[Senate Hearing 106-1114]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 106-1114

               REAUTHORIZATION OF THE PIPELINE SAFETY ACT

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 11, 2000

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation


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                            WASHINGTON : 2003
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine              JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                  Mark Buse, Republican Staff Director
            Martha P. Allbright, Republican General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 11, 2000.....................................     1
Statement of Senator Breaux......................................     3
Statement of Senator Brownback...................................    57
    Prepared statement...........................................    58
Statement of Senator Gorton......................................     2
Prepared Statement of Senator Hollings...........................     4
Statement of Senator Hutchison...................................    24
Prepared Statement of Senator Inouye.............................     5
Prepared Statement of Senator Lott...............................     5
Statement of Senator McCain......................................     1
Statement of Senator Wyden.......................................     2

                               Witnesses

Asmundson, Mark, Mayor, City of Bellingham, Washington...........    14
Brabec, Bruce, Bellingham, WA....................................    18
Coyner, Hon. Kelley, Administrator, Research and Special Programs 
  Administration, U.S. Department of Transportation..............    25
    Prepared statement...........................................    27
Dalen, Katherine, Bellingham, WA.................................    22
Haener, William J., President and Chief Executive Officer, CMS 
  Gas Transmission and Storage Company, on Behalf of the 
  Interstate Natural Gas Association of America..................    60
    Prepared statement...........................................    62
Hammerschmidt, Hon. John A., Member, National Transportation 
  Safety Board...................................................    41
    Prepared statement...........................................    42
Inslee, Hon. Jay, U.S. Representative, State of Washington.......    11
Kenow, Charles R., National Vice-Chairman, National Association 
  of Pipeline Safety Representatives.............................    78
    Prepared statement...........................................    80
King, Frank and Mary, Bellingham, WA.............................    15
Mead, Hon. Kenneth M., Inspector General, U.S. Department of 
  Transportation.................................................    31
    Prepared statement...........................................    33
Metcalf, Hon. Jack, U.S. Representative, State of Washington.....    10
Murray, Hon. Patty, U.S. Senator from Washington.................     6
    Prepared statement...........................................     8
Pates, James M., City Attorney, Fredericksburg, Virginia, on 
  Behalf of the National Pipeline Reform Coalition...............    94
    Prepared statement...........................................   100
Reiten, Richard, President and Chief Executive Officer, Northwest 
  Natural Gas, on Behalf Of the American Gas Association and the 
  American Public Gas Association................................    83
    Prepared statement...........................................    83
Robinson, Marlene, Bellingham, WA................................    18
Wright, Statement of Phillip D. Senior Vice President, Enterprise 
  Development and Planning, Williams Energy Services, on Behalf 
  of the Association of Pipe Lines and the American Petroleum 
  Institute......................................................    70
    Prepared statement...........................................    72

                                Appendix

Cascade Columbia Alliance, East Lake Washington Audubon Society, 
  Friends of the San Juans, Friends of the Earth, Friends of Tolt 
  River, Lake Joy Community Club, the Mountaineers, North Lake 
  Joy Estates, Ocean Advocates, Pacific Crest Biodiversity 
  Project, People for Puget Sound, Rainier Audubon Society, Safe 
  Bellingham, Surfrider Foundation, Washington State Chapter, 
  Surfrider Foundation USA, Tolt River Highlands, Washington 
  Kayak Club, Washington Public Interest Research Group, 
  Washington Trout, Willapa Hills Audubon Society, and Grays 
  Harbor Audubon Society, prepared statement.....................   137
Harper, Susan, Executive Director, Cascade Columbia Alliance, 
  prepared statement.............................................   139
Holmes, Edward J. Chair, NARUC Committee on Gas and Commissioner, 
  Kentucky Public Service on Behalf of the National Association 
  of Regulatory Utility Commissioners (NARUC), prepared statement   140
Locke, Governor Gary State of Washington, prepared statement.....   141
Somerhalder II, John W., President, El Paso Energy Pipeline 
  Group, prepared statement......................................   143
Williams, George P., Director, Government Affairs, Sempra Energy, 
  prepared statement.............................................   146
Response to Written Questions Submitted by Hon. John McCain:
    Hon. Kelley Coyner...........................................   111
    John A. Hammerschmidt........................................   121
    Kenneth M. Mead..............................................   133
    James M. Pates...............................................   133
Response to Written Questions Submitted by Hon. Patty Murray:
    William J. Haener............................................   131
    Phillip D. Wright............................................   136
Response to Written Questions Submitted by Hon. Ernest F. 
  Hollings:
    William J. Haener............................................   129
    Phillip D. Wright............................................   134

 
               REAUTHORIZATION OF THE PIPELINE SAFETY ACT

                              ----------                              


                         THURSDAY, MAY 11, 2000

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:30 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John McCain, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    The Chairman. Good morning. I am pleased to call to order 
this full Committee hearing to address the critically important 
issue of pipeline transportation safety. In our effort to 
reauthorize and improve Federal pipeline safety programs, 
today's hearing is designed to obtain input from public safety 
advocates, the National Transportation Safety Board, the 
Department of Transportation and its Inspector General, 
industry, and others interested in promoting pipeline safety. 
During this hearing, we will be told that statistically, 
pipeline transportation is perhaps the safest form of 
transportation, and statistically this may be true. But 
statistics are little comfort to those who have experienced the 
tragic consequences of the pipeline accidents that do occur.
    This morning, we will hear of the enormous loss of three 
families who lost their sons as a result of a pipeline accident 
last June in Bellingham, Washington. While enduring the tragic 
loss of their beloved boys, a tragedy almost impossible to 
bear, these parents have demonstrated continued strength and 
courage.
    Over the past year, each has turned their personal tragedy 
into a crusade to improve pipeline safety so that others will 
never experience the kind of loss they have endured. I commend 
each of them, Mr. and Mrs. Frank and Mary King, Ms. Marlene 
Robinson and Mr. Bruce Brabec, and Ms. Katherine Dalen. The 
Committee looks forward to hearing from you shortly.
    In March, this Committee held a field hearing chaired by 
Senator Gorton in Bellingham, Washington, during which 18 
witnesses provided information and expressed views on the 
Bellingham accident. Today's hearing will not repeat that 
testimony. Instead, each witness has been asked to direct their 
testimony to a broad range of pipeline safety issues, including 
the three pipeline safety bills that have been introduced in 
the Senate.
    I am committed to moving a comprehensive pipeline 
reauthorization bill through the legislative process as soon as 
possible. We must act to help improve pipeline safety and 
prevent future tragedies like that which occurred in 
Bellingham. I also want to thank Senator Murray and Senator 
Gorton for all their hard work on this issue. I look forward to 
hearing from today's witnesses, and am eager to hear their 
suggestions on what actions Congress should take to improve 
pipeline transportation safety.
    Senator Gorton.

                STATEMENT OF HON. SLADE GORTON, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Gorton. Thank you, Mr. Chairman, not only for 
holding this hearing but for your commitment to reauthorizing 
the pipeline safety act during the course of this year's 
Congress.
    I think all of us share one feature in common, and I 
include the three witnesses from the Senate and the House as 
well as you and Senator Wyden and myself. This was not an issue 
to which we paid a great deal of attention before the tragedy 
in Bellingham last year.
    Now we are paying a great deal of attention to the subject, 
and it behooves us to do more than pay attention to it. It 
behooves us to take action, and so we need to hear from those 
in the federal government who are responsible for pipeline 
safety to a certain extent about what went wrong, but to a far 
greater extent as to what measures they propose both internally 
and through our reauthorization to see to it that the federal 
safety role is more effective than it has been in the past.
    We also need to hear from those who represent States and 
local communities that often have not only the desire but the 
ability to provide more significantly for the safety of their 
citizens. As to their role, we need to consider what role 
should be played by private organizations, by citizens 
organizations themselves in helping both to oversee safety 
measures and with respect to publicizing problems and helping 
reach those solutions and, of course, we need to hear from the 
industry itself as to how and why accidents like this happen 
and what industry proposes to do to see to it that pipelines 
are operated more safely in the future.
    Obviously, these pipelines are necessary to our 
transportation and to our industrial democracy, but they need 
to be managed and conducted and supervised in a way that does 
not threaten the lives and security of people who live in their 
vicinity, and we need to dedicate ourselves to doing all we can 
to ensure that the kind of tragedy that took place in 
Bellingham last year does not take place in any other place in 
the United States at any other time.
    The Chairman. Thank you. Senator Wyden.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. I very much 
appreciate your holding this hearing. Fire experts in my home 
state of Oregon believe that a tragedy like the one in 
Bellingham could strike in my home state as well.
    We are especially concerned in Oregon about the line from 
Portland to Eugene. Much of this line has been lying in moist 
soil for decades. When you have that kind of situation the pipe 
corrodes, so this is a very, very serious safety problem. I 
appreciate your convening this hearing, and the leadership of 
Senators Murray, Gorton, and our witnesses. I would just wrap 
up my comments with two areas that I am especially interested 
in, Mr. Chairman.
    First, I think this is ultimately a public right-to-know 
issue. The citizens of this country have a right to know where 
exactly these lines are, and that means with clear maps, with 
understandable markings, and certainly that ought to be part of 
any reform package.
    Second, as part of a public right-to-know program, the 
results of pipeline tests ought to be available in an 
understandable format. I am of the view, Mr. Chairman, that 
especially because of our Committee's jurisdiction, that this 
ought to be available online so that people with a click of the 
enter button can get access to this information.
    The second point I would make, and Senator Gorton I know 
has been working in this area, is, we need to come up, as we 
deal with this sort of regulatory side, with a partnership 
between the state and the federal government. There is clearly 
a need for a role for both bodies. Determining exactly what 
that role ought to be is something that I think we can deal 
with in a bipartisan kind of fashion.
    I am very pleased you are holding this hearing, Mr. 
Chairman. The stakes for folks that I represent, more than 3 
million Oregonians, are very, very high, and we need to act and 
act promptly, and I thank you.
    The Chairman. Thank you, Senator Wyden. Senator Breaux.

               STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. Thank you, Mr. Chairman, for having the 
hearing. I think that the information we find will be 
interesting and informative also, I think very helpful in 
making sure we do everything we can to eliminate to the 
greatest degree possible the potential for serious accidents 
related to the transmission of fuel through pipeline systems. 
One serious accident is one too many. I think the goal 
obviously should be, and we all would agree, to eliminate the 
possibility of serious accidents involving transmission lines 
throughout this country.
    I would note a couple of things, however, though, in the 
area of transportation-related injuries. I think the pipeline 
systems in this country have one of the best records of any of 
the various systems that we have. When you compare marine-
related transportation accidents to pipeline accidents, when 
you look at 40,000-plus people who are killed on our highway 
transportation systems, you see that the transportation of 
natural gas and gasoline is, in fact, an industry that has an 
outstanding record. Again, one serious accident is one too 
many, and one tragic loss of life is something that we ought to 
try to do everything that we can to eliminate.
    I think the final point I would make is that I think this 
is an area where there indeed has to be a national role. You 
cannot have 50 different rules and regulations and 50 different 
standards regulating something that is interstate in nature. We 
have to make sure the federal system is strong enough and is 
doing an adequate job, but I think it would be a serious 
mistake to allow 50 different states to oversee or supersede 
the federal responsibility in this area, and hopefully we will 
have some good discussion about it.
    I thank you.
    The Chairman. Thank you, Senator Breaux. I want to welcome 
our congressional witnesses appearing before the panel, or 
appearing before the Committee today. We know you are very 
busy, and we appreciate the opportunity of hearing from you. We 
will begin with Senator Murray. Welcome, Senator Murray.

    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina

    I would like to thank the Chairman for convening this hearing on 
the reauthorization of pipeline safety programs. Any map showing the 
nation's pipelines is clear evidence of the importance of safe 
pipelines to the nation. The question is not whether pipeline safety 
programs should be reauthorized but rather what is the best way to 
maintain the safety of the interstate pipeline system.
    It is my pleasure to welcome Senator Murray to the Committee this 
morning. I look forward to hearing her testimony on her legislation, S. 
2004, which specifies requirements for strengthening safety and 
environmental standards. Senator Murray has been a leader in moving the 
reauthorization of pipeline safety programs forward, and I will 
continue to work with her on this important issue.
    Additionally, I would like to extend my condolences to the families 
from Bellingham, Washington, who have agreed to come testify today 
about their experiences. I appreciate their efforts on behalf of their 
sons to improve pipeline safety for all of us, and I look forward to 
hearing from them this morning.
    As many of you know, in June of 1996, a liquid pipeline ruptured 
where a corroded section of the pipeline crossed the Reedy River at 
Fork Shoals, South Carolina. The rupture released almost a million 
gallons of fuel oil into the Reedy River and surrounding areas. NTSB 
investigated the accident and found that the estimated cost for clean-
up and settlement with the State of South Carolina was $20.5 million. 
Fortunately, no one was injured in the accident, however it is 
important that this type of accident be prevented in the future. I 
understand that OPS is working on new corrosion guidelines and hope 
that Administrator Coyner and Chairman Hall will comment on the 
adequacy of existing corrosion standards.
    Three bills have been introduced in the Senate this Congress. 
Senator McCain and Murray have drafted proposals, and I have introduced 
the Administration's bill by request. We are here today to solicit 
opinions about the pending legislation from those who are most informed 
about pipeline safety. I look forward to hearing their comments and 
critiques of the existing pipeline safety programs and provisions in 
the legislative proposals.
    As far as a critique of the existing pipeline safety program, I 
want to share my concerns about the delays in issuing congressional 
mandates. The Office of Pipeline Safety has not issued final rules on 
outstanding items from our 1992 and 1996 reauthorizations. The rules on 
environmentally sensitive and high density areas should have been 
completed by now, although I understand that they are expected this 
year. The rules on operator qualification and periodic inspections are 
not final either. I hope that Administrator Coyner will comment on the 
status of these rules, it would certainly help to advance the cause of 
pipeline safety if we could understand why these rules are not in place 
or if additional standards need to be enacted.
    Further I am curious about what new regulations may be appropriate 
at this time. There are many new initiatives being proposed in the 
three pending bills and I have a number of questions. What is the 
appropriate level of authorization for funding? I note that the 
pipeline safety budget proposal for FY 2001 represents an increase of 
29 percent over the current level. If that funding request is not met, 
how will the Office of Pipeline Safety implement existing requirements 
and standards? If new requirements and standards are imposed in a 
reauthorization bill, does the Office of Pipeline Safety have adequate 
resources to carry out those new directives? I want to make sure that 
we are not only providing appropriate direction for the pipeline safety 
program, but appropriate expectations and resources.
    I look forward to hearing the witnesses' comments and their views 
on pipeline safety issues.

    [The prepared statement of Senator Inouye follows:]

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii

    I would like to thank the Chairman for convening this hearing 
today. Pipelines are an integral part of our transportation network, 
facilitating large movement of both gas and liquid throughout the 
United States. I was pleased to see that the overall pipeline accident 
rate declined last year, but have concerns because the average spill 
amount increased. While I recognize that pipelines are the safest way 
to transport hazardous materials, there is still much that can be done 
to ensure that pipelines are safer for people living near them and 
safer for the environment.
    It is my pleasure to welcome Senator Murray to the Committee this 
morning. I look forward to hearing her comments on this important 
issue. She has been a strong advocate for increased vigilance on the 
subject of pipeline safety. Her legislation, S. 2004, lays out many 
options for strengthening safety and environmental standards.
    Today we will hear from several very distinguished panels about gas 
and liquid pipelines. I would like to welcome all of the witnesses to 
the Committee this morning. I appreciate the commitment to pipeline 
safety that each of you have, and recognize that some of you are 
testifying before the Committee today as a result of very personal 
experiences. I want to thank all of the witnesses for their 
participation, and I look forward to working with all of you as we 
craft a constructive authorization bill.
    As we begin the process of reauthorizing the pipeline safety 
programs housed in the Office of Pipeline Safety, we have the 
responsibility for ensuring that transportation is efficient, clean, 
and safe. Three bills have been introduced in the Senate this Congress. 
While I support S. 2004, introduced by Senator Patty Murray, I am 
interested in learning the witnesses's views of all the pending bills.
    I look forward to hearing from Administrator Coyner about pending 
rulemakings as a result of congressional mandates from the 1992 and 
1996 legislation authorized by this Committee. I would like to see the 
Office of Pipeline Safety move ahead to implement outstanding mandates. 
Clearly some of these directives have languished much too long and I 
would be interested to know their current status.
    On that subject, I would like to hear about personnel levels at OPS 
and whether or not they are sufficient to carry out legislative 
requirements. I see that your FY 2001 budget request is a 29 percent 
increase over this year's enacted appropriation. In addition, your 
grants to states and local entities is increased by 52 percent in your 
budget request. I understand that there will be additional needs for 
personnel and funding as research and development, inspections, and 
information gathering is expanded. I look forward to hearing how these 
demands will be met if your funding levels remain constant and what an 
increase in funding will permit. I want to work to ensure that the 
pipeline safety program gets the level of support needed to be 
effective.
    I will listen carefully to the testimony today. I look forward to 
hearing about the differences between the provisions in the pending 
legislative proposals and the program in use today.

    [The prepared statement of Senator Lott follows:]

  Prepared Statement of Hon. Trent Lott, U.S. Senator from Mississippi

    I would like to congratulate the Chairman for holding this hearing 
and his commitment to reauthorize the Pipeline Safety Act.
    Congress is reviewing the DOT's pipeline safety program in the 
emotional aftermath of a tragic pipeline accident in Bellingham, WA. 
Today we will hear from the families of the victims. It is very fitting 
that they should be here to remind us of the seriousness of our 
efforts. We will also hear from the Office of Pipeline Safety & the 
pipeline industry about their proposals to prevent future pipeline 
tragedies. My home state of Mississippi has a large pipeline presence, 
and I commend the Chairman for his attention to this issue.
    Oil and natural gas pipelines are of fundamental importance to all 
Americans. Pipelines are essential to the basic infrastructure of our 
economy. Millions of Americans depend on the fuels and raw materials 
transported by pipelines. Americans would not have the productivity or 
the quality of life we have without pipelines. Pipeline transportation 
of oil and gas is not only convenient and economical, it is usually 
very, very safe.
    As Congress considers reauthorization of the Pipeline Safety Act, 
we must look at the whole picture. Measures to increase safety must be 
well coordinated to prevent unnecessary conflicts with the interstate 
movement of materials due to the different regulatory efforts.
    Reauthorization efforts must aim to provide for the continued safe 
operation of this essential infrastructure system. The basic 
responsibility for interstate pipeline transportation lies with the 
federal government. While there are certainly local concerns that need 
to be addressed in some fashion, only the federal government can bring 
consistency to rules that govern the operation of pipelines crossing 
state lines.
    There is a potential for good bipartisan legislation. It is 
Congress's responsibility to ensure that both the safety and integrity 
of the entire pipeline system is upheld.
    I look forward to hearing from today's witnesses.

                STATEMENT OF HON. PATTY MURRAY, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Murray. Thank you very much, Mr. Chairman. I really 
appreciate you holding this hearing, and the personal interest 
you have taken in this very critical issue. I also want to 
thank all of the members of the Committee. I have had the 
opportunity to talk with most of them over the past several 
months about this issue to raise the awareness of pipeline 
safety, and I appreciate the time all of them have taken to 
talk to me about this issue.
    Mr. Chairman, I am very pleased that this Committee is now 
focusing on pipeline safety. I have been pushing for this for a 
long time, and I am grateful that this day is finally here. At 
the same time, I wish we did not have to be here today. I wish 
we did not have to worry about pipeline safety, and I truly 
wish that June 10, 1999 was just another quiet summer day in 
the city of Bellingham instead of a black mark in our memory. 
On that day, a gasoline pipeline in Bellingham ruptured, 
spilling more than 275,000 gallons of fuel. That pipeline 
disaster resulted in the deaths of three young people and left 
thousands of people in my State wondering about the safety of 
the pipelines near their homes.
    Mr. Chairman, my twin sister teaches just a few blocks from 
where that accident occurred, and I can assure you that she, 
the other teachers, the students, the parents, and all of the 
community members are still touched every day by this accident. 
It has truly changed their lives.
    We cannot undo what happened in Bellingham. It will never 
be the same, but we can take steps to reduce the changes that 
another community will suffer from a pipeline disaster, and I 
know, Mr. Chairman, we can pass a strong pipeline safety bill 
this year. Today is an important step in the legislative 
process, and we are here today to see this through to the end. 
If this Committee does not pass a pipeline safety bill this 
year it will have missed a tremendous opportunity to protect 
the people we all represent.
    There are 2.2 million miles of pipelines running across 
this country. They run near our schools, homes, and 
communities. They do perform a vital service. They bring us the 
energy we need to fuel our cars and heat our homes, but at the 
same time they are not as safe as they could be. We have a 
responsibility to pass a bill this year that will protect 
families from the dangers of unsafe pipelines. That is why, 
back in January, I introduced my own pipeline safety bill, the 
Pipeline Safety Act of 2000, and I want to thank the Members 
who cosigned that bill with me, Senators Inouye, Gorton, Wyden, 
Lautenberg, and Bayh.
    I went door-to-door, Mr. Chairman. I met with a number of 
Senators and House members, and I showed them graphic pictures 
of what happened in my State, and I showed them the statistics 
of how pipelines were affecting the people in their own States. 
I worked with administration officials, including 
Transportation Secretary Rodney Slater, who was very responsive 
to the tragedy in my State, and who has been a partner in 
improving pipeline safety. I have also worked with and heard 
from safety officials, citizen groups, and industry 
representatives.
    In March, as was stated, Senator Gorton and I participated 
in a field hearing in Bellingham hosted by this Committee, and 
last month I spoke at a national conference on pipeline safety 
here in Washington, D.C., hosted by the National Pipeline 
Reform Coalition, Safe Bellingham, and the Cascade Columbia 
Alliance. That conference proved that people all across this 
country are following this issue very closely. They understand 
the problem and they are calling for action.
    Mr. Chairman, I want to be clear, we cannot wait any 
longer, and we certainly cannot let this year pass without 
improving our Nation's inadequate pipeline safety laws. While 
it may be true that transporting hazardous liquids through 
pipelines is safer than transporting them on barges and trucks, 
there are several areas where existing laws are not doing 
enough to protect the public. The danger posed by aging, 
corroded pipelines is not going away. In fact, it is getting 
worse.
    Since 1986 there have been more than 5,700 pipeline 
accidents. There have been 325 deaths and more than 1,500 
injuries, and there has been almost $1 billion in environmental 
damage. On average, there is one pipeline accident every day, 
and 6 million hazardous gallons are spilled into our 
environment every year.
    In the 4 months, in just the 4 months since I introduced my 
own pipeline safety bill, at least 20 States have experienced 
pipeline accidents. Let me repeat that. In just the last 4 
months, at least 20 States have had pipeline accidents. I do 
not want another community to go through what the people of 
Bellingham, Washington have gone through. We can make pipelines 
safer today.
    Along with the bill that I introduced in January, I am 
pleased that Senator Hollings has submitted the 
administration's proposal, and that Senator McCain has also 
offered a measure to improve our Nation's pipelines, and I am 
proud, Mr. Chairman, to be a cosponsor of your bill.
    While none of these bills are perfect, I hope when your 
Committee marks up pipeline legislation this month and will 
improve on the bills before you. Certainly, when this bill hits 
the floor I will do everything I can to work with the members 
of this Committee to make sure that we pass an effective bill.
    I am pleased that all of the current proposals touch on 
five key areas of pipeline safety. First, these bills recognize 
the need to improve pipeline inspection and accident prevention 
practices. Second, they recognize the need to develop and 
invest in new safety and inspection technology. Third, they 
expand the public's right to know about the problems with 
pipelines. Fourth, they recognize that States can be better 
partners in improving pipeline safety and, finally, these bills 
increase funding for new State and Federal pipeline safety 
programs.
    I am proud to say we are making progress. Having the 
administration, the Chairman of this Committee and Senator 
Hollings fully engaged on this issue increases the chance we 
will do the right thing and pass pipeline legislation this 
year. During the Committee process, I hope we can all work 
together in a bipartisan manner to improve pipeline safety.
    Mr. Chairman, I know it is an election year, and we often 
find ourselves being partisan at times like this, but pipeline 
safety is not a partisan issue. It is something we can do this 
year in a bipartisan way. As you see from the panel before you, 
on behalf of all of our constituents, in my State the whole 
political spectrum has come together to support pipeline 
safety. I hope that this Committee and this Congress will 
follow that example, and I look forward to working with the 
members of the Committee in that effort.
    Pipeline safety reform can become an accomplishment of the 
106th Congress. We can do this.
    Mr. Chairman, before I close I want to thank you so much 
for lending your support and helping us move closer to pipeline 
safety. I also want to thank all of the people who are going to 
be testifying today, the administration witnesses, the industry 
representatives, and those who are here from the environmental 
and community advocate communities. I especially want to thank 
our Governor, Gary Locke, and I want to ask unanimous consent 
to admit his statement to the record. He has been a strong 
worker on this as well.
    I especially want to mention Mayor Mark Asmundson, who is 
here from Bellingham. I can think of no one who has worked 
harder than he has on behalf of his community, not just for the 
families that were affected, but to make sure that this does 
not occur anywhere else, and I especially want to thank the 
families of the victims. Mr. Chairman, they have gone through 
so much, and they are working so hard to make sure that no 
other family has to endure what they have been through.
    I know that it was not easy for them to come here today, 
but their strength and their courage reminds all of us what we 
have to do, and now it is up to the Senate to match their 
courage by passing a meaningful pipeline safety bill this year.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Murray follows:]

               Prepared Statement of Hon. Patty Murray, 
                      U.S. Senator from Washington

    Thank you, Mr. Chairman. Thank you for holding this hearing, and 
thank you for your leadership on this issue. I'd also like to thank the 
members of this Committee. I've met with many of you over the past few 
months as I've tried to raise awareness about pipeline safety, and I 
appreciate the time you have taken to consider pipeline safety reform.
    Mr. Chairman, I'm pleased this Committee is now focusing on 
pipeline safety. I've been pushing for this day for a long time, and 
I'm grateful it is here.
    At the same time, I wish we didn't have to be here today. I wish we 
didn't have to worry about pipeline safety. I wish June 10, 1999 was 
just another quiet summer day in the city of Bellingham, Washington--
instead of a black mark in our memory.
    On that day, a gasoline pipeline in Bellingham ruptured--spilling 
more than 275,000 gallons of fuel. That pipeline disaster resulted in 
the deaths of three young people, and left thousands of people in my 
state wondering about the safety of the pipelines near their homes.
    Mr. Chairman, we can't undo what happened in Bellingham. It will 
never be the same. But we can take steps to reduce the chances that 
another community will suffer from a pipeline disaster. Mr. Chairman, 
we can pass a strong pipeline safety bill this year. Today is an 
important step in the legislative process, and we have to see this 
through to the end.
    If this Committee does not pass a pipeline safety bill--this year--
it will have missed an opportunity to protect the people we represent.
    There are 2.2 million miles of pipelines running across the 
country. They run near our schools, homes and communities. They perform 
a vital service--bringing us the energy we need to fuel our cars and 
heat our homes.
    At the same time, they are not as safe as they could be. We have a 
responsibility to pass a bill this year that will protect families from 
the dangers of unsafe pipelines.
    That's why back in January I introduced my own pipeline safety 
bill--the Pipeline Safety Act of 2000. And I want to thank the members 
who have signed on as co-sponsors--Senators Inouye, Gorton, Wyden, 
Lautenberg, and Bayh.
    I went door-to-door and met with a number of other Senators and 
House members. I showed them the graphic pictures of what happened in 
my state, and I showed them the statistics of how pipelines were 
affecting the people in their own states.
    And I worked with Administration officials--including 
Transportation Secretary Rodney Slater--who was very responsive to the 
tragedy in my state and who has been a partner in improving pipeline 
safety. I've also worked with and heard from safety officials, citizen 
groups, and industry representatives.
    In March, Senator Gorton and I also participated in a field hearing 
in Bellingham--hosted by this Committee. Last month, I spoke at a 
national conference on pipeline safety here in Washington, D.C. It was 
hosted by the National Pipeline Reform Coalition, SAFE Bellingham, and 
the Cascade Columbia Alliance. That conference proved that people all 
across the country are following this issue closely. They understand 
the problem, and they are calling for action.
    Mr. Chairman, I want to be clear. We cannot wait any longer, and we 
certainly cannot let this year pass without improving our nation's 
inadequate pipeline safety laws.
    While it may be true that transporting hazardous liquids through 
pipelines is safer than transporting them on barges and trucks, there 
are several areas where existing laws aren't doing enough to protect 
the public.
    The danger posed by aging, corroded pipelines is not going away. In 
fact, it's getting worse. Since 1986, there have been more than 5,700 
pipeline accidents, 325 deaths, 1500 injuries, and almost $1 billion in 
environmental damage. On average there is 1 pipeline accident every 
day, and 6 million hazardous gallons are spilled into our environment 
every year.
    In the four months since I introduced my pipeline safety bill, at 
least 20 states have experienced pipeline accidents. I don't want 
another community to go through what the people of Bellingham, 
Washington have gone through. We can make pipelines safer today.
    Along with the bill I introduced in January, I am pleased that 
Senator Hollings has submitted the administration's proposal. Senator 
McCain has also offered a measure to improve our nation's pipelines, 
and I'm proud to be a co-sponsor of his bill.
    While none of these bills are perfect, I hope when your Committee 
marks up pipeline legislation later this month you will improve on the 
bills before you. Certainly when this bill hits the floor, I will do 
everything I can to work with the members of this Committee to ensure 
we pass an effective bill.
    I'm pleased that all of the current proposals touch on five key 
areas of pipeline safety:
    First, these bills recognize the need to improve pipeline 
inspection and accident prevention practices;
    Second, they recognize the need to develop and invest in new safety 
and inspection technology;
    Third, they expand the Public's Right To Know about problems with 
pipelines;
    Fourth, they recognize that states can be better partners in 
improving pipeline safety; and
    Finally, these bills increase funding for new state and federal 
pipeline safety programs.
    I'm proud to say that we are making progress. Having the 
administration, Senator McCain, and Senator Hollings fully-engaged in 
this issue increases the chance that we will do the right thing and 
pass pipeline legislation this year.
    During the Committee process, I hope we can all work together in a 
bipartisan manner to improve pipeline safety. I know it's an election 
year, and we often find ourselves being partisan in times like this.
    Pipeline safety isn't a partisan issue. It's something we can do 
this year in a bipartisan way on behalf of all of our constituents.
    In my state, the whole political spectrum has come together to 
support pipeline safety. I hope this Committee and this Congress will 
follow that example, and I look forward to working with the members of 
this Committee in that effort.
    Pipeline safety reform can become an accomplishment of the 106th 
Congress. Put simply, Mr. Chairman, we can do this. Mr. Chairman, 
before I close I would like to thank you for lending your support and 
helping us move closer to making pipelines safer.
    I would also like to thank those who will be testifying today--
administration witnesses, industry representatives, and those here from 
the environmental and consumer advocate communities.
    But I'd especially like to thank the families of the victims. They 
have gone through so much, and they are working to make sure no other 
family has to endure what they have been through.
    I know it wasn't easy for them to come to here today, but their 
strength and their courage remind us of what we must do. Mr. Chairman, 
now it is up to this Senate to match their courage by passing a 
meaningful pipeline safety bill this year.
    Thank you.

    The Chairman. Thank you very much.
    Mayor Asmundson of Bellingham, where are you? Thank you for 
being here, sir, and thank you for your outstanding work, and 
thank you for taking the time to join us at this hearing, and 
if you would like to join the families when they come up for a 
brief statement we would be glad to hear from you.
    Senator Murray, we thank you, and thanks to you and Senator 
Gorton and others we will lend every effort to try to mark up a 
bill and get it through at least the Senate, and I hope through 
the Congress, before the end of this year. Due to you and 
Senator Gorton and the families and others, this issue has been 
made one of highest urgency, thank you.
    Congressman Metcalf, thank you for being with us.

      STATEMENT OF HON. JACK METCALF, U.S. REPRESENTATIVE
                  FROM THE STATE OF WASHINGTON

    Mr. Metcalf. Thank you very much, Mr. Chairman.
    The Chairman. We are going by age on this.
    [Laughter.]
    Mr. Metcalf. I would like to extend my sincere thanks to 
you for your recent efforts to improve pipeline safety. The 
legislation you have introduced, combined with today's hearing, 
has already dramatically raised the awareness level of this 
issue in Congress.
    I would also, of course, like to thank Senator Gorton, 
Senator Murray, and Congressman Inslee for their work, and 
particularly to thank Congresswoman Dunn, who is not here 
today, for her input. It has been almost a year since the 
tragic pipeline accident that claimed the three lives of the 
people in our State. Since that time, more and more concerned 
citizens throughout Washington and around the Nation have 
clamored for additional protections from the network of 
pipelines which criss-cross the United States.
    Early this year, I introduced H.R. 3558, the Safe Pipelines 
Act of 2000, to address many of the concerns raised by the 
Bellingham explosion and by previous accidents. Under my 
legislation, number 1, pipelines will be required to be 
inspected both internally and with hydrostatic tests. Pipelines 
with a history of leaks will be specifically targeted for more 
strenuous testing.
    Number 2, all pipeline operators will be tested for 
qualifications and certified by the Department of 
Transportation. The results of pipeline tests--this is number 
3--and inspections will be made available to the public and a 
Nation-wide map of all pipeline locations will be placed on the 
Internet, where ordinary citizens can access it.
    Number 4, all pipeline ruptures and spills of more than 40 
gallons will be reported to the Federal Office of Pipeline 
Safety, and number 5, States will be able to set up their own 
pipeline safety programs for interstate pipelines, provided 
that the States have the resources and expertise necessary to 
carry out the programs, and the State standards are at least as 
stringent as the Federal standards. In addition, the bill 
requires studies on a variety of technologies that may improve 
safety, such as external leak detection systems and double-
walled pipelines.
    My bill has been cosponsored by the entire Washington 
Statehouse delegation, and I thank them for that, as well as 
Congressman Dennis Kucinich of Ohio, and John Lewis of Georgia. 
I am working with the House Committee on Transportation and 
Infrastructure to pass my legislation this year. Pipeline 
safety legislation has also been proposed by Senator Murray and 
Senator Gorton, as you know, by the administration, and most 
recently by the distinguished Chairman of this Committee.
    There are excellent provisions on all three bills, and I 
hope we can work together to pass quality legislation. The 
tragedy in Bellingham was not the first deadly pipeline 
accident, and it will not be the last unless we can come 
together in a bipartisan way to bring meaningful improvements 
to our pipeline safety regulations.
    I thank you, Mr. Chairman, for this opportunity.
    The Chairman. Thank you very much, sir.
    Congressman Inslee, welcome.

