Mr. Chairman, and Members of the Subcommittee, I am Ellen Engleman, Administrator of the Research and Special Programs Administration (RSPA) of the U.S. Department of Transportation.  I appreciate this opportunity to provide you an overview of the Department's pipeline safety program and the progress we are making to improve the protection of our national energy infrastructure.   

As Secretary Mineta has emphasized, our national transportation system plays a critical role in our Nation's economic strength.  Our oil and gas pipelines are the backbone of the Nation's energy infrastructure -- these pipelines provide resources for our national defense; to heat and cool our homes; to generate the power for our business enterprises and to fuel an unparalleled national transportation system.  

As overseers of the nation's 2.1 million miles of pipelines, we hold the people's trust to ensure that vital energy resources will be delivered safely and securely.  We execute this mission through a number of statutory charges.  We are charged with setting standards for the design, construction, testing, operation, maintenance and repair of pipelines.  We are charged with ensuring the qualification of personnel who perform pipeline safety responsibilities.  We are charged with responding to emergencies when pipeline systems fail.  And we are charged to enforce the law, when standards are not followed.  We take our job very seriously and I assure you, we are on the job. 

Further, we are not alone in executing our mission.  Through its wisdom, Congress sought fit to provide us with authority to share oversight of these tasks with state agencies, who through adoption and enforcement of our regulations, are primarily responsible for overseeing intrastate pipeline systems.  It is a close working partnership we depend on and value.  We also work closely with our regulated community, to ensure we understand the safety and security challenges they face and to ensure that limited resources are maximized for greatest safety benefit.  However, make no mistake, if the law is broken, we will aggressively enforce it.

This year, we identified the need for significant additional resources to help RSPA's Office of Pipeline Safety (OPS)  fulfill our responsibilities, particularly the need for additional inspection and enforcement.  The President's budget request for fiscal year 2003 reflects the importance the Administration places on assuring the safety of pipelines.  Considering the expectation that pipeline mileage will continue to grow at an unprecedented rate, we need to make clear to the American people and the pipeline industries that the pipeline safety regulator is on the job and equipped with adequate resources to do it properly.

Understanding what the job is, RSPA clearly faces a number of challenges.  Among the most important of these challenges is the need to improve OPS's record and responsiveness to outstanding mandates and recommendations.  Additionally, the agency is poised to address the challenge of leading the way on research and development of innovative pipeline safety technologies.  And finally, in the new security environment caused by the events of September 11, we must address the challenge of ensuring the nation's pipeline infrastructure is secure as well as safe.  I will address each of these challenges in turn.

RECORD

At the start of my tenure, there were 65 outstanding mandates and recommendations from Congress, the National Transportation Safety Board (NTSB), the General Accounting Office (GAO)and the Department's Inspector General (IG).  In recent months we have made great progress in completing work on half of these outstanding recommendations.  In January, we completed four important rulemakings on integrity management, pipeline repair, accident reporting and corrosion control for hazardous liquid pipelines.  By the end of this month, we believe that we will address nearly 50% of the remaining NTSB, IG, and GAO recommendations in a meaningful way, as well as the remaining Congressional mandates, and intend to have the slate clean within a year.  To accomplish this task, we have executed an aggressive plan involving various actions, currently underway. 

First, we are better defining pipeline safety problems and evaluating the results of solutions we put in place through regulatory and non-regulatory efforts.  We  broadened our reporting requirements, to provide better quality data and better control the accuracy of the data.  This action will allow us to make more informed decisions regarding safety.  Additionally, we improved our distribution of information to state and local agencies who assist us in safety oversight of pipeline operations.

Next, we continue to fill gaps in regulation with updated requirements on integrity management, LNG facilities, breakout tanks, pipeline repair standards, personnel qualifications and pipeline corrosion control.  Through the integrity management program, especially, we are improving safety standards by using systemic safety evaluation.  This performance based approach will yield specific improvements for application to individual and unique pipeline systems, and will add value to the effect of the standards we have in place. 

We also strengthened our enforcement efforts by making better use of all of our tools, including fines.  We are improving the enforcement process by updating internal procedures, providing increased enforcement training and expanding the use of automation in case processing.  We also devoted more resources to enforcement in FY 2002, and as previously mentioned, requested further increases for FY 03.  To date, we proposed over $9 million in civil penalties in the past year and a half.  We processed six times the number of cases in 2001 over the prior year.  And now, as our large hazardous liquid pipeline integrity management rule is in effect, RSPA is out enforcing it.  Which means OPS inspectors have been out conducting inspections, reviewing about 70,000 miles or about half of the  mileage covered by the first rule.  Based on our inspections, we estimate that as much as 80,000 to 120,000 miles of pipelines will receive added protections from this first phase of regulation. 

