Text of
Printed Hearing
The Committee on Energy and Commerce
W.J. "Billy" Tauzin, Chairman
Reauthorization of the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act
Subcommittee on Energy and Air Quality
March 19, 2002
2:00 PM
2318 Rayburn House Office Building
<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:78508.wais]
REAUTHORIZATION OF THE NATURAL GAS PIPELINE SAFETY ACT AND THE
HAZARDOUS LIQUID PIPELINE SAFETY ACT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MARCH 19, 2002
__________
Serial No. 107-87
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
U.S. GOVERNMENT PRINTING OFFICE
78-508 WASHINGTON : 2002
________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
-- -- (Vacancy)
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Energy and Air Quality
JOE BARTON, Texas, Chairman
CHRISTOPHER COX, California RICK BOUCHER, Virginia
Vice Chairman RALPH M. HALL, Texas
RICHARD BURR, North Carolina TOM SAWYER, Ohio
ED WHITFIELD, Kentucky ALBERT R. WYNN, Maryland
GREG GANSKE, Iowa MICHAEL F. DOYLE, Pennsylvania
CHARLIE NORWOOD, Georgia CHRISTOPHER JOHN, Louisiana
JOHN SHIMKUS, Illinois HENRY A. WAXMAN, California
HEATHER WILSON, New Mexico EDWARD J. MARKEY, Massachusetts
JOHN SHADEGG, Arizona BART GORDON, Tennessee
CHARLES ``CHIP'' PICKERING, BOBBY L. RUSH, Illinois
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
GEORGE RADANOVICH, California JOHN D. DINGELL, Michigan
MARY BONO, California (Ex Officio)
GREG WALDEN, Oregon
-- -- (Vacancy)
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Anderson, James D., National Vice-Chairperson, National
Association of Pipeline Safety Representatives............. 29
Chipkevich, Robert, Director, Office of Railroad, Pipeline
and Hazardous Materials Investigations, National
Transportation Safety Board................................ 17
Engleman, Ellen G., Administrator, Research and Special
Programs Administration, Department of Transportation...... 11
Guerrero, Peter, Director, Physical Infrastructure, United
States General Accounting Office........................... 21
Haener, William J., Vice President of Natural Gas, CMS
Engineer Corporation, on behalf of Interstate Natural Gas
Association of America..................................... 47
Hereth, Mark L., Senior Vice President, HSB Solomon.......... 43
Kipp, Robert R., Executive Director, Common Ground Alliance.. 89
Morris, Herman, Jr., President and Chief Executive Officer,
Memphis Light, Gas and Water, on behalf of The American Gas
Association................................................ 63
Nilles, Bruce E., Staff Attorney, Earthjustice, Oakland
Regional Office............................................ 101
Shea, William, President and CEO, Buckeye Pipe Line Company,
L.P., on behalf of Association of Oil Pipe Lines........... 54
Sullivan, Edward C., President, Building and Construction
Trades Department, AFL-CIO................................. 96
(iii)
REAUTHORIZATION OF THE NATURAL GAS PIPELINE SAFETY ACT AND THE
HAZARDOUS LIQUID PIPELINE SAFETY ACT
----------
TUESDAY, MARCH 19, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Energy and Air Quality,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2318, Rayburn House Office Building, Hon. Joe Barton
(chairman) presiding.
Members present: Representatives Barton, Ganske, Norwood,
Tauzin (ex officio), Sawyer, John, Markey, Gordon, Barrett, and
Dingell (ex officio).
Staff present: Bill Cooper, majority counsel; Andy Black,
policy coordinator; Peter Kielty, legislative clerk; Sue
Sheridan, minority counsel; and Rick Kessler, minority
professional staff.
Mr. Barton. The subcommittee will come to order. First, we
wish to thank the Science Committee, which I also serve on in
addition to serving on the Energy and Commerce Committee; and
its chairman, the Honorable Sherwood Boehlert of New York, for
allowing us to use the full committee hearing room of the
Science Committee, since the Energy and Commerce Committee
hearing room is currently under renovation.
Today we are going to begin our review of the pipeline
safety laws. It is time for Congress to reauthorize the Natural
Gas Pipeline Safety Act and the Hazardous Liquid Pipeline
Safety Act.
We welcome our witnesses today to discuss the current
status of existing laws, and hear about their recommendations
about any changes, if any, that they would proffer to the
subcommittee.
As I said, I want to thank Chairman Boehlert for allowing
us to use the Science Committee hearing room. At the staff
level, we would like to thank David Goestand and Jeffrey
Donnelly of the Science Committee and the Energy and Commerce
Committee for helping us to use this room.
I find pipelines to be an important part of our Nation's
energy infrastructure and our energy future. Without a safe and
consistently expanding system of pipelines, the Nation's
economy would not fare as well, and American Consumers would
have less fuel for heating and driving.
Pipelines continue to be the safest method of transferring
natural gas and liquid petroleum products over long distances.
There are accidents and have been accidents in the past.
Congress and regulators should do the very most that we can
do to promote safety and prevent accidents in the future. I
would expect later this spring that the subcommittee consider
legislation reauthorizing the pipeline safety laws. As of
today's hearing, it is not clear what bill or bills that we
will consider.
Chairman Tauzin of the full committee and myself are
greatly interested in pursuing a consensus bill with Mr.
Boucher and others on the subcommittee. My intention is to have
the staffs work together over the next few weeks to see if such
a consensus bill can be drafted.
Chairman Tauzin and I have in the meantime co-sponsored
H.R. 3609 with the Transportation Committee Chairman, Don
Young, from Alaska. If consensus is not reached, some bill will
have to be moved and chosen as the appropriate vehicle.
I am going to invite the witnesses to discuss the recent
regulations that have been promulgated by the Office of
Pipeline Safety, and their responses to the General Accounting
Office with suggestions on practical reforms that do not overly
reduce the flow of precious commodities to waiting consumers or
needlessly increase private transportation which the consumer
ultimately pays.
I would also be interested in hearing the Office of
Pipeline Safety's response to the criticisms as to its
responsiveness to mandates and recommendations. Finally, I want
to inform the subcommittee members that Congressman Boucher has
had some flooding in his district.
And I talked to him by phone about 30 minutes ago, and it
is very unlikely that he will make this hearing, but he stated
that the Honorable Chris John of Louisiana is going to be a
more than adequate substitute for him on this matter.
I do want to thank Congressman Boucher for his and his
staff's help in putting together today's hearing. We have
worked very well together at the staff level, and we have a
good group of witnesses to talk to us about pipeline safety.
So with that, I would recognize the Honorable Chris John of
Louisiana for any opening statements that he would wish to
make.
[The prepared statement of Hon. Joe Barton follows:]
Prepared Statement of Hon. Joe Barton, Chairman, Subcommittee on Energy
and Air Quality
Today the Subcommittee will begin its review of pipeline safety
laws. It is time for Congress to reauthorize the Natural Gas Pipeline
Safety Act and the Hazardous Liquid Pipeline Safety Act. I welcome the
witnesses here today to discuss the current status of pipeline safety
laws, regulations, and practices.
I would like to thank Chairman Boehlert of the Science Committee
for letting us use this hearing room today, and thank David Goldston
and Jeffrey Donald of the Science Committee and Peter Kielty of the
Energy and Commerce Committee for setting us up over here smoothly.
Pipelines are an important part of our Nation's energy
infrastructure and our energy future. Without a safe and consistently-
expanding system of pipelines, our Nation's economy would not fare as
well and American consumers would have less fuel for heating and
driving. Pipelines continue to be the safest method of transporting
natural gas and liquid petroleum products over long distances. There
have been accidents in the past, and Congress and regulators should do
what we can to promote and improve appropriate best practices.
Later this spring, I expect this subcommittee to consider
legislation reauthorizing pipeline safety programs and laws. It is not
clear what bill we will consider. Chairman Tauzin and I are greatly
interested in pursuing a consensus bill with Mr. Boucher, Mr. Dingell,
and all Members of the Subcommittee. I will direct my staff to work
over the next few weeks to see if an agreement can be reached. Chairman
Tauzin and I have cosponsored H.R. 3609 with the Transportation
Committee leadership, as well. If a consensus is not reached, that bill
or something like it could also be a markup vehicle.
I invite witnesses to discuss the recent regulations promulgated by
the Office of Pipeline Safety (OPS), the OPS response to reports by the
General Accounting Office (GAO), and suggestions on practicable reforms
that do not overly reduce the flow of precious commodities to wanting
consumers or needlessly increase the price of transportation, which
consumers ultimately pay. I am also interested in hearing OPS' response
to the criticisms concerning its responsiveness to mandates and
recommendations. While I am sure several were excellent, I am also
quite certain that several may have been well-intended, but ill-
conceived.
Finally, I want to thank my good friend Mr. Boucher for his help
putting together today's hearing. I look forward to working with him on
this important issue. He is not here because he is helping his district
cope with some flooding. I wish he and his constituents well in their
recovery. I want to thank Congressman John for being here to take his
place. He too, is an important Member of the Subcommittee and has great
interest in this issue.
Mr. John. Thank you, Mr. Chairman. As you mentioned
earlier, our colleague, Mr. Boucher, couldn't be with us today,
and I was glad to sit in for him during today's hearing. I am
really pleased to have the opportunity to preside over the
hearing because pipeline safety is an important issue to
constituents in the Seventh Congressional District of
Louisiana.
As you know, Mr. Chairman, I represent the Onshore Hub of
the Offshore Oil and Gas Industry, which is in Louisiana's
southwest corner. Many of the fuels, chemicals, and plastics
that people in this room use begin their journey in the
commerce of oil and natural gas that is produced right off-
shore of Louisiana in the Gulf of Mexico and along Louisiana's
shoreline.
From there it travels via pipeline into refineries,
chemical plants, or power generating facilities in our State,
and then from there across the country. Pipelines are the
lowest cost, environmentally accessible, and in many instances
the only feasible mode of transportation on land to distribute
large volumes of petroleum and natural gas.
It is clear that our Nation needs to expand and improve our
pipeline system for our economy if we expect to meet future
demands.
We need a strong, flexible pipeline infrastructure policy
to supply the liquid fuel and gas demands in every region of
this great country.
However, public support and public confidence for extending
our pipeline infrastructure is in my mind directly tied to the
public confidence that they have in pipeline safety.
As you mentioned earlier in your statement, Mr. Chairman,
pipelines are statistically the safest method of transportation
for oil and oil products, and natural gas. However, accidents
as you mentioned do happen, and every member of this committee
and in this Congress is very sensitive to the concerns raised
by members who experience major pipeline accidents in their
districts.
I feel that Congress has a legitimate role in making sure
that our pipeline infrastructure is not only safe, but that the
pipeline operators are qualified, and that reasonable efforts
are undertaken by industry to minimize these accidents.
Mr. Chairman, you are also aware that people have a
tendency to lump all pipelines together, with little regard for
the dramatic differences between liquid, gas transmission, and
gas distribution systems.
The facts are that each one of these systems vary quite
differently in both design and also in operation. We cannot and
should not regulate these different systems in the very same
way.
No engineering or scientific analysis has provided
justification for a one size fits all approach to inspecting
pipelines. I believe we can find consensus in this committee,
and during this Congress on pipeline safety legislation.
There are several legitimate legislative proposals out
there, and quite frankly I think they have much more in common
than some people are willing to acknowledge. There are some
significant differences between the leading proposals, and the
greatest is the frequency of pipeline inspections.
I hope that this oversight hearing will pave the way for
members over the Easter break to work on bridging the gaps so
that we can move forward with a bipartisan consensus product
out of this subcommittee.
I am also committed to work with the ranking member of the
full committee, Mr. Dingell, on finding a consensus that
frankly we could not find in the 106th Congress. I look forward
to the testimony today from the two panels, and I yield back
the balance of my time, Mr. Chairman.
Mr. Barton. The gentleman is welcome, and the chair now
recognizes the distinguished ranking member of the full
committee, the Honorable John Dingell of Michigan, for an
opening statement.
Mr. Dingell. Mr. Chairman, I thank you, and I commend you
for holding this oversight hearing today on pipeline safety.
I am particularly pleased that both the General Accounting
Office, the GAO, and the National Transportation Safety Board,
NTSB, are here today because they have attributed greatly to
the effort to improve the regulation and safety of the Nation's
pipelines.
I also want to recognize the work in the current office of
the Pipeline Safety, Director Stacy Gerard, who despite my
strong and continued misgivings about OPS, there is no doubt
that Ms. Gerard has worked hard to begin cleaning up the
substantial mess left behind by her immediate predecessors.
This subcommittee and this committee has had a long
interest in pipeline safety, and I think it necessarily so. In
1996, the Congress turned its back on the American people and
the environment when it enacted legislation that substantially
cut into our Nation's pipeline safety laws.
And it put industry profits on the same level as human
life, and worse, it was enthusiastically supported by the
Federal Pipeline Safety Agency, which appeared to be much more
interested in providing better service to its industry
customers than in serving the public good.
Unfortunately, the consequences of the Federal Government's
neglect in this area are infamous. In August 2000, 12 people, 5
of them small children, died in a natural gas explosion in
Carlsbad, New Mexico.
Before that a gasoline pipeline blast in Bellingham,
Washington, killed three people, including two, 5 year olds. In
the last 2 years, pipeline accidents caused millions of dollars
in environmental damages, disrupted fuel supplies, contributed
to price spikes, and forced people to evacuate their homes.
Concerned that the combination of a weak law and an absence
of regulation are also recipes for a disaster. Just over 3
years ago, I asked the General Accounting Office to investigate
the effectiveness of both OPS and the 1996 law.
GAO's May 2000 report revealed an agency that places a
disturbing amounts of faith in the industry that is supposed to
regulate it, and it is either unable or unwilling to carry out
the responsibilities that it has under the law.
In its report to the General Accounting Office, it was
found these unfortunate things. One, OPS had almost eliminated
the use of fines, reducing the use of monetary penalties by
more than 90 percent between 1990 and 1998.
Two, at the same time that OPS stopped fining violators,
major pipeline accidents increased by approximately 4 percent
annually, and killing 226 people, and injuring over 1,030
others, and resulting in about $700 million in property damage.
Three, OPS was not complying with the law, and it failed to
implement nearly half of the 49 requirements mandated by
Congress since 1988 to improve the safety of pipelines.
Four, OPS repeatedly ignored recommendations by NTSB. Five,
OPS information on pipeline accidents is extremely limited and
ill-managed. It seems like something should be done here.
Six, OPS was moving ahead with a risk-based approach to
safety regulation,despite a complete lack of quantifiable
evidence to justify such a change. This last point continues to
be of special concern to me.
According to GAO, many of the companies participating in
risk management demonstration programs, which by the way
includes the bastion of corporate responsibility known in the
press today as ENRON, are not even collecting the types of data
necessary to support an evaluation of the program safety
impacts.
The fact is that there is no real empirical evidence to
support OPS's risk-based approach to safety regulation. I would
note that it was conceived in a rather curious kind of
situation in the dark of night, without any consultation with
anybody, and without ever having been properly considered in
this body.
I would note also that this ready, aim, fire approach
strikes me as the same kind of reckless behavior that led to
OPS's disastrous enforcement policy of the last few years. In
the next year, OPS must take bold steps to clean up its act.
Unfortunately, the administration's fiscal year 2003 budget
pushes OPS's precisely in the wrong direction. It cuts overall
pipeline safety funding by $5 million below last year's funding
levels.
Moreover, the administration's budget unwisely proposes to
transfer OPS pipeline safety research work currently being
conducted at the Department of Energy. Clearly, OPS cannot now
handle its workload.
To layer upon the agency still another mission is both
foolish and dangerous. In closing, I note that prior to 1995,
this committee, on a broadly bipartisan basis, led the Congress
to enact legislation that required biannual inspections,
increased the use of internal inspection devices, replacement
of old pipe with new lines, and to accommodate the passage of
smart things, and the creation of a national inventory of
pipeline, and the licensing of operators amongst other things.
Yet, 48 percent of the gas pipeline industry has failed to
provide the Department of Transportation with maps of their
pipeline system. Also, the gas industry have failed to ensure
that old pipelines are replaced by new lines that can
accommodate the smart things, and make possible a really good
program of inspection and safety in this area.
It does not need to be this way. I want you to know, Mr.
Chairman, that I committed to working in good faith with both
you and with our Chairman, Mr. Tauzin, as well as all of my
colleagues, to enact meaningful pipeline safety reauthorizing
legislation.
I want you to know, however, that I am equally committed to
fighting any legislation that would maintain the status quo, or
worse, roll back the new protection of pipeline workers, the
public, and the environment. Thank you, Mr. Chairman.
[The prepared statement of Hon. John D. Dingell follows:]
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Mr. Chairman, thank you for holding this oversight hearing on
pipeline safety. I am particularly pleased that both the General
Accounting Office (GAO) and the National Transportation Safety Board
(NTSB) are here today because they have contributed greatly to the
effort to improve the regulation and safety of our pipelines. I also
want to recognize the work of current Office of Pipeline Safety (OPS)
Director Stacey Girard: despite my strong continued misgivings about
OPS, there is no doubt that Ms. Girard has worked hard to begin
cleaning up the substantial mess left behind by her immediate
predecessors.
In 1996, Congress turned its back on the American people and the
environment when it enacted legislation that substantially gutted our
Nation's pipeline safety laws and put industry profits on the same
level as human life. Worse, it was enthusiastically supported by a
Federal pipeline safety agency more interested in providing better
service to its industry ``customers'' than in serving the public good.
Unfortunately, the consequences of the Federal Government's neglect
in this area are infamous. In August 2000, 12 people--five of them
small children--died in a natural gas pipeline explosion in Carlsbad,
New Mexico. Before that, a gasoline pipeline blast in Bellingham,
Washington, killing three people--including two five-year-olds. In just
the last two years, pipeline accidents caused millions of dollars in
environmental damage, disrupted fuel supplies, contributed to price
spikes and forced some people to evacuate their homes.
Concerned that the combination of a weak law and an absent
regulator was a recipe for disaster, just over three years ago I asked
the General Accounting Office to investigate the effectiveness of both
the OPS and the 1996 law. GAO's May 2000 report revealed an agency that
places disturbing amounts of faith in the industry it is supposed to
regulate, and is either unable or unwilling to carry out any of its
responsibilities under the law. In its report GAO found that:
<bullet> OPS had almost eliminated the use of fines, reducing the use
of monetary penalties by more than 90 percent between 1990 and
1998.
<bullet> At the same time OPS stopped fining violators, major pipeline
accidents increased by approximately four percent annually,
killing 226 people, injuring over 1,030 others, and resulting
in about $700 million of property damage.
<bullet> OPS was not complying with the law, having failed to implement
nearly half of the 49 requirements mandated by Congress since
1988 to improve the safety of pipelines.
<bullet> OPS repeatedly ignored recommendations by NTSB.
<bullet> OPS information on pipeline accidents is extremely limited and
ill-managed.
<bullet> OPS was moving ahead with a risk-based approach to safety
regulation despite a complete lack of quantifiable evidence to
justify such a change.
This last point continues to be of particular concern to me.
According to GAO, many of the companies participating in the risk
management demonstration program--which, by the way, include that
bastion of corporate responsibility known as Enron--are not even
collecting the types of data necessary to support an evaluation of the
program's safety impacts. The fact is that there is no real empirical
evidence to support OPS risk-based approach to safety regulation. This
ready, fire, aim approach strikes me as the same kind of reckless
behavior that led to OPS's disastrous enforcement policy of the past
few years.
In the next year, OPS must take bold steps to clean up its act.
Unfortunately, the Administration's fiscal year 2003 budget pushes OPS
in precisely the wrong direction by cutting overall pipeline safety
funding by $5.0 million below last year's funding levels. Moreover, the
Administration's budget unwisely proposes to transfer to OPS pipeline
safety research work currently being conducted at the Department of
Energy. Clearly, OPS cannot handle its current workload. To layer upon
the agency still another new mission is both foolish and dangerous.
In closing, I note that prior to 1995, this Committee, on a broadly
bipartisan basis, led Congress to enact legislation that required
biannual inspections, increased use of internal inspection devices or
``smart pigs,'' the replacement of old pipe with new lines that could
accommodate the passage of these smart pigs, the creation of a national
inventory of pipelines, and the licensing of operators, among other
things. Yet, 48 percent of the gas pipeline industry still has failed
to provide the Department of Transportation with maps of their pipeline
systems. Also, OPS and the industry have failed to ensure that old
pipeline is replaced by new line that can accommodate smart pigs.
It doesn't have to be that way. I want you to know, Mr. Chairman,
that I am committed to working in good faith with Chairman Tauzin and
you--as well as all my colleagues--to enact meaningful pipeline safety
reauthorization legislation. I want you to know, however, I am equally
committed to fighting any legislation that would maintain the status
quo, or worse, roll back the few protections left to pipeline workers,
the public, and the environment.
Mr. Barton. I thank the gentlemen from Michigan. We are
told that Dr. Norwood is here, and there he is. Would the
gentleman from Georgia wish to make an opening statement?
Mr. Norwood. Very briefly, Mr. Chairman, if I may. I'm
sorry that I was late. Having these hearings on Tuesday
afternoons makes one rush around a little bit, but I do commend
you for holding this hearing today on what I believe to be a
very important issue to all Americans.
It is encouraging to me to see this committee work together
in conjunction and coordination with the Transportation and
Infrastructure Committee to ensure the safety and reliability
of the pipeline network in this country.
To me, public confidence in this expansive network is
paramount to not only maintaining operability and reliability
of the system itself, Mr. Chairman, but effectively meeting
critical energy needs.
Ensuring public safety of this system is a responsibility
of Congress, and I am proud to be a co-sponsor of H.R. 3609.
Again, let me thank you for holding this hearing today, and
don't expect me to be this brief every time.
Mr. Barton. We thank the gentleman and recognize the
gentleman from Massachusetts, for an opening statement.
Mr. Markey. Thank you, Mr. Chairman. All of us have a
vested interest in the safety and purity of our Nation's
pipeline. They crisscross our Nation, delivering 23 trillion
cubic feet of natural gas, and 13 billion barrels of petroleum
products per year, which is instrumental in keeping our economy
running.
Many of our constituents live in close proximity to these
pipelines and are justifiably concerned about the risk that
pipeline accidents or explosions could pose. While we have been
spared the large death tolls that other countries have
experienced, we are not immune from such events, as the El Paso
Natural Gas accident in Carlsbad, New Mexico, demonstrated.
In that case the corrosion of a segment of line that had
not been inspected in 50 years appeared to have been the cause.
According to today's testimony, over half of the pipelines in
the U.S. were originally constructed more than 30 years ago.
So the adequacy of inspections and missions of all the
pipelines is something that I am particularly interested in
hearing more about.
Six months ago a discussion of reauthorizing the pipeline
safety program would have drawn little interest beyond the
effected industry, but in the last 6 months the public has
begun to focus a lot more on infrastructure security issues
following the terrorist attacks of September 11.
Six months ago, we would have asked how the Office of
Pipeline Safety was coping with its statutory backlog. Now we
must ask if what OPS is doing, or what OPS is doing to decrease
the vulnerability of our pipeline networks from premeditated
attacks.
The challenge to our panelists today is to help us
understand what is necessary to mitigate both the ongoing
risks, like accidental third-party damage, corrosion, and
equipment failure, and the more sinister threats, like
terrorist attacks to pipelines.
When we last reauthorized the Natural Gas Pipeline Safety
Act and Hazardous Liquid Pipeline Safety Act in 1996, the
majority failed to emphasize the risk assessment and cost
benefits requirement over traditional inspection and
enforcement.
I had posed a bill at the time because I feared that it
would trap OPS in a paralysis by analysis that would prevent it
from moving to addressing important safety issues. Six year
gone, we still don't know if this program has worked.
Our last hearing in 1999 provided an inclusive answer to
this question, and so I hope that our panelists today will
enlighten the committee so that we can correct any deficiencies
in the current regulation.
I am particularly concerned with the GAO's reported decline
in OPS enforcement actions, and their use of fines for
enforcement purposes without any evidence that this policy is
improving compliance and pipeline safety.
I am also very troubled by the OPS's continued foot-
dragging in responding to National Transportation Safety
Board's safety recommendations. And finally in our post-
September 11 world, we are to think the unthinkable.
We have to avoid, and how do we avoid, and in the worst
case, deal with a well-planned attack on our energy
infrastructure aimed at hurting citizens, and/or compromising
our ability to supply critical energy resources to parts of the
Nation.
As some of today's testimony points out, no coordinated
response plan exists for region-wide emergencies. I have seen
in my own district the confusion that overlapping Federal,
State, and local responsibilities can cause, leading to
incomplete protection of communities near the Distrigas LNG
facility in Everett, Massachusetts.
I hope in this hearing that we can explore some of those
problems, and work toward efficient preparation of a
coordinated response plan. We must also address the balance
between the public need to know about locations of hazardous
pipeline and the security needs to keep critical knowledge from
potential terrorists.
But perhaps the overarching question is whether or not OPS,
which has a dismal track record of implementing Congressional
mandates, is capable of providing the added protections and
safeguards to our pipeline infrastructure.
And if they are incapable of providing this protection, who
should. I look forward, Mr. Chairman, to today's testimony. I
thank you for having this hearing.
Mr. Barton. I thank the gentleman. We would like to welcome
the gentleman from Ohio, Mr. Sawyer, and see if he has an
opening statements.
Mr. Sawyer. Thank you, Mr. Chairman. Just a brief one. I am
grateful to you for holding this hearing. Pipeline accidents in
the last few years have underscored the need for oversight of
the 2.2 million miles of pipeline.
Last week in Cleveland near my district, an intersection
was engulfed by flames from a gas line that was broke during
the course of repair of a nearby water line. It was an
extraordinary experience.
Fortunately, nobody was hurt, but over 100 homes and
businesses had to be evacuated, and 2,000 people were left
without power and heat the following night. I join in my
colleagues concern if that is the type of damage that can be
done by accident, just think of what could be done on purpose.
About half the pipelines in this country were built before
1970. Most of them are in very sound condition, and most of
them operate under State requirements that generally tend to
serve the public well.
And Congress should not let another year pass without a
meaningful pipeline safety bill. With that, I am going to
conclude this opening statement and yield back the balance of
my time, and submit the rest of my statement for the record.
Thank you, Mr. Chairman.
Mr. Barton. Seeing no other members present, the Chair
would ask unanimous consent that all subcommittee members not
present have the requisite number of days in which to put into
the record their opening statements. Hearing no objection, so
ordered.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Greg Ganske, a Representative in Congress
from the State of Iowa
Thank you Mr. Chairman. Pipeline safety is an important issue for
our country. Given that we are moving liquid and gaseous materials
through more than one million seven hundred and fifty thousand miles of
pipeline in our country, it is an extensive undertaking and one that
must be taken very seriously. Recent events have caused the
reexamination of safety and security issues related to all aspects of
our society and pipelines are no exception. Meeting the demand for 23
trillion cubic feet of natural gas and 13 billion barrels of petroleum
products each year is a daunting undertaking. There is no question that
moving the products by pipeline is the best and safest alternative.
Therefore, we must make every effort to assure that we have taken all
the prudent steps necessary to make pipelines even safer.
I know that the General Accounting Office has in the past
questioned the reaction time and responsiveness of the Office of
Pipeline Safety to concerns which have been raised. I hope the
testimony today will indicate that those concerns have been addressed
and that the Department of Transportation has moved aggressively to
implement all necessary steps to achieve a higher level of confidence
in pipeline safety across the nation. I thank the witnesses who have
taken the time to join us today and I look forward to their testimony.
Mr. Chairman I yield back my time.
______
Prepared Statement of Hon. George Radanovich, a Representative in
Congress from the State of California
Mr. Chairman, today's hearing is a vital step in restoring and
maintaining confidence in America's pipeline network. We must continue
to operate, upgrade, and expand our pipeline network in order to meet
our nation's energy needs, and it is our duty to meet these needs with
reasonably priced fuels.
In my home state of California, pipeline capacity remains
insufficient to meet the supply of natural gas from regulated pipelines
entering the state. This problem leaves our state dependent on
hydropower from other states and praying for rain and cool weather. I
believe the hearing today will aid us in crafting a solution to
California's intrastate pipeline problem, as well as help us to resolve
other pipeline issues throughout the nation.
It is also imperative that we upgrade and expand our pipelines
without diminishing the reliability, efficiency and security of the
delivery system. Collaborative research and development efforts must
also be strengthened in order to enhance existing damage prevention
programs, which will further reduce the amount of fatal accidents.
Pipelines are the safest mode of transporting hazardous liquids and
natural gas, but accidents are inevitable. Increased communication with
the public regarding pipeline safety issues can minimize these
accidents and their affects. This goal can be achieved without
compromising security. However, state and local officials must be
provided with adequate information.
In the end, I hope we can work together to forge bipartisan
legislation that will build on our Committees' recent progress and
result in continued improvements in pipeline safety.
Thank you, Mr. Chairman, for holding this hearing today. I look
forward to the witnesses' testimony.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Thank you Chairman Barton for holding what promises to be a very
informative safety hearing today. The information we gather this
afternoon will be most useful as we consider reauthorization of the
federal pipeline safety program.
We all recognize that pipelines play a critical role in our
nation's energy infrastructure. They help enable our economic
prosperity, moving nearly 23 trillion cubic feet of natural gas and 13
billion barrels of petroleum products on a yearly basis.
Compared with other modes of moving freight--such as barges,
trucks, and railroads--pipelines represent the safest form of
transportation available. But accidents do happen, which is why
Congress has provided for federal pipeline safety regulation, and why
we will be discussing safety today.
And of course, safety concerns have become much more acute
following the terrorist attacks of September 11. So I look forward in
particular to the perspective both the government and industry can
offer us on how best to enhance our infrastructure security.
The Department of Transportations Office of Pipeline Safety (OPS)
performs a vital function. It was authorized by Congress to issue and
enforce regulations to provide for safety in the construction and
operation of pipelines. Yet the OPS program's congressional
authorization expired at the end of fiscal year 2000.
Certainly, given our concerns about safety, given our duty to
assure the public that this vital infrastructure meets the proper
standards, certainly we must address reauthorization with some urgency.
This hearing will help us move forward in this process, so we can
assure that the safety programs can do the job.
Now, views differ on the best way to regulate pipeline safety. But
we all agree that a regulatory framework that protects the public and
the environment, while recognizing the operational needs of pipelines,
is not only desirable, but necessary.
Therefore, I look forward to the discussion about measures the OPS
is taking to keep up with the safety demands of the time. What security
measures are necessary to reduce terrorist threats? How well is OPS
responding to new statutory requirements and recommendations from other
safety agencies?
I appreciate the witnesses' willingness to give their time and
views in this process. Thank you. And, Mr. Chairman, thank you again
for holding this hearing.
Mr. Barton. We are now going to hear from our first panel.
We have Ms. Ellen Engleman, who is the Administrator for the
Research and Special Programs Administration for the Department
of Transportation, which is the administration which the Office
of Pipeline Safety is located.
She is going to give her opening statement, and as soon as
she does that, then the other three members can come forward
and give their statements, and we will ask all four questions.
So we welcome you. Your testimony is in the record in its
entirety, and we ask that you summarize it in 5 minutes.
STATEMENTS OF ELLEN G. ENGLEMAN, ADMINISTRATOR, RESEARCH AND
SPECIAL PROGRAMS ADMINISTRATION, DEPARTMENT OF TRANSPORTATION;
ROBERT CHIPKEVICH, DIRECTOR, OFFICE OF RAILROAD, PIPELINE AND
HAZARDOUS MATERIALS INVESTIGATIONS, NATIONAL TRANSPORTATION
SAFETY BOARD; PETER GUERRERO, DIRECTOR, PHYSICAL
INFRASTRUCTURE, UNITED STATES GENERAL ACCOUNTING OFFICE; AND
JAMES D. ANDERSON, NATIONAL VICE-CHAIRPERSON, NATIONAL
ASSOCIATION OF PIPELINE SAFETY REPRESENTATIVES
Ms. Engleman. Thank you, Mr. Chairman, and members of the
subcommittee. My name is Ellen Engleman, and I do have the
privilege to serve as the Administrator for Research and
Special Programs for the U.S. Department of Transportation.
As you are aware the Office of Pipeline Safety is one of
six major departments within RSPA. I appreciate the opportunity
to inform you of the continued progress that we are making to
improve the protection of the pipelines for our national energy
infrastructure.
I am encouraged by the passion and commitment by members of
this committee and Congress as our common goal is the safety of
the American people. As Secretary Mineta and President Bush
have emphasized, our national transportation system plays a
critical role in our Nation's economic strengths.
Our oil and gas pipelines are the backbone of the Nation's
energy infrastructure. Moving our resources for national
defense, to heat and cool our homes, to generate power for
business and to fuel an unparalleled national transportation
system.
As overseers of the Nation's 2.1 million miles of pipeline,
we hold the people's trust to ensure that vital energy
resources will be delivered safely and securely. We are using a
number of statutory changes to achieve this. We are setting the
designs for construction, testing, operation, maintenance and
repair of pipelines. That is our job.
Our job is to ensure the qualifications of personnel who
perform pipeline safety and to respond to emergencies when the
system fails. When those standards are not followed, we will
enforce the law. We take our job seriously, and I assure you
that we are on the job and we are not alone.
Congress has given us the authority to share oversight of
these tasks with the States, which are primarily responsible
for overseeing intrastate pipeline systems. We also work
closely with our regulatory community.
This year the President's budget request reflects the
importance the administration places on assuring the safety of
pipelines, and has added significant additional resources to
support more inspection and enforcement.
In 2003, if the President's budget is accepted, we will
have 89 inspectors, and it should be noted that 73 percent of
our budget for the Office of Pipeline Safety is dedicated to
enforcement and inspection.
My prepared testimony is on the record, and let me just
summarize some of the main points. First of all, at the start
of my tenure in September of 2001, there were 65 outstanding
mandates and recommendations from Congress and the National
Transportation Safety Board, the General Accounting Office, and
the Department of the Inspector General.
By the end of this month, we believe that we will have
addressed nearly 50 percent of these remaining open items in a
meaningful way, as well as the Congressional mandates. In
January, we completed four important rulemakings on integrity
management, pipeline repair, accident reporting, and corrosion
control for the housing for the pipelines.
We will have the slate clean in 12 months--that I am
dedicated to personally and professionally. We have executed an
aggressive plan. Let me show you our plan. We will continue to
fill regulatory gaps and particularly we will finish the
integrity rule to complete our integrity management approach
for oil and gas trasmission lines.
This is performance based, to include pipeline safety. We
will continue to strengthen our enforcement efforts through a
better use of our tools, including fines. We have proposed $9
million in civil penalties in the last 18 months, and processed
six times the number of cases in the year 2001 over the
previous year.
Ten years ago, the average fines were $17,000. The average
fine today is $171,000. We will continue to improve operator
and regulator qualifications. We also must focus on reducing
excavation damage to pipelines, one-third of the critical cause
for pipeline failure.
If you look at the pipeline incidents, and we have copies
for you that have been given to you, please note that in the
last 10 years there has been a 39 percent decrease in liquid
pipeline accidents.
In gas distribution pipeline incidents, a 15 percent
decrease, and in gas transmission pipeline incidents, a 1
percent increase, pretty much flatline.
It also should be noted that given that third-party damage
is critical, approximately one-third of the incidents caused by
that, please note that there has been a 30 percent decrease in
the last 10 years in excavation damages.
And that is in spite of a 57 percent increase in housing
starts, and a 13 percent increase in pipeline mileage. These
actions are a beginning, and I am determined to further improve
our record, again within the next 12 months.
We are also focusing on research, and we need to develop
advanced, innovative technology. We have developed a
comprehensive plan, with a multi-year technology match that
will provide a return on investment within 36 months.
Finally, in security, we are looking at security and
safety. Yes, prior to 9-11, we focused on safety and the
accident; and since 9-11, we must focus on safety and the
deliberate incident.