       STATEMENT OF HON. JAY INSLEE, U.S. REPRESENTATIVE
                  FROM THE STATE OF WASHINGTON

    Mr. Inslee. Thank you, Mr. Chairman.
    Mr. Chairman, it goes without saying that our pipeline 
safety standards in this country have the consistency of Swiss 
cheese, and I personally appreciate your efforts, because my 
people are very concerned about that. This pipeline that 
exploded runs right through my neighborhood, and I think some 
of your efforts on campaign finance reform are going to be 
important in our efforts ultimately to reform the safety 
standards. These issues are related in the public's mind, and 
accurately so, and I just want to tell you I appreciate your 
efforts, because I think it will help not only on this safety 
issue but on many others in the American economy.
    I have two comments about our responsibilities, and two 
comments about what I would hope is in our eventual legislation 
we pass. First, comments on our responsibilities.
    I think we are at a very, very unique moment legislatively. 
This opportunity to pass comprehensive, meaningful legislation 
may not come again until there is another tragedy of this 
dimension, and that increases the burden on us to be 
comprehensive in our approach. We cannot simply do something 
this year thinking we are going to do the next step next year. 
We have really got to touch all the bases this year. It has got 
to be meaningful and comprehensive.
    The second thing I would like to say, and I think it is 
very important we draft this legislation, we cannot punt to an 
agency. We cannot defer to an agency. We cannot seek further 
clarification from the agency. We have done that for the last 
20 years in this country, and we have sadly deficient standards 
as a result.
    The agencies have had the ability to do the things all of 
us have suggested in this legislation for years, probably 50 to 
75 percent of it, but it simply has not happened, and I think, 
while it may be easy for us sometimes to leave some of the 
definitional aspects to an agency, we cannot allow that to 
happen here. We have to do the heavy lifting in Congress to 
make specific requirements in regard to this industry.
    Two points about the legislation, and I have spent a lot of 
time trying to educate myself about this since this tragedy, 
and the parents have done a good job educating me, the mayor 
has done a good job educating me, and there is a couple of 
points that I would like to share with you that I have learned.
    The first has to do with the necessity of a very clearly 
defined testing regimen for pipelines, and what I have found, 
that if we in Congress do not have a very specific internal and 
hydrostatic testing requirement, we are going to miss about 50 
percent of the potential failures of pipelines, and let me tell 
you what I mean by this.
    What you are going to hear a lot about if you have not 
already is these efforts to find corrosion failures, and there 
is, broadly speaking, about three different traumas or failures 
of pipelines. There is corrosion, there is trauma, and there is 
seam failure, and we, in all of these approaches, talk about 
internal inspections using what are called smart pigs, which 
are very good tools at finding two out of those three types of 
failures.
    They are good at finding corrosion, and they are good at 
finding trauma, but they are wholly inadequate at finding seam 
failure. Seam failure--these are welded seam pipes, 
longitudinally along the length of the pipeline, and what Mr. 
Metcalf and I have proposed in our House legislation is to 
require the only type of test which is currently available to 
find that type of seam failure, and that is a hydrostatic test.
    Mr. Chairman, I want to tell you what happened in 
Bellingham when they did this, and I want to take my hat off to 
the local folks in Bellingham, because after this failure they 
used their local leverage to force the pipeline company to do 
something they did not want to do and, in fact, the Federal 
agency at the time did not want them to do, and that is to 
require a hydrostatic test of the line before reopening, and 
you know what happened when they did it, when they filled it 
with water and they pressurized it? It blew up. It blew up a 
second time, and that was a failure that only this hydrostatic 
test was capable of finding.
    That failure could have occurred 5 years from now, and 
imagine how we would feel 5 years from now if we had another 
explosion in Bellingham and we had not done this well-
recognized, technologically simple test, and that is why we 
feel very strongly that we ought to have a hydrostatic test 
component of our testing regimen, unless we can find some other 
technology that can find those seam failures.
    And you will learn, when you talk to your staff, there is a 
type of pipe called a pre-1970 ERW pipe, electrically resisted 
welded that has a history of these failures, and it is in the 
ground all over this country. I encourage you to ask your 
experts about that.
    The second issue, I would suggest the Committee give very 
strong thought to having a Federal certification standard, a 
true Federal certification standard for at least some of the 
operators for these pipeline systems. Let me tell you why I 
think that is so important. In other industries, where we have 
improved safety, we have a Federal certification standard for 
the humans, not just the steel but the humans, and the humans 
could be as much a problem in this accident in Bellingham 
potentially as the pipe in a sense.
    We do it in the trucking industry, where we do not allow 
trucking companies to decide who drives the trucks. We have a 
governmentally operated certification standard. In the airline 
industry we do not just let the airlines decide who flies the 
airplanes. We have a federally authorized certification system, 
if you will.
    We need a federally certified system of who makes the 
operational decisions on these pipelines, and what I have 
learned about these things is, one of the problem is the surges 
that can occur. You know, these pipelines can go for years and 
have no problems, but if an operator makes a mistake and closes 
a valve at the wrong time you get these pressure surges. These 
surges go back up the line, they find the weakest point in the 
line, and then they blow up, and I would urge you to look very 
carefully at our ability to improve not just the steel but the 
humans involved in the system, and I hope that you include a 
Federal certification standard eventually in the bill you pass.
    I want to thank you again, Mr. Chairman, for your efforts, 
and members of the Committee, and I want to applaud the efforts 
of the parents and the local officials here.
    The Chairman. Well, I thank you, and I thank all three of 
you for being here. I know you have other commitments. If you 
would like to stay please do so. We appreciate your time before 
the Committee, and I want to assure you again of our commitment 
to trying to see legislation enacted before the end of the 
relatively brief time remaining. Thank you very much. I thank 
the panel. If it is agreeable to the members of the Committee, 
since the family members came from a long distance away, I 
would like to have them come next, if that is agreeable to the 
members of the Committee on both sides.
    We would like to call Mr. and Mrs. Frank and Mary King, Ms. 
Marlene Robinson, and Mr. Bruce Brabec, and Ms. Katherine 
Dalen, all of Bellingham, Washington, and Mayor Asmundson, you 
are welcome to join the panel, and Senator Murray, you are 
welcome to join us here on the dias if you would like.
    Mayor, why don't we begin with you, and then we will move 
on to the family members, and we thank you again for everything 
you have done on behalf of the families, and your incredible 
effort in trying to be of assistance in this very difficult and 
tragic situation.
    Welcome, mayor.

    STATEMENT OF MARK ASMUNDSON, MAYOR, CITY OF BELLINGHAM, 
                           WASHINGTON

    Mr. Asmundson. Thank you very much, Mr. Chairman. It is a 
surprise and a pleasure to have the opportunity to speak with 
this Committee today. I, along with Senator Murray and the 
Congressmen you have heard from, am very grateful the Committee 
has taken this step of a full Committee hearing on this issue. 
I will try to be very brief.
    Like probably everyone else in my community I was 
completely unaware of the nature of the dangers that were posed 
by a fuel pipeline passing through our city. Since this tragic 
accident and the incredible experience that I had of attending 
in one week funerals for three boys of families who I have 
known for years, I was determined to find out what in the world 
was going on, and how did this occur, and I can assure you that 
what I found out was very startling.
    What I learned, in fact, was that the more I knew about 
pipelines, liquid fuel pipelines, the more I was concerned. I 
was not less concerned. I was not more comforted. I was more 
concerned because the reality is that historically the pipeline 
regulation in this country has been wholly inadequate to meet 
the needs of communities.
    The Office of Pipeline Safety has failed to comply with 
congressional mandates to meet requirements that have been 
specifically and explicitly set forth in legislation, but I 
believe that as a result of the very, very excellent work that 
has been done by our Senators in our State, by the members of 
our congressional delegation, by the family members, by the 
very motivated community, that the Office of Pipeline Safety 
has paid very close attention to what happened in Bellingham 
and in fact has done a good job at this date.
    But doing a good job after an accident just really does not 
cut it, and this is the year, this is the time when the members 
of this Committee and the Congress of the United States can 
make a fundamental difference.
    There was an article in Time Magazine about 2 months ago 
which I found very disturbing. I am sure some of you are aware 
of it. It was the cover article, and it was talking about how 
effectively the only way to get anything to happen in Congress 
was through the passage of lots of money around through 
lobbying efforts, and you know, I read that, and I thought, I 
know it is not true.
    In fact, my immediate reaction was, I am going to write a 
letter to the editor of Time Magazine, because I have been 
involved with our Senators and with our congressional 
delegation, and the U.S. Senate Commerce Committee staff on 
this issue, and the city of Bellingham has no big money to pass 
around, and the National Pipeline Reform Coalition has no big 
money to pass around.
    We do not have any money to pass around. These families 
have no money to pass around, and yet this bill that was 
introduced by Senator Murray and the response by the members of 
the Senate and the members of the House to this issue, with no 
money, with no influence, with people of no stature, has been 
incredible, and it has been the right reaction.
    This Committee acting to definitively and constructively 
and seriously address the inadequacies of pipeline safety in 
this Congress will be the best demonstration of the Year 2000 
that the interest of the public, that the safety of the public, 
that the protection of the environment is the priority of our 
elected representatives. We have no power. We have no money. 
But we have the right idea, and we care about the right things. 
Your response proves that your thoughts are in the same 
direction, and your purposes are the same.
    This is the year. This is the chance. We need substantive 
improvement. The administration recognizes it. Senator McCain, 
you recognize it. Thank you for your bill. Senator Murray 
recognized it. Senator Gorton. They have been wonderful in 
support of and in understanding the inadequacies of the system 
we have in place today. The integrity rule proposed by the 
administration is a good step in the right direction. As 
Senator Murray said, these bills are good. They might need a 
little adjustment here and there, but that is why we come 
together in the Committee to work these things out.
    But this is the year to make positive steps, to make a 
difference. There is nothing in it for Bellingham. We suffered 
our loss, and we continue to mourn our dead, and the scars of 
this fire through a mile and a half of our city will be there 
for decades. All we want is that no other community and no 
other families go through this experience again, and I hope 
that no other mayor and no other Member of Congress and no 
other Senator ever has to attend three funerals for children in 
one week, as I had to.
    I love these people. They had wonderful children. We do not 
have any extra people in Bellingham. We could not afford to 
lose them. You can make sure that no one else experiences this 
loss through substantive and real change. Now is the time.
    Thank you so much for the opportunity to speak with you 
today.
    The Chairman. Thank you, mayor, for your very eloquent 
statement, and I have visited your beautiful city in the past, 
and look forward to visiting it again in the future.
    Mr. Asmundson. You will be more than welcome.
    The Chairman. Thank you. We would like to welcome Mr. and 
Mrs. Frank and Mary King, our first family members of the 
panel. Thank you for being here today, and whichever one would 
like to go first, please do so.

        STATEMENT OF FRANK AND MARY KING, BELLINGHAM, WA

    Mrs. King. Thank you, Mr. Chairman. A Mother Remembers. The 
silence is deafening. No one says a word. The phrase, ``Mom, 
I'm home,'' will never be heard. No baseball and bat await by 
the door. Gone are footballs, basketballs, and more. The school 
bus drives by. My child is not there. I remember his smile and 
his head of blond hair. His friends stop to see me; they've all 
grown so tall. Just 1 year ago, they all seemed so small.
    My son forever is 10 years old. My arms seem so empty 
without him to hold. ``Just rebuild your life'' is repeatedly 
said. But how would they know? Their child is not dead. It's a 
parent's worst nightmare multiplied by ten. To know you will 
never see your baby again. There must be a reason to endure all 
this pain, to keep going forward with nothing to gain. But to 
make this world better in memory of three is a hope we hold 
onto, and know it can be.
    Mr. King. My wife wrote that poem. It is not something that 
she got out of a book. It is something that came from her 
heart. I want to show you some pictures of this little man. 
There is a picture of Wade King when he was about 8 at his 
sister's wedding. He has an older brother and an older sister. 
One is 26 and one is 28. Of all the pictures I have ever seen 
of that little boy, it is the most beautiful picture I have 
ever seen of him.
    I am sure that those of you here who are at this meeting 
who have children, or who have grandchildren, can imagine what 
it must have been like, standing out in the front yard for 45 
minutes to half-an-hour with Steven Travas and my son burned 
over 90 percent of their body. They had no skin from their 
ankles up.
    I have got three sets of these pictures that I will give to 
you, Mr. Chairman. This is a picture of my son, or of San 
Francisco's baseball stadium, that was taken on 4 June. His 
birthday was on 5 June, 5 days before this accident happened, 
and it is a picture of the scoreboard and it says, Happy 10th 
Birthday, Wade King. You're awesome.
    And here is a picture of Wade as it came up on the 
scoreboard, and he saw it. He could not believe it. And here is 
a picture of Wade as he sits by the computer in his house.
    I will give these pictures to you.
    I stood out in the front yard with these two little boys 
for about 45 minutes, trying to keep them calm after getting 
them out of the woods. You need to understand that the skin was 
literally dripping off their fingers.
    The Chairman. Mr. King, I am not sure that is necessary.
    Mr. King. These boys were medicated, flown to Harbor View 
Medical Center where my wife and I, his brother, his sister, 
numerous nieces, nephews, relatives were able to watch him die. 
I cannot imagine a worse death for children. They virtually 
swelled up from the inside out, until their hearts stopped. It 
is the bravest act I have ever witnessed.
    I can only tell you a few things about what I miss about my 
son. I miss seeing him on the couch the first thing in the 
morning with his chubby little fingers on the remote control 
going from cartoon to cartoon, and probably from MTV. I miss 
sitting on the couch with my arm around him watching baseball, 
football, and basketball games. I miss him standing at the top 
of the stairs after he has read books with his mother saying, 
dad, it is time to put me to bed. It is time to say my prayers.
    I miss saying his prayers with him at night every night. 
The little boy virtually squeezed me when he said his prayers. 
I miss him saying, and God bless everyone else that I know. I 
miss him saying, ending his prayers with, please help me be a 
good, kind, loving, giving, sharing boy, a 10-year-old that 
always wanted to be more than what he was.
    I miss my little man's unconditional love. He was my little 
buddy.
    My wife lost her job. My daughter used to call him Shorty. 
My oldest son, every time he saw him, it uplifted his 
personality. The reminders of him are around us forever. You 
know, we drive by a baseball field and there is little kids out 
playing baseball. We go to the grocery store, there is another 
mother or father with their 10-year-old son. We cannot get away 
from it, that our son will be no more.
    I have been asking this question ever since Jim Hall from 
the NTSB and Kelly Coyner from the RSPA, or Office of Pipeline 
Safety, came out to Bellingham to view the accident scene. Why 
has Olympic Pipeline been allowed to continue to operate when 
they have five operators pleading the Fifth Amendment, and the 
NTSB cannot find out why this accident happened?
    I find it unconscionable that we can put Susan MacDougall 
in jail for not wanting to say anything about anybody. I find 
it unconscionable that we can bomb Iraq to tell them to get out 
of Kuwait, but we cannot shut a pipeline company down until we 
find out why the accident happened.
    I have written to Vice President Gore. I have written to 
the President. Patty Murray and Slade Gorton have gotten all my 
letters. Jay Inslee, Jack Metcalf have gotten all my letters. I 
finally got a letter from the President yesterday basically 
telling me that we are really sorry. This company needs to be 
shut down.
    You here in the Senate and those of you who are in the 
House of Representatives are under an illusion that there is a 
regulatory agency called the Office of Pipeline Safety. It is 
an illusion. They feel they have no authority----
    The Chairman. Mr. King, we are going to have to interrupt 
your testimony while the three of us go and vote. We had 
Senator Hutchison go over and back, and I want to hear the end 
of your testimony so we will have to take a brief break while 
we go to vote.
    [Recess.]
    The Chairman. The hearing will resume. I would like to 
thank the witnesses for their patience. I apologize for this 
interruption. We had a vote on the floor which required our 
attendance, and now we will resume with you, Mr. King.
    Mr. King. Let me start over. The Senate and the House is 
under an illusion that the OPS is a regulatory agency. They 
have by their guidelines far-reaching authority over the 
pipeline industry and they do not seem to react at all. I want 
to read you a regulation out of their own regulation book. It 
is 195.6. It is on page 149.
    It says, operator assistance in investigation. It says, if 
the Department of Transportation investigates an accident, the 
operator involved shall make available to the representative of 
the Department all records and information that in any way 
pertain to the accident and shall afford----
    The Chairman. Mr. King, I would like to interrupt you again 
and tell you we have two more panels of witnesses here. It is 
already 10:30 this morning. I am going to have to ask you to 
make your testimony as concise as possible. We have two other 
family members and two other panels, and we need to get the 
hearing completed. I would appreciate your being concise in 
your comments so we have time to hear from the other witnesses.
    Mr. King. Let me just explain to you, Mr. McCain, what I 
would like to see in your bill. I believe that all pipeline 
operators should be fined for a spill. What I proposed was 
fining them $1,000 per barrel for the first 5 years every time 
they have a spill, $5,000 in the next 5 years per barrel, 
$10,000 for every year after that. The fine is nonnegotiable. 
It should be paid within 30 days of a spill.
    If a spill is caused by a third party, the pipeline 
operator will be responsible for paying the fine. The pipeline 
operator can then go after the third party. There are no 
exceptions. If the spills are underreported by more than 15 
percent, the fine will be triple based upon the correct amount 
of the spill, 3,000, 15,000, or 30,000.
    The second thing is, I would like to see the Office of 
Pipeline Safety have the ability--in fact, it should be a law 
that in case of a death or in case of a spill that exceeds 
2,000 barrels the entire system be shut down until such time as 
at least all the causes of the accident are known. The OPS 
would probably still want to be able to keep them shut down if 
they were a hazard.
    And third, I would like to see protection for pipeline 
employees, so that they could become whistleblowers. Apparently 
pipeline companies can retaliate against employees who want to 
come forth with information.
    The Chairman. Does that complete your testimony?
    Mr. King. Yes.
    The Chairman. Thank you very much, Mr. and Mrs. King. Thank 
you for being here.
    Ms. Robinson.

 STATEMENT OF MARLENE ROBINSON AND BRUCE BRABEC, BELLINGHAM, WA

    Ms. Robinson. On June 5 of last year my 18-year-old son 
Liam graduated from Seeholm High School. His graduation present 
from us was his first heart shell whitewater kayak. Friends in 
Oregon were bringing it up for him later in the month, and he 
was so excited.
    He pored over river kayaking books for the next 5 days 
waiting for the kayak's arrival. He had just started working at 
a local outdoor sports store to help pay his way through 
Western Washington University, where in September he would 
begin his first year of college. He had just finished a series 
of swing dance lessons with his friend Jane, and the two of 
them had signed up for tango lessons for the summer.
    Liam never got to see his kayak. He never got to go with 
Jane to any more dance lessons, or attend college. Five days 
after graduation, on the morning of Thursday, June 10, Liam 
called me at work to check in. He had gone into work but had 
been given the day off when it was discovered the shop had too 
many employees scheduled for the shift.
    It was a beautiful sunny day. I did not ask Liam what he 
was going to do. I wanted him to have the sense of freedom a 
day like that gives. He was 18 years old, 6 foot 2, strong and 
capable, and he deserved that sense of freedom.
    As it turned out, Liam decided to do the thing that made 
him happiest. He went fly fishing. He went to his favorite 
place, Whatcom Falls Park, a pristine piece of nature not 5 
minutes from downtown. He never had a chance to protect 
himself. He was fishing in a steep gorge when the 270,000 
gallons of gasoline spilled down the creek.
    The oxygen in the gorge was replaced by a 35-foot wall of 
hydrocarbon fumes. Liam was overcome within seconds. He fell 
into the foot-deep creek and he drowned. A short time later, 
the gasoline and fumes exploded, sending the fire ball down the 
creek that killed Wade and Steven and every other living thing 
for a mile-and-a-half along that creek.
    Whatcom Falls Park will never be the same. The creeks that 
were burned are destroyed forever, the deep humus and 
vegetation burned down to rock that cracked open in the heat, 
the leafy canopy formed by huge trees gone. We humans now go 
about the enormous task of building new creeks, trying to mimic 
the complexity, efficiency, and mystery of nature.
    Our community will never be the same. Children are still 
afraid to go to sleep at night. Parents are afraid that no 
matter what they do, their children are not safe. Emergency 
workers are left with horrible memories of a day and night 
filled with fear, uncertainty, and death.
    We sitting at this table will never be the same. We lost 
two beautiful, much-loved 10-year-old boys and an 18-year-old 
young man who had much to give and a whole lifetime yet to 
live. We are joined in our grief by our families, our friends, 
and our community. Just carrying on from 1 day to the next has 
become a task requiring enormous self-discipline.
    My question to you is, what have you lost in your home 
States, and what are you willing to lose still, because though 
we have the ability, we lack the means and the will to keep the 
Nation's communities safe from pipeline accidents. We in 
Bellingham are now painfully aware of the danger that pipelines 
pose to every community in this Nation.
    We have learned that what happened in Bellingham was not an 
isolated incident. The Federal Government has allowed the 
pipeline industry to be largely self-regulated. This has led to 
a pattern the last 20 years of fuel transportation accidents 
throughout the country.
    The pipeline industry will never have as its bottom line 
the health and safety of communities. It is up to communities 
themselves, and therefore the public representatives and 
Government agencies to ensure that pipelines are safe. The 
technology exists for pipelines to be safe. What we did not 
know before the pipeline ruptured in Bellingham but have 
learned at the price of our son's life is that what is lacking 
is adequate safety standards, regulation, and enforcement.
    The Federal Office of Pipeline Safety has woefully and over 
a long period of time failed in its mandate. We know that had 
OPS addressed these issues adequately in the past, our town 
would not still be reeling from loss. We are working to make 
sure that no other community has to suffer a similar loss.
    I no longer have any children to protect. Nothing I do or 
say about this issue can bring Liam back. I do, however, 
consider it my privilege and obligation to do what I can to 
protect the children of our community and other communities. I 
need to impress upon you that it is not enough to make minor 
changes in pipeline safety regulation and to once again hand 
over the reins to OPS.
    Before June 10, none of us in Bellingham had any idea that 
we needed to be experts in fuel transportation safety. We 
frankly did not even know that we had a gasoline pipeline 
running through the very heart of Bellingham under streets, 
past houses, schools, and parks. We thought we had a Federal 
agency called the Office of Pipeline Safety, and we had faith 
that that agency was doing its job. We no longer have that 
faith.
    I urge this Committee to do what is necessary to protect 
the citizens of this Nation from further avoidable and 
predictable tragedies caused by inadequate regulation oversight 
and enforcement. At this point I would also like to say that we 
have some specific information about the failures of OPS that 
we would like to submit for the record, if we may.
    The Chairman. Without objection. *
---------------------------------------------------------------------------
    * The information referred to was not available at the time this 
hearing went to press.
---------------------------------------------------------------------------
    Ms. Robinson. I am convinced we need two things. We need a 
Federal Office of Pipeline Safety that is staffed by committed 
expert servants who have the safety of communities as their 
bottom line, and we need strong, independent, well-funded 
regional advisory councils to ensure that over time we do not 
return to business as usual.
    Our children's deaths were not trivial. They were not an 
acceptable risk. We easily have the capacity to protect our 
communities from the kind of accident that killed our children 
and has killed all too frequently and needlessly in other 
States. What I need from you, what every community in this 
country needs from you is action that will finally guarantee us 
an Office of Pipeline Safety that truly protects the safety of 
the citizens across the Nation, and that will include citizens 
and local and State governments as effective partners in the 
national oversight of pipeline safety.
    Our children are gone, and gone needlessly. We will not 
rest until Congress passes a bill that ensures pipelines are 
safe for all children and all communities across the Nation.
    I thank you for all that you are doing and all that you 
will do to help us reach our goal.
    The Chairman. Thank you very much.
    Mr. Brabec.
    Mr. Brabec. I am Bruce Brabec. I am Liam's stepfather, and 
I want to thank you for the opportunity to speak today. We 
believe that the loss of our children has made it necessary for 
our voices to be heard often in these discussions about 
improving pipeline safety, and I know we had an opportunity in 
Bellingham, and we appreciate this second opportunity to speak 
to the Committee.
    I think it is pretty clear that our families are here to 
tell you that stronger pipeline safety regulations are very 
necessary. The stakes are quite high. When things go wrong, 
they go very wrong, and what happened in our community and to 
our families is an example, a testament to how deadly and 
serious the consequences can be, and from what we have learned 
we know that the risks to our Nation have grown. This is not a 
problem that is just in Bellingham. It is not a problem that is 
just for the State of Washington, but it is at a national level 
that these risks have grown.
    We have learned that many pipelines were installed many, 
many years ago. Since then, communities have grown much larger, 
such that we have many aging pipelines in heavily populated 
areas. We do not have a situation with an accident waiting to 
happen any more. We have those accidents, and we have those 
tragedies.
    The current standards are inadequate, and the regulatory 
agency at the Office of Pipeline Safety has been ineffective. 
One example of this that we know is that just the poor record 
that OPS has in responding to the safety recommendations from 
the National Transportation Safety Board, and as our awareness 
of the issues has gone up our confidence in the regulations and 
our confidence in the job of OPS has gone down, and so it is 
real evident and clear that stronger regulation is needed.
    Many important changes are being considered by you. We are 
aware of the different proposals from the different bills, and 
also a lot of information that you have heard, or that you will 
hear today, as well as you have heard in individual meetings, 
and we believe that many changes, many of these changes you are 
hearing about are necessary.
    We especially have come to believe in the regional advisory 
councils, that they are needed. This is similar to those that 
were set up after the EXXON VALDEZ oil spill in Alaska, and 
this would partner industry, Government, and community in 
overseeing safety planning and compliance.
    Another thing that I know that we are very interested in 
seeing is the whistleblower protection, and in timely response 
and action by the Office of Pipeline Safety to NTSB 
recommendations, and we also believe that stronger fines and 
penalties are necessary. We do need to motivate the financial 
bottom line to become one of a safety bottom line.
    These are only a few of the many changes that are proposed 
in the bills and that we know you have heard about, and again I 
want to say these and many others are necessary to improve the 
safety and to help bring attention and solution to the problems 
before you that you have become aware of and that we have 
become aware of, so that more families do not have to join ours 
to come here to tell you about our losses and to push for safer 
standards.
    I wish that Liam could be here to speak with you. He cannot 
be, but he did leave us many messages. One that I would like to 
share with you, Liam was a fly fisherman, as you have heard, 
and this is one of his fly reels, and in a sense he left this 
with us unknowingly, but he left it as a message for those of 
us who know him. Particularly Marlene and I know that this 
represents the beautiful life of our son. He was a very avid 
fisherman from a very young age, and so it is something that 
really represents his joyfulness, his love of nature and the 
outdoors, and this kind of sound from a reel is a very familiar 
sound, and so we have this to kind of--to use as sort of--to 
help us with memories, but this sound is also a bittersweet 
one, because this is the reel that he was using when he was 
fishing on Whatcom Creek on June 10.
    This reel represents lots of things for us. When he 
collapsed into the water, he held onto his rod and reel, and 
they were held underwater and they did not get destroyed in the 
explosion, but the creek, did, as you have heard become really 
a creek of gasoline, and this reel was saturated with gasoline, 
and since a friend of ours has cleaned it and it has been 
sitting in the open air since then, too, but you can still 
smell the faint smell of gasoline on it.
    So for us, this is, like I said, a beautiful reminder of 
our son, but it is a chilling reminder of the way he died, and 
I think it sort of speaks to the importance of the issue for 
life, for nature, and that is the message from Liam.
    Sunday is Mother's Day. Liam and I have not been able to 
plan, which we enjoyed each year to do, how we are going to 
honor Marlene on that day. We have not been able to spend time 
thinking of what kind of gift we might give Marlene, and how we 
might surprise her with something really special that would 
convey the love and appreciation for her as a mother.
    She will not get another card written by Liam, which every 
one of them has been saved. She will not get another one that 
she can save long into the future. Mother's Day is really just 
going to be one more day for us. It is going to be another one 
of missing Liam and another one of missing the future that we 
should have had together.
    We cannot have Liam back, we know that, and we cannot have 
that future with Liam. What we want now to be able to do, 
though, is to make a difference so that other families do not 
have to feel this kind of loss that all three of our families 
are feeling.
    I want to thank you again for the opportunity and the 
attention to our testimony. We need you to make serious changes 
to improve pipeline transportation safety for Liam, for Steven, 
for Wade, and for a safer future for our families and all of 
our communities.
    Thank you.
    The Chairman. Thank you very much.
    Ms. Dalen.

          STATEMENT OF KATHERINE DALEN, BELLINGHAM, WA

    Ms. Dalen. Excuse me. I forgot that Sunday was Mother's 
Day.
    The Chairman. Can you move the mike a little closer so we 
can hear you?
    Ms. Dalen. Usually people do not have too much trouble 
hearing me. OK. I wish to thank the Honorable Members of the 
U.S. Senate Committee, to thank you and Senator Murray, Senator 
McCain, for asking me to speak again.
    As you may be aware, and this complicates the Mother's Day 
thing, too, I guess, 11 months ago today my son, Steven Travas 
died as a result of the burns suffered in the gas explosion at 
Whatcom Creek, where he was playing, an explosion and fire that 
claimed the lives of two other children. Because it was so 
close to my home it might well have claimed other members of my 
family, in fact, because the spill was over \1/4\ million 
gallons. It might have destroyed many more lives. It might well 
have destroyed the town of Bellingham. Unfortunately, though it 
sounds a bit extreme, it is not. The whole town of Bellingham, 
all of its residents were in jeopardy of losing their lives.
    Steven's death has changed my life and the lives of each of 
the members of my family. Missing him at every moment, thinking 
of him at every turn, and dreaming nightly of his tender 
involvement in our lives is a constant reminder of that 
horrible night of June 10 when we stood as a family at his 
bedside, gazed at his burned face, and watched him slowly die.
    The loss of his lust for life and our loss, the loss of his 
natural ability to make friends, his sweet song, his curious 
mind and quick humor sends waves of grief and longing through 
our very souls. It is upon occasion quite overwhelming. How 
precious life is. The value of those who live and love is well 
beyond any attempt to calculate. It is a blessing that some of 
us can learn how precious life is from the experiences of 
others while our own families can remain safely in our love, in 
our protection.
    It was shocking to us that our little one was killed while 
he played, but it is not upon reflection surprising that the 
accident happened. What adds to our frustration is the fact 
that his death was not only preventable, but predictable. It 
was an accident waiting to happen. It was an accident waiting 
to happen. It might have happened to anyone.
    So many of us are unaware of the dangers behind our homes 
and in our parks and schoolyards. Many, many of the people of 
this Nation seem to be unaware that the potential for such 
devastation runs through their backyards. There is not a State 
in this Union that does not have pipes actively engaged in 
transporting volatile fuels running for miles within its 
borders.
    I have heard recently that some folks in Spokane, 
Washington, are unaware of the pipes carrying volatile fuels 
that run through their beautiful town, by their children's 
schools, and through their yards. According to Senator Murray's 
statistics, since 1984 the industry that killed my son Liam and 
Wade has had 6,107 accidents, killing some 408 people. In Texas 
there have been 1,654 accidents, injuring 2,190 people, killing 
46, and causing nearly $138 million in property damage.
    In Washington State, the state I have lived in almost all 
of my life, there has been approximately $11 million of 
property damage and five deaths, and it might not be over.
    These are not acceptable statistics. Deaths are not 
acceptable liabilities. My child's death, the deaths of Liam 
Woods and Wade King are not acceptable. More must be done. 
Action must be taken now. We need no more lessons. The pipeline 
industry has not proven capable of regulating or watch-dogging 
itself. We must take responsibility. It is time to take charge 
of the safety and sanctity of our families, our homes, our 
communities, our lives.
    The corporate wolves must not be left in charge of the hen 
house. They do not have the right to profit at the cost of the 
lives of our children, at the cost of our environment, and in 
addition to the work you are already doing to change pipeline 
regulation, I ask that you implement a mandatory fine system 
and activate a citizens' advisory board both on a Federal level 
and on a regional level.
    I ask that you protect whistleblowers and demand that OPS 
reassess their priorities, reestablish citizen and 
congressional trust, and get the wolves out of the 
decisionmaking process. Let the death of my child and of Liam 
and of Wade leave a legacy to the children and parents of this 
Nation.
    The Chairman. Thank you very much.
    Senator Breaux.
    Senator Breaux. I just want to thank all the panel members 
who have given very eloquent testimony, and for their efforts 
in this regard. I think you all are to be commended, and we 
thank you for what you are doing. I know it is very difficult, 
but it can and will make a difference. Thank you.
    The Chairman. Senator Gorton.
    Senator Gorton. If I may, Mr. Chairman, I would like to ask 
Mark a question. Mark, you have had almost a year of dealing 
very first-hand, close and personal with this issue. What 
authority do you think ought to be granted to communities like 
yours, municipal corporations, and what authority do you think 
ought to be delegated to states in connection with pipeline 
safety? Would you feel more comfortable with a greater degree 
of authority with the State of Washington, for example, than 
you do with the present system?
    Mr. Asmundson. The answer to that is, Senator, I would feel 
more comfortable with a greater degree of authority for the 
State of Washington or other states that are qualified and 
interested in participating in maintaining the safety of our 
pipelines.
    If I could expand real briefly, I would say that while it 
is very important that we not have a balkanized patchwork 
system of regulation involving pipelines, it is important there 
be Federal consistency. These pipelines sometimes cross many, 
many states. There still can be a very meaningful partnership 
established between the Federal regulatory agency that gives a 
significant and consequential role to the states in the 
development of the pipeline integrity plans that are currently 
being proposed in the administration bill. I think that is a 
change that needs to be made, to give the states significant 
participation in the ultimate approval of the integrity program 
for individual pipelines.
    That was not a brief answer, I am sorry, but I guess I am 
saying yes, there is an important role for the states, but it 
can be accomplished without undermining the important 
interstate commerce needs of this transportation medium.
    Senator Gorton. Thank you, Mr. Chairman.
    The Chairman. Senator Hutchison.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Mr. Chairman. I, like 
everyone in this room, have been very touched by the testimony 
and your willingness to travel here to try to make sure that no 
parent will ever have to suffer what you have. That is a 
uniquely American trait, that those who suffer tragedy want to 
try to help others never have to feel that pain, and I do 
appreciate that.
    I think Chairman McCain's bill is a very good bill, a very 
good beginning to address this issue, and as the Chairman of 
the Subcommittee that deals with pipeline safety I do want to 
pass a bill this year that will improve federal oversight and 
the community's right to know where these pipelines are and 
what is going on.
    I think the mayor has made some very good points. We want 
to make sure that as we are strengthening the regulations, that 
we do not do something that would make the situation worse, and 
shutting down pipelines is not the answer, because I do not 
want more fuel transported on the freeways and on the train 
tracks, so we need to make our pipelines safe, and do the job 
that they are meant to do in order to enhance safety for 
everyone.
    So, Mr. Chairman, I think you have a very good bill. I will 
work with you, and let me just finish by saying that your 
Senators from Washington have both talked to me as the Chairman 
of the Subcommittee. They both have been so concerned about 
this issue, and I really appreciate their efforts in this 
regard. They are not just talking, they are actually doing 
something.
    Senator Gorton, as my designee, held a hearing in 
Washington that I think was very beneficial, trying to get the 
input from the community, and I think he did an excellent job 
of that, so I really want to say, I think we are all committed 
to doing something that will address many of your concerns, and 
I will stand ready to work with the Chairman and the two 
Washington Senators to make that become an accomplishment.
    Thank you, Mr. Chairman.
    The Chairman. Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman, and 
thank you to all of the family members who have worked so hard 
and traveled so far, and have given us all such compelling 
messages today that I think will be very helpful to this 
Committee as we move forward with the legislation, and we move 
it through Congress, and I personally want to thank you.
    And Mrs. King, I just want to thank you for writing that 
very compelling poem as well. As a mother, it really touched my 
heart. You talked about holding onto a hope, and I think that 
because you have held on to that hope, we are here today, and 
because you have held on to that hope we are closer to making 
pipelines safer, and so I do not want you to surrender that 
hope, because all of us are depending on you to keep that.
    So again, thank you to all of you for being here today.
    The Chairman. I also want to thank you for being here. We 
are deeply moved by the tragedy, and we renew our motivation to 
try to see legislation passed, so that we will never have a 
repetition of this hearing again.
    We thank you for being here. God bless.
    Our next panel will be the administration witnesses, the 
Hon. Kelley Coyner, Administrator, Research and Special 
Programs Administration, U.S. Department of Transportation, the 
Hon. Kenneth Mead, Inspector General of the U.S. Department of 
Transportation, and the Hon. John A. Hammerschmidt, a member of 
the National Transportation Safety Board. Please come forward.
    Ms. Coyner, we will begin with you. Thanks for appearing 
here today.

