plan, and that’s a lot of plan. Holy crap, somebody should count that. What ends up happening is, so a Corporation, a company, entity, they say, hey, look, I know that I’m going to fall within your bucket of regulation. Here it is, I know I’m going to fall within it. I’m not sure to the extent yet. Here’s my procedure, my proposed procedure to get us on track in order to be compliant by the 2035 deadline. With that they have to demonstrate a reason, right, they needed a doctor’s note for their extension. So as soon as they can say, look, I’ve demonstrated to you that I do have a course of action that I’m willing to follow to get compliant, but I need this much time, can I please get an extension? That process, if you have pipelines that are in your control, you should have started that. And if you have not started that, you need to contact somebody and start it.
Jeremy Weisz 19:11
Brian, a few things I wanted to point out so we’ve talked about what is the PHMSA mega rule? Okay. Obviously, there’s over 800 line items. We haven’t discussed the whole thing because a broad overview people understand what’s going on with it. We’ve discussed who has to follow the mega rule compliance. And then is your PHMSA plan documented right in some of those pieces that need to be worked out. And then maybe for another episode, we could talk about, because there is a question on how does the orphan well and mega rule compliance overlap and that’s kind of a whole separate topic. So maybe we talked about that and another one because I do want to get to one other point here. And the benefits of PHMSA compliance right? Keeping everyone safe. And there’s a lot of different benefits of that. And you talked about why you should start the PHMSA mega rule complaints now. I mean, it’s kind of like planting a tree, when’s the best time to plant a tree, which is now or yesterday or 10 years ago or whatever, right. And so what I want to talk about the point is, why should your PHMSA compliance program use a turnkey consultant? And what that means.
Brian Chastain 20:28
So really, what we aim and why I think what we have found is that the old saying of too many chiefs, and not enough Indians kind of comes into play. And I know that that’s probably not the best analogy anymore. There’s too many, the biggest benefit to a turnkey program is our clients get one single stream of information, right? So we use experts who know the policy, and read the documents and build the plan. And we only use contractors and subcontractors that understand what needs to be done. Not only that, but they also meet and or exceed all of the different compliance regulations. As you can imagine, anytime let’s say you get into a situation where you’re, let’s say you got a section of pipe that doesn’t meet the regulations. Well, that’s okay as long as you’re willing to make the repair to get it? Well, now, we have to trust our suppliers and our vendors and our contractors to use the materials that have MTRs, right? They have to have the material, you don’t want to install stuff and then have to go retest it, figure out why that pipeline does or doesn’t meet compliance, because you don’t know the material integrity of what you’re installing. So what we have found is by using one source, you get single source engineers, contract labor, construction labor so that anybody that project is covered. And the reverse of that is true as well. Because if there becomes, let’s say, for some reason, a delay or an issue, or anything arises throughout your project, then you don’t have to worry about tracking down 35 different contractors, you just have to call somebody like us at Dynamix and we work directly with our clients to communicate that we work very hard not to surprise our clients.
Jeremy Weisz 22:33
The last thing I want to ask Brian, before we end, first of all, I just want to point out people can check out dynamixesg.com, to learn more, is we were talking before we hit record of a few people that had been key and helped with some of these projects. People you call on that you trust. So I wanted to give a couple of shout-outs to people.
Brian Chastain 22:59
Yeah, absolutely. So, you know, when you’re inspecting pipeline, you kind of need a pipeline inspection company. So we use, we always call Rob, he does a good job. He’s participated in a lot of our stuff, what they do best is they verify what we think. So we do a lot of work below ground and given his company, they are able to go in and do the exhaustive testing and actually say, yes, we confirm your findings. And you made the right call, or hey, this section of pipe actually can stand a little bit longer. So we always call on him. And they do a fantastic job. He’s always been a kind of one of our champ. We’ll use three reliable the same rig company. So every time we call on anybody, we’re always looking. And we talked to Shawn and his crew, and they come out there for any of the surface work where we have to come in full surface valves, these gathering lines, they all start at the wellhead somewhere, right so we do a lot of on-site wellhead work as well. And then of course you can’t do anything contractual or regulatory without a solid legal and regulation team. So definitely same guy Matson awesome individual.
Jeremy Weisz 24:24
And you were mentioning too Brian, that some of these people you see I mean, when business but you see them personally as well. And you had a charity event?
Brian Chastain 24:35
Yes. So part of what we like to do is try to give back course, we give back to the local communities, our departments, and police departments, but we also try to raise awareness for the people that can’t raise awareness right. So last year, actually all of these people mentioned they attended our hemophilia charity event that we put on and what be doing another event of light session this year where we try to just give back and help those that are unable to help themselves.
Jeremy Weisz 25:08
How did you choose hemophilia as a charity?
Brian Chastain 25:12
I have a relative that sits on the board. And again, a lot of that is, I feel like of all of the different charities that are out there, that was one that is not necessarily always, there’s no one ringing a bell at your local grocery store raising money for the hemophilia organization. But it’s just serious and it still affects a lot of people. So that’s really where we are.
Jeremy Weisz 25:38
Brian, thank you so much, everyone, check out dynamixesg.com, and more episodes of the podcast. Thanks for having me, Brian.
Brian Chastain 25:46
Thanks.
Outro 25:49
Thanks for listening to the Projects Dynamix Podcast. We’ll see you again next time and be sure to click subscribe to get future episodes.
