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Reauthorization of the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act
Subcommittee on Energy and Air Quality
Mr. Mark L. Hereth
My
name is Mark L. Hereth. I am a
senior vice president of HSB Solomon, a subsidiary of The Hartford Steam Boiler
Inspection and Insurance Company. I
have been an employee of the company for 23 years.
I served as a project engineer on engineering and environmental projects,
as a department head, as the business unit manager of our Oil and Gas insurance
operations, and now as the business unit manager of our energy pipeline
consulting practice. I lead a
business today that is taking the tools and the processes we have used
historically to help our customers manage adversity, by applying them to helping
improve the safety, reliability and profitability of their operations. Improving
pipeline safety is not a one-year, a five-year or even a ten-year project.
It is a journey on which you must strive for continuous improvement.
I
believe I can speak of a journey as I work for a company that has been on a
journey to improve safety and reliability of industrial equipment since the
Civil War. Our founders noted the
increase in the frequency of steam boiler explosions in the early 1860s.
They examined the historical experience of steam boilers in a number of
applications and developed an engineering basis for reducing and possibly even
eliminating boiler explosions. They
believed that with the appropriate materials to construct the boiler, fine
workmanship, careful operation and periodic inspection, boiler explosions could
be eliminated. They believed in this enough to indemnify boiler operators in the
event of accidents through an insurance policy. They developed processes to
inspect how operators designed, built, operated and maintained boilers.
It is from this that our company name was derived; we inspect before we
insure, hence the name, Hartford Steam Boiler Inspection and Insurance Company.
Our
founders later codified these ideas into the Hartford
Code and the Hartford
Standard. These documents were the predecessors of the Code
developed by the American Society of Mechanical Engineers (ASME) for boilers and
pressure-containing equipment. The
ASME Code, as embodied in Sections B31.4 and B31.8, serves today as the
foundation upon which pipeline safety regulations are based for hazardous liquid
and natural gas pipelines. Periodic
analyses of historical experience remains as important today as it was in the
1860s. Even though we have been able to evaluate historical performance and
demonstrate improvements with the data collected over the time, many
stakeholders recognized that the incident reporting data forms could be improved
and as such so could the analyses. The
Office of Pipeline Safety recently issued notices updating the incident
reporting forms. We especially commend OPS for updating the forms during the
same time it was finalizing and promulgating rules for integrity management in
high consequence areas for hazardous liquid pipelines and proposing rules for
the definition of high consequence areas for natural gas pipelines. New
reporting forms will provide additional data and more precise data regarding the
cause of incidents. Periodic examination of historical experience with respect to
leaks and spills will continue to be of value in understanding where we are on
the journey. It will enable each
party, the Office of Pipeline Safety, State pipeline safety organizations,
pipeline operators and the public to provide input on where they can provide
additional improvements. We
have learned through the years that way to improve safety is through the use of
risk assessment. Risk assessment is
applied to identify and evaluate threats to the integrity of the pipeline,
whether it outside force and corrosion, among others.
It is then through the application of prevention, detection and
mitigation measures that one can continually improve safety. I
have applied risk assessment techniques for over twenty years of my professional
career; in environmental applications related to industrial point source
emissions and hazardous waste disposal, in evaluating the risk of failure and
loss in insurance underwriting, and in managing pipeline integrity.
However, I never appreciated the value of risk assessment and risk
management any more than the day I walked down the hill from the water treatment
plant in Bellingham and into the ravine where the product flowed along a stream
where two boys were playing and another was fishing.
It was so apparent at that moment that this is why we assess risk, both
the likelihood and consequence; and it is why it is important to understand not
just what is the condition of the pipe, but where is the pipe. For those of you that may have been skeptical of the value of
the risk management demonstration program, take a walk down from the water
treatment plant and into the ravine. The
rules related to integrity management that the Office of Pipeline Safety has
been developing over the past three years, build upon the risk management
efforts undertaken in the mid-1990s. Risk assessment is now a key part of the process for managing
integrity as reflected in API RP-1160 for hazardous liquid pipelines and ASME
B31.8S for natural gas pipelines. We
have seen that as information that operators and the Office of Pipeline Safety
have about risk and the condition of pipelines, the expectations and demands on
the tools an operator can apply to managing pipeline integrity grow.
We were concerned in the aftermath of the Bellingham accident as many
parties grabbed onto internal inspection as an apparent silver bullet.