 STATEMENT OF HON. KELLEY COYNER, ADMINISTRATOR, RESEARCH AND 
      SPECIAL PROGRAMS ADMINISTRATION, U.S. DEPARTMENT OF 
                         TRANSPORTATION

    Ms. Coyner. Thank you, Chairman McCain, for holding today's 
hearing and for the opportunity to speak to the Committee today 
about this very important issue, pipeline safety. I am the 
Administrator of the Research and Special Programs 
Administration which oversees the Federal pipeline safety 
program. I would like to summarize my statement and submit the 
full statement for the record, if I may.
    The Chairman. Without objection.
    Ms. Coyner. Our mission is to ensure the safe, reliable, 
and environmentally sound operation of the Nation's pipeline 
transportation system. We strive to protect people and the 
environment from threats posed by pipelines. The tragic deaths 
of three young people in Washington State last June reminded 
each of us that we must be vigilant in our work to improve 
pipeline safety.
    Since the 1996 reauthorization of the pipeline safety 
program we have continued to address the leading causes of 
pipeline failure, and to work to reduce the impact of pipeline 
ruptures if they occur. The four leading causes of pipeline 
failure are outside force damage, corrosion, human error, and 
material defects. We are taking aim at each of these challenges 
within the program and are addressing them in the 
administration's Pipeline Safety Communication Protection Act 
of 2000.
    Outside force damage poses the foremost threat to pipeline 
integrity and, more importantly, to people. We have compiled 
and shared information about the best ways to protect pipeline 
from outside force damage, conducted public education 
campaigns, as well as beginning to implement a new grant 
program to address this area. We have made progress. Accidents 
by outside force damage are decreasing.
    The second leading cause of pipeline failure is corrosion. 
This summer, we will issue new state-of-the-art standards for 
preventing and detecting corrosion. Our research efforts will 
work to develop more sophisticated tools to detect corrosion 
problems.
    Another leading cause of pipeline failure is human error. 
Our operator qualification rule issued last fall requires 
pipeline operators to ensure safety workers are trained and 
tested to ensure that they are capable not only of handling 
their usual job but emergency conditions, as well. We are also 
addressing operator fatigue as another potential factor in 
pipeline accidents.
    The fourth leading cause of pipeline failure is material 
defects. To address this, RSPA leads an interagency work group 
on performance and safety of plastic pipe. In addition, the 
administration's proposal provides research and development 
initiatives that will help improve tools that detect material 
defects in pipes.
    The administration's legislative proposal, the Pipeline 
Safety and Community Protection Act of 2000, reflects what we 
know is needed for pipeline safety. First, comprehensive, 
integrated periodic testing and measures to address the 
problems detected by such testing, second, a strong community 
right to know, third, a strong State role in the oversight of 
pipelines, and fourth, research and development for better 
monitoring and detection tools. Finally, fifth, stronger 
enforcement tools.
    The administration's proposal would mandate the completion 
of a rulemaking on integrity testing. We recently proposed the 
first in a series of rules requiring operators of hazardous 
liquid lines to establish comprehensive testing programs to 
maintain the safety of their pipelines. This approach would 
require internal inspections, pressure testing, or other best 
achievable technology to be performed on a periodic basis. It 
would also require the placement of appropriate valves and 
other safety protection devices as necessary, based on the 
testing results.
    We believe communities have a right to know about 
pipelines, their safety records, and what is being done to 
prevent pipeline failures. We propose to make it easier for 
residents, businesses, and Government officials to get 
information about pipelines. Pipeline incident reports and 
safety related condition reports would be made available to the 
public. Maps, pipeline safety programs, and other information 
would be made available to State and local emergency response 
authorities and local officials.
    Mr. Chairman, we have a long history of working with States 
to protect pipeline safety. Our proposal would expand the State 
role and increase the authorization and funding of State 
efforts. States could enter into agreements with the Department 
to participate in the oversight of interstate liquid lines. 
States would be reimbursed up to 100 percent for costs to 
monitor new pipeline construction and investigate incidents. 
States could also participate with us in standard inspections.
    Improving the data we have about pipelines is key to 
preventing pipeline failures. The administration proposal 
provides for the creation of a national repository of 
information about precursors of pipeline failures. The proposal 
also reduces the reporting requirement for hazardous liquid 
pipeline releases to 5 gallons.
    There are some who will disregard strong safety efforts and 
violate the law. The administration's proposal would strengthen 
enforcement provisions not only of the Federal Government, but 
also for citizens to ensure the pipeline operators follow safe 
practices. The proposal also provides for criminal sanctions 
against those who willfully cause third party damage to 
pipelines.
    The administration's proposal gives us the tools we need to 
be responsive to recommendations issued by the Department's 
Inspector General and by the National Transportation Safety 
Board. We must remain vigilant in our work to protect the 
American people and our environment by working together to 
pursue the key safety initiatives and by securing the necessary 
resources and funds so that we can improve safety and make a 
difference.
    The pipeline explosion in Bellingham last year took the 
lives of three young people, forever changing that small 
community. Secretary Slater and I are committed to working with 
you and other members of the Committee and the Senate to enact 
pipeline safety legislation as soon as possible. We will work 
with you to ensure that this kind of tragedy does not happen 
again.
    [The prepared statement of Ms. Coyner follows:]

 Prepared Statement of Hon. Kelley Coyner, Administrator, Research and 
   Special Programs Administration, U.S. Department of Transportation

    Thank you Chairman McCain and Senator Hollings for holding today's 
hearing and for the opportunity to speak to the Committee today about 
this very important issue--pipeline safety. My name is Kelley Coyner 
and I am the Administrator of the Research and Special Programs 
Administration (RSPA).
    Within the Research and Special Programs Administration (RSPA), the 
Office of Pipeline Safety (OPS) is charged with regulating the safe and 
environmentally sound operation of the Nation's natural gas and 
hazardous liquid pipeline systems. Pipelines transport natural gas to 
60 million residential and commercial customers. They also transport 60 
percent of the crude oil and petroleum products that fuel our industry, 
our economy and our households. We have responsibility for over 2 
million miles of pipelines involving approximately 2,400 operators, a 
number that has grown 10% since February 1997. Our regulations cover 
the design, construction, inspection, testing, operation, and 
maintenance of pipeline systems. We achieve compliance with our 
regulations through a partnership with state agencies, which assume 
regulatory and enforcement functions primarily as they apply to 
intrastate pipeline transportation, while the Federal government 
assumes these responsibilities for interstate pipelines.
    Our mission is to ensure the safe, reliable, and environmentally 
sound operation of the Nation's pipeline transportation system. 
Consistent with the Department's Strategic Plan, we strive to eliminate 
pipeline-related deaths, injuries, and property damage, and reduce 
pollution to the environment. This year we set a new goal of reducing 
pipeline incidents caused by outside force damage by 25 percent over 
the next three years, five times higher than our previous goal. Other 
top priorities are reducing to zero the incidents caused by non-
compliance with pipeline regulations and working with operators to 
reduce threats to pipeline integrity.
    Over the past 30 years, there has been a steady decline in the 
overall number of pipeline incidents. While the rate of decline has 
slowed in the past decade, it remains moving in the right direction. 
Also on the decline is the number of oil pipeline spills to water. This 
is important because when pipelines spill into water, the results can 
be far-reaching, long-term, and significant. Of greater concern is the 
increasing number of fatalities--most, but not all, of which occur in 
gas distribution systems. The tragic consequences of the pipeline 
incidents in St. Cloud and Bellingham--to name only two--underscore the 
need for unremitting attention to the potential impact of pipeline 
transportation on people's lives. We are committed to improving the 
pipeline safety and environmental record.
    Since the reauthorization of the pipeline safety program in 1996, 
we have continued to work to address the leading causes of pipeline 
failure and to reduce the impact of pipeline ruptures. Sadly, as the 
tragic deaths of three young people in Washington State reminded us 
last June, our work is far from done. Today I will describe the 
progress that has been made in tackling the key threats to pipeline 
safety in the United States and will outline the key issues that should 
be addressed in the reauthorization of the pipeline safety program.
    The four leading causes of pipeline failure are (1) outside force 
damage, (2) corrosion, (3) human error, and (4) material defects. The 
Department of Transportation's Office of Pipeline Safety has taken aim 
at each of these challenges, which are addressed by the 
Administration's proposed Pipeline Safety and Community Protection Act 
of 2000.

Damage Prevention
    The foremost threat posed by pipelines to safe and livable 
communities is incidents relating to outside force damage. Outside-
force damage, including the failure to fix previously caused outside 
force damage, is the number one cause of pipeline incidents, accounting 
for half of those that result in fatalities. This kind of damage can be 
caused by excavation near pipelines and by natural forces such as 
flooding, mudslides, lightning, and heavy rains.
    In 1999, Secretary Slater set a goal of eliminating 25% of 
excavation-related incidents over the next three years, and the 
Department will continue to provide strong Federal leadership to 
achieve this goal. We have seen some progress. In 1991, the Department 
received 202 reports of incidents caused by outside-force damage. By 
1999, that number had declined to 117, or 42% of the earlier level. 
This progress is encouraging, but more work remains because the 
consequences of even a single incident can be so severe.
    One of the Department's key damage prevention efforts is Dig 
Safely--a national public education campaign that Secretary Slater 
announced in June 1999. Our state partners in this campaign indicate 
that they are beginning to observe a decline in excavation-related 
damage.
    In another damage prevention effort, the Office of Pipeline Safety 
convened 160 stakeholders from all areas of the excavation and 
underground facility communities and from state and local government. 
The result of this effort is Common Ground, a compendium of best 
practices in one-call systems and damage prevention programs throughout 
the country. We are implementing a new grant program to assist 
communities in reducing damage to underground facilities by 
implementing these best practices.
    The Administration's legislative proposal provides for integrated 
testing to identify and locate damage to pipelines more quickly and 
efficiently. The proposal provides for research and development 
partnerships among government, industry, and academia to accelerate the 
introduction of new tools to avoid damage to these vital underground 
structures. The proposal also strengthens the Department's and 
citizens' authority to take enforcement action against those who ignore 
pipeline safety regulations and cause damage to pipelines.

Corrosion Detection and Prevention
    The second leading cause of pipeline failure is operator's failure 
to address corrosion problems at their facilities. We have made some 
progress on preventing corrosion through the adoption of improved 
inspection technologies such as ``smart pigs,'' the sensing devices 
that travel inside a pipeline and detect damage. While statistical 
analyses indicate the rate of incidents may be beginning to decline, we 
think that we can further improve our corrosion control standards.
    We are currently working with the National Transportation Safety 
Board and state agencies to develop new standards for corrosion 
prevention, control, and detection. We expect to issue a proposed 
rulemaking for liquid pipelines by the end of this year and for natural 
gas pipelines next year. The integrated testing provision in the 
Administration's proposal would require operators to identify corrosion 
faster and more efficiently, and the research provision would enhance 
technology for corrosion prevention and detection.

Human Error
    Another leading cause of pipeline failure is human error. Human 
error is different from excavation-related damage, which can be caused 
when someone strikes a pipeline while digging. Human error refers to 
pipeline failures caused by lack of appropriate operator training, 
operator fatigue, and similar factors that can cause an operator to 
perform inadequately or inappropriately on the job.
    Our operator qualification rule, issued last fall, requires 
pipeline operators to develop and maintain a written qualification 
program to assess the ability of each worker. While this rule goes far 
in addressing some causes of human error, we also are looking at 
operator fatigue as another potential factor in pipeline incidents. 
RSPA is actively involved in a DOT-wide initiative addressing the issue 
of operator fatigue to increase safety across transportation modes, 
including pipelines.

Material Defects
    The fourth leading cause of pipeline failure is material defects. 
Such defects include faults in pipe material, manufacturing processes 
that cause defects, and welding technology that contributes to pipeline 
failures. The use of plastic pipe is increasing, and there is a need to 
collect information about the performance and reliability of plastic 
pipe. To address that need, RSPA is leading an interagency workgroup 
comprised of state, federal and industry partners that is investigating 
the development and application of advanced materials, including pipe 
strength and the long-term performance of plastic pipe. This workgroup 
will develop a database of all types of plastic pipe failures to detect 
trends with particular types of plastic pipe or pipe fittings.
    The Administration bill provides for research and development 
partnerships that will help improve the tools that detect material 
defects in pipes.

Legislative Proposal
    While I plan to spend the balance of my time discussing the 
Administration's proposal, I want to acknowledge the other proposals 
before the Committee and express the Administration's interest in 
working with the Committee, other Members of Congress, and other 
stakeholders to enact pipeline safety legislation this year.
    As you know, in January, Senator Murray introduced S. 2004, the 
``Pipeline Safety Act of 2000.'' In April, Senator Hollings introduced 
the Administration's proposal by request, S. 2409, ``The Pipeline 
Safety and Community Protection Act of 2000.'' Also in April, Chairman 
McCain introduced S. 2438, the ``King and Tsiorvas Pipeline Safety 
Improvement Act of 2000.'' What is most striking about the three bills 
is the degree to which they agree on fundamental principles. For 
example, all three bills reflect a desire to improve the public's right 
to know about pipeline activities in their communities. Similarly, all 
three bills address a need to improve the integrity of pipelines and to 
strengthen the tools available for enforcement of pipeline safety 
standards. This is not to say that there are no differences among the 
bills. Nevertheless, most of the differences among the three bills are 
in the approach, rather than in the specifics of the goal. With that in 
mind, I would like to explain the approaches taken in the 
Administration's bill.

Pipeline Safety and Community Protection Act of 2000 (S. 2409)
    On April 11, Vice President Gore announced the Pipeline Safety and 
Community Protection Act of 2000. This proposal reflects the lessons we 
have learned in pipeline safety and includes provisions on integrated 
testing, community right to know, partnerships with states, research 
and technology for better monitoring tools, and stronger enforcement. 
The proposal reflects several key principles:

   Integrated Testing--Successful pipeline protection must be 
        based on an integrated, comprehensive use of information 
        available to operators and regulators.

   Community Right to Know--Communities have a right to know an 
        operator's safety record and what operators and government are 
        doing to protect them from pipeline incidents.

   State Partnerships--State governments have a key role to 
        play in the safety of pipelines.

   Research and Development for Better Monitoring Tools--We 
        need to improve and create innovative inspection and monitoring 
        tools to identify defects more quickly and efficiently.

   Stronger Enforcement--The existing enforcement provisions 
        need to be updated to provide stronger sanctions for violations 
        by operators and those who cause third-party damage to 
        pipelines.

Integrated Testing
    We recognize the need for a comprehensive safety program that will 
enable operators to assess and address all threats to pipelines. We 
recently proposed a rule to require operators of hazardous liquid 
pipelines to establish comprehensive programs to assess the condition 
of their pipelines and to use all available information--including the 
results of these assessments--to develop and carry out actions to 
maintain the safety of their pipelines. The proposed rule would require 
operators to integrate results of the testing with other information 
about risks that might impact the safety of their pipelines to more 
accurately identify areas where safety may be at risk.
    This is a comprehensive approach to safety and testing that would 
require internal inspections, pressure testing, or other best-
achievable technology to be performed on a periodic basis. The proposed 
rule clearly defines the criteria for analyzing the inspection or 
testing and would require specific measures for preventing and managing 
the consequences of pipeline failures.
    The Administration's proposal mandates the completion of the 
integrated testing rulemaking. Under the proposal, we would quickly 
require large operators of hazardous liquid pipelines to provide 
additional protection in populated or unusually environmentally 
sensitive areas. The proposal would also require us to extend the rule 
within two years to small liquid operators and natural gas transmission 
lines. Within three years, we would be required to decide whether we 
should extend the regulations to other areas.

Community Right to Know
    The Administration's proposal would make it easier for residents, 
businesses, and government officials to get information about pipelines 
in their communities. Pipeline operators would have an affirmative duty 
to carry out a continuing program of public education. Pipeline 
incident reports and safety-related condition reports would be made 
available to the public, and additional information such as maps and 
pipeline safety programs, would be made available to state and local 
emergency response authorities. Descriptions of the actions pipeline 
operators are taking to ensure pipeline safety also would be provided 
to local officials.

State Partnerships
    We have a long history of working with states to protect pipeline 
safety, and the Administration's proposal would extend our partnership 
with states and authorize increased federal grants to support state 
safety efforts. The Office of Pipeline Safety and state agencies have 
collaborated on initiatives such as the Risk Management Demonstration 
Program, the National Pipeline Mapping System, and many of our damage 
prevention efforts. With their support, OPS continues to add state 
repositories to the National Pipeline Mapping System, make progress on 
the development of the risk-based approaches to pipeline safety, and 
remove barriers to state action on damage prevention. Each year, OPS 
and state partners hold national and regional meetings to promote 
information exchange on pipeline technology, inspection techniques, 
operational problems, significant incidents, and innovative approaches 
for strengthening the pipeline safety program. RSPA's 2001 budget 
requests a 30% increase in funding for state programs.
    The legislative proposal would take the states' regulatory role 
even further--states could enter into agreements with the Department to 
participate in oversight of interstate pipelines. The Department would 
be authorized to reimburse up to 100 percent of a state's costs in 
monitoring new pipeline construction or investigating incidents. All 
states will be encouraged to be active in damage prevention, local 
preparedness and community right-to-know activities. This is a balanced 
approach that addresses states' concerns about participating in the 
oversight of interstate pipelines, without abdicating federal 
responsibility for the interstate transportation of energy products.

Data Improvement
    This proposal also will improve data on pipeline safety. The 
proposal calls for the creation of a national depository to collect 
information about the precursors of pipeline failures. This data is 
vital to ensure we are all focused on the right issues--and that we can 
measure our progress in addressing those issues. Additionally, the 
proposal reduces the threshold requirement for reporting hazardous 
liquid pipeline releases. Current regulations require operators of 
hazardous liquid pipelines to report any release greater than 2,100 
gallons. Under the proposal, operators of hazardous liquid pipelines 
would be required to report any release greater than five gallons.

Research and Development for Better Monitoring Tools
    The proposal calls for better and more innovative inspection and 
monitoring technologies. Internal inspection technology has improved, 
but still more improvement is needed. The bill calls for continued 
support for research partnerships with government, industry, and 
academia so that together, we can leverage our resources and our 
ability to develop innovative inspection tools and monitoring 
technologies. With better monitoring tools, we can better prevent and 
detect pipeline failures and protect lives and the environment.

Stronger Enforcement
    Finally, the Administration proposal would strengthen both the 
Department's and citizens' enforcement authority by providing the 
pipeline regulatory program with the enforcement tools available to 
other public health and environmental statutes. The proposal 
strengthens the ability of citizens and local communities most directly 
affected by pipelines to seek penalties for violations of federal law 
in a judicial enforcement action. In addition, the proposal enables the 
Department to seek criminal sanction against the most egregious 
violators, including third party operators that damage pipelines.

Conclusion
    The pipeline explosion that occurred in Washington State last year 
took the lives of three young people and forever changed the community 
of Bellingham. It is my hope that, working together, final 
legislation--influenced by important lessons learned from that tragic 
event--will be enacted as soon as possible.

    The Chairman. Thank you. Mr. Mead.

  STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Yes, sir. Thank you, Mr. Chairman. After 
listening to the families, I feel obliged to say that I think 
the Committee's leadership on this issue, as well as Senator 
Murray's and the families' is very important. The families have 
gone through a terrible tragedy, and yet they are providing 
leadership on what I believe is a very important national 
issue.
    I also want to express our appreciation to Administrator 
Coyner for being responsive during the course of our work. I 
have five points, Mr. Chairman. I will be brief. First, RSPA's 
action toward completing pipeline-safety mandates is at least 5 
years behind congressional completion dates. The 1992 Pipeline 
Safety Act established mandates to increase pipeline safety, 
especially in sensitive areas where a pipeline rupture would be 
the most dangerous--such as densely populated areas, critical 
habitats, public drinking water supplies, areas such as that.
    Instead of new safety regulations, our review found delays: 
delays in defining sensitive areas, delays in preparing maps 
showing location of pipelines, and delays in the issuance of 
standards for pipeline inspections.
    Last month, a notice of proposed rulemaking was issued. 
That is 5 years after the statutory due date. The proposed 
rule, though, only applies to hazardous-liquid pipeline 
operators. It gives them another 7 years to fully comply, which 
is too long in our opinion. Then they get 10 more years before 
a reinspection is required.
    The proposed rule does not address at all inspections for 
over 300,000 miles of natural-gas transmission pipelines. We 
understand proposed rules covering that area will come out 
sometime this year or early next.
    Second, RSPA has completed some very good research on 
expanding the capabilities of internal inspection devices, 
called ``smart pigs.'' A smart pig looks like a torpedo. It 
travels inside a pipeline searching for corrosion, mechanical 
damage, and metal loss.
    Roughly 90 percent of hazardous-liquid pipelines have a 
configuration that can accommodate smart pigs, but there is a 
need to make these pigs even smarter. The current technology 
has limitations in detecting stress-corrosion cracks, seam well 
deficiencies, and longitudinal mechanical damage.
    RSPA also needs to look to technology to inspect pipelines 
that cannot accommodate smart pigs due to the pipeline 
configuration. While most hazardous-liquid pipelines can use 
smart pigs, we found that, incredibly, RSPA does not have 
estimates of natural-gas pipelines that can be pigged. That is 
important because natural-gas transmission pipelines account 
for nearly 300,000 miles of pipeline, which is the majority, so 
it is important that the Office of Pipeline Safety find out how 
many miles of these pipelines can be pigged. One of the largest 
natural-gas pipeline companies told us only about 15 percent of 
their pipeline could accommodate pigs.
    The most widely used method for inspecting these 
pipelines--subjecting the pipe to high pressure--is called 
hydrostatic testing. You have heard about it before today. 
While there are benefits from that type of testing, Mr. 
Chairman, you should know that that type of testing can harm or 
weaken a pipe, and it does not determine the extent or severity 
of defects. That is why research into smart pigs is needed, and 
if a pipe cannot accommodate a smart pig, some alternative 
effective technique should be used.
    Third, Ms. Coyner mentioned accident data. The current 
accident data are inaccurate too often and do not provide 
adequate information. Let me give just a couple of examples. 
RSPA data show that ``Other'' was the leading cause of 
accidents 37 percent of the time for hazardous-liquid pipelines 
in 1999. That was an increase from 29 percent, for the prior 
year during which ``Other'' was again the leading cause of 
accidents.
    These numbers are going in the wrong direction, leaving 
RSPA with increasingly nonspecific data.
    We also found that 9 of 44 accidents in 1998 were 
incorrectly reported as caused by ``Other,'' when in fact they 
were actually caused by outside force damage.
    Finally, on the data point, accident reports for natural-
gas transmission lines have only four causal categories to 
report the cause of the accident. Three are specific, and the 
fourth is for ``Other,'' so natural-gas operators put into the 
``Other'' category things like incorrect operation by operator 
personnel, or failed weld. I believe those categories need to 
be tightened up, and they can be tightened up soon.
    Fourth, pipeline inspectors and industry pipeline operators 
need more specialized training. RSPA's training program does 
not provide safety inspectors with state-of-the-art skills and 
expertise in either how to use pigs or interpret the results of 
pig inspections. This places RSPA in a position of having to 
rely on a report generated by the pipeline operator or the 
smart-pig vendor. That is not acceptable for an independent 
oversight organization. It is like having an FAA inspector who 
is qualified to inspect Piper Cubs inspect a 777. I think that 
needs to change.
    Finally, several of the reauthorization bills seek to 
expand the State's role in the inspection of interstate 
pipelines. We believe there should be considerably greater, not 
less, State involvement in the inspection of these pipelines. 
There is precedent for this, not just in the pipeline area but 
also in the motor-carrier area, where Congress just enacted 
legislation. However, we do recognize a major distinction 
between a much greater role for the states in pipeline 
inspections and giving the states discretion or license to 
establish rules for pipeline safety.
    Different safety rules from state to state for interstate 
pipelines could themselves cause problems, however well-
intentioned they might be. Frankly, I think this issue of the 
states setting their own protocols for pipeline safety has 
probably been fueled by the delays in implementing the laws 
which you established in 1992, as well as the delays in 
implementing NTSB safety recommendations.
    That concludes my statement.
    [The prepared statement of Mr. Mead follows:]

    Prepared Statement of Hon. Kenneth M. Mead, Inspector General, 
                   U.S. Department of Transportation
Mr. Chairman and Members of the Committee:

    We appreciate the opportunity to be here today to discuss the 
reauthorization of the Department of Transportation's pipeline safety 
program.
    The nation's pipeline infrastructure includes roughly 2.2 million 
miles of pipe, including 156,000 miles of hazardous liquid transmission 
pipelines, 325,000 miles of natural gas transmission pipelines, and 1.7 
million miles of natural gas distribution pipelines. These pipelines 
carry vast quantities of natural gas, petroleum products, and other 
materials to fuel our commercial and consumer demands. Pipelines are a 
relatively safe way to transport energy resources and other products, 
but they are subject to forces of nature, human actions and material 
defects that can cause potentially catastrophic accidents.
    Following the deadly pipeline explosion and fire in Bellingham, 
Washington in June 1999, Senator Patty Murray requested the Office of 
Inspector General to review the Research and Special Programs 
Administration's (RSPA) Office of Pipeline Safety (OPS). Our March 2000 
audit report identified needed improvements in OPS's oversight of the 
Nation's pipeline infrastructure. My testimony today will address four 
issues:

   RSPA has not implemented Congressional safety mandates 
        related to defining environmentally sensitive and high-density 
        population areas, identifying pipelines in these areas, or 
        requiring increased pipeline inspections. Critical safeguards 
        required by Congress for hazardous liquid and natural gas 
        pipelines are at least 5 years overdue and could take as long 
        as 7 additional years for just large hazardous liquid pipeline 
        operators to complete these inspections.

   Pipeline safety research and development must be expanded to 
        improve the capabilities of internal inspection devices--
        referred to as ``smart pigs.'' Previous OPS research has 
        concluded that smart pigs can detect certain defects in a 
        pipeline before failures occur, but they have limited 
        capabilities to pinpoint stress corrosion cracks, longitudinal 
        mechanical damage, and defects in seam welds and pipe 
        materials.
          OPS also must expand research to develop new inspection 
        technologies for pipelines that cannot accommodate a smart pig. 
        Roughly 11 percent of all hazardous liquid pipelines cannot 
        accommodate the use of smart pigs and OPS lacks statistical 
        data on the miles of natural gas pipelines that can accommodate 
        a smart pig. For those pipelines that cannot accommodate a 
        smart pig, operators must rely on visual inspections and 
        hydrostatic pressure testing to check the condition of the 
        pipe. However, visual inspections can only look for evidence of 
        leaks at the surface, and hydrostatic tests stress the pipe 
        material and can cause microfractures or crack defects harmful 
        to the pipe.

   Pipeline accident data collection improvements are needed to 
        enable OPS to focus its resources on the most important safety 
        issues and to measure safety program performance. We found that 
        pipeline operators are incorrectly using the ``Other'' causal 
        category to report the causes of accidents. In fact, the 
        leading reported cause of hazardous liquid accidents for 1999 
        was ``Other.'' In the case of natural gas accidents, we found 
        ``Other'' was being used to describe accidents caused by 
        incorrect operation by pipeline personnel, equipment 
        malfunctions, or failed pipes and welds because these causes 
        are not included on the accident form. OPS should modify its 
        accident report forms to include additional categories 
        identifying the causes of pipeline accidents and thereby reduce 
        the use of the ``Other'' category.

   Pipeline inspectors are not adequately trained on either the 
        use of high-tech instruments or the interpretation of test 
        results. Incorrect operator decisions contributed to 16 
        hazardous liquid pipeline accidents in 1999. Specialized 
        training is essential for pipeline inspectors to make more 
        comprehensive safety assessments and to ensure pipeline 
        operators are qualified to do their job, thereby reducing the 
        probability and consequences of serious accidents.

    First, RSPA has Yet to Implement 1992 Congressional Safety 
Mandates. In 1992, Congress established mandates intended to increase 
pipeline safety by requiring pipeline operators to conduct increased 
inspections in areas where consequences of a pipeline rupture would be 
most severe. RSPA's actions toward completing the mandates are at least 
5 years behind the Congressional completion dates.
    Congress mandated that OPS define the criteria to identify high-
density population areas for natural gas and hazardous liquid pipelines 
and environmentally sensitive areas for hazardous liquid pipelines, and 
to develop an inventory of pipelines in these areas by October 1994. 
The definition for an environmentally sensitive area has not been 
established, and until it is, OPS cannot develop an inventory of 
pipelines located in these areas. The 1992 Act also established a 1995 
deadline for the Secretary to prescribe standards for periodic pipeline 
inspections and the use of smart pigs, or an equally effective 
alternative method.\1\ Although smart pigs can detect certain types of 
defects in a pipeline before it fails, OPS has not established 
requirements for the Congressionally mandated increased inspections 
including the use of smart pigs.
---------------------------------------------------------------------------
    \1\ The Accountable Pipeline and Safety Act of 1996 (Public Law 
104-304) amended the Pipeline Safety Act of 1992 by removing the 
requirement for periodic inspection standards and giving the Secretary 
the discretion to determine if mandatory periodic inspections are 
necessary.
---------------------------------------------------------------------------
    A Notice of Proposed Rulemaking published in April 2000 addressed 
periodic pipeline inspection standards (using either a smart pig or an 
equally effective method), but only for large hazardous liquid pipeline 
operators.\2\ The proposed rulemaking requires operators to complete 
baseline inspections to determine the existing condition of their 
pipelines within at least 7 years of the effective date of the final 
rule. OPS plans to issue the final rule by September 2000, allowing 
operators until 2007 to complete baseline assessments. This timeframe 
is too long. The American Petroleum Institute stated earlier this year 
that 95 to 98 percent of the mileage of large hazardous liquid 
pipelines operators can currently accommodate a smart pig to perform 
the baseline inspection. Furthermore, the 10-year timeframe for 
subsequent pipeline re-inspections to determine deterioration is also 
too long. OPS does not address natural gas pipelines in its current 
rulemaking. OPS needs to aggressively pursue the development of 
regulations for increased inspections on these pipelines in high-
density urban areas.
---------------------------------------------------------------------------
    \2\ Large hazardous liquid pipeline operators are defined in the 
Proposed Rulemaking as operators of pipelines of 500 miles or more.
---------------------------------------------------------------------------
    Second, Enhancements are Needed in Pipeline Safety Research and 
Development. Pipeline operators need advanced technologies to locate 
defects and monitor pipelines before a failure occurs. Early detection 
of serious defects in a pipeline reduces the risk of catastrophic 
accidents. RSPA's current pipeline research and development (R&D) 
program has resulted in improved defect detection by internal 
inspection devices. However, RSPA's research and development program 
now needs additional emphasis in three areas:

   Improving the capabilities of smart pigs to detect pipe 
        defects such as stress corrosion cracks and seam weld 
        deficiencies or irregularities,

   Enhancing technologies to detect the severity of pipeline 
        corrosion, and

   Developing inspection and monitoring technologies for 
        pipelines that cannot accommodate smart pigs. Roughly 11 
        percent of all hazardous liquid pipelines (2 to 5 percent of 
        the large ones) cannot be `pigged', but OPS does not know what 
        percentage of natural gas transmission pipelines cannot 
        accommodate a smart pig.

    We note Congress' strong support in the reauthorization bills for 
expanding research and development programs on inspection technologies. 
We support its efforts to advance pipeline technologies that will 
enhance pipeline safety.
    Third, the Collection of Pipeline Accident Data Needs Improvement. 
OPS must have accurate accident data to focus its inspection and 
research resources and to measure safety program performance. In order 
to do this, accident reports should use precise categories that 
identify the causes of pipeline accidents. OPS accident forms currently 
use up to seven categories including ``Other'' to summarize the cause 
of an accident. Data for hazardous liquid accidents list ``Other'' as 
the leading cause of accidents. This category increased from 29 percent 
in 1998 to 37 percent in 1999. However, because there are only 3 
specific causal categories on the natural gas accident form, operators 
of natural gas transmission lines use the ``Other'' category to report 
such causes as ``Incorrect Operation by Operator Personnel'' and 
``Failed Weld.''
    OPS should expand accident categories to encompass the most 
frequent accident causes now being grouped together as ``Other.'' One 
of RSPA's goals is to reduce ``Outside Force Damage'' accidents by 25 
percent over the next 3 years. However, with the category ``Other'' 
being used so often, RSPA cannot accurately measure how well it is 
doing. For example, our examination of hazardous liquid accident 
reports found 9 of 44 hazardous liquid pipeline accidents in 1998 were 
incorrectly categorized as caused by ``Other'' when they should have 
been classified as ``Outside Force Damage.'' The limitations of the 
current accident reporting were recognized in both a 1998 National 
Transportation Safety Board (NTSB) report and 1999 American Petroleum 
Institute report that recommended accident reporting be revised to 
request more comprehensive data.
    Last, Specialized Training is Needed for Pipeline Inspectors and 
Operators. Pipeline inspectors are not trained on either the use of 
current state-of-the-art technology or the expertise in smart pig data 
analysis. The data obtained from smart pig inspections are an important 
indication of a pipeline's condition. In addition, incorrect operator 
decisions contributed to hazardous liquid pipeline accidents. 
Specialized training is essential for pipeline inspectors to make more 
comprehensive safety assessments and to ensure pipeline operators are 
qualified to do their jobs, thereby reducing the probability and 
consequences of serious accidents.
    Our review of the OPS inspector training curriculum noted its lack 
of training on smart pig technology and how to interpret smart pig 
data. Since the use of smart pig technology is expected to grow, we 
recommend OPS inspectors be trained to interpret results from smart pig 
inspections. The OPS inspector would then possess the knowledge to 
independently assess a pipeline's condition and could quickly make 
safety improvement recommendations, rather than wait for 
interpretational reports as they currently do.
    Better pipeline operator qualifications can also improve safety. 
Incorrect operator decisions contributed to 16 hazardous liquid 
pipeline accidents in 1999. We support reauthorization provisions 
requiring operators to submit their training plans to the Secretary for 
approval. This issue warrants close monitoring to assure the process 
does not focus on the paper record without assurance that the 
individuals have the necessary knowledge and skills. We also agree with 
provisions for periodic retraining and reexamination of pipeline 
personnel.

                               Background

    The pipeline infrastructure of the United States consists of 
roughly 2.2 million miles of pipe including 156,000 miles of hazardous 
liquid transmission pipelines, 325,000 miles of natural gas 
transmission pipelines, and 1.7 million miles of natural gas 
distribution pipelines. Each year these pipelines transport 617 billion 
ton-miles of oil and oil products and over 20 trillion cubic feet of 
natural gas. Pipelines are a relatively safe way to transport energy 
resources and other products, but they are subject to forces of nature, 
human actions and material defects that can cause potentially 
catastrophic accidents. Although the number of natural gas and 
hazardous liquid transmission pipeline accidents was relatively 
constant from 1995 through 1997, natural gas accidents increased by 25 
in 1998, and then dropped by 45 in 1999.\3\ Conversely, hazardous 
liquid accidents decreased by 22 in 1998 and remained relatively 
constant in 1999 (as shown in Figure 1).
---------------------------------------------------------------------------
    \3\ The accident reporting criteria were changed in mid-1994 for 
hazardous liquid pipelines. Previously, operators were required to 
submit an accident report if property damage exceeded $5,000. OPS 
raised the threshold to property damage exceeding $50,000.
---------------------------------------------------------------------------

                                Figure 1
                    Transmission Pipeline Accidents




    The Office of Pipeline Safety administers the Department's national 
regulatory program to assure the safe operation of the Nation's 
transmission pipelines. OPS develops regulations on risk management, 
design safety, construction, testing, operations, maintenance, and 
emergency response of pipeline facilities.

                   Outstanding Congressional Mandates

    RSPA has Yet to Implement 1992 Congressional Safety Mandates. In 
1992, Congress established mandates intended to increase pipeline 
safety by requiring pipeline operators to conduct increased inspections 
in areas where consequences of a pipeline rupture would be most severe. 
These mandates were to establish criteria identifying high-density 
population and environmentally sensitive areas, inventory pipelines in 
these areas, and prescribe regulations for increased inspections on 
these pipelines, including the use of internal inspection devices. 
RSPA's proposed completion dates for some of the mandates are at least 
5 years behind the Congressional completion dates. The following table 
depicts the Congressional mandates and their deadlines.
       OPS Has Not Implemented Congressionally Mandated Standards

----------------------------------------------------------------------------------------------------------------
     Congressional Deadline                    October 1994                            October 1995
----------------------------------------------------------------------------------------------------------------
Natural Gas                        Establish criteria to
Pipelines                          identify high-density areas
                                                                           Establish additional safety
----------------------------------------------------------------------------------------------------------------
Hazardous Liquid Pipelines         Establish criteria to
                                   identify high-density and
                                   environmentally sensitive areas

                                                                           Establish additional safety


----------------------------------------------------------------------------------------------------------------


    Definition of Areas. Congress expected OPS to define 
environmentally sensitive and high-density population areas and to 
develop an inventory of pipelines in these areas by October 1994. These 
actions have not been done. Until the definitions are established, OPS 
cannot develop an inventory of pipelines located in these areas. 
According to OPS officials, this lengthy delay is primarily 
attributable to the difficulty in developing a consensus on the 
definition of an environmentally sensitive area among divergent groups 
including Federal and state governments, environmental groups, and the 
pipeline industry. Once these areas are defined, an inventory would 
identify pipelines where increased inspections may be required.
    Pipeline Inventory. Currently, the inventory of pipelines in high-
density and environmentally sensitive areas relies on voluntary 
operator submissions of pipeline location data. In March 1999, OPS 
developed standards for operators to submit their pipeline inventories. 
However, as of May 2000, pipeline operators have submitted only 10 
percent of total pipeline mileage through this voluntary initiative. 
OPS needs to immediately initiate a rulemaking process to require 
operators to submit their pipeline location data.
    Establishment of Inspection Standards. In most cases, smart pigs 
can warn of problems in a pipeline before a rupture occurs. The 1992 
Act established a 1995 deadline for the Secretary to prescribe 
standards for periodic pipeline inspections using smart pigs or an 
equally effective alternative method. OPS has not yet established 
requirements for the increased inspections including the use of smart 
pigs. According to an OPS official, internal inspection technology in 
1994 had only a limited capability to identify defects that could cause 
ruptures. However, the capabilities of internal inspection technology 
have improved since 1994. In April 2000, OPS issued a Notice of 
Proposed Rulemaking requiring operators of large hazardous liquid 
pipelines (those with over 500 miles of pipelines) to use this 
technology, or an alternate equally effective method, to inspect 
pipelines. OPS plans to issue final regulations for large hazardous 
liquid pipeline operators in September 2000.
    Rulemaking Timeframes. OPS's April 2000 Notice of Proposed 
Rulemaking allows large hazardous liquid pipeline operators until at 
least 2007 (pending the effective date of the final rule, planned for 
September 2000) to complete baseline assessments of their pipelines. 
This timeframe for baseline assessments is too long. The American 
Petroleum Institute stated earlier this year that 95 to 98 percent of 
the mileage of large hazardous liquid pipeline operators can currently 
accommodate a smart pig to perform the baseline assessments.
    Once the baseline is completed, a subsequent re-inspection is 
required by the April 2000 Notice of Proposed Rulemaking. RSPA's 
rulemaking proposes a 10-year re-inspection interval to determine any 
deterioration in the condition of the pipeline. This interval is also 
too long.
    We support reauthorization provisions to expedite RSPA's completion 
of all outstanding Congressional mandates. As Congress intended back in 
1992, these additional protections are critically needed to reduce the 
risk of pipeline accidents and the devastating consequences on the 
public and the environment.

                           Pipeline Research

    Pipeline Safety Research and Development Should be Expanded. Early 
detection of serious problems in a pipeline reduces the risk of a 
catastrophic loss of human life and long-term damage to the 
environment. Pipeline operators and Federal and state inspectors need 
advanced technologies to locate problems and monitor pipelines before a 
failure occurs. High technology inspection devices could give operators 
and inspectors early warnings of serious problems in a pipeline and 
lower the risk of pipeline releases.
    RSPA's current pipeline research and development (R&D) program has 
resulted in beneficial technical data on internal inspection devices. 
The research concluded that smart pigs are reliable for detecting 
internal pipe corrosion, certain types of external mechanical damage, 
and pipe metal loss, but they have limited capabilities in pinpointing 
stress corrosion cracks, longitudinal mechanical damage, and defects in 
seam welds and pipe materials. OPS's program now needs to focus on 
three areas:

   Improving the capabilities of smart pigs to detect pipe 
        defects such as stress corrosion cracks, longitudinal 
        mechanical damage, and defects in seam weld and pipe materials,

   Enhancing technologies to detect pipeline corrosion and its 
        severity, and

   Developing technologies for internal inspection and 
        monitoring of pipelines that cannot accommodate smart pigs.