On September 11, we made over 1,000 telephone calls to
pipeline operators to assess the security of pipeline
facilities and personally address security issues. We also
supported security protocols, which were developed in
coordination with the Department of Energy, the FBI, and the
new Transportation Security Administration. We also focused on
streamlining the communications process and reviewing all
aspects of security for our pipelines.
We are directing the pipeline industry to improve
protection. We are also making sure that our standards for
security practices are closely coordinated with the Office of
Homeland Security.
In summary, RSPA is facing our challenges with a vision and
an action plan. We are cleaning up our record. We are
strengthening our regulatory structure through a systematic,
comprehensive approach to safety evaluation.
And we are aggressively enforcing our requirements. We are
taking a leadership role in advancing technology for pipeline
safety. And, in coordination with the Transportation Security
Administration, we are addressing security and safety as
combined goals.
We need your help. We all agree that reauthorization is
essential to raise the public's confidence in pipeline safety.
Americans need to know that we are upholding their trust and
doing everything possible to ensure the security and safety of
pipelines.
Toward these goals, we are pleased that Congress is
renewing its efforts, and at the appropriate time I would be
happy to answer any additional questions. Thank you.
[The prepared statement of Ellen G. Engleman follows:]
Prepared Statement of Ellen G. Engleman, Administrator, Research and
Special Programs Administration
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.
Mr. Barton. Thank you. We will now like to have the other
three members of the panel come forward. We have Mr.
Chipkevich, who is the Director of the Office of Railroad
Pipeline and Hazardous Materials Investigations for the
National Transportation Safety Board.
We have Mr. Peter Guerrero, who is the Director of the
Physical Infrastructure Program at the U.S. General Accounting
Office; and we have Mr. James D. Anderson, who is the National
Vice-Chairman of the National Association of Pipeline Safety
Representatives.
Gentlemen, we welcome you to the subcommittee, and your
statements are in the record. We will give each of you 5
minutes to summarize, and we will start with Mr. Chipkevich.
STATEMENT OF ROBERT CHIPKEVICH
Mr. Chipkevich. Thank you, Chairman Barton, and members of
the subcommittee. I am pleased to represent the National
Transportation Safety Board before you today to discuss the
pipeline safety issues.
Pipelines carry more hazardous materials in the United
States than any other form of transportation, and nearly
200,000 miles of hazardous liquid pipelines, delivering 14.4
billion barrels of petroleum products annually.
More than 21 trillion cubic feet of natural gas is
delivered through 2 million miles of pipelines. RSPA's pipeline
safety recommendation acceptance rate of 70 percent is the
lowest of all model administrations, and for many years, the
Safety Board has been critical of RSPA's delay in providing
needed pipeline safety improvements.
We are encouraged, however, with recent RSPA action,
particularly in areas of pipeline integrity, data collection,
and environmental damage protection.
Continued operation of pipelines with discoverable
integrity problems has been a recurring issue in safety board
investigations, and our recommendations in this area date back
to 1987.
Recently published PIMHCA rules will require integrity
assessments for liquid pipelines in high consequence areas.
Although the Safety Board provided favorable comments to much
of this rule, we believe that pipeline integrity management
programs must ensure that pipelines located outside high
consequence areas are also adequately assessed and maintained,
which was not addressed in the final rule.
Another pipeline integrity issue, corrosion, is a leading
cause of hazardous liquid pipeline failures. On December 27,
2001, OPS issued a final rule that we believe will improve the
effectiveness of corrosion protection requirements for all
hazardous liquid pipelines, and addresses other issues of
corrosion included in our open recommendations.
The Safety Board has for some time found RSPA's data
collection to be inadequate for trend analysis and pipeline
operator performance evaluations. In May of 2001, OPS issued
new accident reporting requirements for gas transmission
pipelines, and in January of this year issued new accident
reporting requirements for hazardous liquid pipelines.
The new reporting requirements include information that the
Safety Board believes will assist with operator evaluation and
trend analysis. We understand that OPS is now working on
improving the accident data reporting requirements for gas
distribution systems, and implementing which would be very
important a quality control system to be sure that the
information reported on the accident reports is accurate.
Excavation damage remains the leading cause of pipeline
accidents, and as a result the NTSB accident investigations
over the years we have issued numerous safety recommendations
on this issue.
We are aware of research that is intended from OPS,
including improved pipeline location technologies, and improved
inspection technologies for finding pipeline defects, real time
monitoring to detect mechanical damage and leaks, and improved
technology to avoid potential damage to underground facilities.
We are hopeful that the ongoing research which addresses
many of the Safety Board recommendations, will lead to
increased excavation prevention safety.
As previously mentioned, we are encouraged by much of the
work that RSPA has undertaken. However, the Safety Board
believes that insufficient progress has been made in the
qualification and training requirements for personnel operating
pipelines.
In 1987 and 1996, respectively, the Safety Board
recommended that OPS require operators to develop training and
testing programs to qualify employees, and asked RSPA to
complete its rulemaking and operator qualification, training,
and testing standards, and to require operators to test
employees on safety procedures they are expected to follow, and
to demonstrate that they can correctly perform that work.
In January 1999, in comments to an OPS rulemaking, the
Safety Board noted that the proposed rules failed to adequately
address qualification requirements, or include requirements for
training and testing.
The final rule issued in April 2001 allows individuals to
be evaluated by oral or written examinations, observations
during on-the-job or work history. While the rule allows
individuals to be evaluated solely on their work history only
until October of this year, operators will not be required to
reevaluate each individual using additional criteria until the
next scheduled evaluation.
The rule also allows the operators to determine what the
interval time should be between those evaluations. We believe
that a qualification rule should require that pipeline
operators be tested or trained and tested to assess the success
of the training, and that periodic retraining be required.
Mr. Chairman, that completes my statement and I would be
happy to respond to any questions.
[The prepared statement of Robert Chipkevich follows:]
Prepared Statement of Robert Chipkevich, Director, Office of Railroad,
Pipeline, and Hazardous Materials Investigations, National
Transportation Safety Board
Chairman Barton and Members of the Subcommittee, I am pleased to
represent the National Transportation Safety Board before you today to
discuss pipeline safety issues.
Pipelines carry more hazardous materials in the United States than
any other form of transportation. Nearly 200,000 miles of hazardous
liquid pipelines deliver approximately 14.4 billion barrels of
petroleum products annually, and more than 21 trillion cubic feet of
natural gas are delivered through nearly 2 million miles of pipe. Since
its creation in 1967, the Safety Board has issued 257 pipeline safety
recommendations to the Research and Special Programs Administration
(RSPA).
RSPA's pipeline recommendation acceptance rate, 70 percent, is the
lowest of all modal administrations, and for many years, the Safety
Board has been critical of RSPA's delay in providing needed pipeline
safety improvements. We are encouraged, however, with recent RSPA
action, particularly in the areas of pipeline integrity, data
collection, and excavation damage protection.
pipeline integrity
The continued operation of pipelines with discoverable integrity
problems has been a recurring issue in Safety Board investigations. The
Safety Board first issued a pipeline integrity recommendation in 1987,
as a result of investigations into three pipeline accidents--two in
Kentucky and one in Minnesota. The Safety Board recommended that RSPA
require periodic inspections or tests of pipelines to identify
corrosion, mechanical damage, or other time dependent defects that may
be detrimental to the continued safe operation of the pipelines. We
also recommended that RSPA establish criteria for use in determining
the frequency for performing inspections and tests.
In this regard, final rules--Pipeline Integrity Management in High
Consequence Areas--were recently published that will require integrity
assessments for liquid pipelines in high consequence areas. The new
rules will require operators to assess the integrity of pipelines using
in-line inspection tools, pressure tests, or other technologies that
are demonstrated to provide equivalent results. According to the rule,
a pipeline operator must prioritize pipeline segments for baseline and
continual assessments and determine schedules for those assessments,
based on all risk factors that reflect risk conditions. These factors
must include results of previous assessments, defects that could be
found and their growth rates; pipe size, material, manufacturing
information, coating type and condition, and seam type; leak, repair,
and cathodic protection history; product transported; operating stress
level; activities in the area; local environmental factors; geo-
technical hazards; and physical support of the segment. It is our
understanding that Office of Pipeline Safety (OPS) is in the process of
drafting integrity assessment rules that will apply to gas transmission
pipelines.
Mr. Chairman, the Safety Board has provided favorable comments to
much of this rule. It is unfortunate, however, that it has taken 15
years following the issuance of our 1987 safety recommendation for RSPA
to act.
As a result of Safety Board investigations, the Safety Board has
also advocated the increased use of valve automation to reduce the
consequences of pipeline failures. The OPS' integrity management rules
will also require operators to evaluate the benefits of valve
automation in pipeline systems. According to this rule, operators must
consider the swiftness of leak detection and shutdown capabilities, the
type of commodity carried, the rate of potential leakage, the volume
that can be released, topography or pipeline profile, the potential for
ignition, proximity to power sources, location of nearest response
personnel, specific terrain between the pipeline segment and the
affected area, and the benefits expected by reducing the spill size.
Risk management principles, if properly applied, can be powerful
tools to identify the risks to pipeline integrity and should lead
operators to take action to mitigate those risks. Quantifying inputs
into various risk management models, however, can be difficult and
subjective. In a competitive environment, it may not be economically
feasible for a pipeline operator to conduct assessment and mitigation
activities to prevent a possible, but not inevitable, future pipeline
failure. To ensure that the new rules for risk-based integrity
management programs are effectively employed throughout the pipeline
industry, it is imperative that RSPA establish an effective evaluation
program and aggressively examine and monitor operators' pipeline
integrity programs.
An effective program will require significant, qualified personnel
and intense attention from OPS. We note that the Administration's
budget provides RSPA with resources for additional pipeline personnel
that should be helpful in establishing and maintaining an effective
program.
In addition, the principles of risk management assign highest
priorities to locations subject to the greatest damage or consequences.
As a result, a risk-based integrity management program will direct
priority resources to those areas. Pipeline integrity management
programs must ensure that pipelines located outside high consequence
areas are also adequately assessed and maintained. The Safety Board is
concerned that this was not addressed in the final rule.
Another pipeline integrity issue, corrosion, is a leading cause of
hazardous liquid pipeline accidents. In 1987, the Safety Board
recommended that requirements for corrosion protection include criteria
against which liquid pipeline operators can evaluate the adequacy of
cathodic protection systems. As recently as 1998, as a result of its
investigation of a hazardous liquid pipeline accident in 1996 near
Lively, Texas, the Safety Board urged RSPA to require hazardous liquid
pipeline operators to determine the condition of pipeline coating when
pipe is exposed and again asked them to include criteria against which
the adequacy of cathodic protection systems can be evaluated. On
December 27, 2001, OPS issued a final rule that we believe will improve
the effectiveness of corrosion protection requirements for hazardous
liquid pipelines, and addresses other issues included in our
recommendations.
data collection
As a result of Safety Board investigations, we have for some time
been critical of RSPA's collection of accident data. We have found its
data collection to be inadequate for trend analyses and pipeline
operator performance evaluations. On May 8, 2001, OPS issued new
accident reporting requirements for gas transmission pipelines.
Additionally, on January 8, 2002, OPS issued new accident reporting
requirements for hazardous liquid pipelines. The new reporting
requirements include information that the Safety Board believes will
assist with operator evaluation and trend analyses. We understand that
OPS is now working on improving accident reporting requirements for gas
distribution systems, and is implementing quality control procedures to
improve the accuracy of accident data reports.
excavation damage
Excavation damage remains a leading cause of pipeline accidents,
and as a result of NTSB accident investigations we have over the years
issued numerous safety recommendations regarding this issue. We are
aware that OPS is funding research in the following areas:
<bullet> Improved pipeline location technologies,
<bullet> Improved inspection technologies to find pipe defects,
<bullet> Real time monitoring to detect mechanical damage and leaks,
<bullet> Improved trenchless technologies to avoid potential damage to
underground facilities, and
<bullet> Technologies to increase the security of pipelines.
Excavation damage prevention is an item on the Board's ``Most
Wanted'' list of safety issues, and we are hopeful that the on-going
research, which addresses many Safety Board recommendations, will lead
to increased excavation prevention safety.
qualification and training requirements
Mr. Chairman, we mentioned previously, we are encouraged by much of
the work that RSPA has undertaken. However, the Board believes
insufficient progress has been made in the qualification and training
requirements for personnel operating pipelines.
Following the 1987 Kentucky and Minnesota accidents, the Safety
Board recommended that OPS require operators to develop training and
testing programs to qualify employees. Following a 1996 accident in San
Juan, Puerto Rico, the Safety Board asked RSPA to complete its
rulemaking on operator qualification, training, and testing standards.
The Safety Board also asked RSPA to require operators to test employees
on safety procedures they are expected to follow and to demonstrate
that they can correctly perform the work.
In January 1999, the Safety Board commented on OPS' rulemaking
regarding operator qualifications. Our comments noted that the proposed
rules failed to adequately address qualification requirements or
include requirements for training and testing. The final rule, issued
in April 2001, allows individuals to be evaluated by written or oral
examinations, observation during on-the-job performance, or work
history. The rule allows individuals to be evaluated solely by their
work history only until October 28, 2002, and operators will not be
required to re-evaluate each individual using additional criteria until
the next scheduled evaluation. In addition, the rule allows operators
to determine what the interval time should be between evaluations. It
is conceivable that a pipeline employee may continue to perform
indefinitely safety-related tasks based solely on work history.
Following the issuance in April 2001 of the final rule on operator
qualifications, the Safety Board closed its recommendations as
unacceptable response. We believe a qualification rule should require
that pipeline employees be trained and tested to assess the success of
the training, and that periodic retraining should be provided.
Mr. Chairman, that completes my statement and I will be happy to
respond to any questions you may have.
Mr. Barton. Thank you, Mr. Chipkevich.
We will now hear from Mr. Peter Guerrero, and your
statement is now in the record, and we would ask that you
summarize it in 5 minutes.
STATEMENT OF PETER GUERRERO
Mr. Guerrero. Thank you, Mr. Chairman. I appreciate the
opportunity to testify here today on pipeline safety.
Historically, as you have heard, the Office of Pipeline Safety
has been slow to take action to improve its oversight of the
pipeline industry, and to implement critical safety
improvements. However, recently, the agency has initiated
several actions, including requiring pipeline operators to
implement integrity management programs that offer the
potential to improve safety. Today, I will discuss OPS's
progress in implementing these initiatives, its responsiveness
to outstanding mandates and recommendations, and the
outstanding challenges it faces.
OPS has moved forward, as you heard, with a new risk-based
approach that requires operators to focus on the greatest risks
to pipeline safety. This is called integrity management, and
requires pipeline owners and operators to conduct a baseline
assessment of all pipelines that could affect high consequence
areas, to periodically reassess these segments, to take prompt
action to address problems, and to develop measures of program
effectiveness.
OPS has issued final rules requiring these programs for
operators of hazardous liquid pipelines and plans to issue a
final rule for operators of natural gas transmission pipelines
by the end of the year.
OPS has also made progress in other areas. First, it is
taking action to improve its safety data. In the past its data
has been limited and often inaccurate. As a result, OPS could
not identify and focus on the causes of accidents, analyze
industry trends, and compare the safety performance of
operators. The revisions to incident reporting forms, as well
as new procedures, should address the underlying problems.
However, it will be several years before the agency has
sufficient data to analyze trends.
Second, OPS is allowing States to play a larger role in
overseeing pipeline safety. We believe that this makes sense.
State pipeline safety inspectors are an invaluable resource for
OPS because they are familiar with pipeline safety issues
unique to their States. Currently, 11 States, up from 8, are
qualified to participate in all oversight activities and an
additional four States can participate in short term oversight
projects.
Third, OPS appears more willing to use fines for safety
violations, thereby reversing its former trend of relying more
heavily on voluntary compliance. In the 1990's, OPS had
dramatically decreased the number and amount of fines. We
questioned this change in enforcement policy and recommended
that the agency determine the impact of the reduced use of
fines on safety. In response to our recommendations and other
criticisms, OPS has changed its enforcement policies to make
better use of its full range of enforcement tools, including
fines for violations. However, OPS still needs to develop
better information on the effect its enforcement approaches are
having on pipeline safety.
I would now like to turn to OPS's record in responsiveness
in implementing pipeline safety improvements.
As you know, OPS--as you heard from my colleague here--has
one of the lowest records of implementing Safety Board
recommendations, such as requiring periodic inspection of
pipelines. We remain concerned that a significant number of
recommendations and requirements that deal with critical safety
issues are not yet complete, many of them more than a decade
old. As of February of this year, OPS has not implemented 42
recommendations and 9 statutory requirements. OPS hopes to
fulfill most of these by the end of this year.
Mr. Chairman, I have highlighted for you some of OPS's
recent actions that demonstrate their willingness to improve
safety oversight.
However, the agency has a number of significant challenges
that it faces, and I want to enumerate these. First, it needs
to develop performance measures for the integrity management
program. We believe that such measures are essential to
determining whether the new approach is successful and what
improvements may be needed.
Second, it needs to ensure that it has sufficient resources
and expertise to oversee more than 400 integrity management
programs in various stages of development. The integrity
management approach represents a fundamental shift in how OPS's
oversees the pipeline industry. Inspectors used to a checklist
approach will face a number of challenges, such as becoming
familiar with a variety of inspection techniques and
determining when it is appropriate to use them, and how to
interpret the results.
Third, OPS needs to ensure that integrity management
programs are enforced consistently and effectively. To do so,
they will need to develop a comprehensive set of inspection
protocols that provide clear criteria for inspections and for
making enforcement decisions.
Finally, OPS needs to issue a final rule for natural gas
transmission pipelines. To do so, it must resolve a number of
technical issues. For example, many natural gas transmission
pipelines cannot easily accommodate internal inspection devices
and will require alternative inspection approaches.
In conclusion, we are encouraged by OPS's recent efforts to
improve its oversight of pipeline safety, and believe that
those are steps in the right direction. However, significant
challenges remain. Among other things, OPS needs better data
and meaningful performance measures, sufficient resources and
expertise to implement its integrity management approach,
partnerships with States, and greater assurance that its
enforcement approaches are improving pipeline safety. We
believe that it is imperative for OPS to meet these challenges
to ensure the safety of the Nation's pipelines.
Mr. Chairman, this concludes my statement and I would be
pleased to answer any questions at the end of this panel. Thank
you.
[The prepared statement of Peter Guerrero follows:]
Prepared Statement of Peter Guerrero, Director, Physical
Infrastructure, U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee: We appreciate this
opportunity to testify on the Office of Pipeline Safety's (OPS)
oversight of the safety of our nation's pipeline infrastructure. Our
statement is based on reports we issued in May 2000 and September 2001,
as well as ongoing work for Mr. Dingell of this
Subcommittee.<SUP>1</SUP>
---------------------------------------------------------------------------
\1\ U.S. General Accounting Office, Pipeline Safety: The Office of
Pipeline Safety Is Changing How It Oversees the Pipeline Industry, GAO/
RCED-00-128 (Washington, D.C: May 15, 2000) and Pipeline Safety:
Progress Made, but Significant Requirements and Recommendations Not Yet
Complete, GAO-01-1075 (Washington, D.C.: September 28, 2001).
---------------------------------------------------------------------------
OPS oversees the safety of 2.2 million miles of pipelines that
transport potentially dangerous materials, such as oil and natural gas.
Historically, OPS has been slow to take action to improve its oversight
of the pipeline industry and implement critical pipeline safety
improvements. As a result, OPS has the lowest implementation rate of
any transportation agency for recommendations from the National
Transportation Safety Board (the Safety Board). This lack of
responsiveness has prompted Congress to repeatedly mandate basic
elements of a pipeline safety program, such as requirements to
periodically inspect pipelines. In recent years, OPS has initiated
several actions to improve its oversight of the pipeline industry,
including requiring ``integrity management'' programs for individual
operators to assess their pipelines for risks, take action to mitigate
the risks, and develop program performance measures. We are here today
to discuss (1) OPS' progress in implementing integrity management and
other initiatives, (2) OPS' progress in responding to recommendations
from the Safety Board and statutory requirements, and (3) issues that
are critical to the future success of OPS' initiatives to improve the
safety and oversight of the pipeline industry.
In summary: OPS has moved forward with its new risk-based
regulatory approach--integrity management--that requires operators to
develop programs that focus on the greatest risks to their pipelines.
This approach differs significantly from its traditional approach of
inspecting pipelines for compliance with uniform regulations
establishing minimum standards. OPS plans to review and monitor these
programs, which will be unique for each of more than 400 hazardous
liquid and natural gas transmission operators. OPS has issued final
rules requiring the phased implementation of these programs for
operators of hazardous liquid pipelines. The agency also plans to issue
a final rule for operators of natural gas transmission pipelines by the
end of 2002.
OPS has also made progress on other initiatives that are intended
to improve the agency's oversight of the pipeline industry. These
initiatives include:
<bullet> Revising forms and procedures to collect more complete and
accurate data, which will enable OPS to better assess the
causes of incidents and focus on the greatest risks to
pipelines. According to the Safety Board and industry
associations, these actions address the underlying problems
with OPS' data, such as limited data on the causes of
incidents. OPS hopes to implement most of its initiatives to
improve data in 2002. However, according to industry
associations, it may be several years before OPS has sufficient
data to thoroughly evaluate industry trends, especially for
hazardous liquid pipelines.
<bullet> Allowing more states to oversee a broader range of interstate
pipeline safety activities. State pipeline safety inspectors
are an invaluable resource for OPS because they are familiar
with pipeline safety issues unique to their states. OPS
responded to our May 2000 recommendations that the agency
better utilize this resource by allowing states to participate
in a wider range of oversight activities, such as reviewing
integrity management programs for pipelines in their individual
states.
<bullet> Increasing the use of fines, thereby reversing OPS' former
trend of relying more heavily on less severe corrective
actions. From 1990 through 1998, OPS decreased the number and
amount of fines while increasing the use of less severe
corrective actions, such as letters of concern. We questioned
this change in OPS' enforcement policy and recommended in May
2000 that the agency determine the impact of the reduced use of
fines on safety. According to OPS officials, the agency is not
able to determine this impact as we recommended because it does
not have sufficient data to link its compliance actions with
improvements in safety. Nevertheless, OPS determined that its
enforcement policy was perceived negatively and did not
adequately address safety concerns. OPS subsequently changed
its enforcement policy to make better use of its full range of
enforcement tools, including increasing the number and severity
of fines. According to OPS officials, the agency plans to
collect data that will allow it to link its compliance actions
with improvements in safety. We are evaluating OPS' response to
our recommendation.
OPS has made progress in responding to recommendations from the
Safety Board and statutory requirements, but still has not implemented
some significant recommendations and requirements. In May 2000, we
reported that OPS had the lowest rate of any transportation agency in
responding to recommendations from the Safety Board and had not
completed 22 out of 49 statutory requirements imposed since 1988. OPS
has since improved its responsiveness to the Safety Board's
recommendations and taken action on eight statutory requirements.
However, some recommendations and requirements dealing with issues that
are critical for pipeline safety--such as requiring pipeline operators
to periodically inspect their pipelines--are more than a decade old and
OPS still has not implemented them. According to OPS officials, the
agency's ongoing initiatives should fulfill the majority of the open
recommendations and requirements before the end of 2002.
OPS faces major challenges in implementing its initiatives and in
fulfilling the Safety Board's recommendations and statutory
requirements. These challenges include (1) developing performance
measures for the integrity management approach, (2) ensuring sufficient
resources and expertise to oversee operators' integrity management
programs, (3) providing consistent and effective enforcement of
integrity management program requirements, and (4) issuing requirements
for integrity management programs for operators of gas transmission
pipelines. We are reviewing these issues as part of our ongoing work,
and will address them in our final report.
background
OPS regulates the safety of almost 2.2 million miles of pipelines,
which is enough to circle the earth 88 times. There are three primary
types of pipelines under OPS' jurisdiction. Natural gas transmission
pipelines--about 322,000 miles--transport natural gas over long
distances from sources to communities. An additional 1.7 million miles
of natural gas distribution pipelines continue transporting the gas
throughout the communities to consumers. Finally, about 155,000 miles
of hazardous liquid pipelines generally transport crude oil to
refineries and continue to transport the refined oil product, such as
gasoline, to product terminals and airports.
These pipelines transport the bulk of natural gas and petroleum
products in the United States and are the safest mode for transporting
these potentially dangerous commodities. Although pipeline incidents
resulted in an average of about 24 fatalities per year from 1989 to
2000, the number of pipeline incidents is relatively low when compared
with those involving other forms of freight transportation. On average,
about 66 people die each year in barge accidents, about 590 in railroad
accidents, and about 5,100 in truck accidents. Despite the relative
safety of pipelines, pipeline incidents can have tragic consequences,
as evidenced by the incidents at Bellingham, WA, and Carlsbad, NM.
These incidents, which caused 15 fatalities, highlighted the importance
of pipeline safety and the need for more effective oversight by OPS.
From 1989 through 2000, the total number of incidents per 10,000
miles of pipeline decreased by 2.9 percent annually, while the number
of major pipeline incidents (those resulting in a fatality, an injury,
or property damage of $50,000 or more) per 10,000 miles of pipeline
increased by 2.2 percent annually. (See fig. 1.) Over the same time
period, pipeline mileage increased 1.6 percent annually from 1.9 to 2.2
million miles of pipelines.
Figure 1: Major and Total Incidents per 10,000 Miles of Pipeline
[GRAPHIC] [TIFF OMITTED] T8508.001
Traditionally, OPS carried out its oversight responsibility
by requiring all pipeline operators to comply with uniform,
minimum standards. Recognizing that pipeline operators face
different risks depending on such factors as location and the
product they carry, OPS began exploring the concept of a risk-
based approach to pipeline safety in the mid-1990s. In 1996,
the Accountable Pipeline Safety and Partnership Act directed
OPS to establish a demonstration program to test a risk-based
approach. The Risk Management Demonstration Program went beyond
OPS' traditional regulatory approach by allowing individual
companies to identify and focus on risks to their pipelines.
Since the program's initiation in 1997, OPS has approved six
demonstration projects.
OPS HAS MADE PROGRESS IN IMPLEMENTING INTEGRITY MANAGEMENT PROGRAMS AND
OTHER INITIATIVES
Partly on the basis of OPS' experience with the Risk
Management Demonstration Program, the agency has moved forward
with a new regulatory approach that requires pipeline operators
to comprehensively identify and address risks to the segments
of their pipelines that are located in ``high consequence
areas'' where a leak or rupture would have the greatest
impact.<SUP>2</SUP> This approach requires individual pipeline
operators to develop and follow an integrity management
program. Each program must contain specific elements, including
a baseline assessment of all pipelines that could affect high
consequence areas, periodic reassessment of these pipeline
segments, prompt action to address any problems identified in
the assessments, and measures of the program's effectiveness.
---------------------------------------------------------------------------
\2\ For hazardous liquid pipelines, a high consequence area is
defined as a populated area, an environmentally sensitive area, or a
commercially navigable waterway. For natural gas transmission
pipelines, OPS is developing a definition that focuses on populated
areas.
---------------------------------------------------------------------------
Although OPS has issued final rules requiring integrity
management programs for operators of hazardous liquid
pipelines, the agency has not issued a proposed rule for
operators of gas transmission pipelines. In December 2000, OPS
issued a final rule for operators of ``large'' hazardous liquid
pipelines, defined as pipeline systems of at least 500 miles.
Under this rule, individual operators were required by December
31, 2001 to identify pipeline segments that can affect high
consequence areas, and then develop a framework for their
integrity management program and a plan for conducting baseline
assessments by March 31, 2002. OPS issued a similar rule for
operators of ``small'' hazardous liquid pipelines that are less
than 500 miles long on January 16, 2002, with later deadlines.
For natural gas transmission pipelines, OPS anticipates issuing
a final rule in fall 2002.<SUP>3</SUP>
---------------------------------------------------------------------------
\3\ OPS issued a proposed rule to define high consequence areas for
natural gas transmission pipelines on January 9, 2002.
---------------------------------------------------------------------------
OPS plans to review and monitor operators' programs for
compliance with the integrity management requirements, but will
not formally approve operator programs. OPS is currently in the
first of a four-phase plan for reviewing and monitoring
integrity management programs for operators of large hazardous
liquid pipelines.<SUP>4</SUP> In phase 1--scheduled to be
completed by the end of April 2002--OPS is reviewing operators'
identification of pipeline segments that impact high
consequence areas. During phase 2--from July 2002 to July
2004--OPS will inspect the more fully developed framework and
assessment plans. After July 2004, OPS plans to monitor
operators' implementation of their individual programs through
periodic inspections in phase 3, and review and respond to
notifications from operators of changes in their programs in
phase 4.
---------------------------------------------------------------------------
\4\ OPS anticipates following a similar process to review and
monitor integrity management programs developed by operators of small
hazardous liquid and natural gas transmission pipelines.
---------------------------------------------------------------------------
OPS is hiring and training additional inspectors to review
and monitor operators' programs. OPS had 56 inspectors in
fiscal year 2001 and plans to hire an additional 30
inspectors--a 54-percent increase--by the end of fiscal year
2003. OPS plans to augment its inspection force with contractor
and state support as it develops the necessary expertise to
review and monitor operators' programs. OPS has also developed
a list of training courses that will be required for federal
and state inspectors, and it is currently scheduling this
training. OPS officials anticipate that it will take about 2
years to provide this training to all federal and state
inspectors.
In addition to the integrity management programs, OPS is
making progress on other initiatives for improving data,
involving states, and increasing the use of fines. These
initiatives are intended to improve pipeline safety and the
agency's oversight.
OPS Is Taking Action to Improve Data
DOT's Inspector General, the National Transportation Safety
Board, and others have reported that OPS' data on pipeline
incidents and infrastructure are limited and sometimes
inaccurate. For example, in the past, OPS' incident report
forms have used only five categories of causes for incidents on
natural gas distribution pipelines, four categories for those
on natural gas transmission pipelines, and seven categories for
those on hazardous liquid pipelines. As a result, about one-
fourth of all pipeline incidents were attributed to ``other
causes,'' which limited OPS' ability to identify and focus on
the causes of incidents. In addition, data on the amount of
pipeline mileage in various infrastructure categories (such as
age or size) are necessary for a meaningful comparison of the
safety performance of individual pipeline companies. OPS did
not require hazardous liquid pipeline operators to submit this
type of data and did not collect complete data from natural gas
pipelines. Finally, the information on incident reports filed
by operators sometimes changes as the incident investigation
proceeds. OPS did not have a procedure for ensuring that
operators submitted revised reports when needed.
OPS is taking action to collect data that will allow it to
more accurately determine the causes of incidents, analyze
industry trends, and compare the safety performance of
operators. For example, OPS revised its incident report forms
in 2001 for hazardous liquid and natural gas transmission
incidents to include 25 categories of causes and plans to
revise the form for natural gas distribution incidents by the
end of 2002. Furthermore, OPS is assigning an inspector in each
region to review incident report forms for completeness and
accuracy, and has instituted new electronic notification
procedures to ensure that operators submit revised incident
reports, if necessary. OPS also plans to institute annual
reports for hazardous liquid pipeline operators, and is in the
process of revising annual report forms for all natural gas
pipeline operators. Finally, OPS is conducting studies of
incident information to improve its understanding of the causes
of incidents. According to OPS officials, most of these
improvements will be implemented for 2002 data.
According to the Safety Board and industry groups, OPS'
initiatives address the underlying data problems and will
enable OPS to better understand the causes of incidents so the
agency can focus its efforts to improve safety. However,
officials from industry groups told us that it will be several
years before OPS has sufficient data to analyze trends in
incidents. Officials from the Safety Board also noted that
these initiatives are merely a first step, and they emphasized
that OPS should periodically reassess its forms and procedures
and take steps to revise them as necessary. We are evaluating
OPS' data improvement initiatives as part of our ongoing work.
States Are Taking a Greater Role in Overseeing Interstate Pipeline
Safety Activities
OPS is allowing more states to help oversee a broader range
of interstate pipeline safety activities. Although OPS relies
heavily on state inspectors to oversee intrastate pipelines, it
reduced its reliance on states to inspect interstate pipelines
in the mid-1990s when it moved to a more risk-based, system-
wide approach to inspecting pipelines. At that time, OPS
believed it would be too difficult to coordinate participation
by individual states in the new inspection process. However, in
our May 2000 report, we found that allowing states to
participate in interstate pipeline safety inspections could
improve pipeline safety by increasing the frequency and
thoroughness of inspections to detect safety problems.
Additionally, state pipeline safety inspectors are likely to be
familiar with pipelines in their jurisdictions and the
potential risks faced by these pipelines. We recommended that
OPS work with state pipeline safety officials to determine
which activities would benefit from state participation and,
for states that are willing to participate, integrate their
activities into the safety program. We also recommended that
OPS allow state inspectors to assist in reviewing the integrity
management programs developed by the companies that operate in
their states to help ensure that these companies have
identified and adequately addressed safety risks to their
systems.
OPS responded to our recommendations in 2001 by encouraging
more states to oversee the safety of interstate pipelines in
their states. These states may perform a broad range of
oversight activities, such as inspections of new construction,
oversight of rehabilitation projects and integrity management
programs, incident investigation, standard inspections, and
participation in nonregulatory program initiatives. Other
states that want to participate on a smaller scale may apply
for specific, short-term projects, such as inspecting new
pipeline construction projects. As of January 2002, 11 states--
up from 8 in 2000--have been approved to participate in all
oversight activities, and an additional 4 states have been
approved to participate on short-term projects.<SUP>5</SUP>
---------------------------------------------------------------------------
\5\ Arizona, California, Connecticut, Iowa, Michigan, Minnesota,
New York, Ohio, Virginia, West Virginia, and Washington.
---------------------------------------------------------------------------
OPS Is Increasing its Use of Fines
OPS is increasing its use of fines for safety violations,
thereby reversing a trend of relying more heavily on less
severe corrective actions. From 1990 to 1998, OPS decreased the
proportion of enforcement actions in which it proposed fines
from about 49 percent to about 4 percent. During this time, the
agency increased the proportion of warning letters and letters
of concern from about 33 percent to about 68 percent. OPS made
this change in order to place more emphasis on ``partnering''
to improve pipeline safety rather than on punishing
noncompliance. As of May 2000, OPS could not determine whether
this approach was effective in maintaining compliance with
safety regulations. Consequently, we recommended that DOT
determine whether OPS' reduced use of fines had maintained,
improved, or decreased compliance with pipeline safety
regulations.
According to OPS officials, the agency is not able to
determine the impact of its compliance actions on safety as we
recommended because it does not have sufficient data.
Nevertheless, OPS concluded that its decreased reliance on
fines was perceived negatively by the public and Congress, and
that the letters of concern did not allow OPS to adequately
address safety concerns. OPS subsequently changed its
enforcement policy to make better use of its full range of
enforcement tools, including increasing the number and severity
of fines. According to OPS officials, the agency plans to
collect data that will allow it to link its compliance actions
with improvements in safety. We will follow up on OPS' progress
in this area during our current review.
OPS HAS NOT IMPLEMENTED SIGNIFICANT SAFETY BOARD RECOMMENDATIONS AND
STATUTORY REQUIREMENTS
OPS is taking action on open recommendations from the
Safety Board and statutory requirements, but has still not
implemented important recommendations and requirements. In May
2000, we reported that OPS historically had the worst response
rate--about 69 percent--of any transportation agency to Safety
Board recommendations. These recommendations dealt with a
variety of issues that are critical for pipeline safety, such
as requiring operators to periodically inspect pipelines and
install valves to shut down the pipeline in an emergency. Some
of these recommendations were more than a decade old. OPS has
been working to improve its responsiveness over the last
several years by initiating activities in response to the
recommendations and improving communications with the Safety
Board. The Safety Board has been encouraged by OPS' efforts to
improve its responsiveness, particularly in the areas of
excavation damage, corrosion control, and data quality.
