Congress begins hearings to reauthorize pipeline safety law

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 24 -- US lawmakers have made significant progress implementing provisions of 2006 pipeline safety legislation, according to the administrator of the agency that handles such matters, as Congress began hearings to consider reauthorizing the measure. New programs and mandates are not needed, witnesses from associations representing some of the regulated systems suggested.

“The pipeline safety record is good,” Cynthia L. Quarterman, administration of the US Pipeline and Hazardous Materials Safety Administration, told the US House Transportation and Infrastructure Committee’s Railroads, Pipelines, and Hazardous Materials Subcommittee on May 20. “Over the past 20 years, all the traditional measures of risk exposure have been rising—population, energy consumption, pipeline ton-miles. At the same time, the number of serious pipeline incidents—those involving death or injury—has declined by 50%.”

Quarterman said in her written statement that PHMSA has increased the strength of integrity management programs and enforcement activities since Congress passed the 2006 Pipeline Inspection, Protection, Enforcement, and Safety Act (PIPES).

“The additional initiatives included: (1) increasing enforcement activity, transparency, and data quality; (2) implementing an integrity management program for distribution pipelines; and (3) requiring a human factors management plan to reduce risks associated with human factors, including operator fatigue in pipeline control centers, and implementing [National Transportation Safety Board] recommendations on the Supervisory Control and Data Acquisitions (SCADA) systems in pipelines,” Quarterman said.

She said the US Department of Transportation agency has used authority under the 2006 law, and appropriations that followed, to increase the number of pipeline inspectors to 173 by the end of 2009 from 141 in 2006, “including a significant increase in inspection and enforcement staff, and we expect to have 206 pipeline staff [members] by the end of 2010.” PHMSA also has made its enforcement more transparent with a new web site, she added.

Other improvements
The 2006 law also gave PHMSA an important enforcement tool: the safety order, according to Quarterman. The agency published a final rule on Jan. 16, 2009, which established the process by which PHMSA addresses pipeline integrity risks to public safety, property, or the environment, she told the subcommittee. “Finally, the PIPES Act now requires that senior executive officers of pipeline companies certify their pipeline integrity management program performance on an annual and semiannual basis,” she said. “As we had hoped, the certification requirement has placed an increased emphasis on management’s accountability and the importance and accuracy in performance reporting.”

PHMSA also issued a fine rule on Dec. 4, 2009, to address fatigue and other employee management issues in pipeline system control rooms using supervisory data control and acquisition (SCADA) systems, the agency’s administrator said. It includes requirements for operators to define controllers’ roles and responsibilities and supply them with the necessary information, training, and processes so they can manage SCADA alarms, assure control room considerations are taken into account when changing pipeline equipment and configurations, and review reportable incidents or accidents to determine whether control actions contributed to the event, she said.

“The regulations apply to all hazardous liquid pipelines, and gas transmission and distribution pipelines that meet certain risk criteria,” said Quarterman. “This rule not only responds to the PIPES Act mandate but also addresses an NTSB safety recommendation regarding controller fatigue that was on the NTSB’s Most Wanted list.” A public workshop is planned for November to present preliminary guidance materials, and programmatic inspections will be conducted between September 2011 and February 2013, she indicated.

Regulatory and process changes that have occurred under the present law point to a pipeline safety regime that is working well to minimize public risk and does not necessarily need additional programs or mandates, according to Gary L. Sypolt, chief executive of Dominion Energy, Richmond, Va., who testified for the Interstate Natural Gas Association of America.

“For this reason, we would endorse a simple reauthorization bill that reauthorizes the pipeline safety program for four years without any new regulatory programs or mandates,” he said in his written statement. If federal lawmakers decide more reforms are needed, they should include removal of exclusions from participating in excavation damage prevention programs, replacing the requirement for inspections every seven years with risk-based intervals, and a review of PHMSA legacy requirements in light of new technology and processes, Sypolt said.

Costly regulation
Andrew J. Black, president of the Association of Oil Pipelines, told the panel that petroleum pipelines have incurred significant costs as they’ve implemented comprehensive programs to comply with PHMSA’s integrity management program. DOT estimated that liquid pipelines would spend some $279.5 million during 2001-07 to comply with the regulations, but the industry actually spent more than $1 billion during 2005-09, about four times the estimate and for a shorter period, he said. The figure does not include integrity costs associated with DOT-regulated storage tanks, he added.

“It is important to note that as integrity management tools become more sophisticated, they are more effective at identifying issues for pipeline operators to consider,” said Black, who also testify on the American Petroleum Institute’s behalf. “As a result, integrity management compliance costs have trended upward since implementation of the IMP regulations, a trend that the industry expects to continue in the coming years.”

He said in his written statement that AOPL and API believe that PHMSA’s OPS is doing an admirable job with authorities it received under the 2006 law and previous legislation, and recommended that the programs be fully assessed before Congress imposes new mandates.

“If Congress chooses to make changes to the existing pipeline safety program in pipeline safety reauthorization legislation, AOPL and API believe any such changes should be narrowly focused on addressing existing OPS programs,” Black said. “We also suggest the reauthorization should be for a longer period than 4 years, in order to provide more predictability and stability for the pipeline safety program and the industry that must implement it.”

But Carl Weimer, executive director of the Pipeline Safety Trust, said in his written statement that more federal regulation is needed, including expanding the miles of pipeline which fall under integrity management rules, addressing unregulated systems, and clarifying gathering and production pipeline regulation.

Weimer noted that while it might be easy to draw parallels between the Gulf of Mexico oil spill and US oil and gas pipelines, PHMSA and its predecessor agency, the Research and Special Programs Administration, significantly reformed after pipeline failures in New Mexico and Washington killed 15 people 10 years ago.

“While there is always room for improvement, PHMSA is a very different agency today than [the US Minerals Management Service], and people should avoid the temptation to paint all agencies dealing with oil with the same brush,” Weimer said.

Contact Nick Snow at nicks@pennwell.com.

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