    Capabilities of Smart Pigs. Pipeline operators use several 
inspection methods to ensure the integrity and safe operating condition 
of a pipeline (including smart pigs, hydrostatic pressure testing, 
visual inspection, and pipe weld x-rays). Smart pigs, which travel 
inside a pipe, are the most reliable technology currently available to 
detect corrosion, metal loss, and mechanical gouges or dents, without 
excavating a pipe. However, they have limited ability to detect other 
types of serious defects, such as stress corrosion cracks, longitudinal 
mechanical damage, and defects in seam welds and in pipe materials. We 
noted that 10 percent of hazardous liquid pipeline accidents in 1999 
were caused by failed pipe or welds, which might have been prevented if 
better inspection technology were available. OPS research should focus 
on expanding the smart pig's capabilities to pinpoint these types of 
pipeline defects before a failure occurs.
    Detecting Pipeline Corrosion. While current smart pig technology 
can generally detect pipeline corrosion, R&D work is needed on advanced 
technologies to detect additional types of corrosion and the severity 
and extent of all types of corrosion. For example, current smart pigs 
have a limited capability to pinpoint stress corrosion cracking, a type 
of corrosion caused by temperature fluctuations and electric charges in 
the line. In 1999, corrosion caused almost one-fourth (23 percent) of 
all transmission pipeline failures and was the second leading cause of 
accidents. Corrosion caused the failure of an 8-inch pipeline in 
Lively, Texas, in 1996. A fire erupted when 5,518 barrels of liquid 
butane were released, resulting in 2 fatalities and the evacuation of 
25 families. Property damage totaled $217,000. Although pipeline safety 
regulations provide standards to prevent corrosion, it is clear that 
OPS should focus additional research to better analyze the severity and 
extent of corrosion, including stress corrosion cracking, with a goal 
of substantially reducing the number of accidents caused by corrosion.
    Alternative Inspection and Monitoring Technologies. A pipe's size, 
configuration, angle bends, and valve designs can prohibit a smart pig 
from moving inside the pipeline, and natural gas pipelines are most 
likely to require modifications for their use. Although there are 
325,000 miles of natural gas transmission pipelines, OPS does not have 
specific data on the percentage of miles that can accommodate smart 
pigs. For hazardous liquid pipelines, a February 2000 American 
Petroleum Institute survey concluded that smart pigs could be used in 
89 percent, or roughly 139,000 miles, of these pipelines.
    Additional research is needed to identify new inspection and 
monitoring technologies for detecting potentially dangerous defects in 
pipelines that cannot be ``pigged.'' Hydrostatic pressure testing is 
widely used by industry as an alternative to smart pigs, but it can be 
harmful to a pipe by causing tiny fractures or cracks. Furthermore, 
this technique provides only a `snapshot' of a pipe's condition and 
does not determine the extent or severity of corrosion or other 
defects.
    In our review of the various reauthorization bills, we noted 
Congress' strong support for expanding research and development 
programs on inspection technologies. We support legislative efforts to 
further research that will lead to advances in pipeline inspection 
technologies.

                   Pipeline Accident Data Collection

    The Collection of Pipeline Accident Data Needs Improvement. OPS 
must have accurate accident data to focus its inspection and research 
resources and to measure safety program performance. Accident reports 
should use precise categories that identify the causes of pipeline 
accidents. OPS accident forms currently use up to seven categories 
including ``Other'' to summarize the cause of an accident. For example, 
in the case of natural gas accidents, we found ``Other'' could be used 
to describe accidents caused by incorrect operation by operator 
personnel, equipment malfunctions, or failed pipes and welds because 
these causes are not included on the accident form. Table 1 lists the 
cause categories on OPS accident forms for hazardous liquid and natural 
gas transmission pipelines, as well as 1998 reported accidents.
                                Table 1
 Accident Form Causal Categories and 1998 Reported Accident Occurrences

----------------------------------------------------------------------------------------------------------------
                                                            Natural Gas                  Hazardous Liquid
                                                 ---------------------------------------------------------------
         Accident Form Causal Categories                            Percentage                      Percentage
                                                     Category      Reported  by      Category      Reported  by
                                                    Applicable          OPS         Applicable          OPS
----------------------------------------------------------------------------------------------------------------
Corrosion                                         Yes             22%             Yes             26%
----------------------------------------------------------------------------------------------------------------
Outside Force Damage                              Yes             37%             Yes             27%
----------------------------------------------------------------------------------------------------------------
``Other''                                         Yes             21%             Yes             29%
----------------------------------------------------------------------------------------------------------------
Construction/Material Defect                      Yes             19%             No
----------------------------------------------------------------------------------------------------------------
Malfunction of Control or Relief                  No              ..............  Yes             6%
  Equipment
----------------------------------------------------------------------------------------------------------------
Incorrect Operation by Operator                   No              ..............  Yes             5%
  Personnel
----------------------------------------------------------------------------------------------------------------
Failed Pipe                                       No              ..............  Yes             5%
----------------------------------------------------------------------------------------------------------------
Failed Weld                                       No              ..............  Yes             4%
----------------------------------------------------------------------------------------------------------------
    Percentage Total:                             ..............  99% *           ..............  102% *
----------------------------------------------------------------------------------------------------------------
* Totals do not add up to 100% because of rounding.
Source: Office of Pipeline Safety accident database


    We found data for hazardous liquid accidents list ``Other'' as the 
leading cause of accidents. This category increased from 29 percent in 
1998 to 37 percent in 1999. OPS should expand accident categories to 
encompass the causative factors now being grouped together as 
``Other.'' The limitations of the current accident reporting were 
recognized in both a 1998 National Transportation Safety Board (NTSB) 
report and a 1999 American Petroleum Institute report that recommended 
accident reporting be revised to request more comprehensive data.
    One of RSPA's goals is to reduce ``Outside Force Damage'' accidents 
by 25 percent over the next 3 years. With the category ``Other'' used 
so often, RSPA cannot measure how well it is doing. Our analysis found 
9 of 44 hazardous liquid accidents that occurred in 1998 were 
incorrectly categorized as caused by ``Other'' when they should have 
been classified as caused by ``Outside Force Damage.''
    OPS also needs to issue new regulations that require operators to 
correct inaccurate accident reports they have submitted. Under current 
regulations, OPS is unable to correct inaccurate information from 
operators' accident reports without the operators' consent. For 
example, in eight transmission pipeline accidents investigated by NTSB 
between 1994 and 1998, in only one case did the operator submit an 
updated accident form reflecting the NTSB results, although differences 
existed between the results of NTSB investigations and the information 
originally submitted by operators to OPS. In three cases, the NTSB 
investigation reported a different cause for the accident, and in five 
cases, NTSB investigations reported $20.4 million more in property 
damage. As a result, the OPS accident database retained inaccurate 
program performance information.
    We endorse including provisions in the reauthorization that require 
the development of a data collection plan and revisions to accident 
report forms and instructions that are essential for detailed analysis 
of accident causes.

                  Training of Inspectors and Operators

    Specialized Training is Essential for Pipeline Inspectors and 
Operators. The responsibility for pipeline safety is shared among OPS, 
the States, and pipeline operators. Pipeline inspectors need state-of-
the-art skills, expertise, and ability to make accurate safety 
assessments that lower the risk of pipeline failures. In addition, 
pipeline operators must be well qualified to be the ``safe drivers'' 
behind operation of the nation's pipeline system.
    Our review of the OPS inspector training curriculum noted a lack of 
courses on smart pig technology. OPS estimates that operators conduct 
smart pig inspections on 6,500 miles of natural gas and 12,480 miles of 
hazardous liquid pipelines each year, which could include pipelines in 
high-density population or environmentally sensitive areas. For 
example, smart pigs are run annually through the 800-mile Trans-Alaska 
Pipeline, which extends through some of the most sensitive environments 
on the continent.
    The data obtained from smart pig inspections are an important 
indication of a pipeline's condition. Yet, OPS does not train its 
inspectors on how to interpret these data. As a result, the OPS 
inspection force must rely on a report prepared by the pipeline 
operator or smart pig vendor for general information on a pipeline's 
present condition. We find this condition unacceptable. As the use of 
smart pig technology is expected to grow, we recommend the addition of 
an OPS training program on the interpretation of results from smart pig 
inspections. The OPS inspector would then possess the knowledge to 
independently assess a pipeline's condition and make safety improvement 
recommendations.
    Several reauthorization provisions seek to expand the states' role 
in the inspection of interstate pipelines. In sharing the safety 
oversight role, Federal and state inspectors have a greater opportunity 
to leverage limited resources for increasing the number and quality of 
pipeline inspections. State agencies would also be able to address 
numerous local issues and provide a local presence to address pipeline 
safety. Therefore, we also support these provisions.
    To ensure consistent implementation of pipeline inspection 
regulations, state pipeline inspectors should receive the same level of 
training as required of Federal inspectors. As Federal training 
requirements change, such as a new requirement for smart pig training, 
so should the states.' The safe operation of our Nation's pipelines 
depends on uniform educational standards for the entire pipeline safety 
inspection workforce. One possible way of ensuring the standards are 
met would be testing or certification.
    Incorrect operator decisions contributed to 16 hazardous liquid 
pipeline accidents in 1999, resulting in 4 injuries and almost $3 
million in property damage. In 1999, a Conoco Inc. hazardous liquid 
pipeline spilled oil and gasoline in Oklahoma, resulting in 2 injuries 
and $2 million in property damage, or two-thirds of the property damage 
for the entire year. The operator listed the cause of the accident as 
``Incorrect Operation by Operator Personnel.''
    We support reauthorization provisions to ensure pipeline operators 
are qualified to do their job, thereby reducing the probability and 
consequences of serious accidents. Reauthorization provisions that 
require operators to submit their qualifications programs to the 
Secretary for approval and require periodic retraining and 
reexamination of pipeline personnel would be beneficial. Operators 
should be subjected to stringent qualifications programs and trained to 
react to abnormal operating conditions when they occur. This issue 
warrants close monitoring to assure the process does not focus on the 
paper record without assurance that the individuals have the necessary 
knowledge and skills.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you might have.

    The Chairman. Thank you very much, Mr. Mead. Mr. 
Hammerschmidt.

   STATEMENT OF HON. JOHN A. HAMMERSCHMIDT, MEMBER, NATIONAL 
                  TRANSPORTATION SAFETY BOARD

    Mr. Hammerschmidt. Good morning, Mr. Chairman, members of 
the Committee, Senator Murray. It is an honor to represent the 
National Transportation Safety Board before you today to 
discuss pipeline safety issues. We have submitted prepared 
testimony to the Committee, and I would like to limit my 
statement this morning to three specific areas which are of 
particular concern to the safety board, pipeline integrity, 
employee qualifications, and excavation damage.
    The first topic I would like to discuss is pipeline 
integrity. The continued operation of pipelines with 
discoverable integrity problems is a recurring theme in 
accidents investigated by the Safety Board. In 1987, as a 
result of investigations into three pipeline accidents, two in 
Kentucky and one in Minnesota, the Safety Board recommended 
that the Research and Special Programs Administration, or RSPA, 
require periodic inspections to identify corrosion, mechanical 
damage, or other defects. Thirteen years later, there are still 
no regulations that require pipeline operators to perform 
periodic testing and RSPA's responses to our recommendations 
are in an unacceptable status.
    The Safety Board is currently investigating at least five 
accidents with potential pipeline integrity problems. 
Frequently, as may turn out to be the case in the Bellingham, 
Washington, accident, we learn that the damage area, or the 
weak point, has been compromised for months or years before 
rupture. We believe that inspection enables prevention, and we 
need programs that not only provide adequate inspection, but 
that adequately analyze and fix the problems uncovered.
    Several weeks ago, RSPA issued a proposed rule speaking to 
integrity issues, and that is a start. NTSB will undoubtedly 
participate in this rulemaking. We earnestly hope that we can 
see this work finished. RSPA can use its rulemaking authority 
to galvanize, coordinate, and accelerate industry action, and 
it should do so.
    Turning now to the training and qualification of personnel, 
we have a very similar story to tell on this issue. In 1987, 
after several pipeline accidents in which inadequate training 
was an issue, the Safety Board recommended that RSPA require 
operators to develop training programs for pipeline personnel. 
Eleven years later, with no adequate action from RSPA, we also 
closed these recommendations as unacceptable.
    Inadequate training continues to be a factor in pipeline 
accidents. In the 1996 Fork Shoals, South Carolina accident, 
the Safety Board found that controllers failed to recognize and 
respond to observable emergency conditions. In that accident 
the controller mistakenly shut down a pump station, failed to 
recognize the consequences of this mistake, and continued to 
operate the pipeline after it ruptured. Nearly a million 
gallons of fuel oil poured into Reedy River as a result. We 
asked how this could happen. The answer was largely lack of 
training.
    I should add that training is necessary throughout the 
system, not just in the control rooms. We need it for 
inspectors, maintenance crews, and managers. On November 21, 
1996, a pipeline accident in San Juan, Puerto Rico resulted in 
33 fatalities and 69 injuries. Our investigation determined 
that the gas company's employees had not been properly trained 
to survey, pinpoint, or test for pipeline leaks, and failed to 
locate a reported leak before the explosion occurred.
    In our subsequent accident report, the Safety Board 
recommended that RSPA complete a final rule on employee 
qualification training and testing within 1 year. Although the 
Board urged RSPA to amend the proposed rule to include strong 
training and testing requirements, last August RSPA published 
its final rule without the requirements sought by our 
recommendations. Hence, the training recommendations that were 
developed after the San Juan tragedy are now also in an 
unacceptable status.
    The last area I have time for this morning in this brief 
statement is excavation damage, the leading cause of pipeline 
accidents. This issue is on the Safety Board's most wanted 
list. In December 1997, the Board issued 26 recommendations 
aimed at improving excavation damage prevention. We know that 
Administrator Coyner also takes this issue very seriously. 
Preventing excavation damage to pipeline systems is one of her 
top priorities.
    The Administrator has already spoken to their programming 
efforts, of course, which involve the ongoing Nation-wide Dig 
Safely campaign, and the common ground report. We applaud these 
efforts, but think it fair to say that every avenue for 
improved performance needs to be pursued, and we look forward 
to a timely and favorable final action on our open 
recommendations here.
    Mr. Chairman, this concludes my testimony. I would be happy 
to answer the Committee's questions.
    [The prepared statement of Hammerschmidt follows:]

  Prepared Statement of Hon. John A. Hammerschmidt, Member, National 
                      Transportation Safety Board

    Good morning Mr. Chairman and Members of the Committee. I am 
pleased to represent the National Transportation Safety Board before 
you today to discuss pipeline safety issues.
    I would like to start with an update for the Committee on the 
status of the Safety Board's investigation of the fatal pipeline 
accident that occurred last June in Bellingham, Washington. I would 
stress, however, that the Board's investigation is ongoing, and that 
the following information is preliminary. It may be refined and changed 
as the investigation proceeds.
    As an initial point, I would note the National Transportation 
Safety Board has experienced significant procedural problems with the 
Bellingham investigation. The proximity of a criminal inquiry has been 
a serious issue for us. We have been unable to talk to employees of the 
operator, who fear the uncertainties of a criminal inquiry; and we 
have, until recently, been unable to proceed with testing of the 
physical evidence.
    Parallel investigations, by accident investigators and criminal 
authorities, pose a host of complicated issues. We requested, in our 
own reauthorization package, a restatement of Congressional confidence 
in the priority presently accorded by statute to our work, and we are 
gratified that the House of Representatives has responded favorably.
    We note similar provisions in the bill awaiting action by this 
Committee. National Transportation Safety Board staff is working with 
staff of this Committee to ensure that the uncertainties of Bellingham 
do not become the norm, and we earnestly request your close attention 
to this issue.
    After a 16-inch diameter pipeline owned by Olympic Pipe Line 
Company ruptured, approximately \1/4\ million gallons of gasoline were 
released into a nearby creek. The gasoline ignited and two 10-year-old 
boys and an 18-year-old young man lost their lives. Shortly after being 
notified of the accident, the National Transportation Safety Board 
launched a team of investigators to the scene. Safety Board personnel 
were on scene for approximately 5 weeks.
    The accident section of pipeline was originally installed in 1965 
and then rerouted in 1966 to allow for construction of a water 
treatment plant. In 1993 and 1994, a contractor working on behalf of 
the City of Bellingham installed a 72-inch water line across Olympic's 
pipeline, approximately 20 feet south of the rupture. A new 24-inch 
diameter water line was also installed and connected to an existing 
water line 10 feet south of the rupture.
    Although Federal regulations do not require internal pipeline 
inspections, in 1991, 1996 and 1997 Olympic inspected the section of 
pipe that failed last June. The 1996 and 1997 inspections had 
identified anomalies in the pipeline near the location of the 
subsequent rupture, however the pipeline was not excavated, visually 
inspected or repaired at those locations. The Safety Board is looking 
into criteria used by Olympic Pipe Line to evaluate the identified 
anomalies. However, Olympic personnel with direct knowledge of the 
decision-making process have declined to be questioned by the Safety 
Board.
    Sections of the Olympic pipe were carefully excavated under the 
Safety Board's supervision and then transported to our laboratory 
facilities in Washington D.C. During the excavation process, the water 
lines that had been installed across Olympic's pipeline in the vicinity 
of the rupture were exposed, and indications of external damage to the 
pipeline were observed. Safety Board investigators have interviewed 
personnel from the City of Bellingham, the firm that designed the water 
plant modifications and managed the construction activities on behalf 
of the City of Bellingham, as well as the contractor who installed the 
water piping. However, Olympic employees who were assigned to inspect 
the construction activity have also declined to speak with Safety Board 
investigators.
    Preliminary visual examination of the ruptured pipeline segment has 
shown that the fracture originated at a gouge mark on the surface of 
the pipe. Additional gouge marks and dents were found on the exterior 
surface of the ruptured pipe segment, and inward protrusions were noted 
on the inside of the pipe. Examination of a second pipe segment noted 
two dents.
    Because of the criminal inquiry, we had not been able to test the 
failed pipe until now. Microscopic examination of the fracture face is 
underway this week to help us determine whether there are any 
indications of fatigue near the point of origin. Additional tests are 
also being conducted to determine the microstructure and 
characteristics of the pipe material.
    Based upon a review of Olympic's computer pressure data 
automatically recorded during the accident sequence, our investigators 
also began to examine the functioning of valves at a newly-constructed 
pumping and storage facility near Bayview, Washington. Preliminary 
information indicates that a block valve on the pipeline entering 
Bayview Station had closed over 50 times since the facility began 
operating on December 16, 1998. Our investigators are still evaluating 
these events to determine the pressures involved and the functioning of 
a relief valve.
    Shortly after the accident, our investigators also began to 
evaluate the actions of Olympic's personnel who were operating the 
pipeline from the Renton, Washington, control center. Based on the 
event logs, we know that flow within the pipeline was restarted 
approximately 45 minutes after the rupture occurred. The pipeline was 
then operated for approximately 17 minutes until the pumps shut down.
    The Board's investigative staff are reviewing substantial 
documentation provided by Olympic, such as pressure data, design 
information, construction records, telephone logs and e-mail records, 
along with the applicable company policies and procedures related to 
pipeline operations and maintenance, as part of our investigation. 
However, we may never know what happened within the control center 
around the time of the accident unless we are able to interview the 
individuals operating the pipeline when the accident occurred. There 
are at least four key individuals who may have direct knowledge of the 
events that occurred in the control room during the accident sequence. 
Those individuals include two controllers who were on duty at the time 
of the accident, their supervisor, and a former controller now 
responsible for maintaining the SCADA system and acting as a relief 
controller. He was reportedly performing modifications to the computer 
programming at the time of the incident. These individuals are also 
critical to our investigation into human performance issues, such as 
training, fatigue, and ergonomics, that may be relevant with this 
accident. As I mentioned, these individuals and others have declined to 
talk with us.
    Several of the issues being looked into as a result of the 
Bellingham accident--excavation damage, pipeline integrity, training of 
personnel--have been concerns of the Safety Board for many years
    It is unfortunate that some of the issues we have addressed, which 
have been the subject of Safety Board recommendations, have not been 
acted on in a timely manner. Each of these issues could be accomplished 
without legislative action. However, because the Department has not 
acted, Congressional intervention may be necessary.

Safety Issues
    I would now like to discuss general pipeline safety issues. As the 
Federal regulatory agency for pipeline safety, the Research and Special 
Programs Administration (RSPA) plays a crucial role. As the Board has 
often stated, RSPA and its Office of Pipeline Safety (OPS) have not 
responded as aggressively to its mandate as we would have liked. RSPA's 
implementation rate of pipeline safety recommendations is about 69 
percent, the lowest acceptance rate of any modal administration in the 
Department of Transportation. We do not think this low percentage is a 
result of ill-conceived recommendations. In fact, the acceptance rate 
of our pipeline safety recommendations issued to the pipeline community 
as a whole is about 87 percent. Too often, RSPA will find it difficult 
even to respond in a timely fashion, one way or another. We note that 
Section 3 of S.2438 addresses the need for timely responses to pipeline 
safety recommendations.
    We believe that RSPA's lack of action continues to place the 
American people at risk. Administrator Coyner has met with our Board 
Members and has made a commitment to improve RSPA's response rate to 
Safety Board safety recommendations. As a result, we have seen more 
timely responses to new safety recommendations, and increased activity 
on damage prevention and corrosion control issues. However, we are 
still concerned about the lack of timely action on other issues. We 
feel the areas listed below are areas that require immediate action:

   pipeline integrity;
   accident data collection;
   training;
   valve automation; and
   excavation damage prevention.

Pipeline Integrity
    The continued operation of pipelines with integrity problems is a 
recurring issue in accidents investigated by the Safety Board. In 1987, 
as a result of investigations into three pipeline accidents (Beaumont, 
Kentucky; Lancaster, Kentucky; and Mounds View, Minnesota), the Safety 
Board recommended that RSPA require pipeline operators to periodically 
inspect their pipelines to identify corrosion, mechanical damage, or 
other time-dependent defects that may prohibit their safe operation. 
Yet, 13 years after our initial recommendation was issued, there are no 
regulations that require pipeline operators to perform periodic 
inspections or tests to locate and assess whether this type of damage 
exists on other pipelines. Due to the length of time that had passed 
without final RSPA action, the Safety Board in June 1999, classified 
its recommendation as ``Open-Unacceptable Response.'' We note that on 
April 24, 2000, RSPA issued a Notice of Proposed Rulemaking (NPRM) on 
this issue, and the Safety Board is in the process of reviewing it. We 
also note that Section 5 of S.2438 will require a pipeline integrity 
inspection program to be completed within 12 months after the date of 
enactment in unusually sensitive areas and high-density population 
areas.
    The Safety Board is currently investigating five other pipeline 
accidents with potential pipeline integrity problems that occurred 
during 1999-2000. In these accidents, the lack of inspections or 
adequate corrective actions may be relevant safety issues.

Accident Data Collection
    For over 25 years, the Safety Board has pointed out major 
deficiencies and recommended changes to RSPA's pipeline accident data 
collection process. In a January 1996 report, Evaluation of Accident 
Data and Federal Oversight of Petroleum Product Pipelines, the Safety 
Board concluded that RSPA's failure to fully implement the Safety 
Board's 1978 recommendations to evaluate and analyze its accident data 
reporting needs has hampered RSPA's ability to effectively oversee the 
Nation's pipelines.
    Then, in December 1997, another Safety Board report, Protecting 
Public Safety Through Excavation Damage Prevention, indicated that 
RSPA's reporting forms are poorly designed and fail to provide 
necessary information. For example, the form for hazardous liquid 
pipelines lists just seven generic causal categories, such as 
corrosion, outside force damage, and other. In 1996, RSPA indicated 
that ``outside force'' damage was the leading cause of accidents; the 
second leading cause was ``other'' which may include landslides, 
earthquakes and floods. Although we know that excavation damage is the 
leading cause of pipeline accidents, it is not listed as a category. 
Instead, most excavation damage accidents are reported as outside force 
damage, other, or incorrect operation by operator personnel. The Safety 
Board has repeatedly pointed out that RSPA's definitions of accident 
causes are imprecise and that distinctions between categories are 
vague. Such deficiencies preclude effective accident trend analysis and 
performance evaluation. Therefore, the Safety Board has recommended 
that RSPA revise the causal categories on its gas and hazardous liquid 
pipeline accident report forms to eliminate overlapping and confusing 
categories, to clearly list excavation damage as one of the data 
elements, and to consider developing subcategories. We note that 
Section 10 of S.2438 will require improved data collection within 12 
months.
    In an April 1998 report, Brittle-like Cracking in Plastic Pipe for 
Gas Service, the Safety Board noted that RSPA's accident data are 
insufficient to serve as a basis for assessing the long-term 
performance of plastic pipe. Because the Board lacked adequate data 
from RSPA, we had to review technical literature and contact experts in 
gas distribution plastic piping to estimate the frequency of brittle-
like cracks in plastic piping. Based on that research, the report noted 
that brittle-like failures could be the second most frequent failure 
mode for older plastic pipe and recommended that RSPA determine the 
susceptibility of older plastic piping to premature brittle-like 
cracking.

Training of Pipeline Personnel
    The Safety Board has long been concerned about the need to 
adequately train personnel in all transportation modes, including 
pipeline. In 1987, after several pipeline accidents in which inadequate 
training was an issue, the Safety Board recommended that RSPA require 
operators to develop training programs for pipeline personnel. After 11 
years had passed since the recommendation was issued without final 
action, the Safety Board classified the recommendation as ``Closed-
Unacceptable Action.''
    However, inadequate training continues to be a factor in pipeline 
accidents. In the 1996 Fork Shoals, South Carolina, pipeline accident, 
the Safety Board found that pipeline controllers had been inadequately 
trained to recognize and handle emergency conditions. In that accident, 
the controller had mistakenly shut down a pump station, failed to 
recognize his mistake, and continued to operate the pipeline after it 
ruptured. As mentioned earlier, this action resulted in the release of 
nearly one million gallons of fuel oil into the Reedy River.
    On November 21, 1996, a pipeline accident in San Juan, Puerto Rico, 
resulted in 33 fatalities and 69 injuries. Our investigation determined 
that the gas company's employees had not been properly trained to 
survey, pinpoint, or test for pipeline leaks, and failed to locate a 
reported leak before the explosion occurred. Following that accident, 
the Safety Board recommended that RSPA complete a final rule on 
employee qualification, training, and testing within one year.
    In October 1998, RSPA published an NPRM to require pipeline 
operators to develop a written qualification program for individuals 
operating pipelines. However, it did not establish training 
requirements for personnel and it allowed companies to evaluate an 
individual's ability to perform tasks using methods such as oral 
examinations or observations of job performance. In January 1999, the 
Board provided comments to RSPA that urged them to amend the rule to 
include strong training and testing requirements to ensure that 
employees can properly perform their jobs. In February 1999, the Safety 
Board classified its recommendation as ``Open-Unacceptable Action,'' 
because the NPRM did not adequately address those issues. In August 
1999, RSPA published its final rule, which was substantially unchanged 
from the NPRM. We note the Section 4 of S.2438 would require 
reformulation of RSPA's rule along the lines of the Safety Board's 
recommendations for training and recurrent training. We also note that 
legislation proposed by Senator Murray would require qualification 
testing and certification, similar to requirements for aviation 
personnel.

Valve Automation
    The Safety Board has long advocated the increased use of valve 
automation to protect public safety and the environment by reducing the 
consequences of pipeline failures. The issue was first addressed 30 
years ago in a study entitled Effects of Delay in Shutting Down Failed 
Pipeline Systems and Methods of Providing Rapid Shutdown.
    Since then, a number of other accidents have repeatedly highlighted 
the need to control the accidental release of product. On July 8, 1986, 
in Mounds View, Minnesota, gasoline spewed from a pipeline and flowed 
down a city street before igniting and seriously burning three people, 
two of whom later died. The Safety Board found that the pipeline 
operator could not promptly stop the release of gasoline.
    On March 23, 1994, in Edison, New Jersey, a high-pressure natural 
gas pipeline exploded and a fire ensued. Heat from that fire ignited 
several building roofs in an apartment complex. The Safety Board again 
found that the pipeline operator's inability to promptly stop the flow 
of natural gas contributed to the accident's severity. In February 
1995, the Safety Board recommended that RSPA expedite requirements for 
the rapid shutdown of failed pipeline segments. Later in 1995, RSPA 
held a public workshop on this subject and it is continuing to study 
the issue. Despite RSPA's failure to require these systems, several 
companies have voluntarily put in valves to rapidly shut down their 
failed pipelines.
    In an accident in May 1996, near Gramercy, Louisiana, the pipeline 
company took approximately 4\1/2\ hours to manually close the valves on 
either side of a ruptured pipeline. Almost 500,000 gallons of gasoline 
were ultimately released into the environment. In September 1998, the 
Board recommended that the pipeline operator install more valve 
automation into its pipeline system. The operator has advised the Board 
that it is currently evaluating which existing valves to retrofit for 
remote control operation and is planning to install this technology 
into a new pipeline that may run from Kenova, West Virginia, to 
Columbus, Ohio.
    Obviously, this technology is available and is being used. We will 
be waiting for too long, however, if we rely solely on voluntary 
efforts of industry. RSPA must require systems that limit product 
release after a major pipeline rupture for all operators, so that this 
is understood, across-the-board, as a necessary cost of doing business.

Excavation Damage Prevention
    Excavation damage is the leading cause of pipeline accidents. This 
issue was added to the Safety Board's ``Most Wanted'' list of 
transportation issues in 1997, and in December 1997, we published a 
study entitled Protecting Public Safety Through Excavation Damage 
Prevention. As a result, the Board issued 26 recommendations aimed at 
improving excavation damage prevention covering such areas as:

   technology to accurately locate and mark underground 
        facilities;
   training and educating of excavation personnel;
   use of data to evaluate programs; and
   enforcement of damage prevention programs.

    Preventing excavation damage to pipeline systems is a top priority 
for RSPA. RSPA's efforts in the area of underground damage prevention 
include: an ongoing nationwide Dig Safely Campaign, a completed report 
on damage prevention best practices, Common Ground, and helping to 
establish an organization to implement and continue to develop the best 
practices.

State Inspection Programs
    State pipeline safety programs are important to help ensure that 
pipeline system operators comply with minimum safety standards. In 
fact, state pipeline inspectors who conduct daily inspection activities 
represent more than 90 percent of the safety inspection workforce. Yet, 
Federal matching funds provided to states have consistently been below 
the 50 percent level authorized by the Natural Gas Pipeline Safety Act. 
The Board has been advised by representatives of several states that 
funds have not kept pace with demand, and that inadequate funds 
threaten the infrastructure of the Nation's pipeline safety program.
    Additionally, we are concerned that while states have many more 
inspectors than OPS, that OPS is removing states from interstate 
pipeline inspection programs. State officials have advised that OPS, 
while previously encouraging states to act as interstate agents, is now 
denying their applications. In fact, states have advised the Safety 
Board that OPS has effectively halted this program.
    For example, in Virginia, approximately 2 million gallons of 
petroleum products have spilled from pipelines since 1974. In an 
accident near Reston, Virginia, in 1993, more than 407,000 gallons of 
diesel fuel spilled from a pipeline into Sugarland Creek, a tributary 
of the Potomac River. Because of several liquid pipeline accidents that 
occurred in Virginia, the General Assembly passed legislation in 1994 
authorizing the State Corporation Commission to seek interstate agent 
status from OPS, which would allow state inspectors to inspect 
interstate pipelines. OPS apparently originally supported this 
legislation, and for several years encouraged the Commission to pursue 
interstate agent status. Unfortunately, when the Virginia Commission 
was ready to accept agent status, OPS denied their application.
    The OPS currently has the ability to utilize these state resources 
for regular inspection activities through its partnering agreements. We 
believe state assistance in the interstate pipeline inspection program 
may go a long way to improving pipeline safety. Because a single 
pipeline may operate in as many as 10 states, effective Federal 
oversight is needed to ensure that pipeline operators are meeting 
minimum safety standards. It is also critical that comprehensive, 
consistent, and effective regulatory requirements for interstate 
pipelines be enacted at the Federal level to protect citizens in all of 
the states. We believe that Congress needs to closely examine how the 
states are utilized, funded, and evaluated by OPS. However, for the 
consistent and effective application of regulatory requirements to 
interstate pipelines, the authority and responsibility should rest with 
the OPS.
    Mr. Chairman, this concludes my testimony. I would be happy to 
answer the Committee's questions.

    Senator Gorton. Thank you. Senator McCain has been required 
to meet another engagement. He has a long series of excellent 
and thoughtful questions that will be submitted to each of you, 
and we would like your answers for the record.
    I would like to start, Ms. Coyner, by saying that Mr. Mead 
was highly critical of at least the procedural aspects of your 
proposed rulemaking, both the tardiness with which it was 
begun, but perhaps more significant for our purposes, with the 
long lead times before some or all of these rules become 
effective and how well they are enforced. Do you want to 
comment on that critique?
    Ms. Coyner. I think what is important to recognize in the 
rulemaking is that companies have one rule in terms of their 
initial compliance of putting together an integrity management 
plan, and the integrity management plan encompasses internal 
inspections but a number of other steps, and so I think it is 
important to focus on that.
    Second, it is a proposal. It was put together with the best 
data available, and we invite comments in terms of 
strengthening it. We would be delighted to be able to justify a 
shorter timeframe in terms of requiring internal inspections. 
That means that we have to be able to have a demonstrated 
benefit, and we also have to be able to show the availability 
of the actual testing devices in terms of timing, of putting 
together the integrity management rulemaking.
    Under the statute, the first requirement is that we have to 
be able to define what an unusual area is. That is an 
environmental term not existing in any other statute, and that 
definition in fact was changed by Congress in 1996 in terms of 
what the parameters would be. It is an important but 
exceedingly complicated effort in terms of not only defining 
what would fall in that area, but also identifying where it 
would be on the pipeline.
    That definition has been proposed. The comment period on 
that is closing. We chose to go forward with the actual testing 
requirement rule so it would be ready to go when the actual 
definition rulemaking is done.
    Can we do more in this area? Absolutely. We have to 
continue to push forward to finish the other two rulemakings by 
the end of the year, as well as making sure that we are 
identifying technologies that are not used today to be able to 
deal with some of the issues that can meet, and others have 
raised, in terms of the ability to be able to pig natural gas 
pipelines and to deal with other issues.
    Senator Gorton. Does the administration bill enhance your 
rulemaking capacity?
    Ms. Coyner. The administration's bill does a couple of 
things in that regard. One is that it says that if these 
rulemakings for some reason do not go forward the statute will 
require the standards that are proposed in the proposed 
rulemaking, or liquid lines, for all lines.
    Second, it says that after those have been in effect for 3 
years, that the Secretary will have to review them and 
determine whether or not they ought to apply beyond what they 
call high consequences areas, the places where there are people 
who live around the pipeline as well as unusually sensitive 
areas.
    So in fact it is not just a strengthening of the regulatory 
requirement, it says if we cannot reach it one way, we are 
going to make sure we reach it another way.
    Senator Gorton. Mr. Mead, apparently all or almost all of 
the recommendations that you have made are incorporated in 
Senator McCain's bill. Do you think Senator McCain's bill is 
adequate to meet the challenges that have been so graphically 
illustrated to us both by this accident and by the general lack 
of adequacy in pipeline regulation?
    Mr. Mead. I think Senator McCain's bill forms a good 
foundation, and it does refer to our recommendations, but I 
also believe that Senator Murray's bill, and the administration 
bill, have a number of good provisions. I do not think it is 
generally a good way to legislate to say this rule is going to 
take effect if for some reason the rule gets derailed.
    But frankly, Congress contemplated the safety mandates 
would be in place by 1995. The law was not vague when you 
passed it, so I do not know what else I would recommend besides 
the type of provision that Ms. Coyner described.
    I also think that Senator Murray's bill is particularly 
good in the area of encouraging states to have a role. I do not 
think that the states should have to get the Federal 
Government's permission to have a large role, but as I 
indicated in my statement, I draw a distinction between that 
and States actually enacting rules.
    Senator Gorton. Given your position in the Department, are 
you in a position to submit to us your recommendation of what 
elements in each of these three bills is appropriate to make a 
proper overall response to this challenge?
    Mr. Mead. Yes, I am, and I will. The Inspectors General, 
unlike the operating administrators, do not go through OMB for 
clearance for our views on what the legislation should contain. 
You will have that by the beginning of next week.
    Senator Gorton. Thank you.
    Mr. Hammerschmidt, does that apply to you as well, at the 
Safety Board? Have you looked at all three of these bills, and 
can you recommend to us how they ought to be combined, or are 
there any inadequacies in any of them, in a prompt fashion?
    Mr. Hammerschmidt. Senator Gorton, we have reviewed the 
different pieces of legislation, and we would like to offer the 
Committee, if you would like us to do so, to provide you for 
the record an analysis, a comparative analysis of the different 
bills. I cannot speak for the board. I am just one of the board 
members. But we would be glad to expeditiously get that 
information to the Committee if you would like us to.
    [The informations referred to follows:]

                       NTSB Comparative Analysis

    National Transportation Safety Board (NTSB) staff met with your 
Committee staff to discuss Safety Board recommendations for pipeline 
safety improvements related to the proposed legislation. A review of 
our data base reveals that safety recommendations issued to the 
Research and Special Programs Administration (RSPA) can all be 
accomplished without legislative action. However, a number of critical 
safety issues in the proposed legislation have not been acted upon and 
may warrant Congressional intervention.
    Since 1987, the Safety Board has urged that RSPA require pipeline 
operators to verify the integrity of their pipelines by mandating 
periodic inspection and testing. Section 5 of S. 2004 would require 
internal inspections at least every 5 years; the Board does not have 
sufficient data to recommend a specific test period at this time. 
Section 5 of S. 2438 would require operators to periodically inspect 
and test pipelines; the Safety Board suggests that the frequency of the 
inspections or tests required depend upon the characteristics of the 
pipeline and the ability of inspection or test methods to detect 
defects before the defects propagate to critical size. Under such a 
mandate, RSPA could require that pipelines with protective coating 
deficiencies or known corrosion conditions be inspected more 
frequently, and that the frequency depend on the ability of the 
inspection method to detect defects.
    The Safety Board supports language proposed in Sections 2b and 2c 
of S. 2409 that would require an operator to clearly define criteria 
for evaluating and acting on the results of inspections, and that would 
also require that prompt action be taken to address integrity issues.
    The Safety Board has also urged, in safety recommendations, that 
pipeline employees be required to be trained, tested to assess the 
success of training, and periodically retrained and retested, as 
appropriate. Training requirements in Section 4 of S. 2438 are 
consistent with past Safety Board recommendations. Section 6 of S. 2004 
would also require testing to determine whether individuals are 
qualified to perform assigned functions. Such a requirement is 
consistent with previous Safety Board recommendations. S. 2004 requires 
certification by the Secretary of Transportation, which the Board has 
not previously recommended. Objective criteria would provide regulators 
with specific means to reassess the qualification of individuals after 
an accident and before they resume regular duties.
    Most of the provisions in Section 7 of S. 2438 are consistent with 
past Safety Board recommendations concerning public education and 
emergency preparedness needs.
    Finally, the Safety Board is concerned that State officials' 
ability to inspect interstate pipeline operators is threatened. 
Effective oversight is needed to ensure that pipeline operators meet 
minimum standards. Section 9 of S. 2438 Section 9 is consistent with 
the Safety Board's support for participation of State authorities in 
overseeing interstate pipeline activities.