However, the Safety Board remains concerned about the amount of
time OPS has been taking to implement recommendations. As of
February 2002, OPS had not implemented 42 recommendations,
several of which date from the late 1980s and deal with issues
considered critical to pipeline safety, such as requiring
operators to inspect their pipelines.
OPS maintains that its progress is better than the Safety
Board indicates. According to OPS officials, the majority of
the recommendations deal with integrity management and
excavation damage prevention, which the agency's ongoing
initiatives should fulfill before the end of 2002.
We also reported in May 2000 that OPS had not implemented
22 out of 49 statutory requirements that were designed to
improve pipeline safety. Similar to the open Safety Board
recommendations, several of these unfulfilled requirements
dated from the late 1980s and early 1990s and were related to
important pipeline safety issues, such as internal inspections
and identification of pipelines in populated or environmentally
sensitive areas. Since May 2000, OPS has been working to
complete these requirements. As of February 2002, 8 of the 22
requirements were closed as a result of OPS' actions, 9
requirements were still open, and the remaining 5 were
reclassified as ``closed'' because OPS considered them to be
superseded by amendments or other requirements or because the
agency did not believe it was required to take further action.
OPS plans to fulfill the majority of the open requirements
before the end of 2002.
OPS FACES MAJOR CHALLENGES IN IMPLEMENTING ITS INITIATIVES
In our ongoing work, we are examining several issues that
could affect OPS' ability to implement its integrity management
and data improvement initiatives and, ultimately, fulfill the
Safety Board's recommendations and statutory requirements.
These issues include (1) performance measures for the integrity
management approach, (2) sufficient resources and expertise to
oversee operators' integrity management programs, (3)
consistent and effective enforcement of integrity management
program requirements, and (4) requirements for integrity
management programs for operators of gas transmission
pipelines.
Performance measures: In May 2000, we reported that OPS had
not developed programwide performance measures for the Risk
Management Demonstration Program, even though the act required
such measures to demonstrate the safety benefits of the
program. OPS still has not developed such measures. Despite the
lack of quantifiable performance measures for the demonstration
program, OPS moved forward with integrity management programs
and faces the challenge of developing performance measures for
this new approach to regulating pipeline safety. Such measures
are essential to determine whether the new approach is
successful and what improvements may be needed. However, OPS
does not have a complete and viable database of information on
pipeline incidents and an inventory of pipeline infrastructure
on which to establish certain performance measures. OPS has
taken steps to improve its data, but it may be several years
before the agency can accumulate sufficient data to evaluate
trends in the pipeline industry.
Resources and expertise: Pipeline operators are in the best
position to develop integrity management programs that are
tailored to their pipelines; however, it is critical for OPS to
have adequate resources and expertise to oversee the programs.
After OPS issues a final rule on integrity management programs
for natural gas transmission pipelines, the agency estimates
that there will be more than 400 hazardous liquid and natural
gas pipeline operators with individual programs in various
stages of development. OPS must ensure that it has a sufficient
number of inspectors to oversee these programs while
maintaining its other oversight responsibilities. Moreover,
while OPS has resolved to include states in reviewing and
monitoring operators' programs, the agency faces a challenge to
determine how best to leverage federal and state resources and
provide training to state inspectors.
Furthermore, OPS' integrity management initiative
represents a fundamental shift in how it oversees the pipeline
industry. Federal and state inspectors that are accustomed to
using a checklist approach for inspecting pipelines for
compliance with uniform regulations will have to be trained to
evaluate programs that are unique to individual operators. For
example, under the new requirements, operators may use a
variety of inspection techniques to assess the safety of their
pipelines. Inspectors must be familiar with all of these
inspection techniques, know when it is appropriate to use them,
and know how to interpret the results.
Enforcement: The variability of individual operator
programs will make it difficult for OPS to enforce the
requirements of the integrity management program. OPS'
integrity management requirements for hazardous liquid
pipelines allow pipeline operators flexibility to design and
implement integrity management programs based on pipeline-
specific conditions and risks.<SUP>6</SUP> However, this
flexibility will result in unique programs for each operator
and require more judgment on the part of inspectors. To ensure
that the program requirements are consistently and effectively
enforced, OPS is developing a comprehensive set of inspection
protocols that are intended to provide clear criteria to
inspector staff for evaluating the adequacy of operator actions
and making enforcement decisions. As noted previously, OPS
believes its staff will need increased training and expertise
to make these types of judgments.
---------------------------------------------------------------------------
\6\ Pipeline operators must also maintain compliance with uniform
regulation establishing minimum safety requirements.
---------------------------------------------------------------------------
Final rule for natural gas transmission pipelines: OPS has
issued the final rules requiring integrity management programs
for operators of hazardous liquid pipelines; however,
significant differences between natural gas transmission
pipelines and hazardous liquid pipelines present challenges for
OPS in developing a similar rule for operators of natural gas
transmission pipelines. For example, to facilitate the movement
of natural gas under pressure, transmission pipelines tend to
vary more in diameter than hazardous liquid pipelines. These
variations make it more difficult for natural gas transmission
pipelines to accommodate internal inspection devices. The
Interstate Natural Gas Association of America estimates that
about 45 percent, or about 145,000 miles, of natural gas
transmission pipelines would require alternative inspection
methods because modifying the pipelines to accommodate internal
inspection devices would not be feasible. OPS plans to identify
alternative inspection methods that would be effective in
assessing the integrity of these pipelines. OPS has 8 months to
resolve this issue if it is to meet the goal of issuing a final
rule by the end of 2002.
OBSERVATIONS
We are encouraged by OPS' recent efforts to improve its
oversight of pipeline safety and believe they are steps in the
right direction. However, a number of challenges remain. These
challenges include developing performance measures for the
integrity management approach, ensuring sufficient resources
and expertise to oversee operators' integrity management
programs, providing consistent and effective enforcement of
integrity management program requirements, and issuing
requirements for integrity management programs for operators of
gas transmission pipelines. It is imperative for OPS to meet
these challenges to ensure the safety of the nation's
pipelines.
Mr. Chairman, this concludes my testimony. I would be
pleased to answer any questions you or Members of the
Subcommittee may have.
CONTACTS AND ACKNOWLEDGMENTS
For information about this testimony, please contact Peter
F. Guerrero at (202) 512-4907 or guerrerop@gao.gov. This
statement is available on GAO's home page at http://
www.gao.gov. Individuals making key contributions to this
testimony were Helen Desaulniers, Susan Fleming, Judy
Guilliams-Tapia, Michael Horton, Wyatt Hundrup, and Sara
Vermillion.
Mr. Barton. Thank you.
We would now like to hear from Mr. Anderson, and your
testimony is in the record, and we would ask you that you
summarize it in 5 minutes.
STATEMENT OF JAMES D. ANDERSON
Mr. Anderson. Yes, sir. Mr. Chairman and members of the
subcommittee, we are pleased to file this document addressing
pipeline safety reorganization. The National Association of
Pipeline Safety Representatives is an organization of each
States' regulatory oversight pipeline safety personnel.
We represent the States, including the District of Columbia
and the Commonwealth of Puerto Rico, pipeline safety directors,
managers, and inspectors, and technical personnel responsible
for assuring that pipelines are operating in a manner that
assures safety to the public.
NAPSR's mission is to strengthen States' pipeline safety
programs for promotion of improved pipeline safety standards,
education, training, and technology. Several initiatives have
been and are ongoing.
First and foremost is damage prevention. The leading cause
of pipeline failure is third-party damage. NAPSR believes that
the best practices as identified in the report: ``Common
Ground: Study of One-Call Systems and Damage Prevention Best
Practices,'' should be used and encourages this subcommittee to
support States' adoption and implementation of the best
practices into State and private stakeholder's underground
facility damage prevention programs.
In addition to supporting the adoption of the best
practices, we encourage the subcommittee to increase funding
from $1 million to $2 million for the States' One-Call Grants
that are available to the State's pipeline safety programs.
These grant monies are utilized to enhance various projects and
programs in the States.
Data collection. Compiling records of third-party damages
is another damage prevention initiative. We believe this is an
important step to better identify the causes of damages to
pipelines and other underground facilities.
This data collection will focus damage prevention efforts
and campaigns toward those specific problems. We support the
use of Federal grant monies from general revenue funds for
damage prevention awareness campaigns and voluntary data
gathering efforts.
Public Education/First Responders. Finally, in an issue
that is related to pipeline damage, NAPSR supports the use of
damage prevention monies to support efforts toward public
education and/or training to first responders.
Due to their emergency response capabilities, first
responders, local law enforcement agencies and fire
departments, are usually the first personnel to arrive on the
scene of a pipeline failure.
If properly trained, their abilities to quickly arrive at
the scene should enhance safety by proper assessment of the
situation and maintaining a safety zone around the area when
pipeline personnel arrive.
Security. NAPSR supports the new security and anti-
terrorism legislation measures. We believe it is important to
have a consistent, national policy developed and identified
that, in cooperation with the pipeline industry and regulators,
will establish guidelines and standards for pipeline security
that are easily recognizable throughout the country.
For that reason, we support designation of the United
States Department of Transportation's Office of Pipeline Safety
as the Federal agency to take the lead in pipeline security
matters.
Operator Qualification. NAPSR supports the qualification of
pipeline personnel. Members of our association, in cooperation
with the pipeline industry, associations, and other regulatory
personnel, participated in the negotiated rulemaking process
that created the current Federal regulations for qualification
of operator personnel.
National Mapping System. The current voluntary National
Mapping Program has not been successful in obtaining the
participation of the pipeline operators needed to produce a
national map of pipeline facilities.
For this reason, we would support mandatory participation
by pipeline operators in a national mapping system. However,
with the events of September 11 in mind, we believe this
information should be treated as pipeline security sensitive
information with appropriate limitations placed on access,
supplied on a need-to-know basis and not a right-to-know basis.
Amendments to H.R. 3609 Regarding Emergency Waivers. There
has been an amendment to Section 60118 offered that would give
the State authority the ability to waive compliance from the
safety standard, in emergencies as determined by the State, and
provides a shorter timeframe for approval than is currently
allowed.
The State authority would have to notify the Office of
Pipeline Safety within 48 hours, and the Office of Pipeline
Safety would have 10 days to direct the State to rescind the
waiver.
State Jurisdiction for Interstate Pipelines. NAPSR supports
and encourages willing States' oversight and participation in
interstate regulatory activities of those facilities in their
States.
The Federal and State partnership is a cornerstone for
assuring uniform implementation of pipeline safety programs
nationwide.
The ability to inspect these facilities using OPS
guidelines and training will assist OPS in performing more
frequent and thorough inspections than have normally been
performed by OPS in the past.
In summary, in addition to our specific comments, NAPSR
believes that a strong and equal partnership between the States
and OPS is vital to assure the highest level of pipeline safety
possible.
Continued support by Federal grant in aid funding to the
States will continue to protect the Nation's infrastructure.
Thank you very much.
[The prepared statement of James D. Anderson follows:]
Prepared Statement of James D. Anderson on Behalf of the National
Association of Pipeline Safety Representatives
Mr. Chairman and members of the Subcommittee, we are pleased to
file this document pertaining to the Pipeline Safety Reauthorization.
The National Association of Pipeline Safety Representatives (NAPSR) is
an organization of each States' regulatory oversight pipeline safety
managers. We represent the state (including the District of Columbia
and the Commonwealth of Puerto Rico) pipeline safety directors,
managers, inspectors, and technical personnel responsible for ensuring
that pipelines are operated in a manner that ensures the safety of the
public. NAPSR's mission is to strengthen states' pipeline safety
programs through promotion of improved pipeline safety standards,
education, training, and technology. We are the ``state agency
partners'' noted by Ms. Ellen G. Engleman, Administrator of DOT's
Research and Special Programs Administration in her statements at the
Subcommittee on Highways and Transit's hearing for HR3609 on February
13, 2002. The various states' pipeline safety programs directly
regulate 90% of the pipelines and liquefied natural gas facilities in
the country.
The Association supports, encourages, develops, and enhances
pipeline safety, through the Federal/State Pipeline Safety programs as
established and defined by the Natural Gas Pipeline Safety Act of 1968,
the Hazardous Liquids Pipeline Safety Act of 1979, and all subsequent
amendments. This partnership has been the most successful relationship
between states' and the federal government in providing security in
supply and safety to the public.
damage prevention
The leading cause of pipeline failures is third party damage. NAPSR
believes that the ``best practices'' identified in the report, Common
Ground: Study of One-Call Systems and Damage Prevention Best Practices
should be used and encourages this Subcommittee to support states'
adoption and implementation of the ``Best Practices'' into state and
private stakeholder underground facility damage prevention programs.
The Common Ground Study was initiated by the U.S. Department of
Transportation's Office of Pipeline Safety (an element of RSPA). This
study developed ``Best Practices'' by consensus agreement of 160
individuals representing a wide range of interests, organizations, and
viewpoints on preventing damage to underground facilities. The existing
``Best Practices''' in the report are real world experiences that can
help prevent damage to all underground facilities. Several of our NAPSR
members participated in the study and release of the final report to
members of Congress.
In addition to supporting adoption of the ``Best Practices'', we
would encourage the Subcommittee to increase funding from $1 million to
$2 million for the State One-Call Grants, that are available to the
state pipeline safety programs. These grant monies are utilized to
enhance various individual projects and programs in the states. The
programs and projects supported by the grant monies are developed on
the state level and are initiatives that regulators in the field
believe are very effective. Additional support of these types of
programs would help us address specific needs that have been identified
in our states.
data collection
Compiling records of third party damages is another damage
prevention initiative. We believe this is an important step to better
identify the causes of damage to pipelines and other underground
facilities. This data collection will focus damage prevention efforts
and campaigns toward those specific problems. We therefore encourage
efforts toward compilation of information on damage to pipelines so
that data can be used to reduce third-party damage. We support the use
of federal grant monies from general revenue funds for damage
prevention awareness campaigns and voluntary data gathering efforts.
This is a wise investment in determining the causes of all underground
facility damages. The Common Ground Alliance (CGA), a national non-
profit damage prevention organization, has developed public education/
awareness materials that can be used by anyone nationwide. The CGA
organization is continuing its damage prevention efforts through data
collection, education and best practices and we encourage this broad-
based national approach to addressing damage to all underground
facilities. One of our NAPSR members serves on the CGA Board of
Directors as the ``State Regulator Board'' member and others on various
CGA Committees.
public education/first responders
Finally, in an issue that is related to pipeline damage, NAPSR
supports the use of damage prevention monies to support efforts toward
public education and/or training to ``first responders''. Due to their
emergency response capability, first responders (local law enforcement
agencies and fire departments) are usually the first personnel to
arrive on the scene of a pipeline failure. If properly trained, their
ability to quickly arrive at a scene could enhance safety by proper
assessment of the situation and making the area safe until pipeline
personnel arrive. In addition, training of the first responders would
enhance the coordination of efforts with pipeline personnel at the
scene and further allow the pipeline personnel to concentrate their
efforts on making the area safe.
security
NAPSR supports the new security and anti-terrorism legislation
measures. We believe it is important to have a consistent, national
policy developed/identified that, in cooperation with the pipeline
industry and regulators, will establish guidelines and standards for
pipeline security that are easily recognizable throughout the country.
For that reason, we support designation of the U.S. Department of
Transportation's Office of Pipeline Safety as the Federal agency to
take the lead in pipeline security matters. Absent a lead Federal
agency and national guidelines/standards, it will be almost impossible
to coordinate security efforts and communication across the nation.
qualification of pipeline operators
NAPSR supports the qualification of pipeline personnel. Members of
our association (in cooperation with the pipeline industry,
associations, and other regulatory personnel) participated in the
negotiated rulemaking process that created the current Federal
regulations for qualification of operator personnel. Current
regulations require that operator qualification plans were to be
developed by April 27, 2001, and the personnel qualified by October 28,
2002. Therefore, qualification of the pipeline personnel is being
conducted at this time. We believe the current operator qualification
process established by Subpart N in Part 192 of the Federal Pipeline
Regulations should be allowed to continue and regulatory over-site of
the qualification of operations personnel be evaluated before the
requirements are changed. We would support the addition of programs for
the qualification of pipeline product flow controllers.
national mapping system
The current voluntary National Mapping Program has not been
successful in obtaining the participation of the pipeline operators
needed to produce a national map of pipeline facilities. For this
reason, we would support mandatory participation by pipeline operators
in a National Mapping System. However, with the events of September
11th in mind, we believe this information should be treated as pipeline
security sensitive information with appropriate limitations placed on
access (supplied on a ``need-to-know'' basis, not on a ``right-to-
know'' basis).
amendment to hr3609 regarding emergency waivers
There has been an amendment to Section 60118 offered that would
give the ``State authority'' the ability to waive compliance from the
safety standard, in emergencies as determined by the state, and
provides a shorter time frame for approval than is currently allowed.
The State authority would have to notify DOT within 48 hours and DOT
would have 10 days to direct the state to rescind the waiver. NAPSR
believes this provision is needed and supports the amendment. Even
though occurrences are rare, when certain emergencies occur, quick
action is needed to continue or quickly restore service that may not
fully comply with the regulations. This amendment would allow the State
authority to determine those emergencies and to take needed action when
consistent with pipeline safety and allow quick receipt of notice from
DOT.
state jurisdiction for interstate pipelines
NAPSR supports and encourages willing states' oversight and
participation in interstate regulatory activities of those facilities
in their states after meeting OPS requirements. The ability to inspect
these facilities using OPS guidelines and training will provide
assistance to the OPS in performing more frequently and thorough
inspections than have normally been performed due to lack of OPS
resources. The states have the ability due to their location to respond
in an emergency and make the area safe.
summary
In addition to our specific comments, NAPSR believes that a strong,
and equal, partnership between the states and OPS is vital to assure
the highest level of pipeline safety possible. Continued support by
federal grant in aid funding to the states will continue to protect the
nation's infrastructure. The people in the NAPSR organization are
directly involved in assuring the safety and security of a large
portion of our nation's pipeline system. We appreciate the opportunity
to supply our input to this important legislation and give our support
to reauthorize the pipeline safety program.
Mr. Barton. Thank you, Mr. Anderson, and the Chair would
recognize himself for the first 5 minutes of questions.
Ms. Engleman, would it be fair to say that prior to 1996
that the theory in pipeline safety was to catch them after the
fact and punish them?
And that since 1996, we have tried to change the theory to
work with the pipeline industry before the fact to prevent the
accidents in the first place?
Ms. Engleman. Yes, sir, it is. Prior to that time, there
was an approach where one would inspect and one would look at a
checklist, and its ability, exclusive of the opportunity for
proactive performance on safety measures.
From that, there was a time if you will--and I can show you
a time line. If you look at the time line that we are
presenting here, you will see a trend that has evolved, and we
are continuing to operate with pipeline inspections, and all
regulations are in effect and in force.
But as you can see the trend, we are adding both the
security and local police involvement, and attention to the
environment, and a list of implementations, and damage
prevention issues.
Mr. Barton. Now, the number of incidents that has been
reported, there is a chart somewhere of pipeline incidents, and
if you could put that back up. There you go. Now, that is based
on a period that begins in 1986, and goes to 2001.
But what we are really interested in is the period after
1996, and as we change the theory. Now, I am not a
statistician, but it looks to me just looking at 1997, 1998,
1999, and 2000, and 2001, that the blue line stops and the
trend line is obviously down in terms of the number of
incidences.
The gray line, the gas distribution pipeline, honestly I
would have to say is going up some, and then the bottom line,
the gas transmission pipeline, I would say is basically
slightly--I would say it is neutral or slightly up ahead 1 year
in 1998 that it definitely went up.
So how many years do you think your agency would need to
transition to this need theory before you could really give it
a fair evaluation?
Ms. Engleman. Sir, I don't have a specific number to give
you. I can only say that unfortunately accidents do happen, and
when one happens, it affects us obviously statistically.
However, I do believe that the overall trend of using a
holistic approach and using performance metrics will ensure
that we can eliminate as many accidents as can be eliminated.
If I can just make reference to one issue. A few years ago
I had the privilege to become a commissioned officer in the
Navy Reserves; and a lesson that I was told at that time in
leaving the civilian world is as follows.
In the Navy, 98 percent does not give them a minus. It
means that two people were hurt or killed, or two people were
affected. So our goal will always be 100 percent. Whether we
can achieve it in 2 years or 4 years, or ever, I can't address.
But I will say that when we look at a holistic approach,
and when we implement a systematic approach for liquid and gas,
I believe the trend will continue to go downward.
Mr. Barton. Now, much has been made of the fact that a
number of recommendations and mandates have not been
implemented. I won't comment on that other than to say that I
wish we would hold EPA to the same standards as they have--it
is appalling of the number of Congressional mandates that they
have not attempted to implement in the last 10 years.
I want to go to you, Mr. Chipkevich. There are a number of
outstanding national transportation safety board
recommendations that have been made through the OPS. I am told
that as they respond that your organization as a rating system
where you rate the responses as open-accessible, open-
unaccessible. Is that true?
Mr. Chipkevich. Yes, sir.
Mr. Barton. Based on the responses that have actually been
made to your agency, could you give us an idea of how many of
those responses your agency considered acceptable, and how many
they considered to be unacceptable?
Mr. Chipkevich. Overall, the acceptance rate has been a
little over 80 percent, 82 percent.
Mr. Barton. So, 82 percent acceptable, and 18 percent
unacceptable?
Mr. Chipkevich. Yes, sir.
Mr. Barton. What kind of coordination or communication, if
any, do you have in the drafting stage with OPS before they
actually make a formal recommendation? Is there some
interchange before the fact?
Mr. Chipkevich. When we conduct our accident investigation,
we identify and parties participate in our investigation
through the entire fact finding and the technical reviews of
our accident data.
We do ask for input from all parties, including the
regulatory organizations, like RSPA, about any of their
proposed conclusions, and the types of recommendations that
they think would be effective, and also their recommendations
on probable cause.
So we do seek their input when we are looking at types of
recommendations, yes, sir.
Mr. Barton. And generally would you say that OPS attempts
to work with your agency are positive and productive, or
negative and unproductive?
Mr. Chipkevich. I think over the last couple of years it
has been very positive. We have had several meetings with them
to talk about the recommendations in the other areas. There has
been a lot of positive movement in some of those
recommendations, and in particular in the last 2 years.
Mr. Barton. Finally, Ms. Engleman, there are a number of
members on this subcommittee that when we come to drafting a
bill that we are going to want to move this back toward the old
catch-them-after-the-fact regulatory approach. Do you think
that is a good idea or a bad idea?
Ms. Engleman. Sir, we don't have to do either/or, because
please note that the regulations remain in effect as we go
forward with a holistic principle. If you compare what we are
looking at, say, in one health's system, I think it is
important to continue with the holistic, systematic approach.
After all, an EKG cannot tell you if you have diabetes, any
more than a mammogram can tell you if you have a disease other
than what it is created for.
So I believe the holistic, systematic approach is
appropriate to continue the level of work, and so please again
keep in mind that this is added to the regulations. This is in
addition to the regulations which we will continue to enforce
and enforce successfully.
Mr. Barton. I am going to interpret that that you don't
want to go back to the old approach, and that we have
regulations on the books that have to be enforced, but at the
same time it is a good idea to try to work to prevent accidents
in the first place.
Ms. Engleman. Yes, sir.
Mr. Barton. Good enough. Mr. John.
Mr. John. Thank you, Mr. Chairman. Ms. Engleman, at the
time of the GAO report back in 2000, your office or the OPS
office was moving to really discontinue the use of the States
to help them conduct their inspections of the interstate
pipeline.
This brought obviously a great deal of concern amongst
Members of Congress and the States. And since 2000, I think
that OPS has taken steps to restore some of the relationship
that they have had with the States.
As it relates to your integrity management approach, how
exactly are you going to integrate the States--question one--as
to your plans; and second, when are the State inspectors going
to receive any training as it relates to your new program, or
your program?
Ms. Engleman. Thank you, sir. The States are our most
significant partners in our goal of pipeline safety. With
approximately 400 State Inspectors, we add to that 89 Federal
Inspectors, or almost 500 field inspectors that we can utilize.
The field inspectors have an average of 20 years of
experience each. That gives us 9,500 man-years of experience to
put to task, and it is a critical aspect of how valuable our
State partnerships can be.
Mr. John. So you feel that a move back toward a partnership
is a good thing, which is contrary to what would happen prior
to just 2 years ago?
Ms. Engleman. Yes, sir. We support State partnerships and
try exceedingly hard to get input. Please note that the States
participate with us in all of our rulemaking, and they
participate in many of our inspections.
They have access to the data that we have, and we
participate in side-by-side training. We utilize the
Transportation Safety Institute in Oklahoma, which is again
part of the RSPA program.
And we do the same training for the State inspectors as we
do with our Federal inspectors. To answer your second question,
continued training of State inspectors and increased training
for them is part of our plan.
Mr. John. Well, I think that is a positive move toward the
safety inspections. Mr. Chipkevich, is it the authority of the
NTSB or the responsibility of NTSB to inspect accidents that
happen in pipeline incidents across the country; is that
correct?
Mr. Chipkevich. To investigate accidents, yes.
Mr. John. Yes, to investigate accidents. It is my
understanding that the two accidents that were referred to
several times up here by some of my colleagues, the one in
Washington in 1999, and the one in Carlsbad, New Mexico, in
2000, that you have not issued a final report as to findings of
what went on, and how we can use some of these findings to
enter into the debate as we develop a piece of legislation.
Can you maybe expand on why we have not received a final
report on your findings?
Mr. Chipkevich. Yes, sir. In the Bellingham accident
investigation, there was a significant delay because of a
criminal investigation that was ongoing, and almost immediately
from the time that we began our investigation on the scene.
There were from the onset 17 people that we wanted to
interview, including the pipeline operator who would not speak
to us, and in fact noted that they would take the Fifth
Amendment.
We also had to delay our ability to do laboratory testing
and examination on the actual pipe that failed in that
particular accident until the criminal investigation side was
satisfied.
We have been able to thus far interview all but four
witnesses, who have since been given immunity on that
particular accident. As a matter of fact, last month we
interviewed the last witness that was made available to us, and
we don't expect to be able to interview the last four witnesses
any time soon.
But we are moving forward with the investigation and expect
to complete it this summer.
Mr. John. And that is in the Washington case?
Mr. Chipkevich. Yes, sir.
Mr. John. And it is the criminal investigation that has
hampered your investigation is what I am hearing?
Mr. Chipkevich. Yes, sir, that is what has substantially
delayed our work on it.
Mr. John. Do you have any idea as to when that will be
completed so that we can use some of that information?
Mr. Chipkevich. We expect to have our factual reports all
finished on that investigation this month, and hopefully
available and in the docket by April for all the disciplines;
and the Board's complete report by this summer.
Mr. John. And what about the other incident?
Mr. Chipkevich. The next incident has been a matter of the
lack of resources, the number of people able to work on the
investigation. That investigation also will be finished by this
summer.
And as was noted earlier, in that particular accident,
there was significant internal corrosion found in that specific
pipe.
Mr. John. And that is preliminary information?
Mr. Chipkevich. That is factual information that there was
significant internal corrosion found in that pipe.
Mr. John. Thank you, Mr. Chipkevich.
Mr. Barton. I thank the gentleman from Louisiana. I
recognize the gentleman from Massachusetts for 5 minutes of
questions.
Mr. Markey. Thank you, Mr. Chairman. Ms. Engleman, I am
concerned about the harbor at the Distrigas LNG facility in
Everett, Massachusetts, which I represent. As you know, I wrote
Secretary Mineta on this issue last September, and to the
Homeland Security Director Ridge in October.
Secretary Mineta responded to my letter, which was very
helpful, and unfortunately I have yet to hear back from
Governor Ridge since October is my concern.
So I would like to raise with you an issue that I posed to
Governor Ridge. What was seen in Boston is that when an LNG
tanker is going into the harbor and heads for the Distrigas
facility the Coast Guard is involved in providing security.
There is a coordinated security and emergency response plan
involving the Coast Guard, and State, and local police, fire,
and emergency responders. But after the ship docks, unloads,
and leaves, there is no coordinated plan.
The Everett Police and Fire Department are on their own,
and the Distrigas security does not appear adequate. Your
office appears to have some authority over safety and security
at this facility, and the Department of Energy has also gotten
involved in examining the issue, although their statutory basis
for involvement is unclear.
What are you doing to ensure that the Distrigas LNG
facility is protected from terrorist attacks on those days when
an LNG tanker is not docked at the facility?
Ms. Engleman. Thank you, sir. More than any other area, we
specify physical security requirements in our regulations,
specifically for LNG facilities. This includes access issues,
including gates, guards, and so forth.
We have been to that specific plant three times in recent
history; for inspections in November 1996, April 1999, and
November 2001. I am pleased to say that in the November 2001
inspection, concerns had been corrected that had been raised in
previous inspections.
We are looking at all aspects of security. We have issued
several security advisories, and we have put together a direct
action group with industry, local responders, State officials,
and a variety of participants to identify and inspect security
issues that you raised.
We think it is very important to first understand what are
the vulnerabilities, and to look at daily operating procedures,
and to look at action plans and response plans that are in
place.
And to heighten the awareness of the individual employees,
as well as anyone who would be involved in interaction with the
product in question. This is literally a daily activity for us
as we continue to operate in conjunction with the Office of
Homeland Security and our new Transportation Security
Administration.
From that, we have weekly and biweekly conversations with
owner-operators, and individual facilities that we believe to
be at risk. So we have a very aggressive--and though it is not
publicized, but a very aggressive security overview and
response that we are looking at.
Mr. Markey. Okay. So you visited there once since September
11; is that correct?
Ms. Engleman. Yes. There was an inspection in November of
2001.
Mr. Markey. Now, was that to implement the standards that
have been in place prior to September 11, or was it to evaluate
what the security level was post-September 11 given the new
level of threat which the plant obviously now had to prepared
against?
Ms. Engleman. Sir, that inspection was based on prior
inspection concerns that had been raised.
Mr. Markey. So, it did not raise, in other words, the new
level of security threat. It was before September 11 that
terrorists arrived in waves of three, and they were technically
unsophisticated, and they were non-suicidal, and they were not
heavily armed.
We know that since September 11 that they arrived in waves
of perhaps 19, that they are suicidal, highly technically
skilled, and very heavily armed, and suicidal. Have you
upgraded, in other words, or did the inspection in November of
2001 take into account that level of threat?
Ms. Engleman. Yes, sir, and in fact they greatly exceeded
the minimum requirements, if you will, at that particular
plant.
Mr. Markey. So there has been an enhancement since
September 11 of the security requirements?
Ms. Engleman. There has been an enhancement of response by
the facilities themselves. We have not enhanced the security
requirements in a regulatory fashion.
Mr. Markey. Well, why have you not increased the minimal
requirements that each of these facilities have to put forth?
Ms. Engleman. We are in the process of reviewing all
applications in a formal way, and informal way, sir, through
individual correspondence, individual discussion, individual
inspections, as well as the direct action group. These efforts
have increased the awareness of the issue of security.
So while regulations may not be formally on the books as a
result of the heightened awareness, on an inspection in
November 2001 we found that facility had exceeded the minimum
requirements.
Mr. Markey. Did you provide all correspondence which you
have had with LNG Distrigas since September 11 to the
subcommittee?
Ms. Engleman. Yes, sir.
[The following was received for the record:]
Following the events of September 11, RSPA sent Security Alert
Notices to all natural gas and hazardous liquid pipeline and LNG
facility operators, including LNG District Gas (Distrigas). On December
5, 2001, RSPA received a letter from Distrigas describing the actions
taken at the facility as a result of the November 26-30 inspection by
the RSPA Office of Pipeline Safety (OPS). These actions included
updating of the Fire Protection Plan, the establishment of semi-annual
drills, and specific security training for security officers. (Copy
enclosed)
Additionally, RSPA/OPS has actively been involved with Distrigas
and other Federal and State agencies regarding LNG facility concerns,
since September 11:
--Between 9/11 and October 1, RSPA/OPS held numerous telephone
conversations with Distrigas and Federal officials (Coast
Guard, FERC, DOE) about security issues regarding LNG ships and
the LNG plant. For example, RSPA/OPS learned of additional
security staffing, coordination with local authorities, and
more stringent entry procedures to the LNG plant.
--On October 5, OPS participated in a security meeting in Boston with
DOE, FERC, Massachusetts Emergency Management Agency (MEMA),
USCG, City of Everett, and Distrigas to discuss a vapor
dispersion and fire radiant study prepared by Quest (at the
request of DOE and RSPA/OPS), and other security concerns. At
this time, an RSPA/OPS inspector also checked to see that
additional safety precautions were in place at the plant.
Security enhancements include hiring additional security
guards, working with the City of Everett to assign local police
to help protect the perimeter of the plant, and installation of
``Jersey Barriers'' to restrict traffic.
--On October 10-11, DOE personnel from the Office of Security and
Emergency Office and the Office of Independent Oversight and
Performance Assurance conducted a security review of procedures
and protection measures in place at the LNG facility in
Everett, Massachusetts. It is important to note that this
review focused on the LNG facility and not on a LNG tanker or
tanker transit. DOE's overall assessment reflects that
Distrigas's industrial security practices and procedures at the
LNG Everett facility are consistent with or exceed those in
place at other industrial facilities. Distrigas informed RSPA/
OPS that all existing Distrigas employees and security
contractor employees' background checks were completed and that
all new Distrigas employees and contractors will receive
background checks.
--On November 26-30, OPS staff conducted an inspection of the Distrigas
LNG plant and reviewed operations and maintenance procedures.
New Security procedures for the LNG plant were verified to be
in place. During this inspection the RSPA/OPS inspector noted
that contract security guards needed additional training
regarding existing Distrigas security procedures. Distrigas
reported to RSPA/OPS, in a letter dated December 5, that this
security training was conducted by December 1, 2001. These
security training records were reviewed by RSPA/OPS with an
onsite inspection on April 11, 2002. RSPA/OPS is currently
developing the appropriate correspondence to be issued to
Distrigas as a result of the November 2001 and April 2002
inspections.
Mr. Markey. Do you require force on force exercises to test
security at the facility?
Ms. Engleman. Not at this time. However, one of the things
that we are addressing in our training program that we are
developing is the issue of exercise and that very type of thing
that you are talking about, where we actually go in and have
specific exercises, and these are being discussed as part of
our training.
Mr. Markey. You have not decided yet whether or not force-
on-force exercises are necessary to determine the actual
security at facilities, at the LNG facility?
Ms. Engleman. It is part of that which is on the table, and
it is part of the discussion on how we can best frame and
prepare for a response.
Mr. Markey. I would recommend very strongly that you adopt
a force-on-force exercise test for LNG facilities, and I think
that it would be eye-opening to you to find how ill-prepared
these facilities are for such drills.
Do you ever do surprise inspections at LNG facilities to
see if the security at Distrigas or the other two LNG
facilities in the United States is adequate?
Ms. Engleman. Surprise inspections do occur. I am not aware
of any specific surprise inspections that have occurred at that
facility.
Mr. Markey. Since September 11, have you conducted any
surprise inspections at this LNG facility or the other two in
the United States?
Ms. Engleman. Not surprise inspections, sir, not to my
knowledge.
Mr. Markey. I recommend to you that you do in fact conduct
surprise inspections. I recommend that you do it at
approximately 5:30 a.m. in the morning. In other words, the
time at which a terrorist attack is likely to occur at these
facilities.
I think you would be shocked at the low level of resistance
which a surprise mock terrorist assault would receive at this
facility. Do you know whether there are any foreign nationals
employed at the Distrigas LNG facilities, or in its security
force?
Ms. Engleman. Sir, I am not aware of that, but I will be
happy to gather that information and respond accordingly.
[The following was received for the record:]
No, we do not know if foreign nationals are employed at the
Distrigas LNG facilities. Our regulations do not prohibit the
employment of foreign nationals. Distrigas has informed OPS
that all initial background checks have been completed and that
all new employees and contractors received background checks.
Distrigas did not distinguish between foreign nationals or U.S.
citizens.