While inspection does play a key role, it alone is not the answer. In our
experience, sustainable improvement is best realized by applying prevention,
detection (inspection) and mitigation in a comprehensive, systematic and
integrated fashion. Examination
of experience with respect to leaks and spills can help address areas where
there are gaps in technology or the processes for managing integrity.
Additional research and development can be undertaken to develop and
demonstrate technology to improve the way in which integrity is managed.
Likewise as technology is demonstrated or where it is necessary to ensure
that work is conducted in a manner to ensure safe operation or produce quality
data, the national consensus standards organizations can develop applicable
standards and recommended practices. In talking about the importance of training and qualification
programs, one of our clients described how they view the importance of ensuring
that work is conducted the same way, regardless of who is doing the work.
They recognized that a supervisor cannot be with each of his or her
employees all day long, day in and day out.
They have developed a simple phrase to capture the intent; it is, "You
would do, as I would do"
That
phrase probably has applicability far beyond pipeline safety and reliability in
ensuring that the public's interest is being met, but we certainly see its
value in the context in which we speak here today.
The
consensus standards developing organizations are leading the way in furthering,
"You would do, as I would do." There
have developed and issued standards for integrity management for hazardous
liquid and natural gas pipelines. They
are working on standards for in-line inspection, pressure testing as well as
direct assessment. They are also
working on standards for qualification of in-line inspection tools as well as
the analysts who analyze and interpret the tool run data.
And they are working on standards for communications and public awareness
programs. These standards will become integral parts of integrity management
programs. I
have spoken today about historical analyses and I will finish with a review of
an example that we believe demonstrates what we have spoken of today.
We believe that Congress established an effective model in the design of
the Transportation Equity Act for the 21st Century in 1998. It put the spotlight on unintentional damage to underground
facilities as a leading cause of natural gas and liquid hazardous pipeline
accidents. It recognized that
excavations performed without prior notification or with inaccurate or untimely
marking of underground facilities can cause damage that results in serious
injuries, fatalities, harm to the environment and disruption of vital services
to the public. Finally, it
recognized that protection of the public and the environment can be enhanced by
a coordinated national effort to improve one-call notification programs, as well
as the effectiveness and efficiency of such programs.
Congress then established its expectations, as a set of minimum
standards, as follows: 1)
appropriate participation by underground facility operators; 2)
appropriate participation by all excavators; and, 3)
flexible and effective enforcement under State law with respect to
participation in, and use of one-call notification systems. Understanding
these expectations, pipeline operators, excavators, one-call centers, locators,
state pipeline safety organizations, utility contractors and others involved in
damage prevention for underground facilities took steps to improve their
existing programs. This was
accomplished by a numerous initiatives including the Dig Safely Campaign, as
well as public outreach and public education programs, among others.
Representatives from the Office of Pipeline Safety, State pipeline safety
organizations, natural gas and hazardous liquid pipeline operators and members
of the public had undertaken an effort to examine and report on the best
practices used in preventing damage to pipeline infrastructure.
This group spent over two years evaluating and documenting best practices
from across all types of energy pipeline systems.
These best practices were shared in a report referred to as Common
Ground, Damage Prevention Best Practices Report in 1999. We
are now beginning to see the benefits of this model in reduced numbers of
incidents caused by outside force. We have seen a reduction of more than 25% in the annual
incidents from outside force from 1996 through 2001, when examining reportable
incidents recorded by the Office of Pipeline Safety. We
encourage you to set expectations and where you deem appropriate minimum
standards. This will provide the
guidance for consensus standards developing organizations to develop the
standards needed to ensure that "you would do what I would do."
This will also encourage pipeline operators and the Federal government to
engage in cooperative research to develop better tools and improve prevention,
detection and mitigation measures for protection of pipelines.
We encourage you to enable the responsible regulatory agency to develop
the performance and prescriptive-based rules that meet the expectations and
minimum standards. Operators that
truly seek a competitive advantage will do so by complying with and going beyond
those rules. We believe that
managing integrity is the price of admission to play in the energy game, a game
that has undergone fundamental change and will continue to do so for years to
come. Mr.
Chairman, I want to thank you and the other Members of the House Commerce
Subcommittee on Energy and Air Quality for providing me the opportunity to share
our perspective this afternoon. Thank
you.
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