    Senator Gorton. I think that would be of great help to us. 
In fact, Mr. Mead, you anticipated my next question when you 
referred to Senator Murray's state participation in this. You 
had felt that state participation ought to be enhanced. In this 
particular connection, does this bill do enough? Does it 
adequately define the State authority and responsibility?
    Mr. Mead. Yes, but I should also say I think this is an 
area where funding needs to be considered as well. This is an 
authorizing committee. You can authorize money, but this is an 
important area, and we are emphasizing R&D, which costs money. 
We are emphasizing the state program, and I think the answer to 
your question is yes, but some follow-through on the funding, 
the R&D program and the grant program will be in order.
    Senator Gorton. Thank you. Senator Murray.
    Senator Murray. Thank you, Mr. Chairman, and I want to 
applaud all of you for your testimony and your work on this, 
and Ms. Coyner, I want to thank you and the administration for 
working so hard under some pretty strict timeframes we gave you 
to get your bill forward, and I appreciate the work you did on 
that.
    I do have a number of questions. First of all, Ms. Coyner, 
in Senator McCain's bill he includes pipeline personnel 
qualifications that would require periodic retraining and 
examination. Considering the rule on operating qualification, 
you did issue last year----
    Senator Gorton. Excuse me, Senator Murray. We now have 
another vote going on. What I think I will do is, I will go 
vote now while you finish your questioning, then John, and we 
will do it continuously, and I will get back as quick as I can.
    Senator Murray. I would be happy to do that.
    Considering the rule on operating qualification that you 
issued last year, which requires operators to submit plans to 
OPS to qualify their employees by 2001, and implement these 
plans by 2002, how do you think this requirement would 
supplement these plans?
    Ms. Coyner. As I understand the provision in Senator 
McCain's bill, it would require that we review those individual 
plans in an affirmative way, rather than the mere compliance 
States that are in the rulemaking. I think that is something 
that we can do.
    I think the main issue, though, in terms of taking on that 
additional review level is how do we define the roles as 
between the federal government and state governments in the 
review of those plans and second whether or not the Office of 
Pipeline Safety has adequate resources to perform that 
responsibility.
    Senator Murray. Do you think operators could adjust their 
plans to meet these requirements, which I think are common 
sense requirements?
    Ms. Coyner. I think that the issue would be the scope of 
coverage. The operator qualifications rule that we propose has 
very broad coverage in terms of the number of safety employees 
that are covered and the types of conditions that they have to 
be able to respond to. I think that the McCain deadlines may 
mean that we would want to do some sort of phased-in 
requirement in terms of the coverage, but what I would like to 
say, Senator Murray, is that we want to work with you to make 
sure that we have the right legislative requirements and 
regulatory requirements in place in this area.
    Senator Murray. Mr. Hammerschmidt, in your testimony you 
criticized OPS's rule on operator qualification as allowing too 
low of a threshold in evaluating pipeline personnel's ability 
to perform tasks. In Senator McCain's bill he includes a 
section on pipeline personnel's qualifications that would 
require periodic retraining and examination. Do you think that 
would satisfy NTSB's objection to OPS's current rule?
    Mr. Hammerschmidt. Well, again, Senator, I am just one of 
the four Board members, and I do not want to speak for the 
Board on that question, but as I recall, having read Senator 
McCain's bill, I was very impressed that his proposed language 
dove-tailed with some of the recommendations that we had made 
in the past and exhibited a very sensitive hand on the pulse of 
our concerns for many years, and I would answer affirmatively 
for myself.
    Senator Murray. Thank you.
    Ms. Coyner, in the technology section of the administration 
proposal, you separate technologies into two types, one dealing 
with outside force damage and one dealing with internal 
inspection, and you assign two separate timeframes one year 
apart to begin developing those kinds of technologies. As you 
probably know, Senator McCain's bill does not make any 
distinction between the two. Can you explain to us why in your 
proposal you do that?
    Ms. Coyner. That reflects our current activities and the 
way we would be able to build on them, and second it is 
basically strictly a resource issue, Senator Murray, in terms 
of the timeframes that we have put in place.
    Senator Murray. A resource issue from what perspective?
    Ms. Coyner. In terms of, we could in fact start both of 
them at the same time if there were adequate resources to do 
that, in terms of the overall funding of the program.
    Senator Murray. So it is just a matter of the fact that we 
have not put enough money forward to develop technologies, so 
you have separated them out from that perspective?
    Ms. Coyner. I think what I want to emphasize is that the 
proposal in that regard was really just that, a proposal. I do 
not think that one is one where we believe that there's a 
strong reason, other than our ability to ramp up to do the 
work, and the resource component of it.
    Senator Murray. So if there were more resources available 
you could move forward on both internal and external?
    Ms. Coyner. That is right.
    Senator Murray. I do have to say I like the provisions in 
your proposal that recognize the need to create public-private 
partnerships with industry and academia to speed up some of the 
development of these technologies. I hope that we do have that 
provision in the final product.
    Ms. Coyner, I did want to ask you some clarification about 
a provision in the integrity management section of your 
proposal which says that operators cannot use testing that 
would, and I quote, increase environmental or safety risks.
    Now, some people contend that hydrostatic testing increases 
environmental and safety risks because of wastewater and the 
level of pressure used. Wouldn't your section then allow an 
operator to refuse to use certain types of testing techniques 
such as hydrostatic testing, and if so, don't you think it is 
unwise, since hydrostatic testing is the most comprehensive and 
reliable testing method that we have at this time?
    Ms. Coyner. I agree with you until the very final 
statement, and that is with respect to hydrostatic testing 
being the best available alternative. What hydrostatic testing 
does is, it shows you the weakest place in the pipe. It does 
not show you all defects in the pipe.
    I think what is important is that hydrostatic testing be 
used in combination with other forms of testing. If there is 
concern that the administration's proposal and the language in 
it would somehow preclude the use of hydrostatic testing, I 
think we should work together to make sure that what is finally 
passed does not say that. That was not our intent.
    Our intent was really to make sure that we avoid the use of 
hydrostatic testing as the only form of testing, or as a 
testing of first result, not because of the wastewater issue, 
though that is certainly one that is of concern, but also 
because of the damage that hydrostatic testing may do to a 
pipe.
    Senator Murray. I understand that. I am just concerned that 
the language would allow an operator to say no, we are not 
going to do hydrostatic testing even if it is the only 
available method.
    Ms. Coyner. We ought to work together to make sure it does 
not have that unintended consequence.
    Senator Murray. Finally, the integrity management rule of 
your proposal requires at least 500 miles of pipeline to apply, 
and I understand that the proposed integrity management rule 
that you recently issued for comment has that same threshold 
requirement of 500 miles. Why did you create a minimum on this? 
Why do you not include all pipelines?
    Ms. Coyner. In the rulemakings we currently have scheduled 
this year, it is our expectation that we would move forward 
on--we call those large and small operators, above and below 
500 miles, and so what our expectation is, is that we would 
move forward with the small operators and with the natural gas 
pipelines at the end of the year. What the legislation does is, 
it uses the standard that we have currently proposed for large 
operators as the basis for applying it to all operators if we 
do not move forward on the rulemakings. Is that sufficiently 
confusing?
    Basically, it says 500 miles, because that is the 
rulemaking that is out now, and that is the standard which we 
would apply across the board if there were no further 
rulemaking activity.
    Senator Murray. 500 miles is a long space.
    Ms. Coyner. It is not intended to mean that it would not 
apply to pipelines of a shorter length. It is a definition to 
describe a rulemaking right now that only covers the larger 
pipelines. What the provision is designed to do, or was 
intended to do, was to say the standard that applies to large 
operators would apply to small operators as well if there is no 
further action taken.
    Senator Murray. I am going to call for a short recess. 
There is 2 minutes left in the vote, and I need to get to the 
floor and back. I do believe other members of this Committee 
have questions for this panel, so if we could just take a short 
recess, and we will be right back.
    [Recess.]
    Senator Gorton. Ms. Coyner, a question from Senator 
McCain's material here. At the beginning of the year, RSPA 
revoked interstate pipeline agents delegation status away from 
Arizona and Nevada, authority under which the States inspect 
interstate lines, report their findings, and the Department is 
responsible for enforcement, also announced its intention to 
revoke the status from all other states in the future.
    How is this consistent with your own stated views and 
Secretary Slater's testimony before the Committee when he 
stressed the importance of federal and state partnerships?
    Ms. Coyner. The issue with respect to the two states 
mentioned refers to the current interstate agency program which 
is a year, 2-year temporary program and turns on there actually 
being inspections being conducted in that particular State.
    Senator Gorton. And there were not in those two states?
    Ms. Coyner. That is correct. In terms of the scheduled 
inspections, however, we have repeatedly invited Arizona and 
Nevada to reapply for interstate agency status as recently as 2 
weeks ago.
    The issue at stake here is a couplefold, and we have tried 
to address it within the context of our legislative proposal. 
The states have felt very strongly that they would like to see 
permanent interstate agency status. There is no statutory 
requirement for this particular part of the program, but we 
would like to propose there be a statutory provision and that 
it include a permanent grant of interstate agency status for 
the purpose of inspecting liquid lines. We already have a 
similar program for natural gas lines.
    That provision would allow a state to do a number of 
different kinds of inspections. Of particular interest to the 
two states that you mentioned would be operation and 
maintenance inspections. We have asked in that category that 
there be a coordinated work plan, and the issue here is we want 
to make sure that high priority issues are being addressed.
    We want to make sure that intrastate lines are not being 
neglected, and we want to make sure that there is not a 
duplication of effort, but it is my view and Secretary Slater's 
view that there is an important opportunity to allow for a 
state input into the protection of pipelines as well as the 
inspection of pipelines.
    Senator Gorton. Senator Breaux.
    Senator Breaux. Thank you, Mr. Chairman. I thank the 
witnesses.
    I have two short areas I want to get into. The first one, 
in the Bellingham accident, NTSB member Hammerschmidt's 
testimony indicates that, based on the event logs, we know that 
the flow within the pipeline was restarted approximately 45 
minutes after the rupture occurred. The pipeline was then 
operated for about 17 minutes until the pump shut down, and I 
note also from Mr. Hammerschmidt's testimony that back in 1995, 
the Safety Board recommended that RSPA, your agency, expedite 
requirements for the rapid shutdown of failed pipeline 
segments.
    Now, I know for a fact in off-shore areas of the Outer 
Continental Shelf that there are federal requirements requiring 
automatic shut-off valves when an off-shore pipeline has an 
interruption for whatever reason. I guess my question, and they 
were recommending this 5 years ago, why do we not have 
requirements for automatic shut-off valves on gas pipelines?
    Ms. Coyner. Senator Breaux, are you asking me about natural 
gas pipelines, or liquid?
    Senator Breaux. I am asking about natural gas pipelines. I 
mean, I do not understand how this line could have had a severe 
interruption to it and then for a substantial period of time it 
says here that it was restarted again, and obviously the 
interruption was still there, and that it operated something 
like 17 minutes with a major leak.
    Ms. Coyner. I think it is important to note, Senator 
Breaux, that this was a liquid pipeline and not a natural gas 
pipeline, and there is important differences in terms of the 
use.
    Senator Breaux. There is no requirements of automatic shut-
off on liquid pipelines?
    Ms. Coyner. There is a difference in terms of the usage of 
automatic shut-off valves on liquid lines in terms of the 
potential for actually causing a more serious problem.
    Senator Breaux. The question is, is there a federal 
requirement that there be automatic shut-off valves on gasoline 
pipelines?
    Ms. Coyner. There is not a requirement. The integrity 
management issue we have been discussing this morning would 
require that a company install those in order to protect highly 
populated areas and environmentally sensitive areas, balancing 
the possible difficulties that they pose on liquid lines.
    Senator Breaux. Mr. Hammerschmidt, you made this 
recommendation, or your agency did, 5 years ago. Does it 
disturb you that we still, 5 years later, do not have action on 
this?
    Mr. Hammerschmidt. Yes, it is disturbing, but that is just 
one of many areas that have not been addressed for many more 
years.
    Senator Breaux. I think the lack of action speaks for 
itself. I am disturbed by it. In another area, back in 1987, 
the safety board recommended that RSPA--and neither one of you 
were there--recommended back in 1987 that we require pipeline 
operators to periodically inspect their pipelines, and yet you 
point out, Mr. Hammerschmidt, that now we are 13 years later 
and we do not have that recommendation in place. I know that is 
not to say that pipelines are not inspected, because companies 
do inspections without federal requirements.
    Ms. Coyner, can you comment? I know you have the rulemaking 
now, but why don't we have federal requirements that interstate 
pipelines be periodically inspected, particularly when I would 
imagine that most of them in fact are being inspected?
    Ms. Coyner. I think in terms of the time with which it took 
to address that issue, one of the things I would like to point 
out is, over the last 5 years in terms of the NTSB 
recommendations we have had almost a 95 to 97 percent 
acceptance rate in terms of responsiveness. I think that 
reflects, a change in the approach we have taken at the Office 
of Pipeline Safety, but also the increased allocation of 
resources in order to be able to address those issues.
    Senator Breaux. I appreciate that, but with the two I 
listed we do not have regulations yet, and it seems like the 
two, the automatic shut-off valves and the regular periodic 
inspections, have to be two of the biggest.
    Ms. Coyner. On the issue of the automatic shut-off valves, 
the NTSB recommendation indicates that the Bellingham accident 
actually had to do with requiring a leak detection system. I 
think it is important, and particularly important for the 
families who are concerned here, to know that there was indeed 
a leak detection system on this line, and that they were 
subject to regulation in terms of what the standards were for 
that leak detection system.
    Senator Breaux. The problem is not finding out there is a 
leak. The problem is the fact that the pipeline continued to 
pump gasoline for 17 minutes after it was already interrupted.
    Ms. Coyner. The requirements in terms of the automatic 
shut-off valves is not one that the NTSB has recommended with 
respect to liquid lines, only for gas lines. The rulemaking----
    Senator Breaux. I am not sure anybody has to recommend 
that. It seems like it is just sort of logical to be part of 
your office to require automatic shut-off valves.
    Ms. Coyner. The issue with respect to liquid lines is not 
as clear as it is with natural gas pipelines. I would be glad 
to submit for the record the technical documentation in that 
respect, or with that regard.
    I think in terms of the inspections the federal government 
has long required a variety of different types of inspections 
of pipelines. You are right that we have been long in requiring 
the inspection by use of internal inspection devices. We have 
required inspection through hydrostatic testing, we have 
required inspection in terms of the gauges, in terms of aerial 
surveys, and in terms of review of different corrosion issues.
    Internal inspection devices have moved a long way. We 
believe that now is the time to require periodic testing with 
those internal inspection devices, and we also think it is 
important to further push the envelope in terms of the 
technology so that we can have continuous monitoring and 
detection of corrosion problems, and also link them to fail-
safe mechanisms that would shut off the pipelines.
    Senator Breaux. Mr. Hammerschmidt, Ms. Coyner says they do 
have hydrostatic testing requirements and others, and your 
statement says 13 years after the initial recommendations there 
are no regulations that require pipeline operators to perform 
periodic inspections or tests. She says yes, there are.
    Mr. Hammerschmidt. Senator Breaux, what we are referring to 
are the smart pig operations that would test for pipeline 
integrity, and I believe we are talking perhaps apples and 
oranges here, but there are no regulations that address that at 
this point. In other words, as Mr. Mead said, running these 
torpedo-like devices through pipelines to detect weak places.
    Senator Breaux. That is not required?
    Mr. Hammerschmidt. That is correct, and I might add, if you 
would indulge me, I was in fact at the Safety Board in 1987. In 
fact, I was on duty and on scene for an accident investigation 
that led to these recommendations. Actually three accidents I 
cited led to the 1987 recommendations, one of which was on 
February 21, 1986, I believe, which occurred in Lancaster, 
Kentucky, or as they call it down there, Lancaster, Kentucky.
    The only reason I mention that is because it was the first 
pipeline accident investigation I had been out on, although I 
had been out on aviation accidents and other modal-type 
accidents, but this was a 30-inch transmission line basically 
going from Texas to the New York area. It had a rupture, and it 
pretty much released the gas until it expended itself, ignited, 
and in the process it basically incinerated an area, a rural 
area of about 20 acres.
    And the release of the gas--it was under such pressure, I 
believe it was a little less than 1,000 psig, but the escaping 
gas left a ditch that was approximately 500 feet long, 30 feet 
wide, and 6 feet deep, and I remember that that was just a 
scene of devastation to me, and it made a real impression as to 
the potential devastating impacts of these pipeline accidents, 
especially any type of hazardous materials pipeline accidents, 
but in particular gas pipeline accidents.
    Senator Breaux. Thank you. Thank you, Mr. Chairman.
    Senator Gorton. For any of you, can any of you tell me how 
many criminal prosecutions there have been under the criminal 
provisions of the present Pipeline Safety Act?
    Ms. Coyner. Under the criminal provisions of the Pipeline 
Safety Act?
    Senator Gorton. Yes.
    Ms. Coyner. I think the answer is that there has been one 
subject to a particular provision, but actually that is not 
true. I know of at least half-a-dozen of them. There have been 
criminal prosecutions for falsification of records. There have 
been criminal prosecutions that have been brought for knowingly 
causing outside force damage and resulting in the rupture of 
the line. Those are prosecutions that have happened in recent 
years. I would be glad to submit those numbers.
    Senator Gorton. Well, I would certainly like that.
    Senator Gorton. Many of us have expressed our extreme 
frustration in connection with Bellingham. We are now 11 
months, I gather, to the day from the time of the accident, and 
the people who know most about it have not said a word because 
they are theoretically subject to criminal prosecution.
    It seems to me that these criminal provisions often 
frustrate our goal of greater safety, rather than to enhance 
it. Would any of you feel it appropriate that the Department of 
Transportation have the authority to grant immunity from 
criminal prosecution if it felt it better to be able to get 
prompt testimony in order to help prevent such accidents in the 
future?
    Mr. Mead. No, I would not feel comfortable with the federal 
Government being able to do that. I am familiar with the 
situation in Bellingham, and in a lot of these cases it is 
important for the Justice Department, the Department of 
Transportation, and the NTSB to get together very soon in the 
process. In some respects, there are mutually supportive 
things, but if you give transactional immunity to somebody who 
has deliberately, intentionally falsified a report, I think 
there is a certain trade-off, and I am not sure that I would 
want to make that judgment alone.
    I believe the chief law enforcement officer of the United 
States has a role in giving out transactional immunity, plus I 
think that the Department of Transportation would in the end be 
subject to challenge that it was getting too close to the 
industry in granting immunity in situations like that.
    The key is getting the parties involved and cooperating 
early to see if the Justice Department can give immunity to 
certain----
    Senator Gorton. Is that an implied criticism of the 
proposition that that has not happened in this case?
    Mr. Mead. It took longer than I think it should have in 
this case, but it did happen. As you know, just recently the 
court said it would be permissible for NTSB to do testing on 
the pipeline, at least as I understand it.
    Senator Gorton. But you still do not have the testimony of 
these five or six people?
    Mr. Mead. No.
    Senator Gorton. Do you have any idea when a decision will 
be reached that will permit that?
    Mr. Mead. No, sir, I do not.
    Ms. Coyner. I think that what is most important is that the 
NTSB be able to conduct its safety investigation, and that we 
need to work together with the Department of Justice and with 
state prosecutors to make sure that if there is criminal 
activity, that that can be pursued once the safety 
investigation has been completed.
    I am pleased to report that the Department of 
Transportation has begun working with the Department of Justice 
on policies that might guide individual U.S. Attorneys in their 
approach to these things.
    As you know, Senator Gorton, we have had this discussion in 
other places. It is not a uniform policy from one U.S. Attorney 
to another, but we believe it is one that would benefit from 
discussion well before the incident ever occurs. I think that 
the Southern District of Florida, Tom Scott there, probably has 
a model for that. He has had an unfortunate number of cases, 
from ValuJet to other aviation cases and hazardous materials 
cases, and I think it is one that gives us a place to work 
from.
    I do not think--and I would agree with everything that Ken 
Mead said about giving the Department the authority to grant 
immunity. I do not think that would be constructive, 
particularly when the NTSB is the lead safety investigators.
    Mr. Mead. I will tell you where a very gray area is, that I 
have not fully reached a conclusion on. It is not an issue of 
whether somebody willfully and intentionally falsified a 
document or a report, or something like that. Rather, it is 
when there appears to be a pattern of negligence, perhaps even 
gross negligence, and whether that should rise to the level of 
criminal misconduct.
    I think that is a very difficult area, particularly when 
you are trying to balance whether it is more important to put 
somebody in jail under those circumstances or fine them, or 
more important to determine the cause of the accident.
    Senator Gorton. That is what I would like to find out, if 
you ever actually put anybody in jail.
    Senator Breaux. Mr. Chairman, I think Mr. Mead has hit on a 
point. Under the Clean Water Act and other acts, the Migratory 
Bird Act is one of them, a person can be held criminally liable 
for ordinary negligence, not for having to show intentional 
wrongdoing or criminal wrongdoing, or even gross negligence, 
and what you are seeing in the Bellingham case and in others is 
a hesitancy on the part of witnesses coming forward to testify 
who may be ordinarily negligent in their actions because of the 
risk of criminal prosecution for ordinary negligence, and not 
having to even show intentional wrongdoing, or even gross 
negligence.
    It is a problem, and it is in congressional actions that 
have created this problem, and that is why you see people not 
being willing to come up and tell the truth about what 
happened, because they fear being criminally prosecuted.
    Senator Gorton. Senator Brownback, would you like to ask 
questions?

               STATEMENT OF HON. SAM BROWNBACK, 
                    U.S. SENATOR FROM KANSAS

    Senator Brownback. If I could, Mr. Chairman, and thank you, 
and I apologize. I hope I do not hit some redundancies here, 
and I have a statement for the record that I would like to 
submit as an opening statement, too.
    [The prepared statement of Senator Brownback follows:]

               Prepared Statement of Hon. Sam Brownback, 
                        U.S. Senator from Kansas

    Thank you Mr. Chairman for holding this hearing and for providing 
critical leadership on an issue that is so important to the safety and 
reliability of interstate pipelines.
    I would first like to express my condolences to the families who 
lost loved ones during that horrific accident in Bellingham last June. 
I realize that no legislation can take away the pain you have suffered 
but I am hopeful that this Committee will pass a bill that will make it 
more unlikely for these accidents to occur in the future.
    While the recent accident in Bellingham was tragic, pipelines are 
the safest mode for delivering energy. During the past 10 years, 11 
fatalities have occurred from natural gas transmission pipeline 
accidents, with liquid pipelines being responsible for 23 fatalities in 
the same time period. On the other hand, about 20 fatalities per year 
are associated with local distribution companies. As a point of 
reference, more than 40,000 deaths per year are related to highway 
accidents.
    That having been said, third-party damage is by far the leading 
cause of pipeline accidents that result in death and injury. In fact, 
for natural gas transmission lines, third-party damage represents about 
38 percent of all accidents, and about 70 percent of all fatalities 
associated with pipeline accidents. For natural gas local distribution 
companies, third-party damage is an even greater problem, causing 
almost two-thirds of all accidents.
    One of the most effective ways to combat third-party damage to 
pipelines is the use of one-call (or ``call-before-you dig'') centers, 
which provide excavators with information about underground utilities 
prior to beginning their work. One-call centers are governed by state 
law, and are funded by local pipelines and utilities. In 1998, Congress 
passed comprehensive one-call legislation as part of the Transportation 
Equity Act for the 21st Century (TEA-21). The bill established a 
federal grant program for states that work to improve the coverage and 
participation level of their one-call programs.
    I applaud the efforts by the OPS in targeting third-party damage 
through its national ``Dig Safely'' public education campaign and by 
promoting damage prevention practices associated with one-call systems.
    Congress should look at improving public education programs and 
one-call systems in order to prevent third-party damage. However, it 
should not involve weakening federal control over interstate pipelines.
    Of the approximately 2 million miles of pipeline in the country, 
about 75% or 1.5 million miles are natural gas local distribution 
pipelines. These intrastate natural gas pipelines, along with 
intrastate liquid pipelines, are, for the most part, under the 
oversight of state pipeline safety regulatory agencies. Since the 
Federal government regulates all interstate commerce activities, states 
are only preempted from regulating about 500,000 miles of interstate 
pipe.
    Some interstate pipeline transmission systems, those that carry the 
majority of the fuel to the eventual users, traverse more than 10 
states and hundreds of localities as they transport natural gas from 
the wellhead to the consumer. While a large pipeline may pass through 
many state and local jurisdictions, it still must operate and be 
maintained as a single system so that the pipeline system will operate 
in a safe, consistent, and efficient manner.
    If states were allowed to preempt federal safety standards for 
interstate pipelines, the actions of one state could affect gas service 
and deliverability to consumers in other states in which the pipeline 
operates. Differing state safety standards also would be disruptive to 
the testing, inspection and equipment replacement activities that 
interstate pipelines currently perform. Additionally, individual state 
requirements shift focus away from system-wide priorities and service 
considerations, as well as resources from areas where the need is 
greatest, without adding any additional margin of safety to the system. 
Indeed, if one state's requirements were restrictive enough, it easily 
would be possible for safety to actually be lessened in other states by 
having resources deflected away from the areas which may be most in 
need.
    I look forward to working with Committee members in passing a bill 
which I hope will improve upon the 1996 Act and provide for the safe 
transmission and distribution of fuel across this country.

    Senator Brownback. I thank the witnesses, and I want to 
thank the first panel who I got to hear a portion of on the 
television, and it is a terrible tragedy the families went 
through, and all of our hearts go out to you, and thank you for 
trying to make something right and something better or good 
happen out of a terrible tragedy.
    I am curious about looking at the issue of inter- versus 
intrastate pipelines, if we could, and the regulatory regimes 
within each of these, and I am certain that you follow these 
pretty closely, but as I look at DOT numbers overall, within 
this area--and help me if I am looking at this correctly or 
not.
    If you look at the pipeline totals in this country that are 
just under state jurisdiction, it is about 75 percent of the 
pipelines that are under state jurisdiction solely, is that 
correct?
    Ms. Coyner. 75 percent are under the primary jurisdiction 
of the states. That means that they apply Federal standards to 
the intrastate lines, and they have the opportunity to have 
some standards in excess of that within their state.
    Senator Brownback. Where have we had the most pipeline 
problems in the recent couple of years? Has it been more in the 
in-state, intrastate, or interstate pipelines?
    Ms. Coyner. It has been on intrastate pipelines. It depends 
how you define it.
    Senator Brownback. Well, define it by the great number of 
accidents and fatalities.
    Ms. Coyner. That would be on intrastate lines.
    Senator Brownback. But with the primary source of 
regulation being within the state?
    Ms. Coyner. Right.
    Senator Brownback. Has that been changing over a period of 
years? Has it been in the past where it was more of the 
interstate or intrastate, or has that been fairly consistent 
over, say, the past 10-year time period, do you know?
    Ms. Coyner. I believe those numbers have gone up somewhat, 
and the reason for that is the fatalities tend to happen on 
local distribution systems, those gas lines that supply gas 
directly to a residence or a business, and they are in areas 
that by the very nature of where they are, there are more 
people close to the pipeline, and so that is a tendency where 
those were, where those accidents have been.
    Senator Brownback. So it is more of a function of locality 
than it is of percentage of pipelines or distances that they 
are covering?
    Ms. Coyner. It is a function of a couple of different 
things. One is that if you hit--and outside force damage is a 
leading cause of failure. If you hit a natural gas pipeline 
that is serving a neighborhood, you both have a much more 
immediate safety hazard as well as the likelihood that there 
are people in the vicinity.
    Senator Brownback. And what percentage of the accidents are 
what you just described as the outside force on the pipeline?
    Ms. Coyner. I think the numbers have changed somewhat. I 
believe there are 50 percent on local distribution systems, 
somewhat less on natural gas transmission lines, and 25 percent 
on liquid, hazardous liquid lines like the one at Bellingham.
    Senator Brownback. So the numbers I was looking at, the 
number of injuries of the in-state lines last year that you 
were having 31 lines, the number of injuries were under state 
jurisdiction, and one accident of lines under federal primary 
jurisdiction in 1999.
    Ms. Coyner. Well, define accidents, in terms of injuries or 
fatalities.
    Senator Brownback. This is just injury.
    Ms. Coyner. I think that the documentation they are looking 
at, sir, is really defining a seriousness of a particular 
accident in terms of the consequence of it.
    Senator Brownback. As I have looked through this, I think 
overall, Mr. Chairman, this is a very serious issue, and the 
incident in Washington is a horrifying one. I am hopeful we can 
move forward legislatively.
    I have some real caution about the note of having--I think 
the state inspection is a good notion, but you are saying not 
state. I do not know if you put the term jurisdiction or 
regulatory authority. That is where I have some real pause 
about as we look at the overall issue here, because we all want 
safer pipelines. You want that, I want that, but I think an 
issue that I want us to be cognizant and aware of is, we have 
got a lot of the problems that are happening right now that the 
dominant regulatory entity is the State, and a lot of that, as 
I understand from you, is the location of it.
    But as we move forward I think we would be wise not to be 
really giving that authority back over, or giving that 
authority to the States in these particular instances.
    Ms. Coyner. I think what is important about what you 
focused our attention on is that, as we look to strengthen our 
partnerships with States on intrastate lines, we want to make 
sure that they are still focused on intrastate lines where we 
have the greatest problems, and I think what you have expressed 
is more eloquent than perhaps the way we put it, but we are 
certainly in agreement with you on that.
    Senator Brownback. Thank you. Thank you, Mr. Chairman.
    Senator Gorton. Thank you, and I want to thank this panel, 
and we will now hear from panel number 2. Will those witnesses 
please come forward?
    Mr. Haener, you are first on my list, from CMS Gas 
Transmission and Storage.

 STATEMENT OF WILLIAM J. HAENER, PRESIDENT AND CHIEF EXECUTIVE 
OFFICER, CMS GAS TRANSMISSION AND STORAGE COMPANY, ON BEHALF OF 
       THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA

    Mr. Haener. Thank you, Mr. Chairman. In addition to 
representing CMS Energy, I also am here to represent the 
Interstate Natural Gas Association, whose member companies 
represent the majority of the interstate pipeline in this 
country.
    I first want to say that we do appreciate the Commission's 
and the Committee's interest in pipeline safety. We share your 
concern. And clearly, the importance of pipeline safety has 
been highlighted by this recent tragic petroleum pipeline 
incident in Bellingham, which, really, we heard about today, 
killed three young, innocent people. Unquestionably, it has 
been a tragedy, a painful experience for everyone involved, the 
parents that were here today, the communities. I commend the 
parents. It took a lot of courage to come here today. I think 
that is good. That is good for all of us.
    And on behalf of INGAA, which is the Interstate Natural Gas 
Association, I can assure you that the natural gas pipeline 
industry is committed to safety now and into the indefinite 
future.
    Certainly, the pipeline industry, and the natural gas, has 
had a very good safety record. I think the statistics show 
that. Now, statistics are not the end all. We are committed to 
continue to improve safety. We are supporting research 
constantly. We are always looking at new procedures and new 
technologies.
    For the record, safety is a priority in our industry. It is 
not a part-time job; it is a full-time job. We do have state-
of-the-art monitoring equipment that is in operation 24 hours a 
day. We have a combination of high-tech tools and what we call 
no-tech tools, which will range from periodically physically 
walking the pipeline, hydrostatically testing the pipeline, 
close-interval corrosion surveys, to smart pigs. They all have 
a use. And we need to have the majority of those tools 
available to us.
    I will tell you as an engineer, there is not one tool that 
is going to be the end all. We need to use them all. We need to 
continue to improve them. We need to continue to research.
    We fly the pipelines weekly. That is low-tech. But, again, 
there is low-tech, there is high-tech. We need the combination 
and will continue to support both.
    I think that there is a misconception on the natural gas 
side. There are a number of regulations in place. They go from 
design regulations to reporting requirements to maintenance 
requirements. As an example, we are required to constantly 
monitor what we call class locations. This is the population 
that lives close to the pipeline. If the population increases, 
there is more people living there, we are required to change 
the design criteria for the pipe, which might involve taking 
that pipe out and replacing it with heavy-wall pipe. This is 
something we are required to do by law. We want annual surveys. 
And that is kind of a routine safety maintenance procedure that 
we are required to do.
    We do have reporting requirements. We do have very specific 
design requirements that we have to meet and constantly 
monitor. And we do have requirements to notify the public. 
Annually, we have to notify the public. We look at the people 
along the pipeline right away as our neighbors. We visit them 
annually. We tell them who we are, where the pipeline is 
located, what to do, who to call, and whatever we can do to 
assist them, and we encourage them to communicate with us. If 
they have any concerns, if they saw somebody near the pipe, we 
leave them information on the pipe.
    We also are required to give the local communities maps of 
the pipeline system, the officials, where it is. We already do 
this. Can we improve? I am sure we can. But I do not want to 
leave the impression that this is not done. These are our 
neighbors. We understand that and we do work with them, and are 
required under regulation to do that.
    Certainly, we have heard about damage prevention as being a 
major concern from third parties. It is a major concern. It is 
responsible for a good portion of accidents. We do have one-
call legislation, something called TEA-21, that Senator Lott 
sponsored several years ago. It is a good system, but we need 
to continue to improve that system.
    While we do have a very good history of safety, we do need 
to continue and improve, and we do need to continue to work on 
legislation.
    I would like to comment just on three or four things in the 
legislation. First, I think it is important that the pipeline 
integrity rules take into account the difference between liquid 
and gas operations. Certainly, they are both safe operations, 
but the medium they flow does have physical properties that are 
different. In terms of natural gas, it is lighter than air. It 
will vent into the air. It does not accumulate on the ground 
like liquid.
    Gas is a compressible fuel. Liquids are non-compressible. 
They have different physical characteristics within the 
pipeline, and will put different kinds of stresses within the 
pipe. We need to recognize those in the maintenance and design 
criteria. So we do need separate rules and regulations so that 
in fact in the doing we have the safest operation under the 
transportation of both media forms.
    In terms of Federal preemption, this is a concern. The 
pipeline that I am directly responsible for, the Panhandle 
Trunk Line Companies, operate in 13 different States. We 
operate it as an integrated system. We are required to. We 
serve many municipalities along the line. We do need one set of 
safety standards to operate under. We have that now. We need to 
continue that system.
    Can we improve the regulations? Yes. We need to work 
together to do that. But we cannot have a situation of 
individual States having their own regulations that are 
different from the Federal.
    In terms of operator training, the natural gas industry 
does have a requirement, through OPS, under operator training. 
We are in the process of implementing that. And that program 
will be implemented by April of 2001. We ought to look at that 
program, evaluate it, and, if it needs improvement, let us 
improve it. Let us give it a chance to operate first.
    In terms of public notification, I talked about that. We do 
annually notify the people along our right of way. We leave 
things with them so they do not forget us. I have numbers of 
examples here. Here is a thermometer you can stick on your 
window to look at the temperature. It has the name of the local 
pipeline company, the numbers to call. If you have questions or 
see an emergency, we encourage it. We do leave maps with local 
officials. So those things are done. They are underway.
    In closing--I know there are a number of witnesses here--I 
would like to say that we are committed to work with the 
Committee to ensure that OPS and the Committee comes up with 
the best legislation that enhances safety. And on behalf of the 
natural gas industry, we will do whatever is required to work 
on this legislation and make sure it is passed in a timely 
manner.
    Thank you.
    [The prepared statement of Mr. Haener follows:]

Prepared Statement of William J. Haener, President and Chief Executive 
  Officer, CMS Gas Transmission and Storage Company, on Behalf of The 
             Interstate Natural Gas Association of America
Introduction
    Mr. Chairman and Members of the Committee, I am William J. Haener, 
President and CEO of CMS Gas Transmission and Storage, a division of 
CMS Energy Corp., headquartered in Dearborn, Michigan. Today I am 
speaking on behalf of both the Interstate Natural Gas Association of 
America (INGAA) and CMS Energy.
    INGAA is the trade association that represents virtually all of the 
interstate natural gas transmission pipeline companies operating in the 
U.S., as well as comparable companies in Canada and Mexico. INGAA's 
membership accounts for approximately 180,000 miles of the 280,000 
miles of natural gas transmission pipeline in this country. Our members 
transport over 90 percent of the natural gas consumed in America.
    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 Gas Transmission and Storage is the pipeline and field services 
division of CMS Energy. CMS Panhandle Pipe Line Companies, a unit of 
CMS Gas Transmission and Storage, 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 and Storage, owns and 
operates an interstate pipeline and storage company located in 
Michigan.
    Before moving on to the rest of my testimony, I first want to say 
how much we appreciate the Committee's interest in pipeline safety. We 
share your concern. Clearly, the importance of pipeline safety has been 
highlighted by the recent tragic petroleum pipeline accident in 
Bellingham, Washington that killed three young people. It has 
unquestionably been a tragic and painful experience for three sets of 
parents--and for a local community--that probably had previously given 
little thought to the pipeline before the accident. Others will testify 
on behalf of the petroleum pipeline industry. On behalf of INGAA, I can 
assure you that the natural gas pipeline industry is committed to 
safety. As you have pointed out yourself, Mr. Chairman, the safety 
record for natural gas pipelines is quite good, and we will continue to 
improve safety with new procedures and technologies. My testimony will 
discuss the industry's historical emphasis on, and continued commitment 
to, ensuring that the nation's interstate pipeline system operates in a 
safe and reliable manner. INGAA is committed to working with this 
Committee to continue to build on our safety record.
Natural Gas Pipeline Integrity
    Millions of Americans rely on clean, efficient natural gas to fuel 
homes and workplaces, with little 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. And the interstate natural gas 
pipeline industry is spending millions of dollars each year on research 
and new technologies to make their systems increasingly safer.
    Safety is the number one priority for interstate natural gas 
pipelines. As the integrity, or soundness, of our systems is key, 
operators of these pipelines take numerous steps to ensure the safety 
of their systems and use a number of different tools and diagnostic 
procedures to do so. No single tool or procedure will assure safety. In 
a recent survey, interstate natural gas pipelines spent $560 million 
dollars per year on safety for approximately 160,000 miles of pipeline. 
That translates into approximately $3,500 per mile of pipe.
    For years, these interstate pipelines also have pursued new 
technologies to continue to improve the safety of their systems. 
Through the Gas Research Institute (GRI) and the PRCI (formerly known 
as the Pipeline Research Committee), interstate natural gas pipelines 
have been pursuing technologies to examine the limits of internal 
inspection devices such as ``smart pigs'' and to improve sensors used 
in smart pigs. They also are seeking advanced technologies to detect 
dents and metal loss caused by mechanical damage, and are developing 
technologies to provide reliable operations.
    Natural gas pipelines monitor and control safety in many ways. 
Pipelines implement and comply with minimum safety standards imposed by 
the U.S. Department of Transportation's Office of Pipeline Safety (OPS) 
under the Pipeline Safety Act. Moreover, many companies have internal 
procedures that exceed these minimum requirements. These safety 
measures include, but are not limited to: ground and aerial surveys to 
observe third party activity or discoloration of plants and grasses; 
the use of cathodic protection (a small electric charge) to prevent 
corrosion of below-ground pipeline; the use of high quality pipeline 
materials and corrosion coatings; hydrostatic pressure testing of new 
and replaced facilities; and the use of ``smart pigs'' to detect metal 
loss.
    Specific measures are incorporated in OPS regulations to raise the 
level of safety for natural gas pipelines as the population density 
around a pipeline increases. These categories of population density, 
known as class locations, range from rural (Class 1) to heavy urban 
(Class 4). More stringent design, construction, inspection and 
maintenance practices are stipulated in higher population density 
areas. Pipeline operators are required to constantly monitor the area 
around the pipeline for changes in population density. When these 
changes occur, the pipeline operator is required to insure that the 
installed pipeline is commensurate with the new class location 
requirements for pipe design. If it does not meet these requirements, 
the pipe is upgraded to increase the margin of safety. The new class 
location also requires increased frequency of inspections.
The Importance of National Standards
    In the wake of the Bellingham accident, some have called for 
changes to the federal Pipeline Safety Act which would allow each state 
to enact its own safety regulations for interstate pipelines. INGAA 
strongly believes that removal of federal preemption would be a 
mistake. Almost invariably, interstate pipelines operate in more than 
one state. Some systems traverse more than 10 states and hundreds of 
localities as they ship natural gas from the wellhead to the consumer. 
While a large pipeline may pass through many state and local 
jurisdictions, it still must operate and be maintained as a single 
system. This is why one set of standards and one national regulatory 
authority is so important to the consistent, efficient and safe 
operation of the interstate pipeline network.
    The Pipeline Safety Act gives states the authority to adopt 
additional or more stringent safety standards for intrastate pipelines 
if such standards are consistent with federal minimum standards. 
However, states cannot adopt safety standards for interstate 
facilities. That authority is vested exclusively in the Congress and 
the U.S. Department of Transportation.
    The reason for federal preemption is simple. Allowing individual 
states to create their own safety standards would be confusing and 
problematic for pipelines that operate in multiple states. The actions 
of one state might negatively affect gas service and deliverability to 
consumers in all other states in which the pipeline operates. For 
example, one state might require a lower gas pressure on pipelines 
within its jurisdiction, and thus decrease the amount of natural gas 
available to ``downstream'' consumers.
    As Chairman McCain has stated, a ``mishmash'' of state regulations 
would almost certainly hamper interstate commerce without improving 
safety. The states do have an appropriate and important role; that is, 
regulating intrastate pipelines, which account for over 70 percent of 
all pipeline mileage, and creating state one-call damage prevention 
programs.