Mr. Markey. I appreciate that. Do you know how many
security guards are employed at the facility and what their
qualifications or training is?
Ms. Engleman. Sir, I do not have the specific data on that
facility, but I would be happy to provide it to you. However,
if I may, when we have been looking at security overall, the
majority, if not all of the facilities and industry
participants that we have spoken to, had implemented new
security profiling and plans, and have addressed these issues,
and are doing so on a case-by-case basis.
I am very encouraged by industry's response to security
issues.
[The following was received for the record:]
Since 9/11, Distrigas more than quadrupled the security
guard force at the plant and additional security guards
supplemented by the Everett Police Department are also deployed
when a LNG ship is in port for security reasons. However, due
to security concerns, we cannot provide the specific number of
guards deployed at a plant. This information is considered
security sensitive information not to be disclosed in a public
document.
The Federal LNG Safety Code requires a written training
plan for personnel responsible for security. The initial
training must include instruction in recognizing breaches of
security, conducting security patrols, methods to identify all
persons entering the plant, and instructions for notification
of other plant personnel and law enforcement officials when
there is any indication of an actual or attempted breach of
security. The written security training plan must include
continuing instruction at intervals of not more than two years.
Distrigas reported that all contract security guards, including
the additional guards deployed after 9/11, completed the
required training by December 1, 2001.
Mr. Markey. I don't want you to be spies, but I have many
reports that guards at Distrigas are asleep in construction
trailers at the site, and that guards bring in sleeping bags
into work so that they can sleep on the job, and that access
badges are not turned in. Would any such allegations be of a
concern to you?
Ms. Engleman. Absolutely, sir.
Mr. Markey. Do you have any process to investigate in and
evaluate such concerns when unsure of the adequacy of the
security at the Distrigas LNG facility, or to ensure that if
there was a terrorist attack against a facility that there
would be a combination of physical safeguards and trained guard
forces, and a coordinated Federal, State, and local force to
protect these facilities?
Ms. Engleman. Sir, we are establishing new protocols for
that very issue, and if I could share with you that in all
inspections, whether it is oil or gas, we have procedural
reviews, and we have come in and have record evaluations and
physical inspections.
So this is ongoing for safety issues, and as you are aware,
many security issues are a component of safety.
Mr. Markey. When can I tell my constituents in Everett that
you will have a formal set of requirements in place that
guarantee that a high level of security is guaranteed at the
facility? What is that date?
Mr. Barton. This will have to be the gentleman's last
question.
Ms. Engleman. Sir, first of all, we work in conjunction
with the Transportation Security Administration, the Office of
Homeland Security, and the other appropriate agencies on all
security issues.
Second, I can never suggest to you that I could guarantee
functional 100 percent security on every aspect of it.
Mr. Markey. I am not suggesting that, but I am suggesting
that I need a date. Will it be completed by the first
anniversary of September 11? Will there be in place a protocol
for LNG facilities such as the Distrigas by the first
anniversary?
Ms. Engleman. Sir, I cannot guarantee any specific date;
however, I can guarantee that we are on the job and we are
looking to address all security and safety issues as soon as
possible.
Having lived through September 11, sir, and having
participated in all the aspects of it, I assure you that we
take it very, very seriously.
Mr. Markey. If I may indulge the chairman for 30 seconds
and say that is an inadequate response. The people who live
near these facilities are entitled to know that there is a date
upon which the Federal Government has settled that will
guarantee that as best as humanly possible a new set of safety
guides have been put in place and has been implemented.
I don't think we can leave you with the misimpression that
your answer satisfies us that you are going to do the best that
you can. I think that you have to give us a date and meet that
deadline so that we have some level of expectations against
which we can match the actual plan which you put in place.
And at this point I think your testimony is leaving us with
an unanswered question that is very important to the safety and
security of the people who live near these facilities.
Ms. Engleman. Sir, again, I cannot give you a time
specific. However, we will work to address these issues and
problems.
Mr. Markey. Thank you.
Mr. Barton. Thank you. We are going to excuse this panel.
There may be additional written questions, and for the record,
we do plan to go to mark-up some time this spring, and so if we
submit written questions, we would hope that you would answer
them expeditiously.
Thank you for your time and effort, and thank you for your
testimony, and you are excused. We will now call forth our
second panel.
Well, welcome, gentleman. We apologize for the crowded
situation. We have now in our second panel, we have Mr. Mark
Hereth, who is the Senior Vice President of HSB Solomon, in
Atlanta, Georgia, and we appreciate you being here.
And Mr. William Haener, who is a Vice President of Natural
Gas for CMS Engineer Corporation, appearing on behalf of
Interstate Natural Gas Association of America. We appreciate
you being here.
And Mr. William Shea, who is President and CEO of Buckeye
Pipeline Company, who is here on behalf of the Association of
Oil Pipe Lines.
And Mr. Herman Morris, Jr., who has testified before our
subcommittee before, and he is the President and Chief
Executive Officer of Memphis Light, Gas, and Water, and he is
here on behalf of the American Gas Association. Good to see you
again, sir.
And Mr. Robert Kipp, who is the Executive Director for the
Common Ground Alliance, in Chantilly, Virginia. Welcome. Mr.
Edward Sullivan, who is the President of the Building and
Construction Trades Department of the small organization known
as the AFL-CIO. Glad to have you, sir.
And last, but not least, Mr. Bruce Nilles, who is a Staff
Attorney for Earthjustice, in Oakland, California. We have your
statements in the record, and we will start with Mr. Harris,
and give each of you 5 minutes to summarize, and then we will
have some questions.
STATEMENTS OF MARK L. HERETH, SENIOR VICE PRESIDENT, HSB
SOLOMON; WILLIAM J. HAENER, VICE PRESIDENT OF NATURAL GAS, CMS
ENGINEER CORPORATION, ON BEHALF OF INTERSTATE NATURAL GAS
ASSOCIATION OF AMERICA; WILLIAM SHEA, PRESIDENT AND CEO,
BUCKEYE PIPE LINE COMPANY, L.P., ON BEHALF OF ASSOCIATION OF
OIL PIPE LINES; HERMAN MORRIS, JR., PRESIDENT AND CHIEF
EXECUTIVE OFFICER, MEMPHIS LIGHT, GAS AND WATER, ON BEHALF OF
THE AMERICAN GAS ASSOCIATION; ROBERT R. KIPP, EXECUTIVE
DIRECTOR, COMMON GROUND ALLIANCE; EDWARD C. SULLIVAN,
PRESIDENT, BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-
CIO; AND BRUCE E. NILLES, STAFF ATTORNEY, EARTHJUSTICE, OAKLAND
REGIONAL OFFICE
Mr. Hereth. Good afternoon. My name is Mark L. Hereth, and
I am a senior vice president of HSB Solomon, a subsidiary of
the Hartford Steam Boilers Inspection Insurance Company.
I am here today on behalf of my company to share our
perspectives on how we are taking the tools and processes that
we use historically to help our customers manage adversity by
applying them to group safety, reliability, and profitability
of their operations.
Improving pipeline safety is not a 1 year, a 5 year, or
even a 10 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 examined the historical experience of steam
boilers in a number of applications in the early 1860's
following a number of fatal accidents.
They developed processes to inspect how operators designed,
built, operated, and maintained boilers. They believed in this
enough to indemnify operators in the event of accidents through
an insurance policy.
These processes were the predecessors of what have become
the ASME standards for pressure containing equipment. Periodic
analysis of historical experience remains as important today as
it was in the 1860's.
An examination of experience with respect to leaks and
spills will address areas where there are gaps in technology,
or the processes demanding integrity. Additional research and
development will develop and demonstrate technology to improve
the way in which integrity is managed.
And likewise technology is demonstrated, 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
will develop applicable standards.
We have entered a time when it is more important than ever
that we continually work to gain and maintain public trust and
confidence. One of our clients has described the way in which
they view the importance of ensuring that work is conducted the
same way, regardless of who is doing the work.
They recognize that a supervisor cannot be with his or her
employees day in and day out, all day long. They have developed
a simple phrase to capture this intent, and it is ``you would
do as I would do.''
I would share with this subcommittee that this simple phase
probably has applicability far beyond pipeline safety and
liability in ensuring the public interest is being met. But we
certainly see its value in the context in which we speak today.
The consensus standards developing organizations are
leading the way in furthering ``you would do as I would do,''
and they are developing these standards for integrity
management, for hazardous liquids, and natural gas pipeline.
They are working on standards for in-line inspections,
pressure testing, direct assessment, as well as communications
in public awareness programs. These standards will become
integral parts of integrity management programs.
We have seen that as this information becomes more and more
prevalent, operators and Office of Pipeline Safety have about
risk in the condition of pipelines, the expectation and demand
on the tools that an operator can apply demand that pipeline
integrity grow.
We are concerned in the aftermath of the Bellingham
accident that as many parties had grabbed on to internal
inspection as a apparent silver bullet. While inspection does
play a key role, it alone is not the answer.
Our experience is that sustainable improvement is best
realized by applying prevention, detection, and mitigation in a
comprehensive systematic fashion. We encourage you to set
expectations through legislation, and to put the spotlight on
those areas that need improvement.
And to ensure that we are making progress on the journey to
improvement pipeline safety and reliability. This will
encourage operators in the Federal Government to engage in
cooperative research to develop better tools, and to improve
prevention, detection, and mitigation measures to protect our
pipeline infrastructure.
This will provide guidance for consensus standards
developing organizations to development standards needed to
ensure that ``you would do as I would do.'' We encourage you to
enable the Office of Pipeline Safety to develop rules that meet
your expectations and those of your constituents.
Mr. Chairman, I want to thank you and the other members of
this subcommittee for providing me with the opportunity to
share our perspectives this afternoon. Thank you.
[The prepared statement of Mark L. Hereth follows:]
Prepared Statement of Mark L. Hereth, Senior Vice President, HSB
Solomon
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.
Mr. Barton. Thank you, Mr. Hereth.
Next we will have Mr. William J. Haener, the Vice President
of Natural Gas of CMS Engineer Corporation. Mr. Haener, you
have 5 minutes.
STATEMENT OF WILLIAM J. HAENER
Mr. Haener. Thank you, Mr. Chairman. My name is Bill
Haener, and I am the Executive Vice President of the Natural
Gas of CMS Energy Corporation, and President of CMS Gas
Transmission.
I am testifying both on the behalf of CMS Energy and the
Interstate Natural Gas Association of America, the trade
association that represents interstate natural gas industry. My
written testimony focuses on the commitment of the interstate
natural gas pipeline industry to improve the safety and
security of our pipeline systems, as well as to improve
communications with the public.
We support the issuance of a pipeline integrity rule and
hope that the rulemaking process will be finalized this fall.
We support the efforts of this subcommittee and the
Transportation and Infrastructure Committee to develop and
introduce legislation that provides for additional improvements
in our already strong safety record.
And hope that as you move forward that you will continue to
recognize practical limitations in technology and the need to
maintain safe and reliable service to our customers.
Natural gas pipelines are the safest form of transportation
and we have a very good safety record, but we are committed to
continuous improvement and incident free operations.
We have and will continue proactively to support research
programs, while working to improve risk assessment and risk
analysis to reach this goal. For example, outside force, or
third party damage, has been a significant cause of damage to
natural gas pipelines, and the incident that Congressman Sawyer
just pointed out in his opening remarks.
And this is the cause of the majority of our serious
accidents. We have participated in OPS's review of one-call
best practices and the development of the common ground
alliance to help reduce outside force damages to our pipelines.
We have also been involved in the Risk Assessment Quality
Action Team, the Mapping Quality Action Team, and have
participated in other activities proposed by OPS, including
efforts to coordinate and improve research on pipeline safety.
OPS has released a notice of proposed rulemaking on the
definition of high consequence areas as an important component
of the natural gas integrity rulemaking process. INGAA provided
constructive comments in an effort to insure the rule is
practical, workable, and enforceable.
Integrity management has always been a key component of our
safety plan. The industry recognizes the need for a national
technical standard with greater emphasis on risk analysis and
sophisticated risk assessment that will provide a
comprehensive, systematic and integrated program to further
improve the safety of pipeline systems.
The interstate pipeline industry has been working with the
American Society of Mechanical Engineers, ASME, the National
Association of Corrosion Engineers, NACE, and the American
Society for Non-Destructive Testing, ASNT, to develop technical
standards.
ASME has issued a comprehensive standard which natural gas
pipelines, will use to perform their integrity inspections. We
recommend that OPS adopt this standard in their natural gas
integrity rulemaking, with a transition period to minimize
consumer impacts.
INGAA supports three alternative methods to assess the
integrity of natural gas pipelines; hydrostatic testing,
internal inspection devices, smart pigs, and direct assessment.
Each of these methods, including their benefits and drawbacks,
is described in my written testimony.
INGAA, however, does not support a mandated 5 year
integrity inspection program. Complying with such a requirement
would have detrimental effects on the consumer. It does not
have a technical justification, would require an unprecedented
effort of material and service providers, and would result in
minimal safety improvements.
A Gas Technology Institute report prepared by Battelle,
Proposed Re-Verification Intervals for High Consequence Areas,
asserts that under worst-case conditions, a periodic review
interval of 15 years would be scientifically and structurally
appropriate for 95 to 98 percent of all natural gas pipelines.
What we are asking for is flexibility in timing and
methodologies to make sure our inspections and repairs occur
when the demand for natural gas is lower and we can work with
our customers to assure that they have other supply options.
Another aspect of pipeline safety that the industry is in
the process of implementing is operator qualification. OPS has
recently adopted an Operator Qualification rule that is
expected to enable OPS to document that employees who operate
and maintain the pipeline are and continue to be qualified for
these tasks.
The interstate pipeline industry is currently in the
process of completing the initial qualification of individuals
performing covered tasks. The deadline for this effort is
October 28, 2002.
We have also developed a common methodology to qualify
contractors and service providers so we can be effective and
efficient at verifying their qualifications. Regarding accident
reporting by cause, OPS has adopted a more detailed and
specific reporting system with 25 categories.
This new system should provide both OPS and industry with
more specific information to better refine risk assessment
technologies.
We are also focusing on security of our infrastructure in
light of September 11 terrorist attacks and the potential
threat of subsequent attacks on our industry. Immediately after
September 11, our industry responded to security and began an
assessment of ways to reduce and respond to these terrorists.
As part of this effort, INGAA formed a Board Task Force,
which I chair, to oversee the security efforts for the
interstate natural gas pipelines, and our focus is on critical
onshore and offshore pipelines and related facilities, as well
as liquefied natural gas facilities.
We are working with numerous government agencies, including
OPS, DOE, FERC, and Homeland Security. Three issues where we
may need government assistance are the need for pre-approved
waivers for response and recovery to a terrorist attack to
occur; relief from antitrust provisions for regional planning
and coordination of a critical spare parts inventory; and
exemption from the Freedom of Information Act for sensitive
information pipelines are required to file with FERC or OPS,
while assuring that hose with a need to know can obtain the
information they need to participate in the regulatory process.
In closing, Mr. Chairman, I want to assure you that the
interstate natural gas pipeline industry takes safety
seriously, and we are committed to safety. Thank you.
[The prepared statement of William J. Haener follows:]
Prepared Statement of William J. Haener, Executive Vice President--
Natural Gas, CMS Energy Corporation on Behalf of the Interstate Natural
Gas Association of America
Mr. Chairman and Members of the Committee, my name is William J.
Haener. I am Executive Vice President--Natural Gas, of CMS Energy
Corporation and President of CMS Gas Transmission, its pipeline and
field services division. CMS Energy Corporation has annual sales of
more than $6 billion and assets of about $15 billion throughout the
U.S. and around the world with businesses in electric and natural gas
utility operations; independent power production; natural gas
pipelines, gathering, processing and storage; oil and gas exploration
and production; and energy marketing, services and trading.
CMS Panhandle Companies, a unit of CMS Gas Transmission, operates
over 10,800 miles of mainline natural gas pipeline extending from the
Gulf of Mexico to the Midwest and Canada. These pipelines access the
major natural gas supply regions of the Louisiana and Texas Gulf Coasts
as well as the Mid-continent and Rocky Mountains. The pipelines have a
combined peak day delivery capacity of 5.4 billion cubic feet per day
and 85 billion cubic feet of underground storage facilities. In
addition, Consumers Energy, an affiliate of CMS Gas Transmission, owns
and operates a local distribution company and an intrastate pipeline
and storage company located in Michigan.
I appreciate this opportunity to appear at this oversight hearing
before the Subcommittee today on behalf of the Interstate Natural Gas
Association of America (INGAA). INGAA is the trade association that
represents interstate natural gas pipelines in the United States, the
inter-provincial pipelines in Canada and PEMEX in Mexico. These
pipeline systems transport 90 percent of the natural gas consumed in
the United States from the producing areas to the local gas companies.
Millions of Americans rely on clean, efficient natural gas to fuel
homes and workplaces, with no thought about the vast network of
pipelines that criss-cross the country transporting this abundant
source of clean energy from the wellhead to the burner tip. The
companies that build and operate interstate natural gas pipelines have
created the safest mode of transportation today--safer than highway,
rail, aviation and marine transport.
This record is the product of a great deal of hard work and
dedication to continuously improve the performance of our industry.
While the interstate natural gas pipeline industry has had only 31
deaths and 91 injuries in the last sixteen years, we need to keep
working to have none. The interstate natural gas pipeline industry has
a long-standing commitment to target zero failures as evidenced by our
financial and physical investments not only in the facilities and the
people that operate them, but to research and development as well. We
have supported research and development of new technologies to help to
improve safety for over sixty years mainly through two research groups,
the Pipeline Research Council International (PRCI) founded by the
natural gas pipeline industry in 1952, and the Gas Technology Institute
(GTI), formerly GRI, which was organized in the 1970s. We have
voluntarily spent more that $100 million in the last five years, mainly
through these organizations in the development of improved
technologies, materials, industry consensus standards and operation and
maintenance practices to improve safety.
I want to commend this Subcommittee for holding this oversight
hearing on pipeline safety. I would like to give this Subcommittee some
background on our industry regarding pipeline safety as well as an
update on recent developments regarding integrity management, pipeline
security and other actions taken either by OPS or the interstate
pipeline industry over the last few years.
background
From the inception of the natural gas pipeline industry in the
1930s to current day, pipeline companies have utilized consensus
standards to improve the level of pipeline safety. In 1968, Congress
paved the way to adopting and augmenting these standards by passing the
Natural Gas Pipeline Safety Act and establishing the Office of Pipeline
Safety (OPS).
Currently, natural gas pipeline operators monitor and control
safety in many ways. These safety measures include, but are not limited
to the use of high quality pipelines materials and corrosion coatings,
the use of cathodic protection (a low voltage electric charge) to
prevent corrosion of below-ground pipelines, ground and aerial surveys
to identify and report unusual activity or to detect leaks through use
of gas detectors or discoloration of plants and grasses, hydrostatic
pressure testing of new and existing facilities, the use of internal
inspection devices (smart pigs) and by following all of OPS's
prescriptive regulations.
For example, natural gas pipeline operators are required to
constantly monitor the area around the pipeline for changes in
population density, a process commonly known as class location
analysis. These categories of population density or ``class locations''
range from rural (Class 1) to heavy urban (Class 4). Natural gas
pipelines are required to increase the level of safety of pipelines as
the population density around a pipeline increases. When these changes
occur, the pipeline operator is required to insure that the installed
pipeline design characteristics are commensurate with the new class
location design requirements. If it does not meet these requirements,
the installed pipe is replaced with new pipe with the appropriate
design characteristics or the operating pressure is reduced to increase
the safety margin and the frequency of inspections within the new class
location is increased. OPS has refined these regulations over the years
as additional knowledge is gained.
I also want to assure you that interstate natural gas pipelines'
practices are continually being inspected by OPS. As an example, the
Panhandle Companies pipeline systems have been inspected by OPS
nineteen (19) times, which required approximately forty-eight (48) days
over the last two years.
pipeline integrity rule
As we have stated in our comments to OPS, INGAA and its member
companies support development of a natural gas pipeline integrity rule.
We are pleased that OPS has released a Notice of Proposed Rulemaking
(NOPR) on the definition of ``high consequence areas'' as an important
component of the natural gas integrity rulemaking process. The comment
period on this NOPR closed last week. INGAA, as well as members
companies and others, have provided what we hope are constructive
comments in an effort to insure that the rule is practical, workable
and enforceable. We hope that we will see a NOPR on the integrity rule
itself in April or May. We would like to have this rulemaking process
finalized sometime this fall.
While integrity management has always been a key component of our
business plan, the interstate natural gas pipeline industry recognizes
the need for a technical standard with greater emphasis on risk
analysis and sophisticated risk assessment that will provide a
comprehensive, systematic and integrated program to further improve the
safety of pipeline systems. The standard should provide a consistent
process that an operator of a pipeline system can use to assess and
mitigate risks in order to reduce both the likelihood and consequences
of incidents. It should require documentation that the inspections, and
any necessary follow-up, have been performed. It should also provide a
method to enable an operator to allocate resources for prevention,
detection and mitigation activities that will result in improved safety
and a reduction in the number of incidents.
Over the past few years, the natural gas pipeline industry, along
with the American Society of Mechanical Engineers, the National
Association of Corrosion Engineers and others, has undertaken a number
of technical initiatives to provide answers and solutions to the
engineering and scientific issues related to the integrity process.
After two years of intensive work by a number of technical and
scientific experts under the auspices of the Gas Technology Institute,
20 reports have been issued that now provide the technical basis for an
integrity management standard. These reports have been shared with OPS
and the state pipeline safety regulatory bodies. The American Society
of Mechanical Engineers has just now issued a comprehensive standard
for natural gas pipelines regarding integrity inspections. As OPS
develops their integrity rule for natural gas pipelines, OPS can chose
to adopt this standard in whole or in part.
During the course of these initiatives, INGAA has assessed the
effectiveness of our present integrity management practices from three
perspectives--scientific analysis, impact on consumers and actual
results. As a result, INGAA has recommended to OPS that three
alternative methods be used to assess the integrity of pipeline systems
on a periodic basis: hydrostatic testing, use of internal inspection
devices (smart pigs) and direct assessment. Each of these methods has
advantages and disadvantages.
For example, although hydrostatic testing is a useful tool to prove
structural integrity, a pipeline must be taken out of service for a
number of days and sealed off during the test. Water is pumped into the
pipe and pressurized to approximately 125 percent of the design
operating pressure of the pipeline. This pressure is maintained for at
least 8 hours and the pipeline is checked for water leaks. At the
conclusion of the test, the water is released in a manner that ensures
safety and compliance with approved environmental requirements; the
pipeline is then dried and placed back in service.
Internal inspection devices or smart pigs provide another integrity
assessment tool. They have been in use over the last two decades. Smart
pigs are large cylindrical vehicles containing sophisticated sensors
and data collection devices that measure the wall thickness and
internal geometry of the pipe. The information a pig run provides is
used to determine the structural integrity of the pipe. Smart pigs have
a limited application because they can typically only be utilized in
pipelines with a constant inside diameter and they have difficulty
traversing around sharp bends. Much of the industry's pipeline system
was designed and constructed long before the concept of smart pigging
was developed. Such pipeline systems contain reduced-sized valves and
lack the facilities required for launching and receiving smart pigs.
Because of these restrictions, only about 30 percent of interstate
natural gas pipelines are designed or have been modified to be
piggable, i.e., capable of accommodating the passage of a smart pig.
Approximately 25 percent more can be made piggable by adding launchers
and receivers, i.e., the facilities required to insert and remove a
smart pig from the pipeline, and minor modifications (we expect a great
deal of this will be made piggable as a result of the rule). Another 43
percent can only be made piggable with very extensive modifications
(changing out of pipes, valves, bends, etc), while 2 percent cannot be
pigged at all. After modifications are made, the smart pigging of a
pipeline can be completed with the pipeline in-service and only
requires a pressure reduction at the time of inspection.
Hydrostatic testing and modifying a pipeline to make it
``piggable'' require that the pipeline be taken out of service for a
period of time (average 18 days for the former and 30 days for the
latter).
The third integrity assessment process is the direct assessment
inspection process. In this instance, electronic measurements of the
pipeline--including data from the cathodic protection system--are
combined with statistical methods to identify portions of a pipeline to
be excavated and exposed. The pipeline is visually inspected for loss
of coating, external corrosion, etc, measurements are made to detect
the presence of internal corrosion and other tests are performed. This
occurs while the pipeline remains in service, though often at a reduced
pressure. This avoidance of pipeline downtime is a critical factor in
many system operations.
The rule should permit pipeline operators to avail themselves of
new technology as it becomes proven and practical. New technologies may
improve an operator's ability to prevent certain types of failures,
detect risks more effectively or improve the mitigation of risks. As I
had mentioned earlier, the natural gas pipeline industry has spent
approximately $100 million over the last five years on pipeline safety
and OPS is obtaining additional funding this year for R&D. INGAA is
also working to obtain funding for DOE pipeline R&D. A coordinated
effort amongst all of these organizations will be imperative to insure
that available research funds are optimized in order to bring new
technologies to bear on the challenges that face the industry.
Congress should not mandate that the rule require a specific
frequency of inspection, such as five years, as this can have
detrimental effects on the consumer, does not have technical
justification and has minimal safety impact. The GTI report prepared by
Battelle, ``Proposed Re-Verification Intervals for High-Consequence
Areas'' asserts that, under worse case conditions, a periodic re-
verification interval of 15 years would be scientifically and
structurally appropriate for 95 to 98 percent of all natural gas
pipelines.
Energy and Environmental Analysis, Inc. has prepared a new report
called ``Consumer Effects of the Anticipated Integrity Rule for High
Consequence Areas'' for the INGAA Foundation. This study reports that
the price impact to consumers due to pipeline capacity reductions is
the sum of mainline and delivery lateral impacts and is dependent on
the frequency of testing. Under the best circumstances, the projected
impact ranges from $6.3 billion for the 14-year inspection cycle to
$17.6 billion for the 5-year inspection cycle. These costs, for the
most part, would result when demand for natural gas is high and the
pipeline capacity to deliver the natural gas is not available because
of these inspections or modifications. These costs would be incurred by
consumers on pipelines that run at high capacity and/or on laterals
that are the sole source of supply for a local distribution company,
gas-fired electric generation or an industrial load.
There are additional costs to consumers that are not accounted for
in the study. The study does not include the cost to the pipeline
companies or local distribution companies of implementing the integrity
management rule. These costs are expected to be $2.5 billion over 10
years for transmission pipelines and $4.5 billion over 10 years for
local distribution companies. The study also does not include cost
impacts to industrial users such as the need to reduce output or shut
down a plant due to lack of needed capacity during integrity
inspections.
In spite of this point, I do want to emphasize that the industry
can and will support the integrity management rule. However, what we
need is flexibility in timing and methodologies to make sure our
inspections and repairs occur when the demand for natural gas is lower.
That way we can work with our customers to assure that they have
alternate supplies or sufficient storage to meet their short-term needs
and allow us to use the technology and processes that are effective.
OPS has received a significant increase in their budget over the
last two years. This will enable them to improve their risk analysis
and risk assessment protocols as well as improve the training that they
give their inspectors and state inspectors to better prepare these
inspectors to oversee implementation of the integrity rule by pipeline
companies.It is clear that OPS has the statutory authority to implement
these rules, given the fact that they have issued rulemakings for
hazardous liquid pipelines and are moving forward on a rule for natural
gas transmission pipelines. INGAA encourages OPS to move quickly on
this rule.
operator qualification standards
The Operator Qualification rule required that pipeline operators
must have a written qualification program by April 27, 2001. This new
program is expected to enable OPS to document that employees who
operate and maintain the pipeline are and continue to be qualified for
these tasks. The interstate pipeline industry is currently in the
process of completing the initial qualification of individuals
performing covered tasks and the deadline for this effort is October
28, 2002. INGAA and its member companies have also developed a common
methodology to qualify contractors and service providers, so we can be
effective and efficient at verifying their qualifications.
pipeline accident reporting by cause
The natural gas pipeline industry has been reporting detailed
information regarding pipeline accidents by, in essence, five
categories of causes--outside force damage, construction/material
defect, external corrosion, internal corrosion and a category called
``other'' since the inception of the OPS program. We have been and
continue submitting an annual report to OPS regarding all accidents
that occurred within that year along with an inventory of our pipe.
This information has been used by OPS and the industry for extensive
data analysis and trending.
OPS has now adopted a more detailed and specific reporting system.
This new system will have 25 categories. These categories are basically
grouped into three headings: time dependent--examples are internal and
external corrosion; time independent--examples are third party damage,
operator excavation damage and earth movement; and stable--such as pipe
manufacturing or construction defects. This will provide both OPS and
the industry with more specific information on causes of accidents to
better refine our risk assessment technologies and to make other
necessary changes to further mitigate accidents.
communications
INGAA is sensitive to the importance of public perception. The
demand for natural gas is growing and is anticipated to increase 32
percent (from 22.8 Tcf today to 30 Tcf) by about 2010 to 2012. The
current natural gas pipeline infrastructure cannot support this
increase in demand. New pipelines will need to be built.
The current environment provides both opportunities and challenges
for growth of natural gas use. INGAA and its member companies are
undertaking a project to improve our communications with the public. We
are convening member company representatives to collect and develop
``best practices'' that will then be deployed by holding industry
workshops. We will also be working with OPS/RSPA and FERC. Out of these
efforts, we expect to improve our communication with the public so that
they can better understand pipeline safety and other issues. We hope to
complete this effort before the end of this year.
pipeline security
In the wake of the September 11 attacks, our industry immediately
increased security and began an assessment of ways to reduce and
respond to terrorist threats. As part of this effort, INGAA formed a
Board Task Force, which I chair, to oversee the security efforts for
interstate natural gas pipelines. The focus is on critical onshore and
offshore pipelines and related facilities, as well as liquefied natural
gas (LNG) facilities. We have reached out beyond our membership to
others in the industry who have these types of natural gas transmission
pipeline facilities and included them on the task force.
To date we have ensured that every INGAA company has designated a
member of its senior management and made them responsible for security.
Our task force has assessed our industry security practices, given the
new threats, and are developing common risk based practices that can be
utilized by our members. These practices will cover preparation (having
a plan), detection, deterrence, response to an incident and recovery
from an incident. We are categorizing those facilities that are
critical either to the operation of the pipeline or in areas where
there is high population density near the pipeline. We are also
categorizing those facilities that are critical to public service,
i.e.; provide needed service to the military, government, industrial
complexes, electric power plants and communities.
INGAA has been working with our customers and suppliers, AGA, APGA,
EEI and API to develop a common understanding and nomenclature for
threats and security practices. We are working with DOT and DOE and
others in the natural gas industry on consensus security practices that
all pipelines will implement. This should be completed later this
spring. We have determined that we can be more prepared to respond to a
terrorist incident if we formalize cooperation among companies on spare
parts exchange. Additionally, we are assessing the need for separate
regional inventory systems of critical items. We are also reviewing the
effectiveness of our present communications concerning security with
the public, local emergency planning committees, local, state and
federal law enforcement and government officials. We are working
cooperatively with a number of federal departments and agencies
including the Office of Pipeline Safety, DOE, FERC, the FBI, Homeland
Security, and CEQ. INGAA would like to work with the Committee so that
any legislation regarding security reflects the efforts being made with
government agencies and others in the natural gas industry.
We are also currently working with the Administration on issues
that need resolution and that may require assistance from Congress. The
first issue is the need to have pre-approved permit waivers for
response and recovery to a terrorist attack. If a facility experiences
a terrorist attack, it will become a crime scene and we will be denied
access. However, the need will exist for us to continue transporting
natural gas and we will have to quickly find a new site upon which to
rebuild at the minimum, a temporary facility. Physically, we can
reconstruct quickly and we are verifying the availability of the needed
spare equipment, but we need a quick permit approval process to
expedite the reconstruction.
Our second issue is the possible implication of antitrust law to
industry/regional planning to deal with supply disruptions as well as
development and coordination of a critical spare parts inventory. We
are currently performing a review of antitrust implications and are
preparing to talk to the Department of Justice and others about what
flexibility we may have under the laws to participate in regional
table-top tests to better coordinate planning for and reaction to a
terrorist event. Our industry needs to be assured that we can
communicate among pipelines, with producers, our customers and others
to ensure the flow of natural gas in the event of a significant
incident.
Finally, under these extraordinary conditions, INGAA has concerns
with the tension between the need to restrict access to sensitive
pipeline infrastructure and operational information and the public's
right to know. We want to make sure that this sensitive information
about pipelines is exempt from disclosure under the Freedom of
Information Act (FOIA) and, therefore, will not able to be distributed
or displayed to permit easy access by terrorist groups. This type of
information includes detailed pipeline maps, information that can make
a specific area attractive to a terrorist (such as pipeline locations
near hospitals, schools, etc.), and engineering information that
identifies the strategic importance of a pipeline facility including
schematic flow charts. We need assurance that FOIA specifically exempts
the release of critical energy infrastructure information. If not, once
an agency releases the information for legitimate requests under FOIA,
it cannot prevent its release to any other requestor--even a terrorist.
But we also need to make sure that those who have the ``need to
know'' about a pipeline in their local area have adequate access to
information. This includes emergency responders, our neighbors who live
next to a pipeline, and key state and federal officials. However, under
FOIA, once the information is released to them, it is then considered
to be ``public'' and released to anyone who asks for it. For example, a
recently published National Environmental Policy Act (NEPA) report for
a new pipeline shows exactly where the pipeline is in relationship to
schools, hospitals, etc. Although it is clearly of importance to a
community to know where there is underground infrastructure, such
information, in the wrong hands, could pose a security threat.
Pipelines and our regulators need to walk a fine line to assure that
those who need the information get it (perhaps with requirements that
they can't release it or put it on their websites) while limiting
general distribution of detailed information so that it does not get
into the wrong hands.
There are other issues on which we are working with the
Administration and hope that they will be resolved. We are pleased
about the recent announcement by the Head of Homeland Security Governor
Tom Ridge regarding a government-agreed upon alert system and the use
of comment nomenclature. This is a good step forward.
conclusion
I want to thank this Subcommittee for inviting me to testify today.
INGAA and its member companies take pipeline safety and security as top
issues of importance. We want to work with this Subcommittee and the
full Committee to obtain sound pipeline safety reauthorization
legislation in this Congress.
Mr. Barton. Thank you, sir.
We now would like to hear from Mr. Shea.
STATEMENT OF WILLIAM SHEA
Mr. Shea. Mr. Chairman, and members of the subcommittee, my
name is Bill Shea, and I am President and CEO of Buckeye
Pipeline Company. Buckeye owns and operates facilities in 11
States in the Northeast, Midwest, Texas, Louisiana, and
Florida. Buckeye is headquartered in Emmanaus, Pennsylvania.
I am here today representing the Association of Oil
Pipelines and the Liquid Pipeline Companies of the American
Petroleum Institute. Together, these two organizations
represent the vast majority of domestic oil pipelines.
The 200,000 miles of crude oil and petroleum product
pipelines in this country are essential to keeping our economy
moving. Oil pipelines provide about 68 percent of domestic
transportation for crude oil and petroleum products.
Another 27 percent is moved by water, and about 5 percent
by truck or rail. Pipelines are also very efficient. While
gasoline prices vary considerably from time to time, and place
to place, average pipeline transportation costs is consistently
around 2 to 3 cents per gallon.
The oil pipeline industry also has the best safety record
of any of the transportation modes and one that is getting
safer as this chart, or the two charts over to your left would
indicate.
The industry is committed to improving that record until
all incidents are eliminated. In order to achieve that goal the
liquid pipeline industry has undertaken first to use
comprehensive risk management tools and techniques to reduce
the likelihood of pipeline incidents and eventually to
eliminate them.
Second, collect, analyze, and understand the industry's
safety and environmental performance, and use that information
to reduce risks and drive accidents to zero.
Third, to take responsibility for all aspects of excavation
damage prevention, even those that pipeline operators can only
influence and not control. Fourth, provide the best possible
geographic information on pipeline systems to be used by all
stakeholders and pipeline safety.