In the area of qualification, we are addressing the need to improve qualifications for both operators and regulators alike.  We are particularly interested in improving the ability of operators to diagnose and treat safety problems.  Additionally, our operator qualification rule is in effect, and we are in the field auditing its implementation, including the use of examination methods beyond the observation of on-the-job performance.  RSPA and State agencies trained together for auditing implementation of the rule, and currently are in the process of thoroughly reviewing all operators' training programs.  

Also, as outside force damage is the primary cause of pipeline failures, we are focusing efforts on damage prevention.  We are working in conjunction with the Common Ground Alliance (CGA), a national, non-profit damage prevention organization that evolved from the initial one-call framework established by Congress in the TEA 21 Surface Transportation Reauthorization Act.  And I am pleased to report that national efforts in this area are bearing fruit.  Damages to pipelines associated with new construction are coming down - while construction of new housing is up 57 percent in the last ten years, and damages to pipelines resulting from excavation are down 30 percent. 

Finally, RSPA is creating a nationally uniform oversight program that makes better use of the State resources available to us.  In September 2001, GAO closed two recommendations concerning our use of State agencies in the areas of inspection and enforcement.  This was accomplished through RSPA's efforts to develop new guidelines for State participation in interstate pipeline oversight; by involving States in the development of integrity management programs; and by holding frequent conference calls with the States to seek input on our national security initiatives. 

As you can see, we are serious about cleaning up our record.  To date, we are very proud of our results in these areas.  However, these actions represent the beginning of our efforts; I am determined to further improve our record within 12 months.  Our plan to address the remaining recommendations involve a number of RSPA actions, including:  the completion of rulemakings on integrity management, which will address approximately one-third of the remaining recommendations; additional training for Federal and State inspectors in advanced testing, monitoring, management systems and processes; building on our expanded interstate agent program with our State partners; implementing information and management systems to support State/Federal cooperative oversight efforts; and increased enforcement.

Additionally, through our joint actions with the CGA on damage prevention, education and outreach, we should satisfy about another third of the outstanding recommendations.  These actions include the development of a public education standard to guide operators' evaluation of public information; promotion of additional "best practices" for preventing third party damage; development of a database on excavation activities; and review of State requirements for one-call programs.   In this effort, it is critical to share responsibility for pipeline safety and protection of underground facilities with other utilities and local officials.  We need to encourage communication among the various stakeholders and foster alliances in order to focus on this goal and identify specific practices amongst the stakeholders to reduce damage. We must also continue to broaden public awareness of safe excavation practices.  Simply put, protection of pipelines from third party damage is a shared responsibility. 

RESEARCH

Our next primary challenge is fulfilling a leadership role in research and development of innovative pipeline safety technologies.  At RSPA we see a need for technological breakthroughs in the development and use of innovative technologies to provide true safety advances.  Based on our success with previous collaborative efforts, such as one-call, we recognized that we could facilitate a role in this area.  Taking the initiative, RSPA developed a comprehensive research and development plan, or a multi-year "blueprint" or technology map, if you will.  This action was done in cooperation with DOE, the Federal Energy Regulatory Commission and the Department of the Interior Minerals Management Service, as well as a broad-based group of State and industry stakeholders.  As part of this plan, we established four areas of focus: Damage Prevention and Leak Detection; Enhanced Operations, Controls and Monitoring; Improved Materials; and Mapping and Information Integration.  Based on this plan, we intend to have 80 percent of the R & D identified in the plan, complete within three years or less.  I want to be clear, that we are focused on near-term technology results that will be useful and competitively ready for the marketplace in a short time frame. 

Additionally, through the President's budget request for 2003, we are asking to consolidate pipeline safety research activities previously undertaken by DOE, within RSPA to reduce duplicative efforts among federal agencies.  Within this consolidated approach, we will promote clear accountability for safety outcomes and ensure integration of activities among the public and private sector.

In sum, through our R&D efforts, we will place greater emphasis on integrity management tools and practices for distribution companies; we will consider practical options for improved leak detection; we will continue development of techniques, particularly direct assessment, for evaluating pipelines that cannot be inspected with current in-line inspection techniques; and we will pursue development of improved techniques for real-time monitoring of pipelines, including use of satellites, acoustics and unmanned aerial vehicles.