Damage Prevention
    The importance of these public awareness programs is most critical 
in that the leading cause of natural gas pipeline accidents is 
unintentional third party damage. For natural gas transmission lines, 
third party damage represents about 40 percent of all accidents, and 
about 70 percent of all fatalities associated with pipeline accidents. 
For natural gas local distribution companies, third party damage is an 
even greater problem, causing almost two-thirds of all accidents.
    One of the most effective ways to combat third party damage to 
pipelines is the use of one-call (or ``call-before-you-dig'') centers, 
which provide excavators with information about underground utilities 
prior to beginning their work. By using the local one-call center, a 
homeowner, business owner or construction company can learn the 
location of underground facilities ahead of time, and avoid serious 
accidents. One-call centers are governed by state law, but are private 
not-for-profit entities funded by local pipelines and utilities.
    Congress passed comprehensive one-call legislation as part of the 
Transportation Equity Act for the 21st Century (TEA-21) in 1998. The 
law established a federal grant program for those states that work to 
improve the coverage and participation level of their one-call 
programs. The legislation also required the U.S. Department of 
Transportation to assemble a list of one-call center ``best 
practices.'' This study, along with the framework for a new national 
effort to focus on public awareness and damage prevention (entitled 
Common Ground), was released by the Department in 1999. States should 
use this report to continue to improve their one-call center practices, 
thus making them eligible for the grants in TEA-21.

Public Information Disclosure
    Another area where there has been renewed interest is in improving 
public information and disclosure about pipelines and pipeline safety 
efforts. INGAA wholeheartedly agrees that public education is a key 
aspect in ensuring safety. In fact, natural gas pipeline companies 
already provide a wealth of information about their systems to local 
communities through voluntary efforts and regulatory requirements. 
Public education has three goals: avoid accidents by educating the 
public about the potential danger of damaging pipelines; educate those 
living or working near pipelines about how to recognize potential 
problems and what to do in an emergency; and train local emergency 
response personnel in how to handle pipeline accidents.
    Current Federal law requires natural gas pipelines to have public 
education programs. The Pipeline Safety Act calls for public education 
programs to include information about the use of local one-call (or 
``call-before-you-dig'') systems, the possible hazards associated with 
leaks and the importance of reporting suspected leaks to the proper 
authorities. Federal law also requires natural gas pipelines to 
participate in local one-call centers, so that their facilities can be 
marked prior to the start of excavation work. Pipelines help to pay the 
costs associated with the operation of local one-call centers and their 
associated advertising and public outreach programs.
    Current Federal regulations also call for pipelines to provide 
information to local communities and emergency response personnel along 
rights-of-way. For example, natural gas pipelines must provide local 
communities with detailed maps of their systems to aid emergency 
response planning and coordination. Pipeline operators also must engage 
in a ``continuing educational program'' for local governmental 
agencies, including police and fire departments. This is accomplished 
through annual briefings and training exercises for emergency response 
personnel hosted by the pipeline operator. Unfortunately, many pipeline 
operators report difficulty in getting local emergency response 
agencies to participate in these free events due to a lack of interest 
or resources.
    Since a pipeline can pass by thousands of homes and businesses, 
pipeline operators also make information available to residents and 
business owners along the right-of-way. To get the attention of these 
individuals, pipeline companies often give out such items as calendars, 
flyers, thermometers, and other items, all with information about the 
pipeline, whom to call and what to do in an emergency. Landowners are 
encouraged to look for signs of trouble, including unauthorized 
excavation activity and indications of natural gas leaks.
    The OPS has an extensive amount of information about pipeline 
accidents, specific regulatory orders and corrective actions. Its web 
site includes general statistics about pipeline safety, but also 
includes detailed information about OPS investigations, compliance 
orders, findings of violation, warning letters and more. In light of 
the extensive public communications activities already performed by the 
interstate natural gas pipeline industry, INGAA submits that there is 
no need for additional requirements in this area.

Operator Qualification
    Although the interstate natural gas pipeline industry is already 
operating pipelines with qualified personnel, as is evidenced by the 
low rate for incidents attributable to operator error, INGAA supports 
the final rule on qualification of pipeline personnel issued by the OPS 
and placed in the Federal Register on August 27, 1999 (Docket No. RSPA-
98-3783; Amendment 192-86; 195-67). This rule is the result of a 
negotiated rulemaking that included representatives of natural gas 
transmission and distribution pipelines, liquid lines, state pipeline 
safety representatives, emergency response agencies, labor unions, 
corrosion experts, federal safety agencies and others. The Federal 
Mediation and Conciliation Service convened and facilitated this 
rulemaking.
    This rule requires operators of all pipelines covered by 49 CFR 
Parts 192 and 195 to have a written qualification program to evaluate 
the ability of employees and contractor personnel to perform tasks that 
are required under the pipeline safety regulations (called ``covered 
tasks'') and also to recognize and react to abnormal operating 
conditions that may occur while performing covered tasks. Operator 
training is recognized as an important element in achieving and 
maintaining qualification status. The new rule also sets record keeping 
requirements that operators must follow to successfully demonstrate 
compliance. This information must be maintained on each individual who 
has been evaluated and deemed qualified to work on a pipeline facility. 
OPS inspectors then audit this information to determine if the company 
is in compliance with the regulations.
    This rulemaking recognizes the difficulty of devising a system 
appropriate for the wide variations in the operations and maintenance 
procedures and facilities of individual operations by providing a non-
prescriptive, performance based regulation that requires each operator 
to develop, or have developed, a written program for the qualification 
of each individual. For example, some operators do not have 
transmission lines in their systems, others do not have compressors, 
pump stations, or storage facilities. Some operators perform a large 
number of ``covered'' tasks while other, smaller operators may have 
only a limited number of ``covered'' tasks. Therefore, each program can 
be tailored to the unique operations and practices of each operator.
    However, this also permits the OPS to audit each company's program 
to determine what tasks are covered, what qualifications are necessary 
to perform that task, and if the individual employees have demonstrated 
those qualifications. OPS can examine the records of the qualification 
of the employees maintained by each company and compare these to 
similarly situated employees in other companies. This ``benchmarking'' 
will enable OPS to ensure the adequacy of these qualification programs.
    Pipeline operators are now in the process of preparing these 
written qualification programs (to the extent they have not already 
done so), adapting (to the extent necessary) existing training and 
development programs, and developing an auditable record keeping system 
to ensure compliance with the rulemaking.

Safety Research
    Pipeline safety research is another area where there has been a 
heightened sense of interest. Since the earliest days of the industry, 
the natural gas pipeline industry has historically collaborated on and 
funded safety research. Two organizations currently provide 
collaborative research and development activities for the natural gas 
pipeline industry. The industry formed the Pipeline Research Committee, 
now known as the Pipeline Research Committee International (PRCI), in 
1952 to address industry-wide pipeline problems that needed R&D 
solutions. In the late 1970s, the natural gas industry formed the Gas 
Research Institute (GRI), which was supported by FERC-authorized 
funding.
    PRCI was founded by 15 natural gas transmission companies to 
research problems with industry-wide implications through a cooperative 
R&D program. The Committee became PRCI in 1995 to reflect the growing 
number of international members, which now represent almost half of the 
total 24-company membership. PRCI's funding comes from dues and co-
funding dollars received from GRI and others, with dues providing about 
$3.5 million annually.
    The PRCI Board of Directors, made up of key engineering and 
technical officers from member companies, provides oversight of 
research activities. Six committees of member company technical and 
engineering representatives manage PRCI's research programs and 
specific projects. The committees are line pipe, welding, non-
destructive testing, compressor efficiency and environmental 
performance, offshore and onshore design, and corrosion. Most PRCI 
programs focus on improving industry safety, processes for joining 
materials, corrosion control, pipeline design, operations, maintenance 
and construction, station efficiency, reliability, the performance of 
line pipe and system integrity.
    GRI is the more visible of the two gas industry research 
organizations, as it performs research on all sectors of the gas 
industry--production, transportation/transmission, delivery and 
consumer and end-uses. As with PRCI, GRI uses industry input and 
direction to identify, plan and manage research using outside research 
companies. But they differ in that GRI's staff members, not technical 
committees, manage all research programs. The Pipeline Program 
Executive Committee (PIPEC) and the Technical Advisory Groups (TAGs), 
made up of representatives of pipeline member companies, provide 
guidance. There are five such groups in the Transmission Unit of GRI: 
measurement, non-destructive evaluation, storage, integrity management 
and systems optimization and compression.

INGAA Comments on Proposed Legislation
    At this point I want to direct my comments to a few provisions of 
S. 2438, the ``King and Tsiorvas Pipeline Safety Improvement Act of 
2000,'' as well as S. 2409, the Administration bill. I would first like 
permission to submit further comments on these bills and S. 2004, 
introduced by Senator Murray, for the record.
    Mr. Chairman, it is worth noting that natural gas pipelines already 
face a strict regimen of regulations. Natural gas, crude oil and 
petroleum liquids all have different properties. For example, natural 
gas pipelines compress their product while liquid pipelines pump their 
products. Additionally, natural gas is lighter than air, and therefore 
moves into the atmosphere in the event of a leak. The probabilities and 
consequences of an accident are, accordingly, different for natural gas 
pipelines and for liquid pipelines. INGAA urges the Committee to 
continue to recognize these important differences in any pipeline 
safety legislation it approves.
    First, we are concerned about the language in both bills which 
would give states the ability to ``supplement the Secretary's program 
and address issues of local concern'' with respect to interstate 
pipelines. This language appears to give states additional authority to 
go beyond those that exist under federal guidelines. INGAA believes 
that interstate pipelines should be subject to one set of regulations. 
Giving states the ability to ``address issues of local concern'' seems 
to imply that a state authority can go beyond federal minimum standards 
for these interstate facilities. As I noted earlier, this additional 
layer of regulatory authority would almost certainly hinder interstate 
commerce without improving safety. If the intent of this provision is 
to expand state oversight authority to jointly inspect interstate 
pipelines with the OPS, INGAA would like a better understanding as to 
what activities such oversight authority would entail, as well as 
language to clarify this intention.
    The Pipeline Integrity Plan in S. 2409, the Administration's bill, 
calls for ``best achievable technology.'' This appears to be similar to 
EPA requirements for ``best available control technology.'' INGAA is 
concerned that compliance with such an open-ended standard could be 
disruptive to our operations, as well as costly to the industry. For 
example, one could read this language to potentially require us to 
continuously change the technology we use to construct pipelines. Taken 
to an extreme, the test could apply even to the pipe we already have in 
the ground. A ``best achievable technology'' mandate could also lead to 
a dangerous focus on only one or two technologies, rather than the mix 
currently employed by industry. Finally, it also assumes that pipeline 
safety is only derived from new technologies when, in fact, improved 
safety is often achieved through such ``low-tech'' methods as walking 
and flying the pipeline right-of-way and visually inspecting it and its 
surroundings.
    The Administration also calls for EPA to consult with OPS when 
developing an integrity rule for natural gas pipelines. As previously 
mentioned, natural gas is lighter than air and is insoluble in water. 
The environmental impacts of a natural gas leak are therefore minimal. 
For that reason, INGAA fails to see why EPA should have more 
involvement in the development of this natural gas pipeline rulemaking 
than other federal agencies.
    The Administration bill requires an integrity rule to be completed 
for large hazardous liquid pipelines by the end of 2000, and for 
natural gas pipelines within two years of enactment. However, if the 
OPS were unable to complete an integrity rule for natural gas pipelines 
within the specified period, then the existing hazardous liquid rule 
would automatically apply to gas pipelines. While we anticipate that 
the OPS will have this rulemaking out before the two-year period in the 
legislation is reached, and we would work with OPS towards this end, it 
is unfair to require us to fall under the liquid pipeline integrity 
rule. Natural gas and hazardous liquid pipelines are different, and the 
regulations governing their safe operation need to reflect those 
differences.
    While your bill, Mr. Chairman, provides more flexibility for the 
Secretary of Transportation to differentiate between natural gas and 
liquid pipelines, it also calls on the Secretary to implement the 
recommendations of the Inspector General. One of these recommendations 
calls for DOT to complete action on various congressional mandates. We 
want to make sure that Section 2 of S. 2438 would not require the 
Secretary to perform an additional rulemaking beyond that required in 
Section 5 of the bill requiring a pipeline integrity program. We also 
have some recommended language to Section 5 to clarify that 
requirements regarding unusually sensitive areas do not apply to 
natural gas pipelines, as reflected in current law, since natural gas 
pipeline accidents have only a minimal impact on the environment.
    INGAA also objects to the provision (Section 2(g)) in the 
Administration bill that would alter the existing ``grandfathered'' 
status for some pipelines. Some pipelines were grandfathered from 
design, construction, and installation regulations because they were 
designed, constructed and/or installed prior to the existence of the 
new regulations. However, this grandfathered pipe was constructed 
according to the existing industry and federal standards of the time, 
and other safety regulations currently apply to these facilities. For 
example, grandfathered pipelines are included in all inspection 
proceedings and are inspected in the same manner as any other pipeline 
on the system. Moreover, the proposed integrity rule will apply to 
these facilities in the same manner as it applies to newer pipeline 
facilities. The Secretary of Transportation already has the authority 
to shut down pipeline facilities that he or she finds pose a hazard. 
Yet, the provision in the Administration's bill could be read to 
require replacement of entire pipeline systems. Such a requirement 
would be extremely costly, could cause significant gas service 
disruptions and is unnecessary in light of the fact that these 
facilities must comply with current pipeline safety requirements. 
Therefore, INGAA respectfully submits that there is no need to repeal 
this provision of the law.
    S. 2438 also establishes a new operator training requirement in 
Section 4. We believe that the intent behind this provision is 
important. However, we note that the new OPS operator qualification 
rule (Docket No. RSPA-98-3783; Amendment 192-86; 195-67) already 
includes training as a function of the employee qualification 
requirement.
    Finally, I leave this Committee with some comments on the 
authorization level. First, I want to remind the Committee that part of 
the Administration's budget request for FY 2001 has already been 
authorized in TEA-21. I am referring to the $5 million in one-time 
grants to states which improve their one-call systems. In this 
authorization, Congress recognized that gas and liquid pipelines 
generate only about one-fifth of the calls made by one-call centers to 
mark underground facilities. This law states, in Section 6107, ``(a)ny 
sums appropriated under this section shall be derived from general 
revenues and may not be derived from the amounts collected under 
section 60301 (user fee section) of this title.''
    Neither bill breaks out what amounts should come from user fees, 
what amounts should come from the Oil Spill Liability Fund and what 
amounts should come from the Pipeline Safety Reserve. We would like to 
work with the Committee on this issue.
    Mr. Chairman, I would like to thank you once again for giving us 
the opportunity to provide our testimony. Over the last fifty years, 
the natural gas pipeline industry has worked hard to improve our 
already strong safety record. We appreciate your efforts to pass a 
balanced, constructive Pipeline Safety Act reauthorization. INGAA wants 
to work with you and the Committee in making this legislation a 
reality.
                                appendix








    Senator Gorton. Thank you.
    Mr. Wright.

    STATEMENT OF PHILLIP D. WRIGHT, SENIOR VICE PRESIDENT, 
ENTERPRISE DEVELOPMENT AND PLANNING, WILLIAMS ENERGY SERVICES, 
  ON BEHALF OF THE ASSOCIATION OF PIPE LINES AND THE AMERICAN 
                      PETROLEUM INSTITUTE

    Mr. Wright. Good afternoon, Mr. Chairman and members of the 
Committee. My name is Phil Wright. I am Chairman of the 
Executive Committee of the Association of Oil Pipe Lines. I am 
before you today to represent AOPL and API, the American 
Petroleum Institute.
    But before I begin, having heard the courageous testimony 
of the families of those fine boys who perished in the tragic 
accident in Bellingham, Washington, I would just like to 
express, on behalf of myself and my colleagues in the industry, 
how deeply saddened we are by that incident. And we never, ever 
want that to occur again.
    I wish I could promise that the industry will never again 
experience a fatal accident. But not unlike the airline 
industry, who could not possibly represent that there will 
never be another plane crash, I cannot do that. What I can tell 
you is that we view any accident, particularly those involving 
injury or death, as totally unacceptable, and pledge to take 
every step we can to avoid such accidents.
    So, with that objective foremost in mind, let me begin by 
briefly describing the task that we do as an industry. There 
are about 200,000 miles of liquid pipelines in this country. 
They move an enormous amount of materiel. And to put that into 
context, that is about 600 billion ton miles annually. That is 
525,000 million gallons. And I think it is important for us to 
bear in mind the context of the job that is done by the 
pipeline industry as we consider incidents and accidents and 
the occurrences of them.
    This volume amounts to 40 percent of the Nation's energy 
requirements and 97 percent of the transportation fuels that we 
use as a country. Pipelines are also critical in our national 
defense, as they directly supply over 100 military bases in 
this country. In short, pipelines are absolutely vital to the 
quality of life the American people have come to enjoy.
    The people in the pipeline industry are technically 
sophisticated, environmentally aware, we are committed as 
citizens, and dedicated to safety and the protection of the 
environment as our number one priority. Over the last 30 years, 
safety performance has steadily improved, whether measured by 
the number of incidents or the volume released. During this 
period of time, the number of incidents has declined 40 
percent, the volume released has declined 60 percent, and the 
median size of releases has decreased 65 percent.
    And over the last several years, the volume of product lost 
amounts to one-thousandth of 1 percent of the total product 
transported. That is an excellent record, and I would stack it 
up against any other industry's performance. We are, I think, 
justifiably proud of the job we do, but we are far from 
satisfied.
    At my company, we have a slogan: ``Good enough never is.'' 
And I find that attitude to be pervasive throughout the 
pipeline industry. No spill is deemed as acceptable, and we 
believe that the public, the government and we ourselves must 
control the factors contributing to accidents that we can 
control. As you have heard this morning, one such factor is 
external damage from excavation, the largest single cause of 
pipeline accidents. Congress struck a blow last year in this 
regard with the enactment of Federal One-Call legislation, 
which has been referred to previously.
    Now, turning to the legislation. First, it is our 
observation that the current law provides the Office of 
Pipeline Safety all the authority it needs to undertake its 
mission. The industry is closely and effectively regulated by 
the Office of Pipeline Safety.
    Nevertheless, and this may surprise you, it is in our 
interest and in the public interest, in our opinion, to have 
rigorous, comprehensive and consistent Federal regulation. We 
welcome appropriate regulation, because it is good for the 
public confidence and because safe operation of our interstate 
pipeline systems is our number one priority, indeed.
    My written testimony has detailed comments on the various 
bills before the Committee, but let me highlight just a few key 
points. With respect to Federal versus State authority, we 
believe that Federal rules should apply to pipeline facilities 
operating in interstate commerce. We believe this guiding 
principle is critical if we are to have a safe and efficient 
interstate pipeline network in the United States. We, 
therefore, oppose any provisions that weaken this principle.
    We are also concerned about language in the administration 
and the chairman's bills that would let States engage in 
regulatory activities that, quote, supplement the Secretary's 
program and address issues of local concern, end quote. The use 
of this phrase implies that the States can impose standards 
different from the Federal standards. And at a minimum, this 
language will lead to confrontation and uncertainty.
    Having said that, we totally agree that the Office of 
Pipeline Safety should be responsive to State concerns, and we 
certainly have no objection to creating a mechanism for States 
to have issues of concern addressed.
    With respect to integrity testing, we believe the integrity 
rule recently proposed by the Office of Pipeline Safety will 
indeed improve results. The guidance in the chairman's bill is 
in keeping with the OPS approach. By contrast, the provisions 
in the administration's bill are, in our opinion, too 
prescriptive, detailed and, in some cases, ambiguous. For 
example, the administration bill requires that an integrity 
plan use the, quote, best achievable technology, end quote. 
That term is undefined and will lead to great confusion and, we 
think, unintended consequences.
    Safety does not result from using a single test or tool, as 
my colleague pointed out. Nor is there a single best 
technology. Safety is achieved by using a combination of tools 
and operational techniques, some of which are very low-tech. In 
addition to those mentioned by my colleague, simply excavating 
the pipeline and looking at it is often the best thing to do. 
This is distinctly low-tech, but very effective in many cases. 
And certainly an effective overall program will include the use 
of high-tech and low-tech tools. But to suggest there is a 
single best technology or even a single best plan we think 
would be a mistake.
    We note that Senator Murray's bill does not call for an 
integrity program but does in fact mandate internal testing 
every 5 years. We believe the superior approach is to target 
testing and inspection resources to those areas posing the 
greatest risk. A blanket inspection requirement that treats all 
pipe equally will not produce that desired result.
    In terms of public education and communities' right to 
know, we are willing to make more information available to 
local officials and the affected public. And we are here to 
work out ways to do that very efficiently. We do not believe, 
however, that it is useful to simply blanket an area with 
technical information, when only a few people may be 
interested. For this reason, we would like to see this 
provision in the final bill refined to provide more targeted 
information distribution.
    In summary, the Association of Oil Pipe Lines and API 
members are, in fact, proud of our safety record and the job we 
do, while at the same time we also recognize that society and 
our public expects and demands that we do better. We expect no 
less of ourselves. And we look forward to working with the 
Office of Pipeline Safety on the integrity rulemaking as the 
next important step in that effort.
    Thank you.
    [The prepared statement of Mr. Wright follows:]

    Prepared Statement of Phillip D. Wright, Senior Vice President, 
   Enterprise Development and Planning, Williams Energy Services, on 
  Behalf of The Association of Pipe Lines and The American Petroleum 
                               Institute

Introduction
    Mr. Chairman, members of the Committee, my name is Phillip D. 
Wright. I am Senior Vice President of Williams Energy Services for 
Enterprise Development and Planning. Williams Energy Services owns and 
operates around 22,500 miles of pipelines carrying crude oil, liquid 
propane gas and refined petroleum products, including jet fuel, diesel 
fuel, heating oil and kerosene. Our pipelines are spread through 17 
states, primarily in the West, Southwest, and Midwest. Williams is also 
a large operator of natural gas pipelines. Our company operates about 
30,000 miles of interstate natural gas pipelines.
    Currently I serve as Chairman of the Association of Oil Pipe Lines 
and appreciate this opportunity to appear before the Committee today on 
behalf of the Association and the American Petroleum Institute. The 
Association of Oil Pipe Lines (AOPL) is an unincorporated trade 
association representing 58 common carrier oil pipeline companies. AOPL 
members carry nearly 80% of the crude oil and refined petroleum 
products moved by pipeline in the United States. The American Petroleum 
Institute (API) represents over 400 companies involved in all aspects 
of the oil and natural gas industry, including exploration, production, 
transportation, refining and marketing. Together, these two 
organizations represent the vast majority of the U.S. pipeline 
transporters of petroleum products.

The Liquid Pipeline Industry
    Mr. Chairman, the background information for my testimony is 
presented in the information packet included with my testimony. One of 
these packets was delivered to each Member of Congress earlier this 
week. I ask that this packet be made a part of the Record.
    There are approximately 200,000 miles of oil and petroleum product 
pipelines in all 50 states of this country. The liquid pipeline 
infrastructure constitutes a fundamental part of our national economy. 
Pipelines carry about 66% of the petroleum and petroleum products moved 
domestically. About 29% is moved by water and about 5% by truck or 
rail.
    Chances are, the gasoline you put in your car gets to you, in part, 
by pipeline. Our nation's airports rely on pipelines to deliver the jet 
fuel that powers our aviation industry. The trucking system relies on 
diesel fuel delivered by pipeline. Millions of heating oil and propane 
customers rely on pipeline deliveries. And industries across America 
rely on pipelines to deliver the feedstock they use to make many of our 
household goods.
    Pipelines are an extremely efficient transportation system. For 
example, Williams' petroleum product lines moved roughly 591million 
barrels of product through our system last year. That is the equivalent 
of about 8,000 truck tanker loads every day. Gasoline may cost $1.50 a 
gallon, but the pipeline transportation contribution to the cost is 
around two cents.
    As an industry, pipelines depend on a relatively small national 
workforce to approximately 16,000 skilled men and women. That modest 
workforce, however, and the 200,000 miles of pipelines for which they 
are responsible, transport over 600 billion ton-miles of freight each 
year. This mammoth job is accomplished so efficiently that America's 
oil pipelines transport 17% of all U.S. freight, but represent only 2% 
of the nation's entire freight bill.

The Industry's Safety Record
    The liquid pipeline industry has a good safety record, a record 
that we in the industry are striving constantly to improve. On average, 
over the last ten years, liquid pipeline accidents have caused about 
two deaths per year and 10-15 injuries. In three of the last ten years, 
there have been no fatalities, and that is goal for which we strive. 
Pipeline transportation of fuel is far and away the safest form of 
transportation. For example, on a per gallon basis, deaths are 87 times 
more likely to occur when transportation is by truck rather than by 
pipeline. Many industries would be envious of our safety record.
    Having said that, we have a slogan in our company that ``Good 
enough never is'' and that applies here. A tragic accident like the 
recent one in Bellingham, Washington reminds us that any accident 
involving injuries or death is unacceptable and it's our desire and 
intention to improve on the current accident record.
    The same is true with regard to leaks from the pipeline system. The 
last several years have seen, on average, about 160 reported leaks per 
year and involved the loss of about 160,000 barrels of product. This 
represents about one-thousandth of one percent of the total product. 
Still, a spill of any significant size can create serious problems if 
it occurs in an environmentally sensitive area. The recent spill here 
in the Washington, D.C. area demonstrates that.
    It is important for the Committee to understand that the desire to 
operate safely does not result from OPS regulations, the threat of 
fines, or the threat of lawsuits. The desire to operate safely is woven 
into our corporate decision-making and into the industry-driven 
initiatives undertaken by our trade organizations. We assume 
responsibility for operating our lines safely. We care about the safety 
of our employees. We care about the safety of the public who lives near 
our lines. We care about preserving the environment. It is the right 
thing to do.
    It is also in our financial interest to operate a safe, accident 
free system. Consider the practical fact that accidents have 
unacceptable business consequences. Accidents disrupt service to our 
customers and limit our ability to utilize our systems for an 
indefinite period of time. Cleanup and mitigation costs are expensive. 
Litigation costs can be substantial. Increasingly, our employees face 
the possibility that criminal charges may be brought. Accidents cause 
the public and government officials to question our commitment to 
safety and our credibility. Some critics have suggested that our 
companies have no financial reason to maintain high safety standards. 
We would suggest that exactly the opposite is true. The cost of having 
an accident, especially one involving deaths or injuries, is 
financially unacceptable to us and our stockholders.
    These real incentives have led to a renewed focus on safety. And 
our efforts to improve safety have shown results. 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 steadily, 
whether measured in the number of incidents or the volume released. The 
number of pipeline incidents has decreased by 40% and the volume 
released has gone down 60%. These improvements have occurred at the 
same time that the total volumes transported have increased. Between 
1977 and 1997, the amount of oil and petroleum products transported by 
pipeline increased almost 13%.



    Having said this, we understand and accept the fact that the public 
expects the government to oversee the industry's safety efforts. The 
public understandably wants to be assured that we are making every 
reasonable effort to insure safety. We have worked with the Office of 
Pipeline Safety over the years on any number of initiatives to improve 
the safety of the liquid pipeline industry. Issues involving electric 
resistance weld pipe, valve spacing, criteria for determining 
environmentally sensitive areas, and establishing an operator 
qualification program are just a few of the areas where the industry 
has worked with OPS to the benefit of the public and to safety.

The Proposed Legislation
    With this background, let me now turn to a discussion of the 
proposals before the Committee to reauthorize and amend the Pipeline 
Safety Act. There are a number of minor technical suggestions we have 
and will be communicating to Committee staff but let me focus in this 
testimony on our substantive comments and concerns.

Integrity Testing
    Both S. 2438, introduced by the Chairman, and the Administration 
bill, S. 2409, direct the OPS to develop pipeline integrity programs 
that apply more stringent standards in ``high consequence areas,'' 
generally thought of as more densely populated and unusually 
environmentally sensitive areas, as well as commercially navigable 
waters. OPS is already undertaking this effort, issuing the proposed 
rule for liquid lines a few weeks ago. S. 2004 introduced by Senator 
Murray would prescribe mandatory internal inspection of all pipelines 
at least once every five years and periodic external inspection once 
such technology is developed.
    We recommend the language in the McCain bill to that of the 
Administration bill for several reasons. The McCain bill provides 
guidance to OPS to develop an integrity program, whereas the 
Administration bill is far more prescriptive and detailed, which is 
suitable for regulatory development but not for legislation. The most 
troubling feature of the Administration language is the requirement 
that an integrity plan use the ``best achievable technology.'' The term 
is undefined and will lead to great confusion and perhaps unintended 
consequences.
    Safety does not result from using one test or one tool. Safety is 
achieved by using a variety of tools and operational techniques, some 
of which are low tech or do not involve technology at all. In some 
cases, the old fashioned technique of digging holes and visually 
inspecting the pipeline may be the most effective method of determining 
the condition of the pipe. Increased right-of-way patrolling and 
promoting one-call programs may be the most effective way to avoid 
third party damage in populated areas. In certain circumstances, a 
hydrostatic test may be the most effective and appropriate test, but 
this is distinctly a low-tech method. In sum, there is no question that 
technology is important, and we support increased research into new 
technology, but technology is not always the answer and it is a mistake 
to build that concept into the law.
    Also, the use of this term almost assures constant controversy and 
probably litigation over its meaning. When different technologies 
measure different parameters, how can you say that one is the ``best?'' 
The prescriptive use of the term in the Administration's bill raises 
the question as to the point at which a company's integrity plan is out 
of compliance with the law because it does not include the latest 
wrinkle in technology. Taken to its most extreme, the term suggests 
that we should dig up all the pipe laid in the past because newer pipe 
is made using better technology. This is not realistic nor, we suspect, 
the intention of the Administration, but it is the sort of unintended 
consequence that will result if language like this is used in the 
statute.
    While there are parts of the Administration's provision on 
integrity testing to which we would have no significant objection, it 
is simply not necessary to go into such detail. The proposed integrity 
rule for liquid pipelines has been issued using the authority under 
existing law, so clearly there is no lack of statutory authority to 
accomplish their objective.
    S. 2004, introduced by Sen. Murray, does not call for an integrity 
program, but, as previously indicated, does mandate internal testing 
every five years. We believe that such a blanket requirement would 
waste safety resources and detract from the objective of focusing 
safety efforts on the areas of greatest need. Therefore we would oppose 
that proposal. This does not mean that we oppose periodic testing of 
our pipelines, merely that the type and timing of such testing should 
be determined through rulemaking.

Public Education/Community Right-To-Know
    While structured somewhat differently, the bill of Chairman McCain 
and the Administration bill appear to contain substantially the same 
provisions in this area. Senator Murray's bill also requires increased 
dissemination of information to the public.
    We in the liquid pipeline industry do not object to making more 
information about our operations available to the public. We do not, 
however, believe it is useful to simply blanket an area with technical 
information, when only a few people may be interested. We also want to 
understand exactly what is required, so there is not a dispute about 
what constitutes compliance with the requirement.
    With that in mind, we would recommend modifying Section 5(a) of S. 
2438 to direct the Secretary to issue standards prescribing the 
elements of an effective public education program. Also, the bill 
currently calls for companies to submit their plans to the Secretary. 
It has been our experience that OPS inspects these plans as part of 
their overall inspection of company compliance with the statute. We 
therefore suggest changing the language to say that plans shall be 
``made available'' to the Secretary.
    We also suggest that Committee Report language encourage OPS and 
the industry to explore and make greater use of electronic means of 
communications, such as the internet. We understand this is not a 
substitute for more traditional means of communications, but we should 
become more creative in how we approach this task than we have been in 
the past. We must also use new electronic tools to ensure that local 
public officials have access to the information they need when they 
need it, something that is not always easily accomplished with paper 
maps.

Enhanced State Oversight
    Both the Administration bill and the bill offered by Chairman 
McCain contain provisions allowing for greater state involvement in the 
oversight of interstate pipelines. Senator Murray's bill allows for 
greater state regulation of operator training and for delegation of 
authority to states to enact more stringent regulations than those set 
by federal law. A principal imbedded in the Act since its creation is 
that federal rules should apply to pipeline facilities operating in 
interstate commerce while states should be allowed to regulate lines 
wholly with a given state's boundaries. We believe this guiding 
principal is critical if we are to have an efficient, safe pipeline 
network in this country. The industry simply cannot operate effectively 
if states can impose their own rules. Our systems cross state 
boundaries. Our operations and safety activities are planned and 
implemented on a system-wide basis. If we faced separate regulations in 
every state in which we operate, we believe the result would be a less 
efficient, less safe system overall and a potentially significant 
impediment to interstate commerce. Chairman McCain's statement 
accompanying the bill said it well

        ``A mishmash of state laws regarding the construction, 
        maintenance, training and operation of pipelines would 
        certainly hamper commerce and would likely not improve 
        safety.''