And fifth to drive industry sponsored initiatives for
improved safety and environmental performance that exceed
government requirements.
As a result of a 1994 pipeline safety summit, OPS and
industry undertook a collaborative effort to explore risk-based
solutions as a way to drive continuous improvement in safety.
Congress approved that effort and authorized the risk
demonstration program to test and measure the application of
risk management to the concepts of pipeline safety. OPS found
those approved risk demonstration projects enhanced safety on
the individual systems, and enabled OPS to learn much more
about the operations of the affected pipeline and the pipeline
operator, than would have been learned from periodic
inspections.
The Office of Pipeline Safety's integrity management rule
build on those lessons. These rules, the last of which became
final earlier this year, stress risk assessment,
prioritization, data and information integration from multiple
sources, and performance measurement and tracking.
OPS has already begun assessing the progress under the
rulemaking in a series of quick hit reviews reviewing
individual operator's programs for effectiveness. Now, I have
had the personal experience with the quick hit program, as
Buckeye was the first pipeline operator to go through this
process.
We believe that our focus on risk-based approaches is
showing results. The number of liquid pipeline incidents in
2000 and 2001 significantly declined, and may signal the
beginning of a new long term trend.
OPS has also issued a number of recent risk-based
rulemakings and undertaken other initiatives aimed at fostering
improved risk management.
Our industry has supported these efforts, which include
enhanced data collection, support for the Common Ground
Alliance, and improved mapping in the form of a GIS based
national pipeline mapping system, stronger corrosion rules, and
operator qualification rules that require operators to
objectively demonstrate to regulators that their employees,
and/or contractors are qualified to perform specific tasks and
can recognize and respond to conditions that may be abnormal.
But the liquid pipeline industry is not only working with
OPS to foster continuous improvement through regulation.
Industry recognizes that there are still significant advances
to be made in the understanding of pipeline performance and
have formed an industry-wide environmental and safety
initiative.
Our efforts in 2002 aim at fostering strong and effective
Federal regulation of pipelines, refining data management, and
performance methods, engaging with Common Ground Alliance to
target improvement and underground damage prevention, and many
other initiatives.
In summary, we believe that the movement to a risk-based
approach in pipeline safety regulation has resulted in
significant achievement and enhancements in DoT's pipeline
safety program, improvements in pipeline management by
operators, and what we believe is a trend in an improved safety
record.
Congress should foster these improvements through
appropriate support for risk based decision and a rulemaking
process aimed at addressing the greatest risks first. Thank
you.
[The prepared statement of William Shea follows:]
Prepared Statement of Bill Shea, President and CEO, Buckeye Pipe Line
Company, L.P. on Behalf of the Association of Oil Pipe Lines and the
American Petroleum Institute
introduction
Mr. Chairman, Members of the Subcommittee, my name is Bill Shea. I
am President and CEO of Buckeye Pipe Line Company, L.P. Buckeye owns
and operates nearly 3,900 miles of pipelines carrying refined petroleum
products, including gasoline, jet fuel, diesel fuel, heating oil and
kerosene. We also operate approximately 1,200 miles of pipeline for
other owners. We own or operate facilities in 10 states: Illinois,
Indiana, Ohio, New York, Pennsylvania, New Jersey, Connecticut,
Massachusetts, Texas, and Florida. Buckeye is headquartered in Emmaus,
Pennsylvania.
Currently I serve as Chairman of the Executive Committee of the
Association of Oil Pipe Lines (AOPL) and a member of the Pipeline
Committee of the American Petroleum Institute (API). I am here today
testifying on behalf of both AOPL and API. The Association of Oil Pipe
Lines is a trade association of owners and operators of crude oil and
refined petroleum product pipelines. AOPL's members move over 80% of
the oil transported in this country. The American Petroleum Institute
represents over 400 companies involved in all aspects of the oil and
gas industry, including exploration, production, transportation,
refining, and marketing. Together, these two organizations represent
the vast majority of domestic oil pipelines.
the liquid pipeline industry
Mr. Chairman, the background information for my testimony is
presented in the information packet included with my testimony. I am
also releasing to the Committee our most recent publication, The U.S.
Oil Pipeline Industry's Performance, an updated report prepared by
Cheryl J. Trench of Allegro Energy Group.
There are approximately 200,000 miles of crude oil and petroleum
products pipelines in this country. This liquid pipeline infrastructure
is an essential tool in keeping our economy moving. On a barrel-mile
basis, pipelines provide about 68% of the crude oil and petroleum
products transportation domestically. Another 27% is moved by water and
about 5% by truck or rail. (One barrel transported one mile is a
barrel-mile.)
The gasoline you put in your car most likely gets to you in large
part by pipeline. Pipelines deliver directly to our nation's military
bases and airports the jet fuel that powers our air force and our
aviation industry. The trucking system relies on diesel fuel delivered
by pipeline. Millions of heating oil and propane customers rely on
pipelines to bring fuel into their area. Industries across America rely
on pipelines to deliver the feedstock they use to make many products
that are essential to our homes and businesses, like plastics and
pharmaceuticals.
Pipelines are an extremely efficient petroleum transportation
system. While gasoline prices at the pump may vary considerably from
time to time and place to place, the pipeline transportation
contribution to the cost is consistently around 2-3 cents. We
accomplish our job so efficiently that America's oil pipelines
transport 16.8% of all U.S. freight, but represent only 1.9% of the
nation's freight bill.
Pipelines also have very low air emissions compared to other modes
of transportation. Pipelines move oil in a closed environment, usually
underground, propelled by centrifugal force motors, usually electric.
For this reason, pipelines are able to move huge amounts of fuel
without contributing to our ambient air pollution problems.
the industry's safety record
The U.S. liquid pipeline industry has a strong safety record. Yet
it is a record that we in the industry are striving constantly to
improve. In the ten years ending with 2001, there were 21 deaths and
117 injuries associated with liquid pipeline accidents. In three of
those years, including 2001, there were no fatalities, and that is the
goal we seek. Pipeline transportation of fuel is far and away the
safest form of transportation. For example, on a per gallon basis,
deaths are 60 times more likely to occur when transportation is by
truck rather than by pipeline. Many industries would be envious of our
record. However, we industry members believe that pipeline incidents,
especially those that involve injury to persons or the environment, are
unacceptable. In this way, we are like those impacted by these
incidents. We would like to see them eliminated.
Our efforts to improve safety have shown results over the long
term. Real trends in safety performance take a long time to see. As the
chart here demonstrates, over the last 30 years, our safety performance
has improved markedly, whether measured in number of spills or volumes
released. The number of pipeline incidents has decreased by 56% and the
volume released has gone down by more than 60%. These improvements have
occurred at the same time that the volume transported to serve our
nation's energy needs has increased. Viewed on a barrel-mile basis,
volumes spilled have decreased by over 70%.
The year 2000 set record lows for both the number of incidents and
the volumes spilled, and 2001 looks even better. The low numbers have
not happened coincidently. They reflect a concerted effort by the
industry and its regulator to improve safety over the long term. The
records set in 2000 and 2001 are encouraging, but we are determined to
do all we can to turn these recent promising short-term results into a
new long-term trend. No spill of any size should be tolerated, and our
goal must be to eliminate spills entirely.
goal for today's testimony
It is wise periodically to step back and review long term
objectives and our progress towards those objectives. Today I would
like to review five major long-term objectives the pipeline industry
has undertaken and our progress toward meeting those objectives.
Those five objectives are:
<bullet> To focus the pipeline industry on risk reduction as a better
way to eliminate incidents, rather than on chasing individual
actions or activities directed at preventing specific types of
accidents;
<bullet> To collect, analyze, and understand the pipeline industry's
safety and environmental performance and use that information
to reduce risk and drive accidents to zero;
<bullet> To take responsibility for all aspects of excavation damage
prevention, even those which pipeline operators can only
influence, not control;
<bullet> To provide the best possible geographic information on
pipeline systems to be used by all stakeholders in pipeline
safety; and
<bullet> To undertake an industry driven initiative focused on improved
safety and environmental performance.
As an oversight committee, it is your charge to evaluate the
overall progress the industry has made and the role of the federal
government through the Office of Pipeline Safety in policing the
pipeline industry.
risk reduction--changing our expectations
Today's pipeline safety record is the result of a long-range plan
that had its inception back in the early nineties. There were several
initiating events. In 1992, the Congress reauthorized the pipeline
safety program to add protection of the environment to the mandate of
the Department of Transportation's Office of Pipeline Safety (OPS)
pipeline safety program. This was similar to mandates imposed on the
maritime industry by the Oil Pollution Act of 1990.
The OPS is a relatively small agency that had previously been
responsible primarily for public safety as it relates to pipeline
operations. In addition to expanding the scope of the OPS's
responsibilities, the 1992 act had also included a number of
prescriptive directives to the agency and to the industry, each a
specific solution to a single accident.
After a number of proposed rules were severely criticized, the OPS
called a Pipeline Safety Summit in June 1994 to discuss with all
stakeholders the state of pipeline safety. The public, state and local
regulators, and members of the pipeline industry expressed significant
concerns over the acceptability of then operational practices,
regulations, and their enforcement. Participants also identified
evolving environmental sensitivities and priorities as a factor
affecting pipeline risks and operations, and the limited resources
available to the agency and the industry to address the many
expectations of Congress and the public. The OPS and the liquid
pipeline industry recognized the need to address these risk-related
concerns in a thoughtful way, with an emphasis on reducing risks while
communicating and demonstrating to all stakeholders that industry and
government can work together in a responsible manner.
The OPS and the API's General Committee on Pipelines formed the
Risk Assessment Quality Action Team as a cooperative joint venture to
explore the applicability and potential benefits to the liquid pipeline
industry of formalized risk management programs, such as those that had
been used successfully by the nuclear, chemical and refining industries
to improve safety performance. For over a year, the Team sought input
from many risk management experts including those at the Harvard Center
for Risk Analysis. On June 20, 1995, the Team issued a formal report on
the use of risk management in the liquid pipeline industry, identifying
a number of areas within the OPS program and the liquid pipeline
industry that would benefit from risk management techniques and
practices. The Team adopted a number of action items aimed at improving
the management of pipeline risk, including development of industry
guidelines on the application of risk management, a decision to
initiate training of OPS and industry personnel in risk management
techniques, and adoption of collaborative efforts to improve the
quality of risk models and pipeline failure and operating data
necessary to support these models. The Team also agreed to move forward
with risk management demonstration projects to test the validity of
using risk management in the administration of a pipeline safety
program.
risk-based integrity management rules
After Risk Assessment Quality Action Team finalized its
recommendations, OPS began considering how to incorporate the concept
of risk reduction into the pipeline regulatory program. OPS began by
developing a program for risk-based demonstration projects to test and
measure the application of these new concepts into pipeline safety.
Congress sanctioned these efforts through revisions to the pipeline
safety program adopted as part of the reauthorization of the pipeline
safety act in 1996. Ultimately, OPS approved seven demonstration
projects testing alternatives to the pipeline safety regulations that
offered equal or greater safety than the prescribed rules. Under the
program, companies volunteering to participate also agreed to
significant involvement in their operations by OPS inspectors and other
personnel. At the end of the demonstration period, OPS found these
projects had enhanced safety on the individual systems and had enabled
OPS to learn much about the operations of the affected pipeline, as
well as the pipeline operator, beyond the portion of the pipeline
involved in the demonstration project.
OPS then focused on developing new regulations around managing
system integrity, and concentrated on four desired outcomes:
<bullet> Accelerating integrity assessment of pipelines in High
Consequence Areas;
<bullet> Improving integrity management systems within companies;
<bullet> Improving the government's role in reviewing the adequacy of
integrity plans; and
<bullet> Providing increased public assurance that risks are being
effectively reduced.
As now published, the hazardous liquid integrity management rules
propose initial, or baseline, inspections of all pipeline systems that
are in or could affect High Consequence Areas. These inspections,
typically conducted using sophisticated electronic in-line inspection
tools or physical strength tests of the pipeline, will be concentrated
in areas where hazardous liquid pipeline releases could have more
severe consequences. Based on the initial assessment, operators will be
required to repair defects, take specific mitigative actions to protect
certain High Consequence Areas, reevaluate response plans, as well as
integrate other integrity improvement efforts and activities, such as
the effectiveness of one-call programs, into post assessment risk
reduction actions.
One of the major efforts under this rulemaking was defining those
resources that require additional protective measures. OPS assembled a
team of government and private stakeholders to develop definitions
based on the guidance offered by Congress in the 1996 reauthorization.
This multi-year effort resulted in the final rule defining specific
areas based on their ecological sensitivity or their use as drinking
water supplies.
Under the integrity management rules, operators of more than 500
miles of pipelines must develop a baseline integrity plan by March 31,
2002. Smaller operators are required to have their plan in place by
February 13, 2003. In the baseline plan, an operator must identify the
highest risk 50% of segments covered under the rule and schedule those
segments for inspection and evaluation within three and a half years.
The remaining 50% must be evaluated within seven years. Subsequent
inspections must then occur on a cycle of no longer than five years.
Many operators are finding that the efficient use of internal
inspection tools and the tool vendors' resources will lead to as much
as 90% of the actual mileage being inspected in the early period.
OPS has already moved to enforcement of the new rule and is
conducting a series of ``Quick Hit'' inspections to review operators'
diligence in identifying High Consequence Areas along their pipeline
systems and taking a first look at baseline assessment plans. These
inspections, generally conducted by three inspectors visiting the
offices of the affected pipeline, are more in-depth and require a
better understanding of pipeline operations than traditional pipeline
inspections. The Quick Hit inspection teams are not only identifying
strengths and weaknesses in the operators' baseline plans, but also are
training inspectors to conduct comprehensive reviews of pipeline
systems. The Quick Hit inspections will be completed by the end of
April and comprehensive reviews of operator integrity management plans
will follow.
The comprehensive risk-based approach under the new rules requires
a real change in culture for many operators and inspectors. OPS is
stressing risk assessment, prioritization, data and information
integration from multiple sources and performance measurement and
tracking. Judging from other industries where this approach has been
proven, real risk reduction and improved system integrity will be the
result. However, the effectiveness of this approach can only be proven
over time. We hope that the significantly reduced number of incidents
in 2000 and 2001 are the beginning of a long-term trend that shows a
steady improvement in pipeline integrity and a decrease in pipeline
incidents.
using data to reduce risk
The recommendations from the Risk Assessment Quality Action team
also formed the basis for a new set of initiatives. Risk-based
decision-making is very much dependent on data that can be used to
identify and prioritize risk. The OPS and industry began to look at
existing data in new ways and tried to determine what additional
information might need to be collected. OPS data was reviewed and
analyzed to look for strengths, weaknesses, and means to improve the
data that would support analytical work.
As a result, the industry (with the encouragement of OPS) initiated
in 1999 the Pipeline Performance Tracking System (PPTS), a
groundbreaking effort to collect more meaningful data on spills,
information that would first aid in understanding spills and thus in
preventing them. Participants in this voluntary program (currently more
than 50 oil pipeline operators) report any spill of five gallons or
more, and any smaller spills to water. For spills of five barrels or
more, participants provide detailed data on the incident's causes and
consequences. In addition to accident information, PPTS collects
system-wide information once a year on mileage, commodities moved,
decade of construction, pipeline diameter and so forth that will allow
industry also to look at rates of incidents, not just total numbers.
OPS has taken advantage of the industry's experience with data
collection to develop a new regulation reducing the federal reporting
threshold from 50 barrels (2100 gallons) to 5 gallons, requiring more
concise cause differentiation, and providing greater detail about
specific accidents. The final rule revising the pipeline incident
reporting form--issued January 8, 2002 (FR Doc. 02-266)--is designed to
gather much better information from which the causes and consequences
of accidents can be assessed.
OPS is also planning to move forward with a rule to collect
infrastructure information about hazardous liquid pipelines that will
enable OPS to conduct accident evaluations, including trend analysis.
The hazardous liquid pipeline industry supports this effort.
a holistic approach to underground damage prevention
Excavation damage is the cause of the largest amounts of lost
volumes on liquid pipelines and the greatest cause of gas pipeline
incidents. Pipeline operators must often depend on the actions of
others to reduce and eventually eliminate excavation accidents. The
work on risk assessment and risk management provided a model for
another major joint OPS/industry effort--the Damage Prevention Quality
Action Team. OPS worked first with the liquid pipeline industry and
then with all stakeholders to develop recommendations on reducing
excavation damage to pipelines--and ultimately to all underground
facilities. The key to preventing excavation damage is to ensure that
every party does its job well, using proper procedures and
understanding the impact of their task. At the center of excavation
damage prevention is the ``one-call'' program. Under a one-call
program, an excavator (or homeowner) telephones the state or regional
one-call notification center to give notice of intent to dig in a
specific area. The center then acts as a clearinghouse, informing the
operator of any potentially-affected underground facility: liquids and
natural gas pipelines, utility and telecommunications cables, and water
and sewer lines. The facility operator then provides specific location
information to the excavator and marks its underground facility in the
area of the proposed digging. One-call programs are generally governed
by state law. One-call centers are typically funded by the underground
utility operators, usually on a per call basis.
The excavator must make a phone call, the operator must understand
whether its facilities are involved in the area of work, the locating
service must mark utilities accurately, and the excavating contractor
must dig with care. Any breakdown in the chain can lead to accidents.
One of the keys to preventing excavation damage to underground
facilities through one-call centers is awareness. OPS and the industry
next turned to developing and testing a new communications program to
raise excavator awareness of underground utilities. The Dig Safely
campaign, now in use nationwide, has developed a video, a national 800
number where excavators can obtain information about their local one-
call program, and a universal dig safely logo that all excavation
companies and equipment rental companies are encouraged to place on all
equipment.
All parties to the damage prevention effort also supported the
passage of Subtitle C of Title VII of the Transportation Equity Act for
the 21st Century (P.L. 95-178), a one-call notification program to
promote enhancements in state underground damage prevention programs.
This statute also authorized a multi-stakeholder study of underground
damage prevention best practices that came to be called the ``Common
Ground'' study. Building on the success of this study process in
brining together the key interests in underground damage prevention,
OPS and the participants in the damage prevention effort created the
Common Ground Alliance to provide for an ongoing private sector based
focus on damage prevention best practices. The purpose of this
nonprofit organization is to ensure public safety, environmental
protection, and the integrity of services by promoting effective damage
prevention practices. The Common Ground Alliance provides a forum where
all affected interests can participate as equals to address issues in
underground damage prevention. The Alliance's activities include the
promotion of R&D efforts to develop new damage prevention technologies,
the identification and dissemination of best practices, and acting as a
clearinghouse for the collection, analysis and dissemination of damage
prevention data. The Alliance has also taken responsibility for
implementing the Dig Safely campaign.
OPS and industry are also seeking further improvements to
underground damage prevention in the current reauthorization of the
pipeline safety program. Among these are increased penalties for those
who fail to contact their one-call system and damage a pipeline
facility as a result. We also seek broaden application of these proven
one-call systems to all excavation activities, including requiring use
of one-call systems by state and municipal excavators and their
contractors. In many states, government excavators and contractors are
not required to use the one-call system.
geographic information--creating the national pipeline mapping system
Critics of the pipeline industry, including the National
Transportation Safety Board, Congress, public safety advocates and
communities expressed a desire for much better geographic and system
information about pipelines. Building again on the team approach, the
OPS formed a Mapping Quality Action Team to determine how best to
address these concerns and expectations. The result of the multiyear
team effort was the creation of the voluntary National Pipeline Mapping
System (NPMS). Under this program, pipelines provide information in
certain prescribed formats to state-based pipeline mapping information
depositories. This information is then incorporated into a GIS-based
National Pipeline Mapping System.
The liquid pipeline industry (through its individual operators) has
voluntarily provided necessary information on 90% of systems to the
NPMS. The natural gas industry, which has significantly more mileage
than the liquid pipelines, has supplied information on 50% of the
industry's mileage.
This information was available on-line until the events of
September 11, 2001. The OPS has taken this information off the publicly
accessible internet based NPMS and now provides access to emergency
responders, local officials, industry members and others upon a
specific determination based on need. As appropriate security measures
are put in place, OPS expects to make more of this information
available upon request, if not on-line.
improved and updated corrosion rules
A detailed review of incident data revealed that corrosion
(internal, external, micro-biological) is the leading cause liquid
pipeline incidents (although more volume is released through third
party damage). Industry engages in a number of different activities to
combat corrosion ranging from the application of enhanced coatings to
cathodic protection, and from the performance of close interval surveys
to internal inspections. Corrosion control is a challenge for the
entire pipeline industry. OPS also initiated a number of different
approaches focused on reducing corrosion on pipelines, with mixed
success. In 1998, OPS began a coordinated rulemaking process seeking
input from corrosion experts, particularly the National Association of
Corrosion Engineers, and all stakeholders. The resulting rule, issued
December 27, 2001, updates and expands OPS regulations designed to
prevent pipeline incidents involving corrosion.
operator qualifications
Today's pipeline workforce is very well qualified. Operator error
is not a significant contributor to accidents when compared with
excavation damage or corrosion, for example. Even so, we recognize OPS
needs to be able to assure the public that operators do have a
qualified workforce and that federal inspectors are routinely
evaluating employee capabilities and knowledge. Under rules promulgated
several years ago, OPS crafted a set of requirements based on specific
tasks required to be performed under the pipeline safety regulations.
OPS has not mandated a single procedure or test by which operators
are qualified. Instead, OPS's rule requires the operator to demonstrate
that its employees and/or contractors are qualified to perform specific
tasks and that they can recognize and respond to conditions that may be
abnormal. These skills must be demonstrated using various types of
evaluations, including written and performance testing. The burden is
on the operator to demonstrate to OPS that employees or contractors
will be able to perform as expected.
The pipeline industry, through the API Subcommittee on Training and
the Consortium on Operator Qualifications, has developed guidance
materials, a recommended practice, and standardized assessments, and is
developing supporting curricula for all the pipeline safety and
maintenance tasks that fall under the operator qualifications
requirements.
pipeline security
In the aftermath of the terrorist attacks of September 11, 2001,
liquid pipeline operators took prompt action to protect the public,
employees and facilities. Employees were made aware of the severity of
the threat and the operator's commitment to address this newly defined
risk. Operators went on alert and remain on alert. Operators began
reviewing procedures, reducing and restricting access to facilities,
tightening security procedures, rerouting transportation patterns near
key facilities, closely monitoring visitors and activities near key
facilities and making capital improvements to harden facilities. These
actions were undertaken without direction from government but in
coordination with the Office of Pipeline Safety and later, the
Department of Energy and the Office of Homeland Security. Pipeline
operators, like other industries, are looking to government to provide
information about threats wherever possible, to deploy police power
quickly and intelligently, and to assist in recovery in the event of an
attack.
The federal government could provide additional assistance in the
aftermath of an attack to ensure quick restoration of critical pipeline
services and to minimize the disruption of energy supplies to
consumers. With regard to recovery, we believe there is a particular
need for the government to review its emergency authorities and develop
workable plans for emergency access to provide alternate rights-of-way
around attack sites. After a successful terrorist attack, the attack
site may be inaccessible to the pipeline operator for some time due to
contamination or because it has become a crime scene. Yet the public
interest will be in the earliest resumption of service possible.
Without emergency rerouting authority, service resumption may be
unnecessarily delayed.
With respect to pipeline security, there is little question in our
minds that planning for and putting deterrence in place against
potential terrorist attacks, and planning for recovery from such
attacks fit well into a risk based approach to pipeline integrity.
Without government mandate, the pipeline industry is developing
specific guidance for incorporating security planning into operator
pipeline integrity plans. This is being done in consultation with the
Office of Pipeline Safety and other federal agencies with experience
and expertise in security planning and implementation. Liquid pipeline
operators are familiar with the techniques of risk management in safety
planning, so it seems to us entirely appropriate and natural to extend
these techniques to security planning.
industry initiatives
The development and implementation of all of these rulemakings and
standards have absorbed significant resources over the last several
years. But industry recognizes that progress has been made in pipeline
integrity management and that there have been significant advancements
in the understanding of pipeline performance. The liquid pipeline
industry is determined to continue the effort. Thus, chief executive
officers of leadership operators in the liquid pipeline industry began
in December 2000 and recently expanded an Environmental and Safety
Initiative.
The Environmental and Safety Initiative is guided by a shared
vision of the oil pipeline industry. We use the vision as a preface to
communications with the public and internally in our companies to
communicate at all levels a clear statement of purpose and priority for
our work on a day-to-day basis.
Our vision is an oil pipeline industry that--
<bullet> conducts operations safely and with respect for the
environment;
<bullet> respects the privilege to operate granted to it by the public;
and
<bullet> provides reliable transportation of the crude oil and refined
products upon which America and all Americans rely.
We commit to fulfill this vision by:
<bullet> supporting effective federal oversight of pipeline operations
in cooperation with states and local communities;
<bullet> promoting cooperation among communities, public officials,
employees and companies by sharing information on pipelines and
pipeline safety;
<bullet> employing proven pipeline safety technologies and investing in
new technologies to further improve performance; and
<bullet> achieving operational excellence through sound risk management
approaches.
The Initiative is made up of multiple teams, each captained by a
CEO and focusing on one aspect of pipeline safety and performance. The
Initiative in 2002 consists of multiple teams with the purposes stated
below:
1. Pipeline Safety Reauthorization and Pipeline Integrity:
Promote strong, effective and credible federal regulation of the
liquid pipeline industry by the Office of Pipeline Safety (OPS);
understand the agenda of OPS and be proactive in cooperating with the
OPS, its stakeholders and its regulatory oversight of liquid pipelines;
support fair and effective enforcement of OPS regulations to establish
a floor of performance for all companies; and improve procedures for
permitting necessary to perform pipeline inspections and repairs.
2. Data Management and Performance Metrics:
Continue efforts begun in 1999 to improve OPS incident reporting;
continue to expand and refine the voluntary Pipeline Performance
Tracking System incident and infrastructure database; use both industry
and OPS databases to foster credible analyses of important data-driven
policy issues; develop metrics for evaluating changes in pipeline
performance upon implementation of the integrity management rules; and
evaluate and set leading (as opposed to lagging) performance measures
for the pipeline industry.
3. Underground Damage Prevention/Rights-of-Way
Assume a full and enthusiastic role in the Common Ground Alliance
(CGA) in cooperation with other industries with interest in underground
damage prevention; foster enhanced data collection and analysis by CGA
to better target improvements in damage prevention; help develop land
use best practices and industry standards on setbacks; and work to
improve zoning ordinances to protect pipeline rights-of-way from
encroachment.
4. Research and Development
Help design and identify funding for a liquid pipeline integrity
technology research and development program and establish an
appropriate organizational home for the program; work with the
Department of Transportation and the Department of Energy to facilitate
collaboration in research and development on pipeline integrity issues;
and identify liquid pipeline integrity research and development
projects of the highest priority.
5. Public Information and Communication
As part of an industry-wide communications plan, develop guidance
for activities that each member company would deploy to communicate
with elected officials and the public to foster understanding of
pipeline operations; make maximum use of the internet to make
information available; establish outreach and active liaison with key
state and local groups; exceed OPS requirements for availability of
information and communication with need-to-know constituencies; and
establish mechanisms to assess the effectiveness of communications
efforts on a continuous basis.
6. Liquid and Natural Gas Pipeline Coordination
Continue to use industry connections at the company level to
increase communications between liquid and gas industries on the issues
of integrity management, corrosion control, communications and other
pipeline safety initiatives.
7. Pipeline Security
Finalize drafted security conditions and countermeasures and
industry guidance document on security; conduct an evaluation of the
vulnerability of the industry to escalating levels of threats resulting
from possible terrorist activity; work with OPS and other federal
agencies on security issues (background checks, critical facilities,
threat information, etc); and address other security issues as they
arise.
8. Integrity/Operational Best Practices
Promote inter-company learning to improve pipeline operations and
integrity; develop integrity and operational best practices for
adoption by the industry drawing upon the resources of the Pipeline
Performance Tracking System, the OPS audits of Integrity Management
Programs and company experience in implementing risk-based integrity
management programs.
These team efforts are direct progeny of that initial Risk
Assessment Quality Action Team begun in 1995 and the primary focus of
the industry in 2002. All are aimed at finding the necessary tools to
constantly improve pipeline safety and environmental performance.
summary
We believe the movement to a risk-based approach to new pipeline
safety regulations since the early 1990s has resulted in significant
advancements and enhancements in the DOT's pipeline safety program,
improvements in pipeline management by operators and what we believe is
a trend in an improved safety record. Risk management has at times been
controversial in Congress. We hope many of these concerns are behind
us, because risk assessment, risk-based decision-making and risk
management are essential to addressing the risks of pipeline operation
under normal times and are vital in preparing for the never-to-be-
normal-again world we are part of since September 11th.
Mr. Barton. Thank you, Mr. Shea.
We will now hear from Mr. Morris, and both Mr. Bryant and
Mr. Gordon send you their best. They are both attempting to get
here, but they wanted me to let you know that they appreciate
you being here.
STATEMENT OF HERMAN MORRIS, JR.
Mr. Morris. Thank you, Mr. Chairman, and members of the
committee, I am pleased to appear here before you here today,
and I want to thank the committee for calling this hearing on
this very important matter of pipeline safety and the Nation's
natural gas distribution system.
My name is Herman Morris, and I am president and CEO of
Memphis Light, Gas, and Water Division. We are the largest
three-service municipally owned utility in America, as well as
having the lowest combined rates thanks to a very abundant
source of God's best water.
I have spoken to this committee before on the issues of
importance to our electric customers, some 400,000. I am here
today to testify on behalf of the American Gas Association and
the American Public Gas Association on behalf of our 300,000
gas customers.
We currently transport gas across two interstate pipeline
companies to MLGW from Williams Texas Gas Transmission Corp and
from CMS Truck Line Gas Company. We transmit more than 60
billion cubic feet of gas per year.
Together, AGA and APGA represent the gas utilities like our
local distribution company, LDC, that deliver virtually all of
the natural gas to consumers in the United States. In a
municipal utility like ours, the mayor or some elected
official, is usually the chief chairman of the board.
Mr. Chairman, many U.S. energy experts consider natural gas
an ideal energy solution for our country. It is home grown, and
it is efficient, and it is the cleanest fuel, fossil fuel,
possible.
And over the next two decades going into the natural gas
market will bring tremendous benefits for all Americans. But
industry faces some interesting challenges. Local distribution
companies are the last critical link in the natural gas
delivery chain.
We are the face of the industry for our customers, and we
place a high priority on being safe and efficient providers of
these services.
Regulatory Authorities. As part of an agreement with the
Federal Government, State pipeline safety authorities, which
have primary responsibility to regulate natural gas utilities,
as well as interstate pipelines, routinely adopt as minimum
standards the Federal safety standards promulgated by the DOT.
In addition to our strong voluntary programs, we as LDCs
comply with regulatory programs that provide stringent
attention to design, construction, testing, maintenance,
operation, replacement, and inspection, and monitoring
practices.
Natural gas utilities spend an estimated $6.4 billion each
year on safety related activities. We all know the leading
cause of accidents on distribution pipelines comes from
excavators unintentionally striking lines, commonly called
third-party damages.
Sixty percent of the total ruptures of utility lines over
the past few years, and the vast majority of injuries, resulted
from such problems. While many may lump all gas pipelines
together, there are indeed significant differences between the
liquid transmission systems and natural gas transmission
systems, and natural gas distribution systems like our own.
We believe that natural gas utilities should not support
and do not support prescriptive legislative approaches. In
fact, we believe that the one size fits all solutions simply do
not work and divert limited resources from areas that could
most benefit ultimately the customers, and could affect the
reliability of gas delivered to consumers.
As of September 11, we all know that our world changed. And
in our industry, first and foremost, a step needs to be taken
to establish a single point of contact in the government from
which consistently defined threat levels are disseminated to
the industry.
It is critical that there is a coordinated effort
throughout the agencies that have jurisdiction over natural gas
transmission and distribution sectors. The current rules which
require operator qualifications encompass evaluation, testing,
qualification, and additional training if needed.
This rule, when fully implemented in October of 2002, we
believe will provide an appropriate approach to this critical
concern. We strongly recommend that no further action be taken
in this area of operator qualification until the DOT and
Congress have sufficient time to review the rules' impact on
pipeline safety.
We also recognize the Nation's heightened security
concerns, and we urge Congress to consider carefully what
information should be released to the public at large, and what
information should be restricted to those public officials and
emergency and law enforcement agencies that need it.
We support the research and development efforts, and
particularly the NARUC water commission committee's meeting and
resolution supporting Congressional legislation for operation
safety, research, and development, and we encourage the
Congress and this committee to consider that.
In conclusion, I would thank you for providing the
opportunity to present our views on the important matter of
pipeline safety, and we look forward to working with the
Congress, Federal and State, and local authorities in that
regard in the future.
[The prepared statement of Herman Morris, Jr. follows:]
Prepared Statement of Herman Morris, President and CEO, Memphis Light,
Gas and Water Division on Behalf of the American Gas Association and
the American Public Gas Association
Good morning, Mr. Chairman and members of the Committee. I am
pleased to appear before you today and wish to thank the Committee for
calling this hearing on the important matter of pipeline safety and the
nation's natural gas distribution system. My name is Herman Morris, and
I am President and CEO of Memphis Light, Gas & Water (MLGW). MLGW was
founded in 1939 and serves more than 400,000 households and customers
in Memphis and Shelby County, Tennessee. We are the largest three-
service municipal utility system in the nation. Additionally, we
recently instituted a telecom division.
MLGW currently transports natural gas to Memphis across two
interstate pipeline companies, Williams Texas Gas Transmission Corp.
and CMS Trunkline Gas Co. MLGW transports more than 60 billion cubic
feet of gas per year by pipeline to our 300,000 gas customers.
I am testifying on behalf of the American Gas Association (AGA) and
the American Public Gas Association (APGA). We look forward to working
with Congress, the Administration, the states and other stakeholders to
reach consensus on a bipartisan pipeline safety reauthorization bill
this year.
AGA is a national trade association representing 187 natural gas
utilities collectively serving over 52 million consumers. The APGA
represents 480 of the 1000 municipally owned gas companies across the
nation. They include municipal gas distribution systems, public utility
districts, county districts, and other public agencies that own and
operate natural gas distribution facilities. Together AGA and APGA
represent the gas utilities or local distribution companies (LDCs) that
deliver virtually all of the natural gas to consumers in the United
States. MLGW is a member of both organizations.
Unlike most gas utilities, the chairman of the board of the
municipal utility often is usually the mayor or some other locally
elected public official. Local governments operating utility systems
view that Congress, the regulators and utilities need to find safety
solutions that are responsible, balanced, and cost effective.
Natural Gas Use Benefits Americans
Mr. Chairman, many U.S. energy experts consider natural gas the
ideal energy solution for our country. It's a homegrown fuel, it's
efficient and it's the cleanest-burning fossil fuel. Over the next two
decades, growing the natural gas market will bring tremendous benefits
for all Americans.
Increasing the use of natural gas over the next 20 years could cut
foreign oil imports by more than 4.5 million barrels per day. And since
natural gas is the cleanest fossil fuel, using more of it could reduce
carbon dioxide in the air we breathe by 930 tons per year--about 10
percent of total emissions. Fifty-five percent of America's homes are
heated with natural gas and nearly 70 percent of all new single-family
homes are equipped with natural gas. Abundant at home, clean to use and
highly efficient, its perfectly suited to meet our nation's energy
needs today, tomorrow and beyond.
``Face of the Industry''
Local distribution companies are the last, critical link in the
natural gas delivery chain. To most customers, utilities are the ``face
of the industry''. Our mission is to continue to deliver natural gas to
our communities safely, reliably and affordably. Our companies and
facilities are a vital part of the communities we serve. We participate
in many community programs and charitable activities. We fuel area
businesses and therefore, the local economy. The health of the
community is the health of our company.