SECURITY

We are also addressing security issues for pipelines through our Office of Pipeline Safety.  RSPA oversees the safety and security of the nation's 2.1 million miles of pipelines.  The security of our pipeline system is of strategic importance due to the large volumes of materials transported by pipeline and their critical importance to the National economy as well as defense.  The events of September 11 provided us a unique understanding of the state of security preparedness within the pipeline industry -- and we discovered there is work to be done.   To ensure that pipelines are secure to the maximum extent possible, we are now taking a number of measures.  Additionally, we are cooperating with the new Transportation Security Administration, to ensure we provide a unified approach to meeting transportation security challenges. 

Initially, on September 11th, we responded immediately to security concerns for our Nation's pipeline systems by making over 1,000 telephone calls jointly with our State partners to pipeline operators, to assess the security at pipeline facilities and to monitor events.  In recent months, we streamlined this communication process, in coordination with the Department of Energy (DOE) and the Federal Bureau of Investigation, and incorporated it into our daily operations for distribution of security information and threat warnings.

Along with improving our communications capabilities, we are securing our own information systems.  One action on securing information concerns the National Pipeline Mapping System, accessed by a website.  To reduce the opportunity for misuse, we limited accessibility to the website by installing a password protection system.  We are also processing security clearances for key federal, state and industry security personnel, and conducting conference calls every two to three weeks with all the pipeline safety agencies to review recent developments, toward the goal of providing a seamless Federal and State oversight program of pipeline security.   

Realizing that we cannot address the security challenge alone, we called on the pipeline industries to work with us in further assessing vulnerabilities, identifying ways to improve protections for pipeline facilities, and developing plans to improve response and recovery preparedness.  Based on this outreach effort, we encouraged the development of consensus standards for security practices.   We participated in the development of these standards, and we included DOE and state pipeline safety agencies in this process.  We are now incorporating these security practices into a pipeline contingency plan, and are tiered to correspond with the Office of Homeland Security's threat warning levels.  We are also at the stage of implementing a coordinated set of protocols for our inspectors to use during inspections of pipeline facilities to ensure operators are putting security practices into place at critical facilities.

Additional RSPA efforts are focused on improvements to public and private sector planning for response and recovery.  The primary needs in this area include improved communications with local authorities and identification of methods/resources necessary to expedite the return to service of a pipeline, in the event of an attack.  With regard to recovery, this involves identifying critical spare part inventories for rapid restoration of pipeline service, and establishing relationships among the operators to share their resources.  The benefits of such actions will not be limited to terrorist incidents, but will also accrue in the event of natural disasters or pipeline accidents.   Additionally, we formed a work group with DOE to assess the role of Federal-level emergency authorities in the rapid restoration of service.

In sum, the experience we gained from the events of September convinced us of the need for an integrated role for safety, system integrity and security to maintain a reliable national pipeline system.  The consequences of a major pipeline failure, whether intentional or unintentional are potentially the same -- that is loss of life, injury, property loss, environmental damage and disruption of critical fuel supplies.  I am pleased to inform you that OPS security activities are integrated fully within our safety operations.

CONCLUSION

RSPA is committed to addressing the many challenges before us and we have a vision of how to accomplish our goals.  We have a plan to address the outstanding mandates and recommendations, and we are cleaning up our record.  We are strengthening our regulatory structure through a systemic, comprehensive approach to safety evaluation; and aggressively enforcing our requirements.  We are taking a leadership role in advancing technology for pipeline safety.  And in coordination with the Transportation Security Administration, State agencies and the pipeline industries, we are addressing pipeline security issues.  Overall, all of these efforts will provide greater accountability for safety outcomes, which can result in greater public confidence in the safety of America's pipeline systems.

However, our efforts alone are not enough to raise the public's confidence in the pipeline safety program -- we need reauthorization of the program.  Commercial and residential energy demands are growing; urban centers are expanding and moving closer to rural pipelines; and our national defense demands a reliable energy supply -- yet, citizen concerns over pipeline safety have resulted in delays of new construction or rehabilitation of existing pipelines.  This does not serve the public's interest -- and we must act.  American citizens need to know we are upholding their trust.  They need to know we are doing everything possible to ensure the safety and security of pipeline systems, and they need to know we are authorized and provided the resources necessary to accomplish our job.  Toward this goal, we are very pleased that Congress is renewing its efforts on this front, and we offer our assistance in any way possible to complete your work. 

Again, I wish to thank the Subcommittee for this opportunity to share an overview of the pipeline safety program and our vision of how to accomplish pipeline safety, research and security efforts.  I would be happy to answer any questions.