    We could not agree more. We cannot support the delegation of 
authority to the state to enact pipeline safety laws that differ from 
federal law, as provided in S. 2004. Our concern is that S. 2004 and 
the language in the Administration and McCain legislation will lead to 
efforts by states to do just that. While carefully drafted in many 
respects, the McCain and Administration bills provide that a state, in 
the process of overseeing interstate lines as agents for OPS, can seek 
authority allowing it to engage in ``other activities . . . that 
supplement the Secretary's program and address issues of local concern. 
. . .'' The use of this phrase, with no explanation of its meaning, 
raises serious questions. Are the states limited to applying the 
federal standards or are they able, with OPS's permission, to establish 
their own requirements? For example, could a state decide that the 
definition of ``high consequence area'' established by OPS is too lax, 
and require a pipeline to treat the entire state as a ``high 
consequence area?'' Could the state create different public education/
community right-to-know requirements? Could the state treat one company 
differently than another company? These are serious questions raised by 
the language in the bills and by other proposals being made. If nothing 
else, the legislative language will lead to confrontation and 
uncertainty.
    Some have suggested that states be permitted to regulate, and to 
enact more stringent regulation of, an interstate line in lieu of the 
federal government if those states enter into a compact to regulate a 
line located between or among those states. This proposal raises 
serious questions in addition to those raised above. By the very nature 
of the compact, one or more interstate lines would be singled out for 
different treatment than other lines to the same area. Aside from the 
safety and coordination issues raised, this suggestion would appear to 
raise serious competitive concerns. Interstate pipelines serving the 
same markets would face different costs and different operating 
constraints. This is precisely why regulation of interstate commerce is 
left to the federal government.
    OPS should be responsive to state concerns and we have no objection 
to creating a mechanism for states to bring concerns to the attention 
of OPS. However, we strongly recommend that the legislation clarify 
that in no event can states apply regulations to interstate lines that 
are different from the federal regulation.
    It should be noted here that traditionally, the calls for greater 
state involvement in the regulatory process come in the wake of a 
specific accident. The Committee should keep in mind, however, that it 
is the federal government that has consistently taken the lead on 
pipeline safety. When the law was created, it set minimum standards for 
intrastate natural gas lines because not all states had effective 
programs for such regulation. Even today, many states do not regulate 
intrastate liquid pipelines, but rely on the federal government to do 
so. We would also note that in the case of natural gas, over 70% of the 
accidents involving injuries or deaths occur on lines under state 
jurisdiction. It is certainly fair to criticize OPS or the industry for 
not doing a better job, but the suggestion that the answer is to allow 
state regulation of interstate lines is simply not borne out by the 
evidence.
    In addition to the role states have in intrastate pipeline 
regulation, states can improve safety results by establishing 
reasonable setback requirements for future development near pipeline 
rights-of-way and by requiring full participation (with no exemptions) 
in call-before-you-dig/one call systems.

Operator Qualification
    The bill of Chairman McCain requires companies to submit training 
plans to the OPS within six months of enactment. The OPS has already 
issued a rule requiring operators to develop programs for assuring that 
operators are qualified to do their jobs and to document that program. 
We suggest that the language here, which talks about ``training,'' be 
changed to read in terms of ``qualification,'' which is a broader 
concept than training, and that the time for completing those programs 
be made to coincide with the operator qualification rule made effective 
October 26, 1999 (64 Federal Register 46853 of August 27, 1999). Again, 
rather than calling for submission of the plans to OPS, we suggest that 
they be ``made available'' to OPS.
    The bill offered by Sen. Murray would require OPS to certify that 
all individuals involved in the operation and maintenance of pipelines 
have been tested and are qualified to perform their functions. OPS has 
examined this issue and, along with a wide range of stakeholders, 
including state safety officials and representatives of the public, has 
concluded that it makes no sense for OPS to perform a certification 
function. Under the standard developed, the industry must demonstrate 
that its covered employees and contractors are qualified to perform all 
tasks on the facility for which they are responsible. All of the 
documentation is subject to DOT review and audit and DOT can verify the 
implementation of the program.

Penalties
    The Administration bill and that of Chairman McCain quadruple 
penalties for violations from $25,000 per violation to $100,000 and 
double the maximum civil penalty from $500,000 to $1,000,000. We are 
aware of no evidence suggesting that the current penalty levels are too 
low, nor have we seen any analysis as to why the higher penalties 
proposed in the bills are appropriate. Before the Committee approves 
increases of this magnitude, we believe there should be some rationale 
articulated to justify the increase.

Shutdown Authority/Enforcement
    Both the Administration bill and the bill of Sen. McCain contain 
language involving the Secretary's authority to shut down pipelines 
believed to be dangerous. OPS has the authority today to shutdown 
pipeline systems and exercises that authority when necessary. We are 
not sure why this additional authority is needed, but we do not object 
to the provision.
    The Administration bill also proposed two changes to the provisions 
of the law involving civil actions taken by the Attorney General and 
the citizen suit provision of the law. We do not object to the changes 
made to Section 60120(a)(1) involving the civil action provisions.
    The second provision, modifying the citizen suit authority in Sec. 
60121, allows judges to levy fines, not just provide injunctive relief 
if it finds an operator in violation of the regulations. We believe 
this provision of the Administration bill will encourage additional 
lawsuits, not improve safety, and object to its adoption.
    If the Committee does consider this provision, however, there are 
two changes that need to be made to the language. When the Secretary 
levies penalties under Section 60122, the dollar limits on fines 
discussed above apply. However, there are no such limits applied to 
cases decided by the Court under this language. It should be made clear 
that the same limits apply to judgements made under Section 60121 as 
apply under Section 60122. Also, when the Administrator levies a fine 
against a pipeline operator, the fine is paid to the federal government 
as provided in Section 60122. If judges are to be allowed to levy fines 
under Section 60121, then it should be made clear that those fines 
should also be paid to the government.
    Section 4(c) of the Administration's bill proposes correcting a 
language flaw in Section 60123(d) of the Act. The language, as 
currently drafted, requires a contractor both to ``knowingly and 
willfully'' disregard the one-call notification system and to 
``knowingly and willfully'' damage the pipeline. Intentional damage to 
pipelines is already covered in sections 60123(b) and (c). Section 
60123(d) should be modified to require only knowing and willful failure 
to call the available one-call system.
    The Administration bill would amend the penalty provisions of Sec. 
60123, the section dealing with damage to underground facilities, to 
provide that any person engaged in excavation activity without having 
called a one-call system is guilty of a misdemeanor. While we want to 
promote the use of one-call systems whenever possible, we believe this 
provision is excessive. The provision does not define ``excavation 
activity'' so conceivably activities as normal as gardening could be 
covered. This provision should either be dropped or modified to clarify 
what type of excavation activities are covered.
    On a matter not covered in the bills, we have seen an increased 
tendency for accident investigations to be delayed because prosecutors 
want to investigate the possibility of criminal indictments. Frankly, 
we worry about the trend to criminalize accidents, but the bigger 
problem is that accident investigations by the NTSB are being delayed. 
Both OPS and the industry want to know the cause of accidents as soon 
as possible, in order to apply the lessons learned and reduce the 
chances of possible future incidents. We are not sure if a solution to 
this growing problem can be incorporated in this legislation, but it is 
a problem we urge the Committee to address.

Innovative Technology Development
    Both the McCain bill and the Administration's bill propose 
increased research into the development of alternative technologies. We 
support improved research in the listed areas. Traditionally, 
technological innovation and improved safety inspection devices have 
been supported and funded by the industry. We welcome DOT's involvement 
in this important area. We support the Administration's proposal which 
authorizes the Secretary to support technological development through 
cooperative agreements with trade associations, academic institutions 
or other qualified organizations.

Authorization of Appropriations
    We certainly appreciate that OPS is engaged in a number of new 
initiatives that require adequate funding. On the other hand, the 
majority of the OPS budget is funded through user fees paid by the 
pipeline industry. The budget must be sufficient but should not be 
increased beyond what the agency is capable of spending productively. 
The amounts proposed in S. 2004 go far beyond the needs of the OPS and 
would result in a roughly 150% increase in pipeline user fees. A level 
of funding closer to that proposed in the McCain bill appears to be 
warranted. We also support drawing funds from the Oil Spill Liability 
Trust Fund for work undertaken by OPS that falls within the scope of 
that Fund.

Summary
    In summary, AOPL and API members have built a solid safety record, 
but we also recognize that society expects and demands that we do 
better. We expect no less of ourselves. We look forward to working with 
OPS on the pipeline integrity rulemaking as the next important step in 
that effort. Achieving safety is the result of a system-wide effort 
that focuses resources where they are needed. We believe OPS is on the 
right track and that important progress has been made since this 
Committee passed the last authorization bill in 1996. We pledge to work 
with this Committee to pass an equally successful bill in this 
Congress.

    Senator Gorton. Thank you.
    Mr. Kenow.

STATEMENT OF CHARLES R. KENOW, NATIONAL VICE-CHAIRMAN, NATIONAL 
                ASSOCIATION OF PIPELINE SAFETY 
                        REPRESENTATIVES

    Mr. Kenow. Thank you, Mr. Chairman and members of the 
Committee. I appreciate the opportunity to address the 
Committee on a matter of grave importance to these states, this 
nation and the public we serve. This is the issue of public 
safety. As Vice-Chairman of the National Association of 
Pipeline Safety Representatives, I can assure you the states, 
who have been on the front lines of pipeline safety and damage 
prevention, view the actions of this Committee with great 
interest.
    With me today is also the Chairman of NAPSR, Terry 
Fronterhouse, Chief of Pipeline Safety, from the Arizona 
Corporation Commission, who will also be available for 
questions.
    The issue of pipeline safety and the role of the states in 
this federal/state partnership was discussed in great length at 
our recent national board of directors meeting in Phoenix, 
Arizona. Thirty-four states, who were represented at that 
meeting, were involved in the discussion of these remarks. As 
you may or may not be aware, this organization represents state 
agency pipeline safety managers, engineers and technical 
personnel who do inspect gas and liquid pipelines across the 
nation. And our mission is to strengthen that program through 
education, training and technology.
    While the Pipeline Safety Act authorizes the Secretary of 
Transportation to administer a pipeline safety program, it also 
allows to delegate part of that inspection, or all of it, to 
interested States for a grant of up to 50 percent of the cost 
of those States' programs. Unfortunately, despite the active 
involvement of these states, the high performance levels, based 
on federal audits, scoring 95 to 100 percent, this state 
funding level has never been reached. And we are pleased to see 
in both Senate 2438 and 2409 that provisions are being made to 
provide greater funding for specialized or what we would call 
contracted state services.
    We remain concerned, however, that this language is still 
unclear with regard to the role of interstate operators and 
agents, such as Minnesota and, until recently, Arizona, Nevada, 
and seven other states. We would also like to set the record 
straight on the role of the states. We have been actively 
involved in this process since 1968. And in fact, state safety 
personnel represent 90 percent of the federal/state inspection 
work force.
    Actually, we are the first line of defense at the community 
level. Because we know the natural gas and hazardous liquid 
operators and the emergency personnel, and have been strong 
promoters of pipeline safety and underground utility damage. 
Actually, we have inspected more than 10,000 gas operators and 
360 hazardous liquid operators nationwide. And we do this by 
not just going to their offices, we go out in the field in the 
states and the communities where we have responsibility for 
that.
    So we are actually the first ones there. We are the ones 
that are called if something happens. We are the ones that are 
asked to be in public hearings and city council meetings to 
explain what is going on. And we think we should continue that 
effort.
    In 1998, for example, we inspected more than 938,000 miles 
of gas pipelines and 45,000 miles of hazardous liquid. And in 
my detailed testimony, you will see there is over 25,000 
inspection person days by state inspectors on the area of gas, 
and over 2,000 in the liquid area, compared with the DOT's 
current listing of 768 in 1998 and 621 in 1999 for the entire 
nation. So we are an active part in this process.
    We also support the damage prevention efforts and are 
actively involved in Dig Safely and Common Ground. Some States 
have done additional things. Minnesota, for example, did 
several presentations, 231, to 13,000 operators. The State of 
Virginia has reduced its damage prevention by 40 percent since 
1996.
    So what we would ask is further support and increasing 
state grant funding for legislation, education and enforcement 
of state One-Call laws beyond the base pipeline safety program 
allocations. We think we can do even a better job of that.
    As far as the two bills, the concern we have is with them 
being too restrictive with respect to the discussion of 
interstate agents and how they would be involved in this 
process. And we have made suggestions to those sections, 
particularly Section 9 of 2438, and Section 6 of 2409.
    The other issue of concern is we need more clarity to 
assure that States that are already in the interstate program 
are assured due process before they may be removed by USDOT. 
And those that have been removed should be reinstated. We think 
that needs to be made clear, and we have made some 
recommendations on the language there.
    Mr. Chairman, the issue of states' rights and agreement is 
the basis for this change. The states were summarily noticed 
that their programs would be changed and limited. The States of 
Arizona and Nevada were dropped this year. The other states in 
the process were put on notice they would be phased out of this 
process over the next 3 years.
    Those states included Arizona, Connecticut, California, 
Iowa, Michigan, Minnesota, Nevada, New York, Ohio, and West 
Virginia. Other states have tried in the past to become 
interstate agents. Washington, Oklahoma, Texas, Virginia, and, 
I should add, New Hampshire, as well, had previously requested 
but were denied this full interstate inspection status.
    So we think that the removal of the state resources is 
analogous to taking a trained force from the field and 
replacing it with an outside force that has no knowledge of the 
local terrain, people or the conditions in that area, and 
replacing those with federal inspectors from Washington, D.C., 
Atlanta, Houston, Kansas City, and Denver regional offices, 
when we are familiar with our own states' activities.
    We firmly believe these inspections are critical to 
ensuring interstate pipelines are constructed, operated and 
maintained safely. We do not believe the temporary agent 
program, as it is designed, will enhance that process. And I 
would just like to say in closing, let me reaffirm that the 
states' commitment is to pipeline safety and environmental 
protection. We have the trained resources in place and have 
been doing the job. We are familiar with those local 
conditions, emergency responders and operators. And we have 
been on the front lines of our communities, promoting public 
safety and damage prevention.
    We fully support your efforts here to enhance that, but we 
want to make sure that it is not overly restricting those 
states that want to assume a greater role in pipeline safety. I 
would also call your attention to the resolution attached 
supporting this from the National Association of Regulatory 
Utility Commissioners, as well as the National Governors 
Association.
    Thank you for allowing me to comment before your Committee.
    [The prepared statement and information of Mr. Kenow 
follows:]

    Prepared Statement of Charles R. Kenow, National Vice-Chairman, 
        National Association of Pipeline Safety Representatives
    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to address the Committee on a matter of grave importance to 
the states of this nation and the public we serve. This is the issue of 
pipeline safety. As Vice-Chairman of the National Association of 
Pipeline Safety Representatives (NAPSR), I can assure you the states 
who have been on the front lines of pipeline safety and damage 
prevention view the actions of this Committee with great interest. With 
me today, is the Chairman of NAPSR, Terry Fronterhouse, Chief of 
Pipeline Safety from the Arizona Corporation Commission, who will be 
available for policy questions.
    The issue of pipeline safety and the role of the states in this 
federal/state partnership was discussed at great length at our recent 
National Board of Directors meeting in Phoenix, Arizona, April 24-28. 
Thirty-four states were represented in this discussion and preparation 
of these remarks. For those of you who are not familiar with NAPSR, the 
organization was established in 1982 to represent state agency pipeline 
safety managers, engineers, and technical personnel who inspect gas and 
liquid companies. NAPSR's mission is to strengthen states' pipeline 
safety programs through promotion of improved pipeline safety 
standards, education, training, and technology.
    As you are aware, the Pipeline Safety Act (``Act'') (49 USC 60101 
et seq.) authorizes the Secretary of Transportation (DOT) to administer 
a pipeline safety program for the gas and hazardous liquid pipelines in 
the United States. The Act allows the Secretary to delegate all or a 
part of the responsibilities for pipeline safety to interested states 
for a grant up to 50% of the cost of the states' programs. 
Unfortunately, despite the active involvement of the states, and high 
performance levels from federal audits showing the majority of states 
scoring 95-100%, this funding level has never been reached.
    We are pleased to see in both S. 2438 the ``King and Tsiorvas 
Pipeline Safety Improvement Act of 2000'' and the Department of 
Transportation's bill, S. 2409 the ``Pipeline Safety and Community 
Protection Act of 2000,'' that provisions are being made to provide 
greater funding for specialized or ``contracted'' state services. We 
remain concerned over the restrictive language in the bill regarding 
inspections of interstate operators by state agents such as Minnesota 
and until recently--Arizona and Nevada.
    First, I would like to set the record straight about the role of 
the states in this inspection process, since certain information being 
circulated about us is incorrect. States have been actively assisting 
the Secretary in carrying out the pipeline safety program for the 
United States since the Pipeline Safety Act was signed into law in 
1968. In fact, States' pipeline safety personnel represent 90 percent 
of the federal/state inspection workforce. These personnel are the 
``first line of defense'' at the community level. They know their 
natural gas and hazardous liquid operators, emergency personnel, and 
have been strong promoters of pipeline safety and underground utility 
damage prevention.
    State inspectors conduct inspections of more than 10,000 gas 
operators and 360 hazardous liquid operators nationwide. State pipeline 
safety programs ensure public safety through periodic office and field 
inspections of existing gas and liquid facilities, code compliance 
activities, and construction reviews of new facilities. These 
inspections ensure pipeline operators comply with safety regulations 
and company procedures pertaining to pipeline operations and 
maintenance. This directly results in the safe transportation of 
products to consumers.
    In 1998, states were responsible for inspecting more than 938,000 
miles of gas pipelines, 47.5 million gas service lines and 1,851 gas 
facilities such as liquid natural gas plants. States were responsible 
for inspection of approximately 45,000 miles of hazardous liquid 
pipelines. In 1998, the states conducted 25,785 inspection person-days 
of gas facilities and 1,948 inspection person-days of hazardous liquid 
pipelines. In comparison, US DOT's Office of Pipeline Safety's 
inspections consisted of 768 in 1998 and 621 in 1999 for the entire 
nation.
    With respect to Damage Prevention, it is a well-known fact that 
damage to pipelines caused by excavation activity remains the leading 
cause of pipeline failures. It is imperative that all stakeholders take 
action to reduce these damages. The states have been and remain, on the 
forefront of initiatives that are designed to reduce damages to 
pipelines and other underground infrastructures. Recent national 
initiatives (DIG SAFELY and Common Ground) sponsored by the Federal 
Office of Pipeline Safety (OPS) were fully supported by the states. 
States have taken other actions on their own to reduce excavation 
caused damages to pipelines. In Minnesota, from 1998-2000, 231 outreach 
and educational talks were conducted by our engineers to 13,073 
operators and excavators. We also added requirements for tracking 
abandoned utilities and made calling 9-1-1 immediately a requirement 
when there is a release of gas or hazardous liquid. In Virginia, since 
1996, state efforts resulted in a 40% reduction of excavation damage to 
pipelines. Nationally, in 1998, 1,800 inspection person-days were spent 
on damage prevention activities. We support increasing state grant 
funding for legislation, education, and enforcement of State One-Call 
laws beyond the base pipeline safety programs.
    Allow me to discuss our specific concerns with the bills. While 
many of the provisions in the bill are useful, recent actions by DOT to 
summarily limit the states' past role in inspecting interstate 
pipelines remains of concern. We believe the current language remains 
too restrictive and will neither improve pipeline safety nor ``enhance 
the states' ability'' to maintain their current levels of inspection. 
We believe existing interstate agent states will be adversely affected 
by the limitations placed on their inspection program. If these new 
conditions are written into law, they will overly restrict state 
inspections and will prevent other states from entering into the 
interstate inspection process.
    Finally, we believe that additional clarity is needed to assure 
that states already in the interstate program are assured due process 
before they may be removed by US DOT.
    The language changes we are suggesting are as follows:
Sec. 9 in S. 2438 and Sec. 6 in S. 2409 DOT bill:

ENHANCED ABILITY OF STATES TO OVERSEE OPERATOR ACTIVITIES

    (a)(3) should be amended to read, ``An agreement under paragraph 
(2) shall also include a program allowing states to assume full 
inspection responsibilities to ensure compliance with pipeline safety 
standards, provided that the Secretary determines that--(A), (B), and 
then strike (C), change (D) to (C).
    To assure that states receive due process before their agreements 
are terminated, (b)(3) should be amended as follows: Section 60106(d) 
is amended by inserting after the first sentence the following: ``In 
addition, the Secretary may end or decline to renew an agreement for 
the oversight of interstate pipeline transportation when the Secretary 
finds that there are significant gaps in the regulatory authority of 
the state authority over intrastate pipeline transportation . . .
    This addition would address the state's right to a hearing should 
its program be dropped by any administrative procedure by DOT. Due 
process did not occur this past year when the interstate agency 
agreements for the states of Arizona and Nevada were dropped.
    Mr. Chairman, the rights of states who have effectively conducted 
interstate inspections for years, as an ``agreement state'' is the 
basis for this language change. Interstate agent states were summarily 
put on notice that their programs would be cancelled or phased out over 
the next three years and replaced by more limited ``contracted'' 
services. The states affected include Arizona, Connecticut, California, 
Iowa, Michigan, Minnesota, Nevada, New York, Ohio, and West Virginia. 
Other states including Washington, Oklahoma, Texas, and Virginia had 
previously requested but were denied full interstate inspection status 
in the past.
    The removal and limitation of state resources is analogous to 
disengaging a seasoned, fully trained force and their field commander 
from the battlefield and replacing them with a force from a foreign 
country that does not know the local customs, people, terrain, or rules 
of engagement. This proposed language would adversely tie the states' 
hands by re-designing the conditions that must be met in order to 
fight, and then replacing state ``troops'' with federal ones from 
Washington D.C., Atlanta, Houston, Kansas City, and Denver. History has 
proven, more than once, this isn't the way to win the battle.
    The states firmly believe their inspections are critical to 
ensuring that interstate pipelines are constructed, operated, and 
maintained safely. In several states including Minnesota, the state 
legislature mandated they seek this inspection role, which we have been 
successfully doing since 1991. In ending the current interstate agent 
program, OPS unfortunately presumes it could be replaced with a 
``temporary agent'' program, which has not been fully analyzed, 
formalized or discussed with the states. This would only be for new 
construction and incident investigation. It also assumes that they will 
receive additional resources from Congress to replace state inspectors 
with federal ones. Unknown, unproven, uncertain alternatives must not 
be used to replace state activities that promote pipeline safety.
    In closing, let me reaffirm the states' commitment to pipeline 
safety and environmental protection. We have the trained resources in 
place and have been doing the job. We are familiar with the local 
conditions, emergency responders, and operators. We have been and 
continue to be, on the front lines of our communities promoting public 
safety and damage prevention. We fully support your efforts to enhance 
this partnership without overly restricting those states that want to 
assume a greater role in pipeline safety.
    Thank you for allowing me the opportunity to testify before your 
Committee.

                                                         Attachment

Resolution in support of Interstate Agents passed by National 
Association of Regulatory Utility Commissioners (NARUC) Washington, 
D.C. Annual Meeting March 8, 2000 and supported by NAPSR and the 
National Governor's Association.
               Resolution In Support Of Interstate Agents
WHEREAS, The States have a vital interest in the safety of the 
interstate pipelines within their respective States; and

WHEREAS, The Congress of the United States has provided a means for 
States to take an active role in the safety of interstate pipelines by 
becoming ``interstate agents'' for the U.S. Department of 
Transportation, Office of Pipeline Safety (OPS) via Section 60117(c) of 
49 U.S.C.; and

WHEREAS, The States of Arizona, Connecticut, California, Iowa, 
Michigan, Minnesota, Nevada, New York, Ohio, and West Virginia 
currently have interstate agent status which enables them to conduct 
safety inspections of interstate pipelines operating within their 
States, and other States including New Hampshire, Oklahoma, Texas and 
Virginia have requested but were denied interstate agent status; and

WHEREAS, By letters to the interstate agent States dated December 23, 
1999, OPS announced that the States of Arizona and Nevada were being 
terminated as interstate agents, and that the entire interstate agent 
program would be phased out over three years; and

WHEREAS, This action was taken unilaterally and without notice to or 
consultation with the affected States, and in the case of the 
terminations the rationale given contained incorrect information; and

WHEREAS, In ending the interstate agent program OPS appears to presume 
it could be replaced with a ``temporary agent'' program, which has not 
been formalized or discussed with the States; and that it will receive 
substantial additional resources from the current Congress, which is 
not assured; and

WHEREAS, The States strongly believe their inspections are critical to 
ensure that interstate pipelines are operated, constructed and 
maintained safely; and that State activities which promote pipeline 
safety should not be arbitrarily supplanted by unknown, unproven, and 
uncertain alternatives; and

WHEREAS, The resources the States expend inspecting interstate 
pipelines in no way diminish the safety inspection of local 
distribution companies or other intrastate operators; and

WHEREAS, The National Transportation Safety Board (NTSB) has encouraged 
the inspection of interstate pipelines by State inspectors; and

WHEREAS, The National Governor's Association has adopted a Proposed 
Policy on Pipeline Safety encouraging greater State oversight of 
interstate pipelines; and

WHEREAS, Washington State Governor, Senators, Congressional 
Representatives and the Washington Utilities and Transportation 
Commission all desire a greater role in the oversight of the interstate 
pipelines through their State; now therefore be it

RESOLVED, That the Board of Directors of National Association of 
Regulatory Utility Commissioners (NARUC) convened in its March 2000 
Winter Meeting in Washington, D.C., urges the U.S. Department of 
Transportation to stay any change in the pipeline interstate agent 
program as historically administered, that any changes to the program 
be made only after full consultation with the States and the 
finalization of alternatives, and that OPS be instructed to accept 
additional interested States as interstate agents.

Sponsored by the Committee on Gas
Adopted by the NARUC Board of Directors March 8, 2000

    Senator Gorton. Thank you very much.
    Mr. Reiten, please proceed.

  STATEMENT OF RICHARD REITEN, PRESIDENT AND CHIEF EXECUTIVE 
 OFFICER, NORTHWEST NATURAL GAS, ON BEHALF OF THE AMERICAN GAS 
      ASSOCIATION AND THE AMERICAN PUBLIC GAS ASSOCIATION

    Mr. Reiten. Good afternoon, Mr. Chairman and members of the 
Committee. My name is Dick Reiten. I am President and Chief 
Executive Officer of Northwest Natural Gas, headquartered in 
Portland, Oregon. We are a local gas distribution company, 
serving more than 500,000 customers in Oregon and Southwest 
Washington. And I am here to testify on behalf of the American 
Gas Association and the American Public Gas Association.
    As part of my testimony, I have an additional statement 
from the American Public Gas Association.
    Senator Gorton. It will be included in the record.
    [The information referred to follows:]

  Prepared Statement of Richard Reiten, President and Chief Executive 
     Officer, Northwest Natural Gas, on Behalf of The American Gas 
          Association and The American Public Gas Association

    Good morning Mr. Chairman and members of the Committee. My name is 
Dick Reiten, President and CEO of NW Natural. NW Natural is a 141 year-
old company headquartered in Portland, Oregon. We are a natural gas 
local distribution company serving more than 500,000 customers in 
Northwest Oregon and Southwest Washington.
    I am here testifying on behalf of the American Gas Association 
(AGA) and the American Public Gas Association (APGA). Thank you for the 
opportunity to comment on the essential matter of public safety and the 
nation's natural gas distribution system.
    AGA is the national trade association representing over 180 
investor-owned natural gas utilities collectively serving almost 60 
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 we represent the companies that deliver virtually 
all of the natural gas to consumers in the United States.
    Our industry is a growing business as 70% of all new households 
choose to have natural gas service. Our fuel is primarily domestically 
produced, reasonably priced and environmentally friendly. Delivering 
natural gas safely to our customers is essential for us to continue 
conducting our business. Our industry's commitment to safety is borne 
out each year through the National Transportation Safety Board's annual 
statistics. Delivery of natural gas by pipeline is consistently the 
safest mode of transportation.
    Although State pipeline safety authorities regulate natural gas 
utilities, our State governments routinely adopt the federal safety 
standards as minimum standards. Therefore, what happens in Congress 
affects our companies. We are very concerned that any perceptions or 
allegations that we are not devoted to safety be addressed and 
dispelled. Utilities are the ``faces'' of the natural gas industry. Our 
companies and facilities are located within the communities we serve 
and the public knows us well. We participate in many community programs 
and charitable activities. The health of the community is the health of 
our company.

Natural Gas Systems are Different From Liquid Systems
    As the legislative process moves forward, there are important 
differences between the natural gas and liquid pipeline systems that 
Congress needs to recognize and understand when crafting new 
requirements. While many may unintentionally link all ``pipelines'' 
together, there are significant differences between the liquid 
transmission, natural gas transmission and natural gas distribution 
systems. Each industry faces different challenges, operating conditions 
and consequences of ruptures.
    The federal regulations recognize the differences between the 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.
    Transmission systems are generally long and straight pipelines are 
large diameter and operate at high volumes and high pressures. 
Distribution systems are constructed in pipe configurations that look 
like grids or web, use smaller diameter pipe and operate at low volumes 
and low pressures.
    Natural gas moves a single product, methane, by periodic 
compression along the pipelines. Natural gas transmission lines take 
our product from the producing areas to our towns where the utility 
receives it and distributes the product to homes and businesses. Liquid 
transmission pipelines move commodities such as crude oil, gasoline, 
heating oil, jet fuel, diesel, propane and other liquids. These 
products are physically pumped through the pipeline to distribution 
centers or end-users.

The Leading Cause of Accidents--Third Party Damage
    The leading cause of accidents on distribution pipelines is 
excavators unintentionally striking our lines, commonly 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. 
While we work very hard to provide for safety we can't do it alone. 
Excavators and other underground utility operators need to work with us 
to provide for safe and reliable natural gas service.
    This Committee recognized the problem last Congress and created a 
federal program to reward States with strong one-call laws. These laws 
require excavators to call before they dig and for utilities to 
accurately mark their underground facilities. 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. The DOT/stakeholder effort is called 
``Path Forward'' and utilities are participating fully. We thank you 
for your work on one-call and hope to find additional ways to improve 
this important safety tool.

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; pipeline system integrity regulations; operator fatigue 
surveys; utility transmission mapping and many other efforts. We view 
these as investments in our customers and the communities we serve.
    In addition to our voluntary efforts, LDCs must comply with a 
regulatory program that pays stringent attention to design, 
construction, maintenance, operation, replacement, inspection and 
monitoring practices. We continually refine our safety practices. 
Combined, natural gas utilities spend an estimated $3.4 billion each 
year in safety related activities. Roughly half of this money is spent 
in compliance with federal and state regulations. The other half is 
voluntarily spent to ensure that our systems are safe and that the 
communities we serve are protected.
    Over the past ten years we have seen the rate of incidents on 
natural gas distribution lines decreased by almost 40% while the volume 
of natural gas use nationwide has increased by 25%. Our industry has a 
tremendous incentive to maintain our excellent safety record. Safety is 
a matter of corporate policy and a top priority for every company. 
These policies are carried out in specific and characteristic ways. 
Each company employs safety professionals, provides on-going employee 
evaluation and safety training, conducts rigorous system inspection, 
maintenance, repair and replacement, 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.

Collaboration and Professional Organizations
    Company safety professionals also participate in a variety of 
professional 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 Mechanical Engineers (ASME), Transportation 
Safety Institute (TSI), American Society of Civil Engineers (ASCE), and 
the American Society of Safety Engineers (ASSE).

Research and Development
    Utilities also contribute to research and development through such 
organizations as the Gas Research Institute and Institute of Gas 
Technology 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.

Senate Legislative Proposals
    Legislative proposals have been made to address a number of 
concerns that are contained in the three pipeline safety 
reauthorization bills before the Senate--S. 2438, S. 2409 and S. 2004. 
Allow me to comment broadly upon some general themes. More specific 
comments on each bill are included with this testimony as attachments. 
We appreciate the opportunity to discuss the various proposals and to 
suggest specific language changes.

Operator Qualification
    Concerns have been raised about expertise and abilities of the 
natural gas industry's workforce. While we have maintained that our 
excellent safety record shows that our employees are qualified, we are 
fully participating in the new Operator Qualification rule that was 
issued in August 1999. For the first time operators will be required 
document this qualification in writing. Utilities' written 
qualification plans must be completed by April 2001 and are subject to 
audit by our state regulatory authorities. In the event of an accident 
this information is subject to discovery in court.
    Some have suggested that we focus on training and certification. 
The current rule encompasses training and the employees are actually 
certified by the company under an enforceable federal rule. Some may 
question self-certification but the fact remains that operators are 
``on the hook'' and responsible for their decisions and actions. 
(Please see Attachment #4 for more details)

System Integrity Rule
    The Administration has proposed legislative language that tracks a 
pipeline system integrity rule for the liquid transmission industry. 
The language as written does not discriminate between natural gas and 
liquids and includes such language as a requirement to use ``best 
achievable technology.'' Natural gas distribution companies are 
actively working with the Office of Pipeline Safety to develop a rule 
that can be applied to our systems. It is evident that the system 
integrity rule for natural gas is going to be very different than the 
one for liquid transmission. As mentioned before, our systems are very 
different.
    Unlike most liquid transmission lines, the physical characteristics 
of distribution lines preclude the use of internal inspection devices 
in many cases. Distribution companies to maintain their lines utilize 
other means of inspection. Regulations require utilities to perform a 
greater level of safety activities in more highly populated areas 
within our systems called ``business districts.'' This is similar to 
the Class location approach used for natural gas transmission lines.

Public Education/Community Right To Know
    We 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. In many instances, improving public information is a 
cooperative effort between the natural gas industry and communities 
served. 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 is recognized and any new requirements 
are crafted in a way that takes this into consideration.
    We also 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.

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. Uninterrupted flow is critical in natural gas systems. 
If interstate flows are interrupted, the ability of a utility to 
maintain adequate pipeline pressure to serve customers is immediately 
impaired. In such situations we must manually turn off service to 
individual customers. When 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 industry is proud of its safety record. 
Natural gas has become the recognized fuel of choice by both citizens 
and the federal government. This customer growth and confidence also 
bears with it an added responsibility. As such, public and employee 
safety is a top priority for natural gas utilities. We will continue 
our ongoing 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, as well as within our industry, 
to achieve the highest possible level of public and employee safety.

                                                      Attachment #1
                                S. 2438
     THE KING AND TSIORVAS PIPELINE SAFETY IMPROVEMENT ACT OF 2000
By the American Gas Association and The American Public Gas Association
                              May 11, 2000

IG Report
    Section 2 requires the Office of Pipeline Safety (OPS) to respond 
to the recommendations of the Inspector General's report on the Office 
of Pipeline Safety. Some of the other provisions of S. 2438 go to areas 
mentioned in the IG report. Any inconsistencies should be rectified.

Operator Training Plans
    Section 4 would require distribution companies to develop written 
training plans and submit them to the Department of Transportation. 
Normally, distribution companies work directly with their state 
regulatory authorities. States do adopt the federal standards as their 
minimum safety standards. However, the state pipeline safety inspectors 
inspect and enforce the rules on distribution companies. There are 
approximately 1200 natural gas utilities nationwide. We suggest that 
the requirements be changed to indicate that utilities will work with 
their state regulators when developing their final operator 
qualification plan that includes training.
    All companies are now implementing the new federal Operator 
Qualification rule that was issued in August of 1999. The new rule 
requires companies to ensure that their safety related employee force 
is qualified to do their jobs and respond to abnormal circumstances. 
Companies must document this qualification in writing and this 
documentation is subject to audit by the regulatory authorities. 
Training is one of the tools used in qualification but not an end unto 
itself. An employee can go through a training program but not 
necessarily demonstrate the skills, knowledge and abilities to receive 
qualification. The focus should be on having a qualified workforce. 
(Please see Attachment #4 for further detail.)

Pipeline Integrity Inspection Program
    Section 5 requires the Secretary to establish rules for inspection 
in ``high-density population areas'' and ``unusually sensitive areas.'' 
Under the current statute the terms are defined whereby ``high-density 
population areas'' cover both natural gas and liquid pipelines and 
``unusually sensitive areas'' cover only liquid pipelines. The language 
should be clarified to make this distinction. Unusually sensitive areas 
are designed for environmental protection measures. Natural gas 
ruptures do not result in environmental pollution.

Public Education and Community Right to Know
    Section 7 requires distribution companies to engage in a number of 
public education programs including informing the public about how to 
use the one-call programs. We strongly support better knowledge of the 
use of one call or ``call-before-you-dig'' programs. Almost 60% of the 
accidents on natural gas distribution lines are caused by third parties 
unintentionally digging into the lines.
    We already participate in many public education and outreach 
programs with state and local official and emergency response, police 
and fire personnel. One section requires distribution companies to 
``advise municipalities, school districts, businesses and residents of 
pipeline facility locations.'' Does this mean that utilities are 
required to directly contact every citizen, public official and 
business owner in the cities we serve regarding the location of our 
lines? It is far more effective to notify citizens that they need to 
call before they excavate or report any gas leaks directly to the 
utility. Information sent directly to individuals is often ignored. It 
is more effective to repeatedly put out your safety messages through 
various forms of advertisement. Natural gas utilities operate within 
the communities they serve and constantly interact with them.
    The section also requires that companies provide maps to the 
municipalities where their pipes are located. Unlike long-line 
transmission pipelines that are relatively straight and are mainly 
located in rural areas, natural gas utilities are, by their nature, 
located in populated areas. We are concerned that releasing the 
location of our utility facilities may represent a security problem. A 
city could be seriously disrupted if such information fell into the 
wrong hands. A requirement to duplicate our maps and provide them to 
all municipalities also represents a significant storage issue for the 
municipal authorities. It is much more workable to simply require that 
company's supply any maps to the state or local authorities if they 
request them.