Regulatory Authorities
Natural gas pipelines are thoroughly regulated. As part of an
agreement with the Federal government, State pipeline safety
authorities have primary responsibility to regulate natural gas
utilities as well as intrastate pipelines. However, state governments
routinely adopt as minimum standards the federal safety standards
promulgated by the U.S. Department of Transportation (DOT). Therefore,
what Congress does will affect state regulations and our companies.
Safety Is Our Top Priority
Natural gas utilities are committed to safety. Year in and year
out, safety is our top priority. Indeed, delivering natural gas safely
and reliably to our customers is essential for us to continue
conducting our business. That is why our industry is constantly working
to develop technologies that will enhance the safety, reliability and
efficiency of the nation's gas delivery system. Our industry's
commitment to safety is borne out each year through the National
Transportation Board's annual statistics. Delivery of energy by
pipeline is consistently the safest mode of energy transportation.
Natural gas utilities are dedicated to seeing this continue.
Safety Record and Expenditures
In addition to our strong voluntary programs, LDCs comply with a
regulatory program that devotes stringent attention to design,
construction, testing, maintenance, operation, replacement, inspection
and monitoring practices. We continually refine our safety practices.
Natural gas utilities spend an estimated $6.4 billion each year in
safety-related activities. Approximately half of this money is spent in
compliance with federal and state regulations. The other half is spent,
as part of our companies' voluntary commitment to ensure that our
systems are safe and that the communities we serve are protected.
Safety is a top priority, a source of pride and a matter of
corporate policy for every company. These policies are carried out in
specific and unique ways. Each company employs safety professionals,
provides on-going employee evaluation and safety training, conducts
rigorous system inspections, testing, maintenance, repair and
replacement programs, distributes public safety information, and
complies with a wide range of federal and state safety regulations and
requirements. Individual company efforts are supplemented by
collaborative activities in the safety committees of regional and
national trade organizations. Examples of these groups include the
American Gas Association, the American Public Gas Association and the
Interstate Natural Gas Association of America.
Clarification of GAO Reports
Some pipeline safety critics have seized on a statement in the May
2000 U. S. General Accounting Office (GAO) Report entitled ``The Office
of Pipeline Safety is Changing How It Oversees the Pipeline Industry'',
that indicated that ``major'' pipeline safety incidents (those causing
a fatality, injury, or more than $50,000 in property damage) have
increased by 4% per year over the 10-year period 1989-1998. This
implies that accidents are increasing and that pipelines are becoming
increasingly unsafe. This information needs to be put into context.
What the GAO report does not recognize is the fact that the
increase in ``major'', or reportable incidents, is due to the ever-
increasing cost of ``property damage'' associated with accidents that
include loss of product and remediation costs. These have increased
drastically over the time period examined. Further, the $50,000
threshold is not adjusted overtime for inflation and therefore the
trend lines are skewed.
The GAO report does recognize (see footnote on page 10 of this
report) that the total number of accidents has decreased by 1.5 percent
annually over this same timeframe. This trend continues. According to
AGA's study of the data, incidents involving natural gas distribution
systems decreased by over 10 percent while the volume of natural gas
used nationwide has increased by 25 percent over the period of 1987-
1999. Thus, while more citizens are now enjoying the benefits of using
natural gas, the safety of the delivery system continues to improve.
While, our industry is rightly proud of our excellent safety
record, we are constantly striving to improve it.
The Leading Cause of Accidents--Excavation Damage
The leading cause of accidents on distribution pipelines comes from
excavators unintentionally striking our lines. It is known as
excavation damage, also commonly called third-party damage. Year after
year, these strikes cause over 60% of the total ruptures on utilities
and the vast majority of injuries and fatalities. This problem has been
highlighted again in two recent accidents--one in Perry, Oklahoma and
another in Marble Heights, Ohio.
While we work very hard to provide for safety, we cannot do it
alone. Excavators and other underground utility operators need to work
with us to provide for safe and reliable natural gas service. Congress
should urge states to require government agencies and their contractors
to participate in One-Call programs. This would help eliminate some
exemptions some state agencies currently have in several states from
participation in One-Call.
The 105th Congress recognized this problem and created a federal
program to reward States with strong One-Call laws. These laws require
excavators to call before they dig, and utilities to mark their
underground facilities accurately. The Committee also directed DOT to
gather all stakeholders together to produce a ``best practices'' study.
This effort was completed last year, and we are working to help
implement the best practices to improve field operations of One-Call
systems. DOT has also supported the creation of a broad-based public/
private organization--the Common Ground Alliance--to promote the
adoption of the best practices across the nation. This group includes
underground pipelines, utility owners, constructors, excavators, and
One-Call organizations, with over 400 current members.
We support efforts to provide for additional funding for both state
grants and promotion of best-practices adoption. This additional
funding is provided through general revenue funding as the efforts
provide for clear public benefit and include other utilities beyond
just gas and oil pipelines. Reduction of third party damage incidents
provides for the safety of the public and also helps ensure the
unimpeded flow of natural gas to consumers.
Other Distribution Safety Initiatives
Natural gas utilities are working with federal and state
governments on a variety of new safety initiatives. These include the
creation of a voluntary data gathering effort on performance of older
plastic pipe materials; pipeline system integrity standards; operator
fatigue surveys; improved data gathering on transmission and
distribution systems, and many other efforts. We view these as
investments in our customers and the communities we serve.
Collaboration and Professional Organizations
Company safety professionals also participate in a variety of
professional and national standard-setting organizations dedicated to
advancing the practice of work place and public safety. A partial list
of the leading groups include the following: National Association of
Corrosion Engineers (NACE), National Fire Protection Association
(NFPA), National Safety Council (NSC), American Petroleum Institute
(API), American Welding Society (AWS), American Society of Testing
Materials (ASTM), American Society of Non-Destructive Testing (ASNT),
American Society of Mechanical Engineers (ASME), American Society of
Civil Engineers (ASCE), and the American Society of Safety Engineers
(ASSE).
Natural Gas Systems are Different From Liquid Systems
There are important differences between the natural gas and liquid
pipeline systems that Congress should recognize and understand when
crafting new requirements. While many may unintentionally link all
``pipelines'' together, there are indeed significant differences
between the liquid transmission systems, natural gas transmission
systems and natural gas distribution systems. Each industry faces
different challenges, operating conditions and consequences of
ruptures.
Interstate transmission systems are generally made up of long runs
of generally straight pipelines, having large diameter, and operated at
high volumes and high pressures. Distribution systems, in contrast, are
constructed in configurations that look like a network or web, use
smaller diameter pipe, and operate at lower volumes and pressures.
Federal regulations recognize the differences between these three
types of systems, and different sets of rules have been created for
each. 49 CFR Part 192 sets out the regulations for natural gas
transmission and distribution and the rules discriminate between the
two. 49 CFR Part 195 sets out the regulations for liquid transmission
lines.
Natural gas pipelines move a single product, which is mainly
methane, by periodic compression along the length of the pipelines.
Natural gas transmission lines take our product from the producing
areas to our towns where the utility receives it and delivers our gas
to homes and businesses. Liquid transmission pipelines, in contrast,
move several different commodities such as crude oil, gasoline, heating
oil, jet fuel, diesel, propane and other liquids. These products are
physically pumped, sometimes in different batches, through the pipeline
to distribution terminals, refineries, and end-users.
Legislation
Congress must periodically reauthorize the natural gas pipeline
safety act. The current authorization has expired. Last year, Congress
began the reauthorization process but was unable to pass a bill. Today,
we are once again fully engaged in this process. In addition, the
Department of Transportation is in the process of issuing significant
new integrity management rules for natural gas and is expected to
complete the effort this year. And all of our natural gas utilities are
on schedule to comply with DOT's new Operator Qualification rule by
completing the qualification of natural gas utility and contractor
workers performing safety-related jobs by the rule's October 2002
deadline. The industry also is engaged actively in finding new
mechanisms to fund research, development and demonstration projects for
pipeline safety technologies.
Mr. Chairman and members of the Committee, we urge you to frame the
current debate by recognizing that the world has changed since this
committee held its last congressional hearing on this topic in 1999.
Much progress has been made on several important new regulations.
Further, the September 11 terrorist attacks have brought about a new
focus on security for preventing, deterring, detecting and responding
to potential attacks. Companies now must focus significant attention on
security issues, in addition to safety matters.
``One Size Fits All'' Does Not Fit Our Pipelines
Natural gas utilities do not support prescriptive legislative
approaches. In fact, we believe that ``one-size-fits-all solutions''
divert limited resources from the areas that could most benefit and
ultimately, could affect the reliability of gas deliveries to
consumers. All pipelines are not the same. They vary physically and
operationally and face unique challenges related to their locations,
trajectories, construction and operating characteristics.
Given this context, I would like to comment on several issues and
suggest reasonable approaches for addressing them for municipally and
investor owned natural gas distribution utilities.
The issues that I will cover are:
<bullet> Security from Terrorist Attacks
<bullet> Causes of Accidents
<bullet> System Integrity Rule
<bullet> Operator Qualification
<bullet> Public Education/Community Right to Know
Security from Terrorists Attacks
The industry has been actively involved in addressing the security
of the natural gas transmission and distribution system since the
events of September 11. In addition to taking immediate steps to secure
critical facilities, the industry has been meeting--through the trade
associations--to determine appropriate threat levels and responsible
actions that reflect the current heightened state of security.
Additionally, utilities are coordinating and cooperating fully with
federal and state law enforcement and regulatory authorities to find
ways to protect our natural gas pipeline system. The effectiveness of
security-response measures is dependent on the threat levels that
trigger their execution. The first and foremost step in this process is
to establish a single point of contact in the government from which
consistently-defined threat levels are disseminated to the industry. It
is critical that there is coordination throughout the agencies that
have jurisdiction over the natural gas transmission and distribution
sector, including DOT, DOE, FEMA and FERC. This will result in commonly
understood and effective operator response actions.
We are committed to identifying further additional practices for
the current state of condition and higher threat levels, as well as
refining vulnerability assessments to assist in the identification of
critical facilities. At this time, our companies have in place, or are
developing, plans to respond to higher alert levels, including
activating corporate security plan(s), emergency response plan(s) and
business recovery plan(s); engaging emergency personnel; and securing
facilities as appropriate.
Ensuring security of the nation's natural gas infrastructure is a
fundamental part of the industry's ordinary course of business. We are
constantly refining methods, performing risk assessment and reviewing
our practices.
We encourage Congress to focus on a coordinated approach to the
protection of energy infrastructure--recognizing the growing
interdependencies between different industry and government sectors.
To achieve this, we recommend that industry and government work
together to:
<bullet> Heighten efforts in providing the tools and access necessary
to help assure critical infrastructure protection from
potential terrorist activities;
<bullet> Ensure all public dissemination of infrastructure and business
information is reviewed, in advance, with respect to potential
security concerns, and;
<bullet> Develop a coordinated strategy with a clearly delineated
organizational structure to protect our nation's infrastructure
against potential terrorist attack, while minimizing redundancy
in information collection and government reporting.
System Integrity Rule
DOT has responded to congressional and public concerns and has
moved forward aggressively in this area. Having issued a new set of
integrity management rules for liquid pipelines, DOT is moving
expeditiously on new rules for natural gas transmission lines. As
outlined above, the liquid and natural gas transmission systems are
very different from one another. The system integrity rule for natural
gas transmission is going to be issued soon, but it is important to
understand that it will be different from the one for liquid
transmission.
We urge Congress to allow DOT to finish its work on developing a
new rule for increased inspection requirements for natural gas
transmission pipelines in high-consequence areas. DOT is well on its
way to completing its work on this matter and issued a proposed rule
for the definition of high-consequence areas for natural gas in January
2002. DOT is expected to issue a Notice of Proposed Rulemaking for the
integrity management plan for natural gas transmission lines in these
areas in mid-2002. Legislating in advance of DOT's rule seems hasty and
unnecessary. DOT understands the distinguishing characteristics between
liquids and gas systems and is taking these into consideration in the
rulemaking process.
Natural gas utilities own and operate 40,000 of the 300,000 miles
of transmission pipeline in the United States. Most of these
transmission lines are smaller in diameter than the typical interstate
transmission line and operate at lower pressures. However, almost 40%
of these 40,000 miles of transmission lines are likely to fall within
``high consequence areas,'' and therefore utilities will be greatly
affected by the new rules. Unlike most liquid transmission lines, the
physical characteristics of natural gas transmission and distribution
lines preclude the use of internal inspection devices in many cases.
Thus, natural gas distribution companies must use a variety of
inspection tools and methodologies to ensure the integrity of their
lines.
Some would like to require that natural gas transmission lines be
inspected with specific tools and within a mandatory inspection period.
We strongly oppose this type of approach, as it does not provide
necessary flexibility needed to the operator in order to maintain the
integrity of the system. Further, requiring utility-owned transmission
lines to be tested with smart pigs or hydrostatically would result in
these lines being out of service for extended periods of time. This
poses a separate problem, as many of these lines are the sole source
for natural gas delivery to systems serving large numbers of consumers.
This would not increase safety; in many ways it could, in fact,
undermine many of the safety-related measures that are in place for
distribution systems. For residential customers, interruption of
service can cause additional problems and risks as each individual
service must be isolated, re-lit inside the house and then inspected
again. This is a time consuming and laborious process, and expensive.
Utilities know that their lines must be inspected regularly but
inspection decisions, including the types or tools used and inspection
frequencies, should be based on objective risk analysis and resources
directed accordingly. It is important to note that the regulatory
requirements for natural gas transmission lines already incorporate
additional operational safety and increased inspection requirements
based on the population levels around the pipeline.
Pipelines are required to have personnel patrol and inspect their
lines each year and account for the houses and buildings along the
right-of-way. The segment of pipeline in question is ``classed'' 1, 2,
3 or 4, with Class 1 being rural and Class 4 being the most urban. As
population around the pipeline increases regulations require pipelines
to lower operating pressure, increase pipeline wall thickness, and
inspect more frequently. This class location system for natural gas
transmission lines recognizes that pipelines must provide greater
safety margins when operating in more populated areas. The new
integrity management rules will add to these existing requirements.
Inspection methods and inspection intervals under the new integrity
management rule should be based on an assessment of risks balanced by
the need to maintain reliability of gas service at a reasonable cost to
consumers.
Some critics base their demand for a statutorily required
inspection period or use of specific inspection technology or methods
on the fear that without them pipelines will not be inspected. Nothing
could be further from the truth. Pipelines are continually inspected
today. A natural gas utility company's greatest asset is its reputation
for the safe and reliable service of natural gas. We actively monitor
our systems on a continuous basis. This is an essential part of doing
business.
Operator Qualification
Concerns have been raised about expertise and the abilities of the
natural gas industry's workforce. Even though our excellent safety
record shows that our employees are qualified to do their jobs,
utilities are fully participating in the new Operator Qualification
(OQ) rule that was issued by DOT in August 1999. For the first time
operators will be required to verify and document this qualification in
writing. There are two parts to this rule.
Phase 1. Written Plan. Phase 1 is complete. All pipeline operators
were required to have a written OQ Plan in place by April 2001. All OQ
Plans are now subject to audit by the state regulatory authorities. In
the event of an accident, the operator's OQ Plan is subject to
discovery in court.
Phase 2. Qualification of Individuals. Using the written plan, all
pipeline operators must qualify every individual who performs a covered
task on the pipeline, under the provisions set forth in the operator's
OQ Plan. This requirement is effective October 27, 2002.
Some have suggested that we shift the focus from ensuring an
individual is qualified to perform their operations and maintenance
tasks on the pipeline, to a requirement for training and/or federal
certification. The current rule already encompasses evaluation, or
testing, and qualification, which may mean additional training if
needed, and further testing. Thus, employees are actually certified by
the company under an enforceable federal rule. This rule is not yet
fully implemented. We strongly recommend that no further action be
taken in the area of operator qualification until DOT and Congress have
had sufficient time to review the rule's impact on pipeline safety.
It is estimated that pipeline operators will incur over $500
million in compliance costs associated with this rule. This is both a
significant undertaking for pipeline operators and another cost for
natural gas consumers.
Some of the House bills that have been introduced call for some
form of federal certification of these employees. We do not agree that
this approach is warranted or the best use of limited federal and
company resources. We urge Congress to allow the Operator Qualification
Rule to be implemented fully before deciding whether it needs to be
significantly changed or additional requirements layered over it.
The fact that there are still very few accidents on our nation's
1.5 million miles of natural gas pipelines is in itself a testament to
the workers' skills and qualifications. Issues such as training
requirements, portability of qualifications, qualification process
modifications and the overall effectiveness of the rule are most
appropriately worked out among the stakeholders and federal and state
regulators. Utilities are actively engaged in this process and do not
believe that further legislative action is justified at this time.
Public Education/Community Right-to-Know
Given the nation's heightened security concerns, we urge Congress
to consider carefully what information should be released to the public
at large and what information should be restricted to those public
officials and emergency and law enforcement agencies that need it.
Typically, in the utility industry, those that need the information can
readily obtain it from the operator upon request. We also support
planning officials understanding how pipelines interact with their
communities to allow them to incorporate needed safeguards into their
land use decisions.
We support advanced preparation and training for fire, police and
emergency service personnel who are often first to arrive at a
hazardous site. It is critical for them to know and understand the
nature of a natural gas incident and how best to manage it.
AGA and APGA support the public's right to know and understand how
and where the natural gas system operates. An informed public will be
better able to contribute to accomplishing the objectives of improved
public safety. However, detailed information such as very accurate
locations, product flow rates, valve placement, control center
locations, accident scenarios and other potentially sensitive
information should be restricted. A balance needs to be found and
implemented.
In many instances, improving public information is a cooperative
effort between the natural gas utility and communities it serves.
Whether new efforts extend or improve existing programs, utilities will
participate in their development and implementation. However, we ask
that our unique relationship with our state regulatory agencies and
local communities be recognized and any new requirements be crafted in
a way that takes this into consideration.
Research, Development and Demonstration
AGA and APGA support increased funding for research and
development. However, the current funding for the Office of Pipeline
Safety is provided through user-fee assessments on pipeline operators.
We urge Congress to authorize and appropriate funds from general
revenues for additional pipeline research and development dollars.
Where user fees are used to fund research and development, the Office
of Pipeline Safety should coordinate with the industry to help make
sure that efforts focus in areas where needs exist in the field and are
used as efficiently and effectively as possible.
Several focus groups have been held with government, industry and
research organizations to identify the areas of most interest for RD&D.
These groups have consistently suggested that RD&D funding address the
development of better technologies and improvements for excavation
damage prevention and detection, in-line inspection tools, small leak
detection, monitoring and technologies for meeting any new security
requirements.
Utilities contribute to research and development through such
organizations as the Gas Technology Institute where advanced safety
devices and technologies are designed and tested. Interstate pipeline
and local distribution companies invest millions in non-construction
safety-specific activities. We are always seeking better technologies
to use in our safety activities and will continue with these
initiatives.
Last month at NARUC's Winter Committee Meetings here in Washington
D.C., NARUC passed a resolution entitled ``Resolution Supporting
Congressional Legislation for Operations and Safety Research and
Development (R&D) Funding for Gas Distribution Utilities''. A copy of
that resolution is attached to my testimony.
In summary, NARUC's R&D Resolution 1) expresses NARUC support for
Congressional legislation establishing an R&D funding program for gas
distribution utilities to ensure essential research for distribution
delivery systems in the amount of approximately $65 million per year;
2) states that the annual funding of $65 million would be collected
through a legislatively designed volumetric charge designed to collect
an average of less than $1 per year for residential customers, and
average $5 per year for commercial customers, with a cap of $250 per
year for very large volume customers; and 3) states that funds
collected for R&D would be focused on improving infrastructure
security, safety, reliability and efficiency. This research will
benefit all users of natural gas by improving the delivery systems. The
funds will not be used to conduct R&D for end use applications and will
not be used to promote natural gas usage by advertising. We believe
that this research program will enable utilities to directly address
those safety and security related concerns that Congress has raised
over the course of the pipeline safety debate. Clearly, this program is
critical to the utility industry meeting expectations of an enhanced
safe, secure and reliable system. As several members of this and other
committees have proposed, there is going to have to be a significant
and dynamic change in the way we currently fund research.
State Jurisdiction for Interstate Pipelines
Utilities are concerned that different requirements imposed by
States on interstate transmission could lead to supply disruption to
our customers. One state could make a requirement that could in fact
cause customer shut-offs in another state. Uninterrupted flow is
critical to natural gas systems. If interstate gas flows are
interrupted, the ability of a utility to maintain adequate pipeline
pressure to serve customers is immediately and often severely impaired.
In such situations, our companies must manually turn off service to
each individual customer in the area affected by the gas outage. When
gas flows resume, we must then restore service and re-light each gas
appliance in every affected home and business. The process is a long
and tedious one, and is obviously not without its own risks.
Unnecessary disruptions should be avoided.
Summary
In summary, the natural gas utility industry is proud of its safety
record. Natural gas has become the recognized fuel of choice by both
citizens and the federal government. Customer growth and confidence
also carry with them an added responsibility.
Public safety is the top priority of natural gas utilities. We
invite you to visit our facilities and observe for yourselves our
employees' dedication to safety. We will continue our dedication and
efforts to operate safe and reliable systems and to strengthen One-Call
laws and systems in every state.
Thank you for providing the opportunity to present our views on the
important matter of pipeline safety. We look forward to working with
federal, state and local authorities and representatives, as well as
within our industry, to achieve the highest possible level of public
and employee safety.
[GRAPHIC] [TIFF OMITTED] T8508.002
[GRAPHIC] [TIFF OMITTED] T8508.003
[GRAPHIC] [TIFF OMITTED] T8508.004
[GRAPHIC] [TIFF OMITTED] T8508.005
[GRAPHIC] [TIFF OMITTED] T8508.006
[GRAPHIC] [TIFF OMITTED] T8508.007
[GRAPHIC] [TIFF OMITTED] T8508.008
[GRAPHIC] [TIFF OMITTED] T8508.009
[GRAPHIC] [TIFF OMITTED] T8508.010
[GRAPHIC] [TIFF OMITTED] T8508.011
[GRAPHIC] [TIFF OMITTED] T8508.012
[GRAPHIC] [TIFF OMITTED] T8508.013
[GRAPHIC] [TIFF OMITTED] T8508.014
[GRAPHIC] [TIFF OMITTED] T8508.015
Pipeline Operator Qualification and Training Briefing Paper
by the american gas association and the american public gas association
March 19, 2002
Background
The Accountable Pipeline Safety and Partnership Act of 1996 amended
the statute to broaden a requirement for testing and certification of
operations personnel, law required DOT to adopt regulations requiring
that ``all individuals who operate and maintain pipeline facilities
shall be qualified to operate and maintain the pipeline facilities''
and ``shall address the ability to recognize and react appropriately to
abnormal operating conditions that may indicate a dangerous situation
or a condition exceeding design limits'' (49 U.S.C. 60102(a)).
The Department of Transportation issued a final Operator
Qualification Rule on August 27, 1999. Companies are currently required
to have their written qualification plan completed by April 27, 2001
(49 CFR Part 192, Sec. 192.805 Qualification Program). All employees
performing ``covered tasks'' are required to be qualified by the
operators by October 27, 2002.
Qualification Encompasses Training
Rather than only requiring training to an individual, the DOT
Operator Qualification (OQ) rule was designed to focus on ensuring that
an individual is qualified. This means a candidate for qualification
must have the knowledge, skills, experience and demonstrated ability to
perform covered tasks.
A task is covered by the OQ rule if it meets all four of the
criteria below:
<bullet> Performed on a pipeline facility,
<bullet> It is an operations and maintenance task,
<bullet> It is performed as a requirement of the pipeline safety code
(49 CFR Part 192), and
<bullet> Affects the operation or integrity of the pipeline.
Qualification is the process of acquiring and demonstrating the
ability to perform a covered task. Training is an enabling process that
helps an individual acquire only the knowledge and skills to perform a
covered task. But training alone may not be enough; after training, the
individual must gain the experience and demonstrate the ability to
perform a covered task in order to be qualified. So, the OQ rule is
broader in scope than a rule that only emphasizes training.
<bullet> An individual who acquired the ability to perform a task
by regularly performing it prior to the effective date of this rule may
be evaluated and determined to be qualified in accordance with
evaluation methods and criteria established by the operator.
<bullet> An individual who will be performing a new task must also
acquire the ability. This may be by training or any other appropriate
means. The rule is flexible as to how this is to be done. Under the
rule the individual must be evaluated to verify their ability to
perform the covered task.
<bullet> In the event an individual is not able to qualify
(demonstrate through evaluation their ability to perform a covered
task), the operator may elect to help that individual acquire the
ability through training or other appropriate means. After acquiring
the ability the employee may be periodically evaluated to verify his/
her qualification.
Recognizing that the great majority of the of individuals in gas
utilities are already qualified to perform covered tasks, the OQ rule
was designed to be flexible as to the type of process needed to acquire
the qualification, emphasizing also those areas where additional
efforts are need by the operator in order to improve the safety of its
pipeline system operations and maintenance.
During the negotiated rulemaking that took place in developing the
OQ rule, it was determined that a national qualification program
conducted by the Research and Special Programs Administration, another
federal agency, or a state agency, would not be an appropriate or
practical response to the 1996 Act. While such a system would offer the
advantages of national consistency, including the ability of contractor
employees to work for different operators under a single qualification
regime, the complexity and cost of administering such a system, coupled
with the difficulty of devising a system appropriate for the wide
variations in the operations and maintenance procedures and facilities
of individual operators, precluded this from being an effective option.
It was determined the mandate would best be met by a non-prescriptive,
performance based regulation requiring each operator to have, a written
program for the qualification of individuals. This would allow operator
programs to be tailored for some to their unique operations and
practices, without precluding others, including contractors, from
joining each other to agree on specific common aspects of
qualification.
A straightforward, performance oriented rule was developed that
applies to both gas and hazardous liquid pipeline operators. It
contains five sections that include the scope, definitions,
requirements of the qualification program, record-keeping and specifies
the schedule for compliance.
In the requirements section (49 CFR Part 192, Sec. 192.805
Qualification Program), the OQ rule requires operators to identify
covered tasks, to carry out evaluation of individuals, and to identify
periods of reevaluation of individuals along with the corresponding
covered tasks for which they have to be qualified. It also has
provisions for changes in covered tasks, and what is required in
special situations involving individuals that are not or may not be
qualified.
The OQ rule also includes a requirement for evaluation of
individuals. An integral part of these evaluation methods is the
requirement that training be performed if an employee fails the
qualification test.
Acceptable evaluation methods are subject to certain restrictions
and include, written exam, oral exam, work performance history,
observation during:
<bullet> performance on the job,
<bullet> on the job training,
<bullet> simulations,
<bullet> or other forms of assessment.
Many operators in industry have been carrying out training and
qualification of their workforce in connection with operation of their
systems. They may not necessarily have their plans or carry out
qualification in the format that the OQ rule requires. Operators have
been given 18 months to prepare written plans for compliance with the
rule and an added 18 months to comply by completing the qualification
of their workforce.
Critical Tasks Are Further Covered
The rule also recognizes that there are specific critical tasks
with a high level of specialized ability that may have to be performed,
such as welding of a pipeline, fusion/joining of plastic pipes, or
ensuring corrosion protection of steel piping. These tasks are already
prescribed in detail the existing pipeline safety code. They are left
intact by the OQ rule, with the added requirement that the individual
qualified to perform them must also have the ability to recognize and
react to abnormal conditions that may be encountered in connection with
these tasks.
OQ Efforts Are Under Way
Preparations for the qualification process are well under way
within a great majority of the gas industry. Taking advantage of
similarity in some aspects of their operations and maintenance
activities, some companies have joined together to develop common
covered tasks or processes for qualification. Other companies are
working by themselves. Both are supported by a cadre of recognized
experts in instruction and training developing additional specialized
teaching curriculums and evaluation materials and methods. The great
majority of the operators are working with their state regulators to
develop measurement criteria to verify compliance with the rule.
Let the DOT OQ Rule Run Its Course
Requiring operators to submit plans for training beyond those
required in the OQ rule could result in the premature submittal of
plans in a wide variety of formats. Because of the large variation in
the scope of programs in effect by various operators, this would be
making it very difficult to evaluate the adequacy of the operator
qualification programs in existence and under development today. This
could in turn lead regulators and legislators to the wrong conclusions.
Alternatively, imposing more prescriptive requirements under the DOT
rule deadline would result in inefficient and wasteful use of resources
by the stakeholders involved, without added benefit to safety.
Therefore, it is suggested that implementation of the DOT OQ rule be
allowed to run its course.
______
List of Currently Mandated Inspections
The following list includes most but not all periodic inspections
mandated by 49 CFR Part 192. This list does not include mandated
inspections and tests performed as part of construction, or repairs on
the pipeline.
Transmission Pipelines & Facilities
1. Buried pipeline corrosion protection electrical current readings
at test stations spaced along the pipeline must be checked at least
once a year
2. Buried pipeline external corrosion control systems must be
checked at least 6 times a year
3. Equipment monitoring for internal corrosion at points where the
risk of such exists must be checked at least once in 6 months
4. On shore pipelines exposed to the atmosphere must be checked for
external corrosion at least once in every 3 years; off-shore pipes
exposed to the atmosphere must be checked at least once a year.
5. Operator carries out continuing surveillance of its facilities
to determine and take appropriate action concerning changes in
population density near the pipeline, failures, leakage history,
corrosion and other unusual operating and maintenance conditions.
6. If a segment of pipe is determined to be in unsatisfactory
condition, but no immediate hazard exists, the operator must initiate a
program to recondition that segment or phase it out. If this is not
possible, the operator must reduce the operating pressure of the
pipeline, in accordance with prescribed guidelines. If an immediate
hazard exists, the operator must take prompt action to repair the
segment.
7. Each operator must patrol its transmission pipeline trajectory,
at intervals between 4 times and once a year, depending on certain risk
factors.
8. Transmission pipelines carrying odorized gas must be checked for
leaks at least once a year.
9. Emergency shutdown devices at gas compressor stations must be
tested at least once a year.
10. Each pressure limiting and pressure regulating station on the
transmission pipeline must be inspected and tested at least once a
year. This includes inspecting the gas pressure history recorded at
these stations.
11. Pressure relief devices on the pipeline or at compressor
stations to must be tested at least once a year for the ability to
protect the pipeline from overpressure.
12. Each transmission line valve must be inspected and partially
operated at least once a year.
13. If larger than 200 cubic feet in size, each underground vault
housing pressure regulating or pressure limiting equipment must be
tested for gas leaks at least once a year.
Distribution Systems
1. Buried pipeline corrosion protection electrical current readings
at test stations spaced along the pipeline must be checked at least
once a year
2. Buried pipeline external corrosion control systems must be
checked at least 6 times a year
3. Equipment monitoring for internal corrosion at points where the
risk of such exists must be checked at least once in 6 months
4. Distribution pipelines exposed to the atmosphere must be checked
for external corrosion at least once in every 3 years.
5. Operator carries out continuing surveillance of its facilities
to determine and take appropriate action concerning changes in
population density near the pipeline, failures, leakage history,
corrosion and other unusual operating and maintenance conditions.
6. If a segment of pipe is determined to be in unsatisfactory
condition, but no immediate hazard exists, the operator must initiate a
program to recondition that segment or phase it out. If this is not
possible, the operator must reduce the operating pressure of the
pipeline, in accordance with prescribed guidelines. If an immediate
hazard exists, the operator must take prompt action to repair the
segment.
7. Distribution pipelines in places or structures where anticipate
physical movement or external loading could take place must be
patrolled at least 4 times a year in business districts and twice a
year outside business districts.
8. Distribution pipelines in business districts must be checked for
leaks at least once a year including tests for gas presence in
subterranean facilities and other areas in the vicinity of a leak.
9. Distribution pipelines outside business districts must be
checked for leaks at least once every 5 years. Where electrical
readings for corrosion protection are impractical, the leak checks must
be at least once every 3 years.
10. Disconnected gas service lines must be re-tested before being
reconnected.
11. Each distribution line valve that may be necessary for the safe
operation of the system must be inspected at intervals not exceeding
one year.
12. If larger than 200 cubic feet in size, each underground vault
housing pressure regulating or pressure limiting equipment must be
tested for gas leaks at least once a year.
how a pipeline is inspected
Pipeline right-of-way is driven or walked to check for evidence of
excavation or other activity over or in the vicinity of the buried
pipeline. Special attention is paid to construction areas, highway and
railroad crossings, populated areas, business districts, areas where
ground movement is likely, or where water may erode the ground above
the pipeline.
Changes in population (e.g. housing density) in the vicinity of the
pipeline are also observed and noted, if the pipeline is in a sparsely
populated location.
Where permitted by regulation, visual evidence of gas leaks is
first sought. If preliminary evidence of a gas leak is found, the
location is then checked with an instrument, if not previously done.
The rate of leakage is established and monitored to determine the
criticality of the leak (depends on location of leak, pressure inside
line, size of line and rate of gas leak).
Depending on initial the criticality, the location may then be made
secure and immediately excavated to find the cause of the leak. If it
is corrosion, the exposed portion of line is checked for corrosion
until the location where there is no evidence of corrosion.
The exposed portion of the line may be checked with x-ray or
ultrasound equipment to determine the extent of the anomaly and its
effects on the pipe wall.
If no immediate hazard exists, the operator establishes a program
to repair or recondition that portion of the pipeline.
Above-ground sections of line are visually inspected for corrosion
or other damage (e.g. vandalism, erosion, vehicular damage). Mechanical
piping joints are checked for leaks.
Corrosion protection electrical current readings are taken at
stations on the pipeline and checked for evidence of unusual readings.
Where corrosion readings are impossible (e.g. near other electrical
facilities, or under extensive paved areas), leak surveys with leak
detector equipment are conducted to check for evidence of gas leaks
over and near the pipeline path.
Equipment for monitoring internal corrosion is checked.
Each transmission line valve is inspected visually and checked for
operability.
Each pressure relief device on the pipeline is checked for proper
setting and operation, to ensure the maximum pressure on the pipeline
is not exceeded.
Pressure recording charts at specific locations are retrieved and
inspected for evidence of unusual pressure excursions.
Maintenance records are filled out to record the observations made
and the conditions found.
Mr. Barton. Thank you, Mr. Morris.
We will now hear from Mr. Kipp.
STATEMENT OF ROBERT R. KIPP
Mr. Kipp. Thank you, Mr. Chairman, and members of the
committee. My name is Bob Kipp, and I am the Executive Director
of the Common Ground Alliance, an alliance of 15 stakeholder
groups created some 2 years ago.
Common Ground Alliance is a non-profit organization
dedicated to shared responsibility and damage prevention to
underground facilities. The CGA was created upon the completion
of a common ground study of one-call systems, and damage
prevention best practices.
This landmark study, sponsored by the U.S. Department of
Transportation, Office of Pipeline Safety, was completed in
1999 by 161 experts from the damage prevention stakeholder
community.
And in my comments today, I would like to focus on three
key areas. First, NTSB recommendations to risk to the Office of
Pipeline Safety. As stated in the written testimony, the CGA
comprises members from 15 stakeholder groups, and they are gas,
oil, road builders, excavators, one-call systems, locators,
engineers, regulators, insurance, electric, telecom, private
water, equipment manufacturers, railroad and public works.
When the CGA makes a recommendation to the Office of
Pipeline Safety, or any other government or private body, all
15 stakeholder groups have agreed to the wording in those
recommendations. We believe this to be a very powerful
statement.
Our recommendations are not those of any one industry, but
those of a group of industries, with belief that damage to our
infrastructure is a shared responsibility. In the past few
months, we have undertaken a review of eight NTSB
recommendations to risk by OPS.
We believe that the first of these recommendations P0001,
related to the use of E-911 when damage to a pipeline results
in the release of gas or other hazardous substance, has been
resolved with a change to the best practices and
recommendations to OPS earlier this year.
The second NTSB recommendation, P-0101, on the separation
of gas and electric utilities in common trenches, is under
review and a recommendation will be forthcoming later this
year, which we believe will satisfy the action outstanding and
close this recommendation.
Of the six remaining items under review, P-97-16, 17 and
18, and P-97-22, 23, and 24, three relate to data gathering,
while the three others have to do with locating technologies
and the certification of these.
Both of these series of recommendations will take more
time, and may or may not completely satisfy the NTSB
recommendation, and in the case of data gathering
recommendations will require fairly substantial funding.
Our more than 700 members, of which some 200 are currently
working on five committees and numerous subcommittees,
volunteered their time and traveling expenses to work through
the issues and recommendations.
We are thankful to OPS for the seed money in getting the
CGA off the ground, and are working with the office of pipeline
safety toward a 2002 cooperative agreement to help fund the
above work and a great number of other initiatives in the CGA.
We are also hopeful that the grants that the CGA proposed
in 3609 will be passed as proposed to help us continue our
work. The second item, 3 or 4 digit dialing. Three digit
dialing, or in the case of call dig, four digits, is of great
interest to our industry.
It is generally accepted by infrastructure owners that
between 33 percent and 60 percent of third-party damages are
caused by individuals who did not call prior to digging. There
are numerous reasons why people do not call before digging.
And included in the various reasons are the lack of
knowledge or awareness of the need to call, or the number to
call. The CGA believes that a single nationwide 3 or 4 digit
number would increase awareness and consequently increase calls
to various one-call centers, resulting in fewer instances of
third-party damage.
A number of wireless companies have programmed some of
their switches to direct pound dig to the appropriate one call
center served by these various switches. We believe that the
extension of this program to all wireline and wireless switches
in the country would be a major step in the direction of damage
prevention to the infrastructure.
The CGA also realizes that such a program would be costly
to the various call center providers, and hope that a solution
to this potential issue in deployment of the truncated
universal number can soon be implemented.
Item 3, regional CGAs. Like many other programs, much of
the success and payoff is derived from the buying at local
levels.
The CGA has as one of its key programs the assistance to
local groups in creating regional damage prevention committees,
be they State CGAs, regional damage prevention organizations,
or any other form of group interested in the implementation of
best practices, and bringing industries together to work toward
damage prevention.
We are thankful to OPS for making State grants available
for those working toward best practices implementation, and are
grateful to the provision in 3609 to make a million a year
available to States from 2002 to 2005.
In summary, we have numerous other activities under way.
Our education committee has pages of initiatives stated for
2002. Our best practice committee is tackling the issue of
security with respect to our stakeholders, and the CGA mandate.
Last, damage prevention is truly a shared responsibility,
and no one industry should be singled out in the general
discussion of incidents. The CGA believes that stakeholders
working together at both national and regional levels will make
a difference in reducing damage to our underground
infrastructure. Thank you.
[The prepared statement of Robert R. Kipp follows:]
Prepared Statement of Robert Kipp, Executive Director, Common Ground
Alliance
Good afternoon, Mr. Chairman and members of the Committee. My name
is Robert Kipp and I am the Executive Director of the Common Ground
Alliance (CGA). I am pleased to appear before you today to represent
the CGA.
Background: The Common Ground Alliance is a nonprofit organization
dedicated to shared responsibility in the damage prevention of
underground facilities. The Common Ground Alliance was created just
over two years ago at the completion of the ``Common Ground Study of
One-Call Systems and Damage Prevention Best Practices.'' This landmark
study, sponsored by the U.S. Department of Transportation Office of
Pipeline Safety, was completed in 1999 by 161 experts from the damage
prevention stakeholder community.
The ``Common Ground Study'' began with a public meeting in
Arlington, VA in August 1998. The study was prepared in accordance
with, and at the direction and authorization of the Transport Equity
Act for the 21st Century signed into law June 9, 1998 that authorized
the Department of Transportation to undertake a study of damage
prevention practices associated with existing one-call notification
systems. Participants in the study represented the following
stakeholder groups: oil; gas; telecommunications; railroads; utilities;
cable TV; one-call systems and centers; excavation; locators; equipment
manufacturers; design engineers; regulators; federal, state, and local
government. The Common Ground Study concluded on June 30, 1999 with the
publication of the ``Common Ground Study of One-Call Systems and Damage
Prevention Best Practices.''
At the conclusion of the study, the Damage Prevention Path Forward
initiative led to the development of the nonprofit organization now
recognized as the Common Ground Alliance (CGA). Building on the spirit
of shared responsibility resulting from the Common Ground Study, the
purpose of the CGA is to ensure public safety, environmental
protection, and the integrity of services by promoting effective damage
prevention practices. The CGA works to prevent damage to the
underground infrastructure by: fostering a sense of shared
responsibility for the protection of underground facilities; supporting
research; developing and conducting public awareness and education
programs; identifying and disseminating the stakeholder best practices
such as those embodied in the Common Ground Study; and serving as a
clearinghouse for damage data collection, analysis and dissemination.
The CGA now counts more than 700 individuals representing 15
stakeholder groups and over 120 member organizations. Each of the 15
stakeholder groups has one seat on the CGA Board of Directors,
regardless of membership representation or financial participation. CGA
members populate the organization's five working committees: Best
Practices, Research & Development, Educational Programs, Data Reporting
& Evaluation, and Marketing, Membership, & Communications.
working committees
The CGA working committee guidelines include:
<bullet> All stakeholders are welcomed and encouraged to participate in
the Committees' work efforts.
<bullet> Committee members represent the knowledge, concerns and
interests of their constituents.
<bullet> A ``primary'' member is identified within each Committee for
each particular stakeholder group as the spokesperson for
consensus decisions.
A. Best Practices Committee
It is important that all stakeholders implement the damage
prevention Best Practices. The Best Practices Committee:
<bullet> Identifies Best Practices appropriate for each stakeholder
group to minimize the possibility of damages;
<bullet> Gauges current levels of implementation and use of Best
Practices in each industry;
<bullet> Encourages and promotes increased implementation;
<bullet> Updates Best Practices to incorporate recent developments in
damage prevention processes, procedures, practices, and
technology.
Current Activities:
Resulting from the NTSB report, ``Natural Gas Pipeline Rupture and
Subsequent Explosion, St. Cloud, Minnesota, December 11, 1998''--a
review of safety recommendations regarding the use of E-911 when
excavation damage occurs for inclusion to CGA Best Practices. As a
result of this report, the Office of Pipeline Safety requested that the
CGA review the existing Best Practice and determine if the NTSB
recommendation P-00-1 should be included as a ``New Best Practice''.
The recommendation from the NTSB report read: ``To advise
excavators to call `911' if the damage to the pipeline results in a
release of gas or other hazardous substance or potentially endangers
life, health or property.''
Prior to the Recommendation the Best Practice on this issue left it
to the excavator to determine if the release of gas or hazardous
substance posed a danger, and if so, to determine if 911 should be
called.
The CGA Best Practices Committee reviewed the recommendation and
unanimously approved a change to the Best Practice to reflect the
following:
Practice Statement (Best Practices Committee Approved by Consensus
11/27/01)
``If the damage results in the escape of any flammable, toxic, or
corrosive gas or liquid or endangers life, health, or property, the
excavator responsible immediately notifies 911 and the facility owner/
operator.''
The CGA Board of Directors subsequently unanimously approved the
change to this practice. The Executive Director wrote Ms. Stacey Gerard
of the Office of Pipeline Safety earlier this year informing her of
this change.
Resulting from the NTSB report, ``Natural Gas Explosion and Fire in
South Riding, Virginia, July 7, 1998''--a review of July 1, 2001
Virginia State legislation regarding minimum separation of utilities
located in common trenches;
The Office of Pipeline Safety wrote the CGA regarding the NTSB
recommendation P-01-1 on the separation of gas and electric
utilities in common trenches. It is expected that our Best
Practices committee will soon approve a change to the existing
practice increasing the distance in radial separation of the
gas and electric in common trenches, similar to what has been
recommended by the NTSB, and consistent with the National
Electric Safety Code.
The review of the HDD Consortium Horizontal Directional Drilling,
(HDD) Good Practices Guidelines, for potential endorsement by the CGA;
The review of NULCA and APWA ``Address Marking, Color Codes and
Marking Paint'';
Condensing language of current Best Practices document.
The Best Practices Committee has begun an in-depth review of
Security Practices across the stakeholder groups. Once assembled, these
practices will be reviewed, and if appropriate, either integrated into
the existing Best Practices, or implemented as a separate section in
the Common Ground Alliance Best Practices document.
Though all of the work is done voluntarily through the members, the
Office of Pipeline Safety has been instrumental in funding start `` up
costs associated with getting the CGA up and running. The CGA is
currently negotiating a cooperative agreement with the Office of
Pipeline Safety to enable the CGA to pay for support, materials, and
external services required to accomplish its ambitious mandate.
It is important to note that any changes to the Best Practices have
unanimous approval from the 14 industry groups represented on the
committee, and subsequent approval of a minimum of 10 of the14 Board
members.
B. Research and Development Committee
The CGA promotes damage prevention R&D and serves as a clearing
house for information on damage prevention technologies and practices.
The Research and Development Committee's mandate is to:
<bullet> Seek to identify new and existing technologies that can be
adapted to improve damage prevention efforts;
<bullet> Encourage the sharing of non-proprietary information
concerning technologies;
<bullet> Search for opportunities, including sponsoring conferences,
for the CGA to promote damage prevention R&D.
Current Activities:
<bullet> Standardized National Mapping--Standardized mapping
technologies are being reviewed. Vendors are being invited to
make presentations to the committee. Existing mapping
technologies in railroads and pipelines are being studied.
<bullet> One-Call Center 3-digit dialing `` review and recommendation--
Three digit-dialing (or 4 digits such as #DIG) is of great
interest to our industry. It is generally accepted by
infrastructure owners that between 33% and 60% of third party
damages are caused by individuals who did not call prior to
excavating (digging). There are numerous reasons people do not
call before digging. Included in the various reasons is the
lack of knowledge or awareness of the need to call or the
number to call. The CGA believes that a single nation-wide, 3
or 4 digit number, would increase awareness and consequently
increase calls to the various One-Call Centers resulting in
fewer instances of third-party damage. A number of wireless
companies have programmed some of their switches to direct #DIG
(#344) to the appropriate One-Call Centers served by these
various switches. We believe that the extension of this program
to all wireline and wireless switches in the country would be a
major step in the direction of damage prevention to the
infrastructure. The CGA also realizes that such a program would
be costly to the various Telecom providers and hope that a
solution to this potential issue and deployment of the
truncated universal number can soon be implemented.
<bullet> Compendium of Locating Technologies under review--The
committee is reviewing and compiling all available Locating
Technologies and locating products. The committee working in
concert with NULCA ( National Utility Locating Contractors
Association), hope to make available on both websites and
available to the stakeholders of all industries involved, a
complete library of all products and technologies. We are
working with OPS and the NTSB in order to attempt to satisfy
NTSB recommendations P-97-16, P-97-17, and P-97-18 addressing
the Certification of Locating Technologies. Again, we are
working closely with the OPS on a cooperative agreement to help
defray external costs associated with this initiative.
<bullet> Root Cause of Damage--The R&D Committee requests that the Data
Reporting and Evaluation Committee have begun to initiate
collection of comprehensive data on the root cause of
underground utility damage. The R&D committee suggests that
each stakeholder group encourage their members to use the form
developed in Best Practices (figure 9.1 of the Common Ground
Best Practices Study) to report root cause data. The 2
committees will now negotiate the work to be done. If
successful, the CGA will have the first comprehensive database
of the causes of damage to our underground infrastructure
across all industries.
<bullet> Encroachment Monitoring
<bullet> Uniform One Call Laws--The task team is working on a survey to
be used to interact with one-call centers to gather information
on uniformity in one-call laws. They are looking for 100%
participation and some of the data will include answers to the
following questions: What type of software do One-Call centers
use? Who will use the results after the information is
gathered? Which Best Practices are being used by the One-Call
center? These answers will facilitate the decision-making
regarding the development of a nation-wide mechanized database
of calls to the One-Call Centers.
C. Educational Programs Committee and Dig Safely Sub-committee
One of the purposes of the CGA is to develop and conduct public
awareness and education programs to promote damage prevention. The
Educational Programs Committee:
<bullet> Identifies existing programs for opportunities where the CGA
can have significant impact in furthering their reach and
effectiveness;
<bullet> Evaluates aspects of existing programs for areas where
additional emphasis is needed; and
<bullet> Continues to promote Dig Safely and develop other educational
programs to reduce damage to underground facilities
Current Activities:
<bullet> Create 8 Best Practices brochures summarizing best practices
from Common Ground Study:
LOCATING AND MARKING BEST PRACTICES
MAPPING BEST PRACTICES
ONE-CALL CENTER BEST PRACTICES
PLANNING AND DESIGN BEST PRACTICES
PUBLIC EDUCATION AND AWARENESS BEST PRACTICES
REPORTING AND EVALUATION BEST PRACTICE
COMPLIANCE BEST PRACTICES
EXCAVATION BEST PRACTICES
<bullet> Dig Safely video--``Get the Dirt''
<bullet> Public Dig Safely Awareness Survey
<bullet> Working with M&MC to coordinate participation at various shows
and conventions
<bullet> Best Practices on CD Rom
<bullet> Public Dig Safely Awareness Survey
<bullet> Work with MM&C to coordinate participation at various shows
and conventions
<bullet> Review of Corporate Dig Safely Programs
<bullet> Damage Prevention State Laws
<bullet> Develop materials to target specific stakeholder groups, in
addition to the current materials that reflect the best
practices in general;
<bullet> Review and evaluate homeland and evaluate homeland and
infrastructure security as an underlying benefit/purpose for
damage prevention education;
<bullet> Develop videos, DVDs and other media depicting each individual
best practice ``in action'';
<bullet> Develop the ``Locate Accurately'' educational program;
<bullet> Develop materials for priority audiences
<bullet> Seek data on damage causes (note the R&D and Data Reporting
Committees' efforts);
<bullet> Establish graphics standards for the CGA and Dig Safely logos;
<bullet> Analyze the results of the latest public Dig Safely survey and
develop and implement appropriate recommendations;
<bullet> Finalize criteria for the CGA endorsement or ``seal of
approval'' for 2nd party materials;
<bullet> Resolve and begin the production and distribution of a CGA
newsletter; and
<bullet> Evolve/improve the distribution process for CGA materials
<bullet> In summary, this large committee has an extremely ambitious
program. We are working closely with OPS on funding issues
associated with the dissemination of educational information.
D. Data Reporting and Evaluation Committee
The Common Ground Study determined that consistent & meaningful
damage data is needed. The Data and Reporting Evaluation Committee
looks at available data, data gaps, and how data can best be gathered
and disseminated. Reporting and evaluation of damage data is important
to:
<bullet> Measure effectiveness of damage prevention programs;
<bullet> Assess the risks and benefits of different damage prevention
practices being implemented by various stakeholders;
<bullet> Assess the needs and benefits of education and training
programs.
Current Activities:
<bullet> Survey on available damage data and reporting
<bullet> Studying requirements for funding to establish mechanized
database for damage reporting `` NTSB Recommendations P-97-22,
P-97-23, and P-97-24
<bullet> It is essential that data gathering on a mechanized objective
basis, and a substantial nation-wide report on the analysis of
all damages be developed. The CGA, in concert with and through
a co-operative agreement from OPS have begun the work necessary
to determine the parameters and feasibility of such a report or
series of report. An RFP will be issued in March/April to
companies specializing in data gathering. Once the responses
have been received we will evaluate the submissions and
determine our next course of action.
<bullet> Our intent is to work with OPS in an effort to respond to NTSB
Recommendations P-97-22, P-97-23, and P-97-24. These
recommendations deal with the development of a method to gather
damage data, consistently gather the data, and utilize the data
to periodically assess the effectiveness of various excavation
damage prevention programs.
E. Marketing, Membership, & Communication Committee
The Committee: Identifies opportunities and needs for promoting the
organization to increase sponsorship and membership; Identifies
opportunities for obtaining outside funding such as grants to promote
the development of the organization; Evaluates communication
opportunities and methods to ensure the CGA is effectively
communicating with its members, sponsors, and all other stakeholders.
Current Activities:
<bullet> Ongoing booth presence and presentations at trade shows
<bullet> This year the CGA will make presentations to more than 50
companies, municipalities, associations, trade-show attendees
and conventioneers.
<bullet> Regional CGA effort
<bullet> Partner with existing DP entities.
<bullet> Disseminate CGA information.
<bullet> Collect local information.
<bullet> Strengthen cooperation amongst stakeholders.
<bullet> Create opportunities for stakeholder involvement.
<bullet> Establish new councils where none exist.
<bullet> Find new members.
<bullet> Purpose is NOT to absorb or control any existing Damage
Prevention organization!
<bullet> Support in recruiting new sponsors and members
<bullet> Development of booth theme and promotional materials
<bullet> Development and distribution of press releases
<bullet> Publication of a bi-monthly CGA newsletter
<bullet> Website monitoring and development
h.r. 3609 `` pipeline infrastructure protection to enhance security and
safety act
In December of 2001, Mr. Young as well as Mr. Petri, Mr. Tauzin,
and Mr. Barton tabled H.R. 3609, the Pipeline Infrastructure Protection
to Enhance Security and Safety Act.
The CGA supports this Bill. In addition to recognizing the Best
Practices developed by the 161 volunteer experts across the stakeholder
groups, it also encourages States through financial incentives, to
implement these Best Practices. The Bill also recognizes the work of
the CGA and encourages continued funding of the CGA from 2002 through
2005.
We encourage the committee to delete reference to ``construction-
related'' damages, as our goal is to reduce all damages regardless of
the circumstances. Lastly, we recommend that the final version of the
Bill include language encouraging the implementation of a nation-wide 3
or 4 digit number to call before digging.
summary
The Common Ground Alliance is a true member-driven organization.
Members from the 15 stakeholder groups work together to determine
direction and problem-solve, making the CGA a truly unique forum. We
would not exist without the immense dedication and effort of our
members as well as the financial and logistical support of Ellen
Engleman and Stacey Gerard of RSPA and OPS.
Our greatest strengths can be summarized as follows: When the CGA
proposes a policy, solution or response to a government or corporate
body, the wording of such a proposal has been agreed to by primary
members representing every stakeholder group within the CGA. The
receiving body of a CGA proposal knows that no one industry has a
vested interest, and that all stakeholder groups agree with the content
and wording of such a proposal.
In addition, the CGA has brought together industry leaders on a
National basis to work together and help fund the Alliance in its
effort to reduce damage to our nation's underground infrastructure.
Lastly, in addition to all of the wonderful accomplishments in
education, best practice development, data gathering, and research and
development, the CGA is now reaching for and succeeding in bringing
together stakeholders at a local effort. We believe to be successful,
we must continue to encourage and promote communication, problem
resolution, and the following of the Best Practices at a local level.
Thank you.
Mr. Barton. Thank you, Mr. Kipp, and now we will hear from
Mr. Sullivan.
STATEMENT OF EDWARD C. SULLIVAN
Mr. Sullivan. Thank you, Mr. Chairman. On behalf of the 3
million members and 14 affiliated unions of the Building and
Construction Trades Department, I am pleased to be here to help
this committee and inform this committee about the current
status of the pipeline industry.
Let me take this opportunity to thank Chairman Tauzin,
Ranking Member Dingell, Subcommittee Chairman Barton, and
Ranking Member Boucher, for holding this hearing.
All our members care very deeply about passing an effective
pipeline safety bill that will protect the public, the pipeline
workers, and the environment, from pipeline accidents, and from
new national security threats.
The building trades represent a large contingent of members
in different crafts who work on and around pipelines. They
construct, operate, and maintain gas, oil, and other pipelines
all over this country.
It is critically important to our workers that these
pipelines are safe and secure. Unfortunately, after the events
of September 11, protection of the pipelines and their related
facilities from terrorist attack have become a new concern.
The building trades men and women who work on pipelines
have one priority, and that is safety. We want to protect our
country's pipelines from new terrorist threats, and protect
communities from future accidents, like the tragedies that
occurred in Bellingham, Washington, and in New Mexico.
While the building trades is actively working with Congress
to help shape the best pipeline safety bill possible, today I
would like to talk about our biggest safety concerns.
I request that the committee please enter my entire
statement into the record, even though I won't have time to
speak on all of the aspects of the bill today. In general, a
worker on a pipeline will tell you that the standards issued by
the Office of Pipeline Safety are good enough.
The problem lies in the enforcement. More enforcement is
needed to make sure that the pipelines are tested for leaks,
but more importantly are tested for integrity. When a leak is
detected, pipeline companies notify a contractor with whom they
have an agreement to do repair work.
The contractor is usually called out to replace only the
section of the line that is leaking and not the entire line.
This often leaves our members wondering when will they be
called on to fix the other sections of the same pipeline.
Although leaks often pose a threat to public safety, when a
pipeline rupture occurs, human lives are put at risk. A
pipeline will come apart when its integrity fails. When your
product is flowing through a pipe that has a compromised
integrity at a high pressure, heat is created, and an explosion
is imminent.
The best means of testing the integrity of a pipeline is
called hydrostatic testing. This is accomplished by purging the
section of pipe to be tested, and then filling the pipe with
water, and putting it under constant pressure for a specified
number of hours.
Pipeline companies will complain that this test is costly,
and it will shut a line down and interrupt service. It will put
pressure on the pipe that is above its normal operating
pressure and may damage the pipe.
These are all true. If the pipe is damaged, however, it is
because the pipe's integrity was failing. But wouldn't the
members of this committee rather have water spilling out of a
weak and deteriorating pipe than have it blow up and only then
find out that the integrity was failing.
This test will tell you if the pipe integrity is in good
condition, and the pipeline in Bellingham, Washington had been
tested only weeks before the pipe ruptured by the smart pig
testing.
A pig test only reveals corrosion and leaks, and it does
not conclusively tell an operator how the integrity of the
pipeline is holding up. A pipeline's integrity must be tested.
Testing for leaks only is not sufficient.
Although half of the Nation's pipelines were originally
constructed before 1970, those lines are subject both to
external and internal corrosion, and their integrity must be
periodically tested.
The building trades support require periodic inspection of
pipelines that look for leaks and integrity failures. The
building trades is also aware of the major cost factor to the
operating companies to do this type of testing.
We are therefore also suggesting for the safety of the U.S.
citizens and in these times of uncertainty the U.S. Government
should give these pipeline operators some type of incentive or
tax relief to perform these tests on a periodic basis.
Pipelines are not a national security issue because there
are approximately 2.2 million miles of them in the United
States. They are a unique national security concern because
many of them run underneath communities and the above ground
pumping stations are visible with little protection.
Just as in New York City when the planes struck the Twin
Towers, construction workers from all over New York State
dropped their tools to help with the rescue and recovery.
If a pipeline would be attacked, our members would again be
rushing to the site to help with the rescue and recovery.
Our members know how to clear debris, shut down a pipe, and
repair it, and restore product flow. If a pipeline in Upstate
New York was blown up by terrorists in the middle of winter,
thousands of people would go without heat until the pipeline
operators and constructors could repair the lines to restore
service.
How long would it take to repair the line and restore full
service? The answer to that question depends on the cooperative
response of local fire fighters, Federal, State, and local
emergency management officials, and the area's pipeline
workers.
Apparently, we are not aware of coordinated response plans
already in place in the majority of this country's communities.
If such an attack were to take place, we would have difficult
responding because of the following obstacles.
Only pipeline workers who are certified to work on that
company's pipeline would be allowed to do the repair work.
Workers on a nearby line employed by another company would not
be able to help because they are not certified by that company
to work on their lines.
This presents the problem of having enough workers
immediately on the scene. Chances are that replacement pipe
would not be nearby and would take time to locate and retrieve.
Large bodies of tools and operating equipment would have to
be easily accessible in a plan to redirect product flow would
need to be in place. These are just a few of the immediate
concerns that would have to be dealt with for an effective
response.
The building trades believes that the emergency response
teams need to be assembled and coordinated as soon as possible.
The building trades men and women and contractors working on
pipelines today are ready and willing to work with officials to
enhance safety around the pipeline and to create an emergency
response plans.
We believe that the new Office of Homeland Security should
be consulted and involved in helping communities create an
emergency plan and response teams to aid in this effort.
We would like to see national standards put in place that
would give workers certification to come on different company
lines during an emergency. The building trades strongly urges
Congress to pass a pipeline safety bill as soon as possible.
Our members fear that without better enforcement effective
pipeline integrity and detection of leaks another explosion
will certainly happen again. Emergency response teams must also
be coordinated immediately around the country to help prevent
terrorist attacks on pipelines and to create swift and
effective responses to such attacks.
We are committed to making sure that this country's
pipeline infrastructure is operated properly, safely, and is
protected from national security threats. As pipeline
legislation evolves in the House, we look forward to working
with the members of this committee to pass the best pipeline
safety bill possible. Thank you.
[The prepared statement of Edward C. Sullivan follows:]
Prepared Statement of Edward C. Sullivan, President, Building and
Construction Trades Department, AFL-CIO
On behalf of the three million members and fourteen affiliated
unions of the Building and Construction Trades Department, I am pleased
to be here to help inform this committee about the current status of
the pipeline industry. Let me take this opportunity to thank Chairman
Tauzin, Ranking Member Dingell, Subcommittee Chairman Barton and
Ranking Member Boucher for holding this hearing. Our workers care very
deeply about passing an effective pipeline safety bill that will
protect the public, pipeline workers and the environment from pipeline
accidents and from new national security threats.
The Building Trades represent a large contingent of workers in
different crafts who work on and around pipelines. They construct,
operate and maintain gas, oil, and other pipelines all over the
country. It is critically important to our workers that these pipelines
are safe and secure. Unfortunately, after the events of September 11,
protection of the pipelines and their related facilities from terrorist
attack has become a new concern. The Building Trades men and women who
work on pipelines have one priority: safety. We want to protect our
country's pipelines from new terrorist threats, and protect communities
from future accidents like the tragedies that occurred in Bellingham,
Washington and New Mexico.
While the Building Trades is actively working with Congress to help
shape the best pipeline safety bill possible, today I'd like to talk
about our biggest safety concerns. I request that the committee please
enter my entire statement into the record even though I won't have time
to speak to all the aspects of the bill today.
In general, a worker on a pipeline will tell you that standards
issued by the Office of Pipeline Safety are good enough. The problem
lies in the enforcement. More enforcement is needed to make sure that
pipelines are tested for leaks, but more importantly that they are
tested for integrity.
When a leak is detected, pipeline companies notify a contractor
with whom they have an agreement to do repair work. The contractor is
usually called out to replace only the section of the line that is
leaking and not the entire line. This often leaves our members
wondering, when will they be called on to fix the other sections of the
same pipeline?
Although leaks often pose a threat to public safety, when a
pipeline rupture occurs human lives are put at risk. A pipeline will
come apart when its integrity fails. When you have products flowing
through a pipe that has a compromised integrity, at a high pressure,
heat is created and an explosion is imminent.
The best means of testing the integrity of a pipeline is called
hydrostatic testing. This is accomplished by purging the section of
pipe to be tested and then filling the pipe with water and putting it
under a constant pressure for a specified number of hours. Pipeline
companies will complain, that this test is costly, it will shut a line
down and interrupt service, it will put pressure on the pipe that is
above its normal operating pressure and may damage the pipe. These are
all true. If the pipe is damaged however, it's because the pipe's
integrity was failing. But wouldn't the members of this committee
rather have water spilling out of a weak and deteriorating pipe than
have it blow up, and only then find out that the integrity was failing?
This test will tell you if the pipe's integrity is in good condition.
The pipeline in Bellingham, Washington had been tested weeks before the
pipe ruptured by a smart pig testing device. A pig test only reveals
corrosion and leaks, it does not conclusively tell an operator how the
integrity of the pipeline is holding up.
A pipeline's integrity must be tested. Testing for leaks only is
not sufficient. Over half of the nation's pipelines were originally
constructed before 1970. Those lines are subject to both internal and
external corrosion and their integrity must be periodically checked.
The Building Trades supports required periodic inspections of pipelines
that look for leaks and integrity failures. The Building Trades is also
aware of the major cost factor to the operating companies to do this
type of testing. We are therefore also suggesting for the safety of
U.S. Citizens and in these times of uncertainty the U.S. Government
should give these pipeline operators some type of incentive or tax
relief to perform these tests on a periodic basis.
Pipelines are now a national security issue because there are
approximately 2.2 million miles of them in the United States. They are
a unique national security concern because many of them run underneath
communities and the above ground pumping stations are visible with
little protection. Just as in New York City when the planes struck the
twin towers, construction workers from all over New York State dropped
their tools to help with rescue and recovery, if a pipeline were to be
attacked, our members would again be rushing to the site to help with
rescue and recovery. Our members know how to clear away debris, shut
down a pipe, and repair it to restore product flow.
If a pipeline in upstate New York was blown up by terrorists in the
middle of winter, thousands of people would go without heat until the
pipeline operators and constructors could repair the lines to restore
service. How long would it take to repair the line and restore full
service? The answer to that question depends on the cooperative
response of local fire fighters, federal, state and local emergency
management officials and the area's pipeline workers.
Currently, we are not aware of coordinated response plans already
in place in the majority of this country's communities. If such an
attack were to take place, we would have difficulty responding because
of the following obstacles. Only pipeline workers who are certified to
work on that company's pipeline would be allowed to do the repair work.
(Workers on a nearby line employed by another company would not be able
to help because they are not certified by that company to work on their
lines, this presents the problem of having enough workers immediately
on the scene.) Chances are, that replacement pipe would not be nearby
and would take time to locate and retrieve. Large volumes of tools and
operating equipment would have to be easily accessible and a plan to
redirect product flow would need to be in place. These are just a few
of the immediate concerns that would have to be dealt with for an
effective response.
The Building Trades believes that emergency response teams need to
be assembled and coordinated as soon as possible. Building Trades men
and women and contractors working on pipelines today are ready and
willing to work with officials to enhance safety around pipelines and
to create emergency response plans. We believe that the new Office of
Homeland Security should be consulted and involved in helping
communities create emergency plans and response teams. To aid this
effort, we would like to see national standards put in place for
workers that would give them certification to work on different company
lines during an emergency.
The Building Trades strongly urges Congress to pass a pipeline
safety bill as soon as possible. Our members fear that without better
enforcement for testing pipeline integrity and detection of leaks
another explosion will certainly happen again. Emergency response teams
must also be coordinated immediately, around the country, to help
prevent terrorist attacks on pipelines and to create swift and
effective responses to such attacks.
The Building Trades are committed to making sure this country's
pipeline infrastructure is operated properly, safely and is protected
from national security threats. As pipeline legislation evolves in the
House, we look forward to working with the members of this committee to
pass the best pipeline safety bill possible.
Thank You.
The Building and Construction Trades Department is committed to
working with Members of Congress to make sure that all pipelines are
safe and secure. To craft the best pipeline safety bill possible and in
order to take steps to protect our pipelines from new threats, the
Building Trades would like to see a pipeline safety bill pass the House
that includes the following provisions.
<bullet> Required periodic inspections of pipelines, with priority
going to those lines that are at the greatest threat to life
and property (based on proximity to persons and property, age,
and time since last inspection). The use of independent third
party inspectors should be encouraged to help do inspections.
Congress should consider setting up a system of monetary
incentives to help operators perform efficient, periodic
inspections.
<bullet> Community right to know, worker right to know and emergency
preparedness provisions must be included. Municipalities must
have secure access to maps of local pipelines.
<bullet> Whistleblower protections for employees. This is already
included in the McCain-Murray bill and must be included in a
House passed bill.
<bullet> We support the certification of safety programs and standards;
in addition individual employees performing safety-sensitive
work on pipelines should also be certified. We also support a
national standard to certify workers to work on any line in
case of an emergency.
<bullet> Pipeline Integrity Management Programs that include the best
leak detection technologies and detection for integrity
failures. The Secretary of Transportation needs to continue
with or initiate further research and development to identify
innovative technology that can aid in leak detections and in
detecting pipeline integrity failures.
<bullet> Federal studies to recommend and implement solutions for the
multifaceted problems of population encroachment. There need to
be adequate amounts of pipeline right-of-way so that pipeline
construction, operation and maintenance work may be performed
safely. This should also be taken into consideration in future
planning and permitting processes.
<bullet> Language that would give the Secretary of Transportation, in
consultation with the Office of Homeland Security, the
authority to work with industry, labor, communities, federal
and state agencies to implement new safety and security
measures in light of the new threats to our nation's energy
infrastructure after September 11.
<bullet> Increased security around pumping stations and metering
facilities is a must. There also needs to be a special team of
people from the pipeline crafts to assist along with the
firefighters and state, local, and federal officials in
drafting a plan to help control and repair any problems that
may arise. Based on the recent experience with key building
trade craft unions at the World Trade Center and at the
Pentagon, we know first hand many of the problems which arise
for emergency first responders.
<bullet> The Building Trades recommend that this Committee consider
amending Section 4(b) of the Accountable Pipeline Safety and
Partnership Act of 1996, 49 U.S.C. 60102(b), so that it
provides that the courts may not review a minimum safety
standard adopted by the Office of Pipeline Safety solely on the
basis of the standard's satisfaction of the cost-benefit
analysis requirement. In 1996, Congress adopted a requirement
that the Office of Pipeline Safety must perform a risk
assessment and a cost-benefit analysis whenever it prescribes a
new minimum safety standard. Cost-benefit analysis is an
inappropriate means of controlling federal administrative
agencies, because such provisions often require estimates of
hard-to-measure things like human lives and environmental
amenities. The Building Trades are concerned about the effect
that the cost-benefit analysis requirement in the current
pipeline safety statute has on the ability of the Office of
Pipeline Safety effectively to prescribe minimum safety
standards at all. That is, there is nothing in the current
pipeline safety statute that prohibits judicial enforcement of
the cost-benefit analysis requirement. Consequently, the single
greatest impediment to the adoption of a minimum safety
standard may well be the threat of judicial challenge by
opponents of the standard. This proposed change in the law
would enable Congress and the President to retain control over
the agency's incentives to comply with the cost-benefit
analysis requirement rather than leave it to the courts.
Mr. Barton. Thank you, Mr. Sullivan.
Last, but not least, we will hear from Mr. Nilles, and he
is going to summarize his testimony in 5 minutes.
STATEMENT OF BRUCE E. NILLES
Mr. Nilles. Good afternoon, Mr. Chairman, and
Representative John. My name is Bruce Nilles and I am very
pleased to have this opportunity to meet with you to discuss
pipeline safety.
I am currently a staff attorney with Earthjustice in
Oakland, California. Earthjustice is a non-profit public
interest law firm that presents without charge hundreds of
public interest clients, both large and small, throughout this
country.
We work through the courts to safeguard public lands, to
reduced air and pollution, to preserve endangered species, and
to achieving environmental justice for all Americans. Before
joining Earthjustice 2 years ago, I had the pleasure of working
at the United States Department of Justice in the Environment
and Natural Resources Division, where I spent 6 years working
on pipelines.
It was in this position that I had the primary
responsibility for the Department to review all pending
pipeline legislation, and all regulations that were being
proposed by the Office of Pipeline Safety, to determine how
effectively the existing law could be changed to improve
compliance, as well as how the civil and criminal enforcement
provisions could be strengthened to enforce the law and ensure
that our communities are safe.
My testimony today focuses solely on the issue of
enforcement, and how, as you reauthorize this bill, that there
might be ways to improve historical problems that have been
experienced in the Office of Pipeline Safety.
By any measure the Office of Pipeline Safety has failed,
and continues to fail, in its most basic mission of adopting
and enforcing this regulation. It has one of the very worst
enforcement records of any agency in the U.S. Government.
I know of no other agency that has a worse enforcement
record than the Office of Pipeline Safety. GAO calculated in
1998 that OPS proposed and not imposed, but proposed a penalty
in only 1 out of every 25 cases that it brought.
Imagine how many people would be speeding illegally if
every time you got pulled over there was only a 4 percent
chance that you might get a fine proposed. There is literally
no enforcement going on at these critical pipeline safety
regulations at the Office of Pipeline Safety.
More important than this lack of enforcement is showing up
in terms of the number of spills reported by GAO has maintained
about four every week. There are four major oil and gas spills
every week where there is either an injury, a death, or more
than $50,000 worth of damage.
Every week there are four of those kinds of incidents. More
alarming, GAO reports that incidents are increasing and not
decreasing, at about 4 percent per year. So the trend is
exactly in the wrong direction.
So why is it occurring? I would suggest because of a lack
of enforcement, and there is three primary things that could
happen to improve this situation. First of all, OPS does lack,
and the Federal Government as a whole, lacks some of the very
basic elements of a modern enforcement program.
Any kind of meaningful enforcement program, like you have
in the Clean Water Act, has a full range of tools that allow
Federal officials to bring to or ensure compliance.
There are some basic elements that are missing in the
Office of Pipeline Safety, or in the regulations that oversee
pipeline safety.
For example, criminal sanctions in the Office of Pipeline
Safety. The Office of Pipeline Safety has one of the highest
burdens of criminal prosecutors to be able to bring a case.
Ignorance of the law in most situations is not a defense
unless you happen to be a pipeline operator, and then the way
the pipeline statute is constructed, it is practically
impossible for Federal prosecutors to bring a criminal case.
It requires the prosecutors to show that the person knew
what the law was and the law was violated. It is the only
difference from most other environmental statutes.
The second thing is that there needs to be a modern
equipment program in place so that the laws can actually be
enforced. The second is that if we look at the laws that had a
tremendous impact on building pipelines, one of the most
successful to date is the Oil Pollution Act that was passed in
1990 in response to the Exxon Valdez oil spill.
Since that time the number of major spills from oil
pipelines to water in the United States has decreased. The Oil
Inclusion Act provides for penalties per barrel, across the
line, of $1,000 per barrel, or if it is gross negligence,
$3,000 per barrel for oil spills to water.
We need that same provision as to ground water and land,
and that would provide the same deterrence that is shown to be
successful in reducing the amount of oil spills in water in the
United States.
Third, training for OPS. Congress has been on the record
since 1979, for 23 years, Congress has identified the inability
by the Department of Transportation to enforce the very laws
that you have passed.
Without a strong and rigorous enforcement program, the laws
that you have passed are unable to be implemented and provide
the protections that we desperately need. We recommend that
enough is enough.
What we are dealing with is 2.2 million miles of pipeline
that undermine all of our communities. Every one of our
constituents has pipelines that run through their communities.
It is time to say that if the Office of Pipeline Safety is not
up to the task of doing its job to enforcing these laws, then
they should not be in the business.
What we recommend is to give them 24 months to show that
they can run an effective enforcement program, and that they
know how to do civil and criminal enforcement. To my knowledge
they have never in that entire district referred a single civil
case to the Department of Justice.
In 23 years there have been no civil enforcement cases to
the Department of Justice. They have been basically unable to
do the basic job as an enforcement agency. So it is critical
that they been given a time line to shape up or get out of the
business.
There is too much riding on the line between security and
environmental protection.
So in closing I have some additional suggestions in my
written testimony about how Congressman Young's Bill, H.R.
3609, and others bills may be strengthened. I think you have a
tremendous opportunity to really improve the safeguards that
have been placed to protect the American people.
And I would urge you to move quickly before we have another
Bellingham or New Mexico tragedy, and with that I want to thank
you for the opportunity to testify here today.
[The prepared statement of Bruce E. Nilles follows:]
Prepared Statement of Bruce E. Nilles, Staff Attorney, Earthjustice
Mr. Chairman and Ranking Member Boucher, I am very pleased to have
this opportunity to meet with you and the Members of this Subcommittee
to discuss pipeline safety and reauthorization of the existing pipeline
statutes.
I am currently a staff attorney with Earthjustice in Oakland,
California. Earthjustice is a non-profit public interest law firm
dedicated to protecting the magnificent places, natural resources, and
wildlife of this earth, and to defend the right of all people to a
healthy environment. We bring about far-reaching change by enforcing
and strengthening environmental laws on the behalf on hundreds of
organizations and communities.
We represent--without charge--hundreds of public interest clients,
large and small. Earthjustice works through the courts to safeguard
public lands, national forests, parks, and wilderness areas; to reduce
air and water pollution; to prevent toxic contamination; to preserve
endangered species and wildlife habitat; and to achieve environmental
justice. In short, with almost fifty lawyers in nine regional offices
nationwide, we have extensive experience enforcing many of the laws
that you enact.
Prior to joining Earthjustice in early 2000, I worked for four
years as an attorney at the U.S. Department of Justice, in the
Environment and Natural Resources Division. In my last year at the
Justice Department I was Special Counsel to the former Assistant
Attorney General. In this position I was intimately involved in various
aspects of pipeline safety. First, I had the primary responsibility for
coordinating the Department's review of all pending pipeline
legislation, including the Administration's pipeline bill. My charge
was to determine how the existing law could be changed to improve
compliance, as well as how the civil and criminal enforcement
provisions could be strengthened. Second, I worked very closely with
the Office of Pipeline Safety (``OPS''') in the promulgation of the
hazardous liquid pipeline Integrity Management Rule. 67 Fed. Reg. 75378
(Dec. 1, 2000). And, third, I coordinated the Department's review of
several of OPS's Risk Management Demonstration Projects.
Today, I would like to discuss the importance of a robust
enforcement program, OPS's history of nonenforcement, and then offer
some suggestions as to how the enforcement situation could be improved.
Finally, I will give some initial views on how Representative Young's
pipeline bill, H.R. 3609, could be strengthened.
a. the importance of environmental enforcement
Environmental and public safety statutes promote and encourage
voluntary compliance. But it is a vigorous and fair enforcement program
that drives widespread compliance. While many people may comply with
the law for the good of the community, there are always some bad actors
that would not comply but for the threat of meaningful sanctions. How
many people would send the IRS their tax checks this April if tax
violations carried no penalty? People comply with the tax laws in part
because they run the risk of being caught, and sanctioned, if they do
not. So too, we cannot expect voluntary compliance with environmental
and public safety laws unless those laws are enforced, and enforced
rigorously.
Enforcement actions are brought for several important reasons
relating to achieving better compliance rates: to protect the
environment and the public's health, to remedy environmental harm, to
punish wrongdoers, to deter future violations, and to compel reluctant
agencies to comply with their nondiscretionary duties.
Achieving compliance is important because environmental and public
safety violations have real victims. When a toxic waste site pollutes
an underground drinking water supply it can threaten the health of
thousands of people. An oil spill that damages an entire ecosystem--
such as the Exxon Valdez spill in Alaska--may undermine the economic
foundation of surrounding communities. The harm from environmental
violations may extend far into the future, affecting the healthy of
generations yet unborn. Damage to natural resources can be permanent,
as when a species is lost forever, a productive wetland is destroyed,
or a drinking water aquifer or fishery is contaminated beyond repair.
Thus, strong enforcement is critical if we are to reduce the number of
victims harmed and the natural resources that are destroyed when
pipeline operators fail to comply with federal law.
b. ops's history of non-enforcement is having serious public safety and
environmental consequences
OPS administers the national regulatory program established to
ensure the safe operation of nearly 2.2 million miles of natural gas
and hazardous liquid pipelines in the United States. The mission of OPS
is to develop, issue and enforce pipeline safety and environmental
protection regulations. By any measure, OPS has failed, and continues
to fail, in fulfilling this important mission. OPS has one of the very
worst enforcement records of any federal agency. GAO calculated in 1998
that OPS proposed a civil penalty in just one out of every twenty-five
enforcement actions.<SUP>1</SUP> This record was a precipitous decline
from 1990 when OPS proposed a penalty in fifty percent of its
enforcement actions.<SUP>2</SUP> Imagine how seriously anyone would
take speed limits if each time you were pulled over for speeding that
there was only a four percent chance that a fine would even be
proposed, let alone collected? So too, pipeline operators facing such a
low risk of any sanctions have little incentive to comply with safety
and environmental protections.
---------------------------------------------------------------------------
\1\ Pipeline Safety The Office of Pipeline Safety Is Changing How
It Oversees the Pipeline Industry, U.S. General Accounting Office, GAO/
RCED-00-128, May 2000, p.26 (``2000 GAO Report'').
\2\ Id.
---------------------------------------------------------------------------
This lack of enforcement may be one reason why pipelines incidents
are increasing. The GAO reported in May 2002 that there were over four
major oil and natural gas incidents per week between 1989 and 1998,
with a major incident defined as one causing a death, an injury, or
more than $50,000 in property damage.<SUP>3</SUP> Even more alarming,
GAO determined that pipeline incidents were increasing at an average
rate of four percent per year.<SUP>4</SUP>
---------------------------------------------------------------------------
\3\ Id. at 10
\4\ Id.
---------------------------------------------------------------------------
c. recommendations to improve compliance with safety and environmental
protections
To reverse the upswing in pipeline incidents, and to make sure
pipeline incidents become increasingly rare events, Congress should
undertake five prudent actions: 1) Provide OPS, the Justice Department,
and citizens with the full range of modern enforcement authorities
necessary to enforce existing laws; 2) Keep the pressure on OPS to
issue long overdue protections and comply with NTSB recommendations; 3)
Extend the penalty provision of the Oil Pollution Act to include
hazardous liquid spills to land and groundwater; 4) Give OPS twenty-
four months to demonstrate it is operating an effective civil and
criminal enforcement program, and if it fails, transfer OPS's
enforcement functions to a more responsive agency; and 5) Sunset the
incredibly wasteful Risk Management Demonstration Projects Program--
instead redirect the resources currently being used for this program
towards OPS's basic mission of developing, issuing and enforcing
pipeline safety and environmental rules.
1) Modernize the Pipeline Safety Enforcement Program
Pipeline operators have for too long operated in a world where the
regulators are struggling to protect communities with one hand tied
behind their backs. The current enforcement scheme lacks many of the
basic aspects of a modern enforcement program, and so inhibits the
ability of regulators to do their job. For example, under the current
statute, the Department of Justice may not seek civil penalties in a
judicial enforcement action. Instead, penalties may only be sought
through a separate administrative proceeding. Thus, to bring a basic
enforcement case to compel compliance with safety requirements and to
impose a penalty it is currently necessary to commence two separate
proceedings. This is both unwieldy and ineffective from the perspective
of an efficient enforcement program. Citizens are barred from seeking
penalties altogether. Another outdated aspect is that the criminal
enforcement provision establishes a much higher burden on criminal
prosecutors than other environmental statutes. Recommendations
<SUP>5</SUP>:
---------------------------------------------------------------------------
\5\ Many of these recommendations were proposed two years ago by
the prior Administration based on input from seasoned civil and
criminal prosecutors.
---------------------------------------------------------------------------
* Authorize the Justice Department and citizens to seek civil
penalties in a judicial action for violations of the pipeline safety
statute up to $27,500 per violation without any limit on the total
penalty for related violations. See e.g. Sections 311(b) and 304 of the
Clean Air Act (``CAA''), 42 USC Secs. 7413(b) & 7604. Multi-million
dollar penalties are sometimes necessary to serve as a meaningful
sanction and deterrent against large corporations. This was the case in
United States v. Smithfield Foods in which the judge imposed a fine of
$12,600,000 for more than 5,000 violations of the Clean Water Act. 972
F.Supp. 338 (E.D. Va, 1997).
* Lower the mens rea threshold for criminal prosecutions to a
straightforward ``knowing'' standard to mirror other environmental
statutes. See e.g. CAA Section 311(c), 42 USC Sec. 7413(c).
* Add ``economic benefit'' as a factor for a court and the agency
to consider when calculating the appropriate size of a civil penalty.
Such an improvement would ensure that a bad actor that gained an unfair
competitive advantage over its competitors by violating the law could
be required to disgorge its ill-gotten gains. See e.g., CAA Section
113(e), 42 USC 7413(c). For example, just last month a federal judge in
Pennsylvania imposed a $8,250,000 penalty against Allegheny Ludlum
Steel Corporation for 1,122 days of Clean Water Act violations. Most of
this penalty was based on the economic benefit that Allegheny achieved
over its competitors by violating the law.
* Increase the number of civil and criminal inspectors. This could
be done by both an increase in overall resources, as well as
redirecting existing OPS resources away from its Risk Management
Demonstration Projects and other similarly wasteful projects.
2) Keep the Pressure On OPS to Issue Long Overdue Protections and NTSB
Recommendations
As the GAO reported in September 2001, OPS has begun to make modest
progress in addressing its substantial backlog of overdue
regulations.<SUP>6</SUP> However, GAO also found that OPS still has not
implemented eleven regulations--including some significantly overdue
regulations.<SUP>7</SUP> Moreover, as of September 2001, there were
forty-four open recommendations from NTSB--or five more than were open
in May 2000.<SUP>8</SUP>
---------------------------------------------------------------------------
\6\ Pipeline Safety: Progress Made, but Significant Requirements
and Recommendations Not Yet Complete, GAO-01-1075, Sept., 2001, at 1.
\7\ Id.
\8\ Id. at 2.
---------------------------------------------------------------------------
Overdue regulations include integrity management rules for natural
gas pipelines; leak detection performance standards for oil pipelines
to ensure that leaks of a particular size are rapidly discovered;
specific requirements for shut-off valve location and used for oil and
natural gas lines (as Congress mandated in 1992 and 1996,
respectively); regulation of gathering lines (as Congress mandated
in1992); enhanced regulation of low-stress lines given their potential
for serious environmental impacts; requirements that operators submit
revised incident reports once the full impact of the incident is
determined (as recommended by the DOT IG); and failsafe requirements to
prevent over-pressurization.
In addition to OPS failing to focus sufficient resources on
rulemaking, OPS's ability to expeditiously issue new rules is impeded
by the cost-benefit provision added to the pipeline statute in 1996.
This provision bars OPS from issuing a new standard unless if can first
determine that the ``benefits of the intended standard justify its
cost.'' 49 USC Sec. 60102(b)(5). All agencies, including OPS, should be
mindful of the relative costs of their programs; however, OPS should
not be hamstrung with an onerous cost/benefit requirement, which
further impedes its already atrocious progress in issuing new
protections.
Recommendations:
* Require GAO to report on OPS's progress in issuing the overdue
rules and responding to NTSB recommendations every six months until all
rules and recommendations are either adopted or responded to.
* Remove the onerous cost/benefit mandate in Section 60102(b)(5),
and instead require the agency to select the most cost-effective
protections.
3) Establishing Civil Penalties for Hazardous Liquid Spills to Land and
Groundwater
One of the most serious gaps in pipeline regulation is the absence
of meaningful penalties when hazardous liquids are spilled on land and
into groundwater. Without the threat of meaningful penalties for such
spills, operators have little incentive to prevent spills; instead
there is an incentive to simply clean up the spill after-the-fact, and
patch the pipeline. The industry's tendency to react to spills, rather
than prevent spills, may explain why, as GAO reported, pipeline
incidents are increasing by four percent per year.<SUP>9</SUP>
---------------------------------------------------------------------------
\9\ 2000 GAO Report at 10.
---------------------------------------------------------------------------
The Oil Pollution Act of 1990 (``OPA'') imposes a flat penalty on a
per barrel basis for oil spills to water--$1,000 per barrel unless the
spill was the result of gross negligence and the fine increases to
$3,000 per barrel. 33 USC 1321(b)(7). This penalty structure provides a
tremendous incentive for companies to prevent spills to water in the
first instance, and if spills should occur, to minimize the spills as
much as possible. In fact, an EPA study showed that after passage of
OPA that the number of large pipeline spills to water decreased by 43
percent.
Recommendation: Extend the penalty provisions of OPA to include
spills of hazardous liquid to land and groundwater.
4) Give OPS Twenty-Four Months To Fix Its Enforcement Program
The history of OPS's failure to enforce the most basic public
safety and environmental protections is legendary. Its record has been
criticized by the public, states, DOT's IG, GAO and Congress. In fact,
it appears everyone is unhappy with its performance except, of course,
the pipeline operators who enjoy operating without any accountability.
Congress has been on record since at least 1979 regarding OPS's
terrible enforcement record. The Senate Report to the bill that became
the Hazardous Liquid Pipeline Safety Act (``HLPSA'') criticized the OPS
for ``not doing an adequate job of regulating [liquefied natural gas]
and [liquefied petroleum gas] safety . . . [T]he Committee has been
concerned for several years that DOT has not placed sufficiently high
priority on . . . programs in general.'' S. Rep. 96-182, 96th Cong. 1st
sess. at 3 (1979), reprinted in 1979 U.S.C.C.A.N 1971, 1973.
Congressional criticism of OPS's enforcement efforts has continued
to the present. In the House Report for the 1984 Amendments to the
HLPSA, the House Committee criticized the pipeline safety program as a
``poorly managed program that needs a reevaluation of its direction.''
H. Rep. 98-780, 98th Cong. 2nd sess. at 10 (1984), reprinted in 1984
U.S.C.C.A.N. 3154, 3163. See also, H. Rep. 102-247, 102nd sess. at 14
(1991) (``DOT's performance in implementing the laws since the last
authorization in 1988 has been mixed.''), reprinted in 1992 U.S.C.C.A.N
264, 2644. More recently Congress has removed its gloves in criticizing
OPS during the debates on the Pipeline Safety Act of 2000 and the
Pipeline Safety Improvement Act of 2001:
[T]here is little to no enforcement of existing regulations.
The General Accounting Office found that the Office of Pipeline
Safety had not enforced 22 of the 49 safety regulations that
are already on the book [sic] ...It is enough to make me wonder
if there is some collusion of some kind going on behind the
scenes. Why else would this Federal agency be so lax in
enforcing its own regulations? Madam Speaker, this inaction of
the Office of Pipeline Safety will not be excused by this
Congress.
146 Cong. Rec. H7841-42 (Rep. Pascrell)(200). See also, 147 Cong. Rec.
S524 (Sen. Dominici) (``Unfortunately, the Office of Pipeline Safety
has had a poor history of regulation and enforcement. It is true that
the Office has traditionally been slow to act.'') 2001).
Against this backdrop of uniform condemnation regarding its
enforcement programs, there are some very preliminary indications the
agency may be finally making some progress: Administrator Engleman has
testified that the agency has completed a comprehensive review of its
enforcement program, and has made several improvements. In addition,
Ms. Engleman testified that the agency has proposed $9 million in fines
in the past year and a half. These are important baby steps, but are
far from building the type of robust enforcement program necessary to
ensure all 2.2 million miles of pipeline are operating safety, and that
pipeline incident rates decline rapidly.
Recommendations:
* Give OPS twenty-four months to build a robust enforcement program
that is delivering results. If it does not make substantial progress, I
strongly urge Congress to reassign the entire enforcement program to
another, more responsive agency. OPS's progress should be measured
against very clear performance standards, including: 1) the number of
civil and criminal enforcement cases referred to the Justice Department
(I am unaware of OPS ever referring a civil enforcement case to the
Justice Department); 2) the number of cases where civil penalties are
actually imposed, not just proposed; 3) the average size of the civil
penalties imposed (not just proposed); and 4) the number of OPS staff
reassigned from other duties to its enforcement program.
* As an interim measure I would suggest asking GAO and the DOT
Inspector General to review OPS's internal review of its enforcement
program, and determining if the improvements proposed are meaningful
and achievable.
5) Congress Should Immediately Sunset OPS's Risk Management
Demonstration Projects
As I described above, one of my prior tasks at the Justice
Department was to review OPS's proposed Risk Management Demonstration
Projects. The Justice Department's primary interest was how OPS
exercised its authority to waive regulatory requirements for specific
companies, and how such waivers would affect other enforcement actions.
For example, the criminal section was concerned about its ability to
argue to a jury in a criminal enforcement case the seriousness of a
pipeline operator violating an OPS rule if at the same time OPS has
granted a waiver of the same rule to another company.
In addition to undermining enforcement, the risk management program
had two other serious defects. First, it consumed an inordinate amount
of OPS resources. Second, the program never appeared to yield any
meaningful data that was in turn used to promulgate additional, more
protective regulations. There were even projects, such as the Equilon
Demonstration Project where after years of investment of time and
resources by OPS, the pipeline company never even exercised its option
to operate under the OPS waiver. All the ``risk management'' projects
undertaken by Equilon certainly appeared like good ideas, and generated
good press for the company, but there was absolutely no need for any
investment of OPS resources. OPS has much more important and pressing
demands on its time than the feel-good activities of its Risk
Management Demonstration Project.
Recommendation: Congress should immediately sunset OPS's Risk
Management Demonstration Project program. As long as OPS cannot perform
its most basic mission of developing, issuing and enforcing safety
regulations, it should not be engaging in new and unproven activities.
d. initial assessment of h.r. 3609
To strengthen the enforcement provisions of existing law, H.R. 3609
should include provisions implementing the recommendations listed
above. In addition, I would propose three changes to the bill as
currently drafted:
1) Delete proposed Section 60133(f), which would modify the
National Environmental Policy Act (``NEPA'') by allowing OPS to exclude
the input of other agencies during the NEPA review process if the input
is not timely. This provisions would have the exact opposite effect
desired by its author--it would cause more, not less, delay. The most
certain way to ensure a project is delayed and that it can be
successfully challenged in court is to conduct an incomplete
environmental review. The same streamlining goal of this provision
could be achieved by ensuring that commenting agencies, such as the
U.S. Fish and Wildlife Service, have the resources necessary to be able
to participate early and fully in all environmental reviews.
2) Clarify Section 14 to ensure that OPS must provide all security
sensitive information relating to a pipeline's vulnerability to EPA and
the Justice Department, two agencies that serve a critical role in
overseeing the nation's pipeline system.
3) Require OPS to extend the protections required by its hazardous
liquid integrity management rule to the entire network of hazardous
liquid pipelines. Currently, the reach of the rule is limited to
approximately twenty percent of the nation's hazardous liquid
pipelines. This is far too narrow, and excludes such important areas as
many rivers and streams.
Thank you very much for inviting me to testify on the important
issues surrounding pipeline safety. I am happy to answer any questions
you may have.
Mr. Barton. The Chair recognizes itself for 5 minutes of
questions. Mr. Morris, you are here on behalf of the AGA, and
you have heard what Mr. Nilles has said. If it is true that 60
percent of the accidents are third-party people out digging
without checking.
What can OPS really do to prevent that? Take a few out and
shoot a few every now and then?
Mr. Morris. I believe a more vigorous encouragement and
enforcement of what we have in our area a one-call system, a
call before you dig. There are several jurisdictions where
perhaps it is a little more lax than in our State of Tennessee,
but I think more attention and more effort to encourage and
enforce a vigorous one-call, a call before you dig effort will
solve that.
Mr. Barton. What about Mr. Nilles saying that you just need
a stronger penalty, and that we ought to refer some of these
cases to the Justice Department?
Mr. Morris. Well, the referral of operators to the Justice
Department for what is in effect a third-party trauma to a
system I think is a bit extreme. And I don't believe quite
frankly that the person doing the digging, although many may
call without digging or intentionally trying to rupture a gas
line.
I think that perhaps a system of more aggressive
communication and requirement, or encouragement that all States
impose and enforce that kind of call before you dig policy, or
philosophy, or statute, would improve the performance on that
particular industry.
Mr. Barton. Now Mr. Kipp's testimony says we ought to go to
this one-call system, and Mr. John up here spontaneously had
the same idea without reading your testimony.
And when he saw that you were going to testify as to that,
he felt pretty smart. Is there anybody who disagrees with this
national one-call? Is that one thing that we all agree on?
Mr. Kipp. If I may, I am not proposing a national one call.
I am proposing one number. But one-call centers, and there are
67 of them, would remain as is, but by dialing the number, the
switch would point it to the right one-call center. It is not a
national one-call center.
Mr. Barton. Exactly what Mr. John said. Does anybody oppose
what Mr. Kipp has said about this? Now, Mr. Sullivan puts in
his testimony--I believe he is the only one that says that we
should in some way use hydrostatic testing, where actually take
the product out of the pipeline, and put water in, and
pressurize it above the operating system's normal operating
pressure. Mr. Hereth, what do you think of that idea?
Mr. Hereth. I think that's only one of the methods that are
viable and we use and should be reserved for applications. The
successes--whatever method is applicable.
It is expensive, and it is the best in terms of assessing
if there has been other damage to the pipeline, and it takes
the pipeline out of service for an extended period of time.
There are environmental problems in controlling the water and a
number of issues. It is not the----
Mr. Barton. So there is no problem with making that an
option as long as it has mandatory requirements?
Mr. Hereth. It certainly is an option and is a tool
available to us, and my company does use it.
Mr. Barton. Mr. Sullivan, what do you think about that?
Mr. Sullivan. Well, I think the pig testing that uses an
imaging that can show its effect, and it cannot determine with
a great deal of accuracy the pipeline integrity.
Mr. Barton. Define integrity for me.
Mr. Sullivan. I will give an example. If you do the
hydrostatic testing, and you use water as a medium, and then
you pressurize it, you pressurize the entire pipeline, either
25 to 50 percent over what it is supposed to take.
If there is a problem that is going to come in the future,
a very short time, this will show it because you will have to
hold that pressure for a certain amount of hours. But instead
of oil or gas leaking out on to the ground, you will have water
leaking out on to the ground.
Like in my testimony, that line was tested in Washington
just shortly before it went, and I just think that the
hydrostatic testing is much better.
Mr. Barton. Is there any other way to test? I guess when
you say integrity, you mean the strength of the wall at that
time?
Mr. Sullivan. Yes, where there may be some corrosion,
either inside the pipe that the pig testing won't show. The
hydrostatic testing will because it puts a little more, 25 or
50 percent more, pressure than is normally there. And the heat
will make those things happen.
Mr. Barton. But that is the only way? You can't test the
pipe in a different way?
Mr. Sullivan. He mentioned that there was a third way and
the industry may have some other tests today that I am unaware
of, but I have only been told about the pig testing, and the
hydrostatic testing.
Mr. Shea. Mr. Chairman, with improvements in in-line
inspection tools that have been realized in the past few years,
you are actually able to now project the remaining strength in
a pipe. So there are tools that are available are now in a
position where they can provide a lot better information on the
remaining integrity of a pipe.
Mr. Barton. What tools?
Mr. Shea. Typically high resolution tools.
Mr. Barton. Well, is there any industry data on aid to
pipelines that correlates to integrity? I mean, I would assume
that pipelines built last year would have more integrity than a
pipeline built 50 years ago.
Is it 4 years ago that they were 4 inches thick and a year
ago they are a half-inch thick? So there is really no
correlation to age integrity?
Mr. Haener. It depends on the maintenance. It would depend
on what kind of coating and what kind of soil it is in, and if
it is constructed properly, and tested periodically, there
shouldn't be any difference at all. Pipelines should last for
100 years.
Mr. Barton. Mr. Sullivan.
Mr. Sullivan. Well, the pipe that is put in prior to 1970
does not have any cathodic protection and soil conditions, such
as limestone, also offer high risks. Now, the pipe put in after
1970 has that protection.
It is protected against electrolysis, which will rot a pipe
that is in the ground because of the soil conditions.
With the cathodic protection, that does not happen, but any
pipe put in before 1970 doesn't have that.
Mr. Shea. Mr. Chairman, I would disagree with that. At the
Buckeye Pipeline, we have pipeline that has been in service
since the turn of the century, the other century, 1900, and 100
percent of our pipeline is cathodically protected.
There have been studies that have been done on a decade of
construction and whether or not there is----
Mr. Barton. Well, the problem is that it was not required
until 1970.
Mr. Shea. Well, I am speaking for my company, but I believe
most are cathodically protected 100 percent. It is a proven way
to maintain pipeline integrity, and there are decades of
construction of pipeline studies that have been done.
And as you would imagine, they indicate that older pipe has
a higher incidence of failure, or potential failure. But
maintenance as Mr. Haener said, maintenance is a key to the
entire thing. We do have pipeline that has been in service for
60 or 70 years, and it is as good as pipeline that we have put
in place in the last 10 or 15 years.
Mr. Morris. If I might add to that from the local
distribution company perspective. It is just good business to
maintain the infrastructure so that you continue to operate and
stay in business, and continue to service your customers.
So we would suggest and encourage a number of options, and
whatever seems appropriate for a given system at a given time
to address their needs be available, but not that any of them
be specifically mandated.
Mr. Barton. Mr. Haener.
Mr. Haener. I just wanted to echo Mr. Shea's comments.
Mr. Barton. Mr. John.
Mr. John. Thank you, Mr. Chairman. Mr. Haener, I think you
were here earlier when Mr. Markey raised some concerns about
the security of the district LNG facility?
Mr. Haener. Yes.
Mr. John. So obviously you know that CMS might have a small
facility in my district, but LNG is all over the country. And I
actually had the opportunity to go visit the facility down
there, and it is quite a facility, but do you believe that the
OPS and/or the Office of Homeland Security provided enough
assistance relative to what Mr. Markey was talking about with
security?
Mr. Haener. I do believe that. The second day after
September 11, I was on an airplane with a man in charge of our
nuclear security, and we implemented our security rolls, and we
followed up with local authorities, the Coast Guard, and we had
very good cooperation with local people, and the Coast Guard
has been excellent, and we did change some operating
procedures.
I did bring in an outside control and beyond that said you
guys did a great job, but I think that Lake Charles is very
safe, but we have made necessary changes to ensure that, and I
feel very good about it.
Now, can I give 100 percent assurance that we won't have an
incident? No. I think the other thing you have to understand is
that LNG is not that big a problem. It is not explosive. It is
very difficult.
Mr. Barton. It's cold?
Mr. Haener. It is cold, but you won't get the right air
mixture to make it explode. Will it burn? Yes.
Mr. John. Thank you.
And I shared some of Mr. Markey's same concerns myself, and
of course being from Louisiana, we are somewhat vulnerable
because of the petro-chemical industry, and being on top of the
Gulf of Mexico, and the security meetings that I have been
involved in with the government, and Mr. Tauzin, and other
agencies across the State, I have been very proud on how they
have handled things in Louisiana.
I would really like to direct the next question back to
you, Mr. Haener, and also to Mr. Morris. As I mentioned in my
opening statement, I believe that we have to recognize that
there are differences between natural gas transmission lines,
and natural gas distribution lines, or pipelines.
I really want to share with you the views of the
subcommittee and some of my colleagues that we have had in
discussing legislation about a date certain, and that seems to
be a very contentious part of where we are hung up at this
point in time.
What I would like to do is really get your opinion about
how we maneuver through this issue, and how we get ourselves
out of a seemingly four-sided box that is closing in on us to
try to resolve this particular problem.
And I would address this to Mr. Shea, but obviously with
the rule in place on integrity of oil pipelines, my final
question is going to be to you and maybe you can shed some
light on it.
Mr. Shea. I would be glad to start. First of all, I think
we should start with the facts and have some scientific backup
for those facts. I think when we start setting arbitrary rules
and one size fits all, you are going to have consequences.
And I think the consumer is going to get hurt, and I think
we are going to get a false sense of security, because I don't
think that the industry, in terms of supplying inspection
devices, and inspectors, including the results, can keep up
with the demand.
We have already got the liquid rule going into effect in 5
years, and we have got that situation, that is putting a real
stress on the industry.
And I have to tell you that my company has spent $25
million this year on safety and integrity of our pipeline
system, and part of that is requiring new line inspections, and
getting results back now. We just can't get them on a timely
basis.
I think there is some kind of answer, but I think it is
going to depend upon really the circumstances, and what kind of
inspection devices are used, and what were those results, and
when was it inspected before.
And I think that is probably the best answer, and we will
probably be able to even come up with consensus that makes
sense for all of us, and I would be glad to work with you on
that. We do have some time certains, but it is not one size
fits all based on the data, and improving the pipeline system
without really hurting the consumer.
Mr. John. I think it is very helpful to hear you say that
this is something that we can talk about, because I think that
is where compromises start. Mr. Morris.
Mr. Morris. I would for the most part agree. We tend to
think in our system that we have got a list of various types of
inspections and tests that we conduct from every perspective,
and the idea is to do it in such a manner that it doesn't cause
any great problem for our infrastructure or for our customers.
Some of the tests or inspections that are being proposed
would require us to basically shut down significant parts of
our system, and shut down significant numbers of our 300,000
customers, and then have to go back and go through the process
of bringing them back up, relighting pilot lights, and et
cetera, and that creates a lot of anxiety for our customers
when we have to do that.
We have got a system of review and analysis of our system
that we think serves us, and I would dare say that most LDCs
have similar protocols in place that are specifically tailored
to address the needs of their system.
One example that I will offer is about 10 years ago we
embarked on an effort through inspection to replace a lot of
our cast iron system with plastic pipes, and we did it in
response to perceived risk of earthquake.
This is ahead of any mandate or any requirement that it be
done, but because of the knowledge of our system and our area
suggested that this was an appropriate thing for us to do.
It is a 30 year project, and we are 10 years into it, and
we are better than halfway there, but the point that I am
making is that we know our system as most LDCs do. We know what
the system needs, and we live with it every day, and we
maintain it, and we keep it operational because that is what
our customers demand, and that is what is good for business,
and it is also what is good for safety.
And we think that guidelines and perhaps even options,
alternatives, are far superior to any specific mandates, even
in terms of time and specific dates, and tests.
Mr. John. Okay. Thank you. Mr. Shea, if you could--you were
right in the middle of implementing a similar program. Could
you maybe shed your experiences and some light and giving us
some direction as we move through?
Mr. Shea. Certainly I will try. As you know, the liquid
pipeline industry has had rules that are now in effect. We have
to within 3\1/2\ years test 50 percent of our systems, which
are prioritized as being the highest 50 percent risk pipeline,
and then do the other 50 percent in the next 3 to 4 years, for
a total of a 7 year cycle.
And at that point forward, we test every 5 years. What we
have found is that there appears today anyways, and this is
before the natural gas industry has to begin their program,
that there are enough smart pigs out there and crews actually
to run the smart pigs through the pipeline.
Of course, a lot of times that requires us to make
modifications to our pipeline for various sized diameter pipes
to be able to get the pigs in and out of the pipeline. Where
the problem has been, and it has not been overly severe, but
the issue has been in the interpretation of the data.
I mean, very sophisticated computer programs that are
analyzing the data that is coming out of these tools, and the
people and systems required to analyze and interpret the data
are in short supply.
And so while you can run as many miles of smart pigs that
you would like, getting the data back in a timely fashion to be
able to then go out and inspect your pipeline where the
anomalies are the greatest, there has been a time lag there.
Mr. John. I think the three responses from the gentlemen
here show a stark contrast in what I said earlier, and that it
is almost impossible to try to cookie-cut the regulations.
And finally for Mr. Kipp, I want to congratulate you for
putting in your testimony about my idea of (inaudible) and the
way for a national one-call, and I appreciate you getting on
that project very quickly. Thank you.
Mr. Barton. Great idea. Well, I want to thank the panel. We
do hope to move the markup of the bill sometime this spring. I
can say with some degree of certainty that it is not going to
be 100 percent consent bill.
We hope to work with Chairman Young and the Transportation
Committee, and hopefully on a bipartisan basis come up with a
House bill, and I would like to do that sooner rather than
later.
I might also just say for those of you who are wondering
what we are going to do on Thursday, we were scheduled to have
a hearing on the nuclear waste issue at Yucca Mountain, and in
consultation with Mr. Boucher and the Secretary of Energy, we
have postponed that hearing.
It is expected that the House will not be in session on
Thursday. Quite frankly, I didn't relish having myself and Mr.
Boucher stay over as the only members that sit on that
subcommittee. So we postponed that to some time in April, and
April 16 is the last date that the Governor of Nevada can veto
the site selection at Yucca Mountain.
So we would assume our hearing would be on or near April
16th. Again, thank you, gentlemen, and this hearing is
adjourned.
[Whereupon, at 4:20 p.m., the subcommittee was adjourned.]
The
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
(202) 225-2927
Feedback |