Authorization of Appropriations
    Section 12 authorizes an increase in overall appropriations 
including an increased draw from the Oil Spill Liability Trust Fund. 
The majority of the appropriations are funded through user fees 
assessed on transmission lines. Natural gas utilities absorb a portion 
of these fees as part of the transportation costs and these costs are 
passed to the consumer. It is therefore important that any increased 
fees be wisely spent and not unduly burden the natural gas consumer. It 
is important to note that companies provide for the actual safe 
operations of their pipelines.

                                                      Attachment #2
                                S. 2409
        THE PIPELINE SAFETY AND COMMUNITY PROTECTION ACT OF 2000
By the American Gas Association and The American Public Gas Association
                              May 11, 2000

Additional Pipeline Protections
    Section 2 requires the Secretary to establish and implement a 
pipeline integrity program. The language also calls requirements to use 
``best achievable technology.'' If accepted the requirement would 
likely mean that local distribution companies (LDCs) would constantly 
be out of compliance and subject to fines. What is ``achievable'' is 
unclear. At what price is it ``achieved.'' The language also appears to 
track the ongoing integrity rule for liquid pipelines. The discussions 
and issues surrounding the natural gas rule indicate that, because of 
the differences in the two products and systems, that it could be very 
different from the liquid rule. As the rules are ongoing, Congress 
should not confuse the matter with unnecessary legislative language. 
The natural gas industry is participating in developing the rule for 
our industry in good faith and these efforts should not be undercut.

Community Right to Know and Emergency Preparedness
    Section 3 requires companies to promote knowledge about one-call 
notification systems and other possible hazards. Companies strongly 
support continued efforts to educate the public regarding one-call and 
how to respond to a natural gas leak. LDCs also would be required to 
work to ensure that emergency response authorities be educated to 
respond to natural gas leaks and other information.

Enforcement
    Section 4 would expand the Department of Transportation's (DOT) 
enforcement authority and penalties. These provisions are unnecessary 
as the Secretary already has very wide enforcement authorities. The 
section also would broaden the existing citizen's suit provisions in 
the law. We question why this is necessary. Pipelines need to focus on 
safety activities not court cases.

Underground Damage Prevention
    Section 5 would make it misdemeanors for an excavator to hit a 
natural gas line. We support strong enforcement for those that 
continually refuse to use one-call systems or wantonly endanger 
themselves or the pipelines. However, it is more important that an 
excavator report a strike, even if it relieves him of a penalty. One of 
the most serious problems is excavation activity damaging pipes and 
then reburying the pipe.

Improved Data and Data Availability
    Section 7 would establish a national data depository for 
information other than incident related data. DOT is already working 
with both the liquid and natural gas industries to voluntarily develop 
a database to help identify any trends or problems. These programs are 
just being implemented and should be allowed to continue. There is no 
need to spend user fee dollars to create another depository.

Enhanced Investigation Authorities
    Section 8 would allow the Secretary to collect ``extraordinary 
expenses of incident investigation.'' Currently, the National 
Transportation Safety Board investigates accidents on LDCs when there 
is a death or injury. State authorities also investigate LDC accidents. 
We are concerned that there is no definition of the expenses or caps 
for an agency, that's primary role is to create safety regulations and 
to enforce them, not investigate accidents.

International Authority
    Section 9 would allow DOT to support international efforts to share 
information. Once again LDCs fail to see the benefit to the public 
safety. The U.S. has one of the best pipeline systems in the world. If 
other countries benefit from our expertise they should foot the bill.

Support for Innovative Technology Development
    Section 11 would direct DOT to take appropriations (user fees) and 
participate in the development of alternative technologies for 
identifying outside force damage. LDCs have for many years supported 
the development of technologies used in preventing or identifying 
outside force damage. If Congress desires to have DOT involved in 
research then the projects should be useful and, where possible, be in 
conjunction with industry supported efforts.

Authorization of Appropriations
    Section 12 would authorize DOT's FY2001 budget request. The request 
asks for a 43% increase in user fees. Any additional funding for the 
Office of Pipeline Safety should come from increased drawdown of both 
the Oil Spill Liability Trust Fund and the OPS ``reserve fund.'' $5 
million of the requested increase is for a state grant program for 
states with one-call programs. These funds are authorized to come from 
general revenues and should. One-call systems protect all underground 
facilities, excavators and the public in general. Solely pipeline user 
fees should not fund the grants program. The request for full 50% 
funding for the annual state pipeline safety programs is acceptable but 
the level should be $15 million not $17 million.

                                                      Attachment #3
                                S. 2004
                    THE PIPELINE SAFETY ACT OF 2000
By The American Gas Association and The American Public Gas Association
                              May 11, 2000

Expanded State Authority
    Section 3 proposes to give State's the authority to promulgate and 
enforce regulations for interstate transmission pipelines. Varying 
state regulations on interstate transmission lines could result in 
requirements that cause the pipeline to interrupt service to local 
distribution companies (LDC) serving a different state. This could 
cause disruption of residential and business services that would 
require LDCs to individually visit them one by one to re-light their 
pilot lights for safety reasons.

New Federal Requirements
    Section 5 would require that pipeline facilities capable of 
accommodating an internal inspection device be inspected every 5 years 
and that an external inspection occur every 5 years if the Secretary 
determines that the technology exists and is reliable. This provision 
would mandate internal inspection of any part of the nation's 1.7 
million-mile distribution system, including service lines if the line 
could accommodate the same. Distribution lines are normally smaller in 
diameter and lower pressure and internal inspection devices are not 
routinely used. Other inspection means are much more prevalent.
    The section also would require external inspections. In order to 
externally inspect the lines they would have to be entirely excavated 
every 5 years. The cost of these provisions would be enormous; the 
disruption to citizens and the public in urban areas by excavation 
every 5 years would be extreme. Basically, every city's streets served 
by natural gas would be cut and excavated on a continuing basis.

Enhanced Qualifications of Pipeline Operators
    Section 6 would require that employees of pipeline facilities be 
tested and certified as qualified by the Secretary of Transportation. 
The industry is in the midst of implementation of DOT's Operator 
Qualification Rule. Under the rule companies must ensure that employees 
performing safety related jobs be qualified to perform their jobs and 
to respond to emergency and unusual circumstances. Companies must also 
keep records of an employee's qualification and such records are 
subject to audit by the Office of Pipeline Safety and, in the case of 
distribution companies, the state pipeline safety inspectors. The rule 
was created through two and one-half years of hard work in a negotiated 
rulemaking that was facilitated by the Federal Mediation and 
Conciliation Service.

Study and Report
    Section 7 requires studies on internal and external inspection 
devices, burial depth, automatic failsafe mechanisms and equalizing 
priorities between natural gas and liquid pipelines. Numerous studies 
exist on many issues important to pipeline operation. Prior to 
expending user fees to conduct additional studies, Congress should 
avail themselves to the existing body of work. If an area of interest 
has not been covered, a study could be conducted.

Authorization of Appropriations
    Section 8 would increase user fees $81 million for FY2001 and 
accelerating to $108 million by FY 2005. Currently user fees total a 
little over $30 million. Natural gas consumers eventually absorb the 
majority of user fees assessed on pipelines. Diverting pipeline safety 
dollars away from field activities to the federal government does not 
increase safety. The Office of Pipeline Safety's mission is to 
promulgate regulations, inspect and enforce. Pipelines are responsible 
for operating their systems safety 24 hours a day, 7 days a week, 365 
days a year. Collectively, natural gas transmission and distribution 
spend approximately $4 billion annually on safety related activities. 
Our excellent safety record bears out our industry's commitment to 
safety.

                                                      Attachment #4
              PIPELINE OPERATOR QUALIFICATION AND TRAINING
                             BRIEFING PAPER
By the American Gas Association and The American Public Gas Association
                              May 11, 2000

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).

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:

   Performed on a pipeline facility,

   It is an operations and maintenance task,

   It is performed as a requirement of the pipeline safety code 
        (49 CFR Part 192), and

   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.

   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.

   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.

   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 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 needed 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:

   performance on the job,

   on the job training,

   simulations,

   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 within six months 
of the passage of Reauthorization, 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 above 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.

    Mr. Reiten. Thank you.
    I want to thank you for the opportunity to comment on the 
matter of public safety and the Nation's natural gas 
distribution system. Let me start by saying our industry 
understands the importance of safety and the terrible 
consequences that can result from a pipeline failure. And 
please understand, in testifying today, we do not want to 
diminish in any way the seriousness of the Bellingham incident 
or the tragic loss of life that occurred there. As a father and 
a grandfather, I think I have a keen awareness of what could 
be, and certainly I extent my sympathies to the families who 
are here today.
    As the legislative process moves forward, there are 
important differences between the natural gas and the liquid 
pipeline systems that we would hope Congress will recognize. 
While many may unintentionally link all pipelines together, 
there are significant differences between liquid transmission, 
natural gas transmission--high-pressure transmission, if you 
will, and the natural gas local distribution systems. Each face 
different challenges, operating conditions and consequences of 
ruptures and problems.
    Current federal regulations recognize the differences 
between the three type of systems and different sets of rules 
have been created for each. We hope that that differentiation 
will play a part of any new legislation.
    In the U.S., there are 2 million miles of natural gas 
pipelines, as was discussed here earlier; 300,000 miles of 
interstate and intrastate high-pressure transmission pipelines; 
and 1.7 million distribution miles of pipeline. The federal 
Office of Pipeline Safety regulates the interstate pipelines. 
The distribution pipelines are basically under the authority of 
the states, who routinely and most always adopt federal 
pipeline safety standards as a minimum.
    The leading cause of accidents on distribution pipelines is 
excavators unintentionally striking our lines. Year after year, 
these third party damages cause over 60 percent of the total 
ruptures on pipelines and the vast majority of injuries and 
fatalities. 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.
    The Committee recognized this problem last Congress, and 
created a federal program to reward states with strong One-Call 
laws. These laws require excavators to call before they dig, 
and for utilities to accurately mark their underground 
facilities. This Committee also directed DOT to gather all 
stakeholders together to produce a best practices study. This 
study was completed last year, and we are working to help 
implement it to improve field operations of One-Call systems. 
So we thank you for this work on One-Call and hope to find 
additional ways to improve this important safety tool.
    I would mention, in Oregon, we have one number, one set of 
regulations, training for contractors and penalties for failing 
to adhere to it.
    Natural gas utilities are also working with federal and 
state governments on a variety of new safety initiatives. These 
include the creation of voluntary data gathering on the effect 
and performance of plastic pipe, pipeline system integrity 
regulations, operator fatigue surveys, utility transmission 
mapping, and many other efforts. We view these as investments 
in our customers and the communities we serve.
    In addition to our voluntary efforts, local gas 
distribution companies must comply with a regulatory program 
that pays stringent attention to design, testing, construction, 
operation and maintenance practices. We continually refine our 
safety practices. Combined, natural gas utilities spend an 
estimated $3.4 billion each year on safety-related activities. 
And these efforts have really made a difference.
    Over the past 10 years, we have seen the rate of incidents 
on natural gas distribution lines decrease by almost 40 
percent, while the volume of natural gas used nationwide has 
increased by 25 percent. So, safety is a top priority for 
everyone, every company. Companies employ safety professionals 
and conduct ongoing employee evaluations, safety training, 
rigorous safety system inspections, maintenance, repair, 
replacement, distribute public safety information regularly, 
and comply with a wide range of federal and state safety 
regulations and requirements.
    Legislative proposals aimed at addressing various concerns 
about pipeline safety have been introduced and are contained in 
three bills before the Senate. More specific comments on each 
bill are included with my written testimony. With respect to 
this legislation, I would like to comment on three topics.
    First, concerns have been raised about the expertise and 
abilities of our industry's work force. It is clear from the 
Office of Pipeline Safety data that we have an exceptional 
safety record. Still, we are fully participating in the new 
operator qualification rule that was issued in August 1999. 
This rule encompasses training and requires that employees are 
actually certified by the company, but under enforceable 
federal rules.
    Second, Senate bill 2409 contains language about system 
integrity. It does not differentiate between natural gas and 
liquids. Natural gas distribution companies are actively 
working with the Office of Pipeline Safety to develop a rule 
that can be applied to our systems. It is evident that the 
system integrity rule for natural gas should be different from 
the one for liquid transmission. We hope you will consider this 
in your deliberations.
    We are also concerned about any requirement that might 
impair the reliability of natural gas transportation service to 
local distribution companies from interstate pipelines. Unlike 
liquid lines, uninterrupted flow is critical in natural gas 
lines. If interstate flows are interrupted, the ability of a 
local distribution company to maintain adequate pipeline 
pressures may be impaired and customers may lose service. The 
process of restoring natural gas service to these customers is 
a long and tedious one and is not without its own risks.
    Unlike liquid transmission lines, the physical 
characteristics of distribution lines, especially older ones, 
preclude the use of internal inspection devices in many cases. 
So distribution companies use other means of inspection to 
maintain pipeline integrity. In addition, regulations require 
utilities to perform a greater level of safety activities in 
more highly populated areas within our systems.
    Finally, we do support the public's right to know where 
natural gas systems are located and how they operate. 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.
    We also support advanced preparation and training for fire, 
police and emergency service personnel, who are often first to 
arrive at a hazardous site. We work very hard at this. It is 
critical for them to know and understand the nature of a 
natural gas incident and how best to manage it.
    So, in summary, the natural gas industry is proud of its 
safety record. Natural gas has become the recognized fuel of 
choice by both citizens and the federal government, and this 
customer growth and confidence also bears with it an added 
relationship. As such, public and employee safety is a top 
priority for natural gas utilities. We will continue our 
ongoing efforts to operate safe and reliable systems, to 
strengthen the One-Call laws and systems in every state.
    Thank you for providing the opportunity to present our 
views on this important matter of pipeline safety. And we look 
forward to working with federal, state and local authorities to 
achieve the highest possible level of public safety.
    Thank you.
    Senator Gorton. Thank you.
    Mr. Pates.

  STATEMENT OF JAMES M. PATES, CITY ATTORNEY, FREDERICKSBURG, 
 VIRGINIA, ON BEHALF OF THE NATIONAL PIPELINE REFORM COALITION

    Mr. Pates. Good morning, Mr. Chairman and Senator Murray. 
My name is Jim Pates. I am the City Attorney for the City of 
Fredericksburg, Virginia. I am here as Vice-President of the 
National Pipeline Reform Coalition.
    Before I get started, though, I would like to point out to 
you that I have with me this morning a copy of a letter that 
was sent, I believe, to the Committee this week by the National 
League of Cities, which is now in support of some of the 
measures that we are talking about today. And I would ask that 
their letter be included in the record.
    Senator Gorton. It will be. *
---------------------------------------------------------------------------
    * The information referred to was not available at the time this 
hearing went to press.
---------------------------------------------------------------------------
    Mr. Pates. Thank you.
    The National Pipeline Reform Coalition is a new 
organization, having only been formed a couple of years ago by 
State and local government representatives, environmental 
organizations, local community organizations, and businesses 
that are committed to the idea of pipeline safety reform in 
this country.
    We have heard today about the Bellingham accident. But 
please do not get the impression or allow the public to get the 
impression that this accident is somehow an isolated case. In 
fact, our organization was formed because there have been so 
many accidents and so many communities adversely affected by 
these accidents that we felt that there was finally a need for 
us to work together to try to get some change, because we have 
gotten, as a group, so little satisfaction or help from the 
Office of Pipeline Safety.
    In my written testimony, I discuss some of these accidents, 
many of them equally tragic to the one you have heard about 
here today.
    Within the last 15 years, we have seen serious accidents in 
Greenville, South Carolina; Lively, Texas; San Bernardino, 
California; Houston, Texas; MoundsView, Minnesota; and you just 
read about the recent spill here in Maryland.
    The city of Fredericksburg has had the unfortunate 
distinction of having twice lost its entire public water supply 
due to oil pipeline accidents, first in 1980, and then again in 
1989. A 32-inch pipeline, operated by Colonial Pipeline 
Company--it is an interstate line, which runs from Houston to 
New York and provides a great deal of the petroleum to the East 
Coast--runs 30 miles west of Fredericksburg. On two occasions, 
this pipeline ruptured, causing petroleum to spill into the 
Rappahannock River, which is our sole water source.
    Each time, our water system was contaminated. We had to 
shut down our whole system for a week. The first time, the 
Governor declared a state of emergency. And they had a 
tremendous impact on our community, although we did not suffer 
the fatalities that you have heard about here today.
    Both of these accidents were due to a rare phenomenon known 
as ``railroad fatigue.'' Which means that when the pipeline was 
originally constructed back in the early sixties and the pipe 
was shipped on railroad gondola cars, it jostled along the 
railroad enough times that tiny, hairline fractures developed 
in the pipeline which were not readily detectable at the time. 
And then, over normal usage over the years, these fractures 
eventually will propagate to failure.
    After our second accident, we decided that enough was 
enough and that we needed to really look at this situation and 
educate ourselves about the risk from a pipeline that did not 
even lie within our jurisdiction. Our conclusion was that the 
Office of Pipeline Safety had not taken adequate action after 
the first accident, and we were not convinced that they would 
do so now.
    They entered into an agreement with Colonial. Testing was 
done. Pressure was reduced on this line to 455 psi. That is now 
10 years ago. And that pipeline is still operating under the 
reduced pressure, because, I assume, that OPS still considers 
the pipeline dangerous. We certainly do.
    In the aftermath of our accident, that pipeline was 
hydrostatically tested. And hard as it may be to believe, when 
they tested that line, it ruptured, which is not surprising. 
But what was amazing was--and this was in approximately 1992, I 
believe, when they tested that line--the joint of pipe that 
burst--and pipe usually comes in 40-foot segments, called 
joints--and the joint that burst that time, under testing, was 
the exact same joint of pipe that had failed in 1980, the first 
time. What had happened was when that pipe broke the first 
time, Colonial went in, cut the pipe in half, and left the 
other half of the defective pipe in the ground to fail again.
    I have heard here today that pipeline safety is first and 
foremost in the minds of the industry. And I am sure, for many 
operators, it is. But, to me, that hydrostatic testing rupture 
reflects a shocking lack of regard for safety on the part of a 
single operator and on the part of the Office of Pipeline 
Safety in inspecting and monitoring the activities of the 
pipelines.
    Over the past 10 years that I have been involved in this 
issue, we have not seen much cause for optimism when it comes 
to the Federal Government. I am hoping this year is different. 
I think the two of you are to be commended, to have both 
Senators from a State take the personal interest in an issue 
like this, which generally attracts zero public attention, and 
for you to be pursing this I think is commendable. And I am 
hoping that it will be fruitful.
    I would encourage you, however, to ask some hard questions 
of the administration, and not to accept glib, bureaucratic 
answers at face value. Our group would like to ask you to focus 
on three issues as you look at this bill--or these bills, 
actually, the four of them.
    First, there is no question that there are insufficient 
financial incentives for pipeline operators to prevent 
accidents. Under current Federal law and enforcement policy, 
there is little financial incentive for companies to take the 
serious actions needed to reduce the risk of accidents. 
Generally, unless there are fatalities or calamitous 
environmental damage to surface waters, pipeline operators 
generally face no fines or penalties at all for accidents that 
could have been prevented altogether.
    Even when State or Federal authorities do seek penalties 
for oil spills under the Oil Pollution Act or similar State 
statutes, the penalties and remedies are related to 
environmental damage and remediation, not to public safety, 
pipeline design, operation or maintenance. In other words, what 
we see treated are the symptoms or the results of these 
accidents, but not the disease itself, which is the design, 
operation and maintenance, and location of pipelines.
    You have heard here today that the Office of Pipeline 
Safety already has considerable enforcement tools at its 
disposal, but has deliberately chosen not to use them. They can 
impose civil penalties, seek injunctive relief, seek criminal 
penalties for willful violations. But these enforcement tools 
are rarely used.
    From 1987 to 1989, for example, at a time when over 33 
million gallons of petroleum were spilled, in hundreds of 
separate accidents, OPS collected fines of only $188,000. That 
adds up to less than 5 cents per gallon spilled. Both the 
administration's bill and S. 2438 contain provisions increasing 
the maximum alowable civil penalties from $25,000 to $100,000. 
While such additional penalties are helpful, OPS's track record 
strongly suggests that such enhanced penalties will never be 
used.
    Rather than relying on such discretionary penalties, the 
Pipeline Reform Coalition strongly urges the Committee to look 
at the Oil Pollution Act of 1990 as a model for providing 
stronger financial incentives for pipeline companies to act on 
their own to adopt operational practices that will reduce the 
likelihood of catastrophic accidents.
    Specifically, we recommend that the bill be amended to 
include mandatory fines for gas and hazardous liquid pipeline 
releases that exceed a certain minimum threshold, or when 
fatalities are involved, regardless of fault. In addition, we 
would suggest that you take a hard look at the citizen suit 
provision that is already in the current law. Under the Act, 
any person may file suit against OPS or a pipeline operator for 
violations under the Act.
    When this was first enacted, Congress intended that this 
section serve as a powerful incentive to ensure compliance with 
the law. Unfortunately, the citizen suit provision has not 
worked. We are unaware of a single incident in the last 20 
years where any person has successfully brought a citizen suit 
under this Act.
    The reason for this is that the Act bars any person from 
bringing a citizen suit as long as the agency is diligently 
pursuing some form of administrative proceeding to correct the 
violation. Since OPS's proceedings often go on for years and 
years--I mean, Colonial has been under an order in our case for 
10 years--so, in essence, what happens is, by having this 
administrative proceeding hang out there for 10 years, you are 
helping the company by protecting them from a citizen suit. 
This section should be amended to bring it more into line with 
other Federal statutes, which provide that violators are 
shielded from citizen suits only if they are under judicial 
supervision.
    The second issue we would like to have you focus on is the 
fact that OPS has consistently disregarded congressional 
mandates to establish higher safety standards, to protect the 
environment and to penalize operators who violate the law. You 
have heard here today about one of the most egregious examples. 
And that is the fact that Congress, in 1992, added protection 
of the environment for the first time as part of OPS's 
statutory mandate and mission. And they were given those 2 
years to come up with criteria for identifying environmentally 
sensitive areas.
    As of today, almost 6 years after the Congress' deadline, 
no final rule on these criteria has been adopted, much less any 
additional safeguards actually put in place. Now, I would 
submit to you that there is simply no excuse for such a 
dereliction of duty by OPS.
    You have heard how OPS has failed to carry out NTSB 
recommendations. They also have relied, and continued to rely, 
on notoriously inaccurate data. I, for one, would question any 
statistics about pipeline accidents, whether they are given by 
the industry, given by us or given by NTSB. The studies have 
shown, time and again, that the figures compiled by OPS are 
almost completely inaccurate.
    For instance, you were talking about different causes of 
accidents. I do not think anybody can realistically pinpoint 
percentages on causes of accidents because the data is so poor.
    In our opinion, this pattern of neglect by OPS shows that 
OPS, as an agency, needs to be fundamentally restructured or 
reinvented. Instead of seeing itself as an advocate and 
protector of the industry, OPS must refashion itself as an 
advocate and protector of the public interest. In this regard, 
we would make several suggestions.
    Number one is that either this Committee or some 
congressional committee should conduct some meaningful 
oversight hearings on OPS. NTSB Chairman Jim Hall recently 
recommended such hearings that would look into the repeated 
failure of OPS to carry out congressional mandates. Such 
hearings would also be able to evaluate this Federal/State 
partnership that we have been talking about today. And they 
could also examine the peculiarly close relationship between 
OPS and the industry that it is supposed to be regulating.
    We would also recommend that in your legislation you 
mandate some tougher safety requirements. We commend the 
chairman on his bill, and Senator Murray and Senator Gorton, on 
the specific safety requirements that have been included in 
your bills. We would suggest, however, that these be 
strengthened and additional ones be added to require:
    Number one, that by December 31, 2002, all pipeline 
operators complete internal inspections of their pipelines if 
it is technologically possible; number two, that OPS mandate 
minimum operator qualification and training standards; three, 
that operators develop fail-safe mechanisms to protect 
pipelines from over-pressurization in the event of equipment 
failures; four, that all liquid pipelines install emergency 
shutoff valves, with stiff requirements for pipelines located 
in environmentally sensitive areas; five, that pipelines with 
significant accident histories undergo periodic hydrostatic 
testing; and, six, that OPS develop leak detection standards 
for all pipelines and require the operators to utilize such 
systems.
    The third issue that we would ask you to look at is that 
Congress needs to enhance, not reduce, the role of State and 
local governments in protecting the public from pipeline 
accidents. Specifically, right now, as you know, there are two 
systems in place. First, States can be certified to handle the 
intrastate program. And then, on the interstate level, the OPS 
may designate States as its interstate agents.
    It is hard to believe, in the wake of the Bellingham 
accident, that OPS would still be pursuing its stated policy of 
phasing out the existing interstate agent program within 3 
years. Following our accident in Virginia, our most recent one, 
in 1989, Virginia adopted legislation to authorize our public 
utility commission to develop a liquid pipeline program.
    At that time, OPS came to Virginia, testified in support of 
that bill, saying that not only do we welcome Virginia assuming 
responsibilities for its intrastate lines, but also being 
designated as an interstate agent. So, Virginia went through 
the process, hired the necessary people, trained them, got 
their intrastate program up and running. And then, when they 
were ready to assume responsibility for the interstate lines, 
which are the main ones in Virginia and the ones that cause all 
the problems, OPS said, oh, sorry, we do not need your help 
anymore.
    And the chairman of our utility commission wrote back to 
OPS and said: Why is it that after you have led us on for all 
these years and encouraged us to assume this responsibility, 
and we have incurred expenses, hired people, and now you are 
telling us that you do not need us anymore?
    I find that absolutely incomprehensible, when you look at 
the scope of the problems that are facing all levels of 
government with this problem. We are convinced that the real 
reason OPS is attempting to reduce the States' role in pipeline 
safety arises from a demonstrated commitment by a number of 
States, including ones such as Washington, Minnesota and 
Virginia, to take a more aggressive approach on pipeline safety 
than OPS is willing to do.
    As far as this interstate agent issue goes, we would 
propose that S. 2438 be amended to grant States the authority 
to develop and administer their own pipeline safety programs 
for interstate lines, provided they do not overburden 
interstate commerce or compromise public safety. OPS would 
still rightfully be entrusted with primary authority over 
interstate pipelines, but States would be given a legitimate 
partnership role in protecting the public from pipeline 
accidents.
    Finally, we would encourage the Committee to include two 
other measures that would enhance State and local involvement 
in pipeline safety. The first is the creation of these regional 
advisory councils. The Oil Pollution Act of 1990 provides a 
model for fostering long-term partnerships among industry, 
government and local citizens in monitoring compliance with 
safety and environmental laws.
    Under that statute, Congress established these regional 
committees, comprised of local elected officials and other 
community representatives for the purpose of working with the 
Alyeska Pipeline Company to promote their mutual goals. By all 
accounts, the program has been very successful. We would urge 
you to consider extending this concept to pipeline safety by 
allowing communities interested in forming such regional 
councils to do so.
    Lastly, we would encourage the Committee to amend the bill 
to require OPS to institute a program aimed at encouraging 
State and local governments to take a more active role in 
utilizing their existing legal authority to promote pipeline 
safety. As a local government official myself, I can tell you 
that most cities and counties in America are largely unaware 
that large transmission pipelines run through their 
communities.
    Senator Gorton. Mr. Pates, can I ask you to finish up 
quickly? Senator Murray has been called to the floor of the 
Senate, and I want to give her a chance to ask questions.
    Mr. Pates. On this issue, we would ask the Committee to 
direct the National Research Council to conduct an independent 
risk assessment study to determine the public safety and 
environmental risks posed by new and existing pipelines, and to 
develop model standards for easement widths, building setbacks, 
fire codes, and other measures that local governments could 
then use.
    Thank you so much for giving us the opportunity to appear 
today. Thank you.
    [The prepared statement of Mr. Pates follows:]
 Prepared Statement of James M. Pates, City Attorney, Fredericksburg, 
     Virginia, on Behalf of The National Pipeline Reform Coalition
Mr. Chairman and Members of the Committee:

    My name is Jim Pates and I serve as City Attorney of the City of 
Fredericksburg, Virginia. I am appearing today as Vice-President of the 
National Pipeline Reform Coalition (``NPRC''), a national pipeline 
safety advocacy organization consisting of individuals, state and local 
governments, citizens groups, environmental organizations, pipeline 
accident victims, and businesses committed to promoting pipeline safety 
reform in the United States. We are a new and growing organization, 
having been formed in 1998 in response to numerous oil and gas pipeline 
accidents across the country and efforts by pipeline companies to 
construct new pipelines without adequate public safety and 
environmental safeguards. We recently sponsored our first national 
conference here in Washington and were pleased to see how well attended 
it was and how many national organizations are supporting our efforts 
to secure meaningful pipeline safety reform.

Introduction
    I would first like to thank the Chairman, Senator McCain, and 
Senator Hollings for being permitted to speak here today. All too 
often, the Pipeline Safety Act (``Act'') has been the subject of 
Congressional hearings and reauthorization proceedings that have not 
included input from public interest organizations, local governments, 
or victims who have personally suffered from pipeline accidents. You 
are to be commended for your willingness to hear from these families 
today. We thank you for including the NPRC and hope that our comments 
will be received in the same spirit in which they are offered, that is, 
simply, to improve pipeline safety regulation in this country.
    The NPRC exists for one simple reason. Communities and individuals 
that have either experienced pipeline disasters or who have sought 
assurances that new pipelines will be constructed in a safe and 
environmentally sound manner have discovered, to their dismay, that our 
federal laws and the agencies charged with enforcing them, particularly 
the Office of Pipeline Safety, U.S. Department of Transportation 
(``OPS''), do not adequately protect the public interest.
    You have heard today from the people of the State of Washington, 
who have suffered one of the worst pipeline accidents within the past 
decade. But please don't think that their story is an isolated case. 
There have been many other similar accidents, most of which you are 
probably unaware. For example:

        1. Greenville, South Carolina--Shortly before midnight on June 
        26, 1996, an interstate oil pipeline ruptured along the Reedy 
        River near Greenville, South Carolina, spilling almost a 
        million gallons of diesel fuel into the river. For hours, fuel 
        poured into the river, killing an estimated 34,000 fish and 
        other wildlife and threatening public water supplies before an 
        emergency crew of 500 workers could stanch the flow. By the 
        time the leak was stopped the next day, the pipeline's owner, 
        Colonial Pipeline Company, and the state of South Carolina had 
        each experienced their largest oil spills in history. The state 
        Department of Natural Resources later catalogued 23 fish 
        species that had been decimated, including catfish, largemouth 
        bass, suckers, shad, carp, bullhead, and warmouth, as well as 
        turtles, muskrat, snakes, crawfish, and wood ducks.

        2. Kemp, Texas--Two months later, on August 24, 1996, in the 
        small town of Kemp, Texas, about 50 miles southeast of Dallas, 
        a transmission pipeline carrying liquid butane ruptured, 
        creating a massive cloud of foul-smelling gas. Two teenagers, 
        Jason Stone, 17, and Danielle Smalley, 18, jumped into their 
        pickup truck to warn others. Sparks from the engine ignited the 
        highly flammable gas, causing an explosion that sent a fireball 
        into the air visible from 40 miles away. Both teenagers were 
        killed.

        3. San Bernardino, California--In May 1989, a Southern Pacific 
        train derailed in San Bernardino, plowing through a residential 
        neighborhood and killing four people. The train landed on top 
        of a pipeline operated by Calnev Pipeline Company, an 
        interstate carrier that transports petroleum from California to 
        Nevada. Thirteen days after the train derailment and train 
        service had been restored, the pipeline exploded in the same 
        location. The flames rose 500 feet in the air. Two people were 
        killed, 10 homes destroyed, and dozens of people injured.

        4. Fredericksburg, Virginia--In 1980 and again in 1989, my 
        hometown of 20,000 people lost its public water supply for a 
        week due to oil spills in the Rappahannock River. Both 
        emergencies were caused by the failure of an interstate oil 
        pipeline operated by Colonial Pipeline Company. The first 
        accident resulted in 92,000 gallons of fuel oil spilling into a 
        tributary of the river, the City's sole water source. Nine 
        years later, it happened again, with 212,000 gallons of 
        kerosene flowing into the river. Both accidents took place 20 
        miles upstream of the city's water intake. Each time, fish and 
        wildlife were killed, businesses were forced to close, and the 
        city had to haul water from neighboring jurisdictions.

        5. Houston, Texas--On October 20, 1994, Houston's San Jacinto 
        River, swollen by heavy rains and flooding, gouged a new 
        channel through the floodplain and exposed 17 underground 
        pipelines. Four of them broke. Gasoline from Colonial's 40-inch 
        line ignited, sending flames down the river and destroying 
        houses, trees, and barges. ``It was like hell had opened up and 
        swallowed the whole river,'' said Mike Norman, 34, who 
        witnessed the explosion.

        6. Mounds View, Minnesota--At 4 o'clock in the morning on July 
        8, l986, a gasoline pipeline owned by Williams Pipeline Company 
        ruptured in the small town of Mounds View, sending vaporized 
        and liquid gasoline into the streets of a residential 
        neighborhood in this suburb of Minneapolis. Twenty minutes 
        later, an automobile passed by, causing the gasoline to ignite. 
        Two people were burned to death while fleeing their home. When 
        the City of Mounds View attempted to delay the pipeline from 
        resuming operations until local safety concerns had been met, 
        company officials went to court and secured a permanent 
        injunction blocking the city from taking any action that might 
        restrict their operations.

    Since 1990, there have been nearly 4,000 incidents reported to OPS 
involving gas and hazardous liquid pipelines,--more than one every 
single day. These incidents have resulted in over 200 deaths, nearly 
3,000 injuries, and at least $780 million in reported property damage. 
Over 62 million gallons of oil and other hazardous liquids have been 
released into the environment over the past 10 years, making oil 
pipeline accidents one of the largest point sources of oil pollution in 
the country. It is not a record of which any of us should be proud.

Reauthorization of the Pipeline Safety Act
    This year, we see history repeating itself.
    For those of us who have been involved in pipeline safety reform 
efforts for years, we recognize a familiar pattern unfolding. For the 
past several years, there has been little discussion on a national 
level about pipeline safety because there have been only one or two 
high-profile accidents. During this time, the Office of Pipeline Safety 
and the pipeline industry have worked together quietly to avoid any 
regulatory measures which would place any new requirements on pipeline 
operators or reduce industry profits. In fact, they have been busy 
trying to reduce state and federal regulation of pipelines generally.
    But then along comes an accident such as the one in Bellingham and 
the public demands action. Congress responds by directing OPS to devise 
tougher standards, by imposing deadlines for agency action, by granting 
OPS additional enforcement authority, and by increasing the agency's 
budget.
    Then several more years pass, during which time OPS conducts 
studies (generally funded and directed by the industry) and determines 
that no new standards are actually needed or that compliance with them 
should be strictly voluntary. It ignores the deadlines set by Congress 
and uses its increased funding to pursue deregulation of the industry.
    Then another tragic accident occurs and the process repeats itself. 
Throughout such cycles, very little actually changes and preventable 
accidents continue to plague unsuspecting communities and individuals 
who happen to live near dangerous transmission pipelines.
    We hope this year will somehow be different. As you know, there are 
at least four different bills that have recently been introduced as a 
result of the Bellingham accident. The NPRC has reviewed all four of 
these bills and believes that all of them contain useful provisions. We 
would urge the Committee, however, to take advantage of this narrow 
window of opportunity and to delve deeply into the serious problems 
that plague OPS, to ask some hard questions, and not to accept glib 
bureaucratic answers at face value.
    We urge you to focus on three fundamental issues in formulating 
this legislation:

ISSUE #1--There are Insufficient Financial Incentives for Pipeline 
        Operators to Prevent Accidents.
    Under current law and federal enforcement policy, there is little 
financial incentive for pipeline companies to take the actions needed 
to reduce the risk of serious accidents. Unless an accident results in 
deaths or calamitous environmental damage to surface waters, pipeline 
operators generally face no fines or penalties at all for accidents 
that they could have prevented altogether or that could have ended 
tragically. Even when state or federal authorities do seek penalties 
for oil spills under the Oil Pollution Act of 1990, the Clean Water 
Act, or other state statutes, the penalties and remedies are related to 
environmental damage and remediation, not to public safety, pipeline 
design, operation, or maintenance. In other words, the symptoms or 
effects of pipeline accidents get treated, but not the disease itself.
    The Office of Pipeline Safety already has considerable enforcement 
authority but they have deliberately chosen not to use it. Under 
current law, OPS has the power to impose civil money penalties up to 
$25,000 per day per violation (up to a maximum fine of $500,000), to 
obtain injunctive relief and punitive damages against operators, and to 
seek criminal penalties for willful violations. The agency can also 
utilize a special statutory remedy called a ``hazardous facility 
order,'' which allows OPS to find that a pipeline or other facility is 
either

          (1) hazardous to life, property, or the environment; or

          (2) constructed or operated, or a component of the facility 
        is constructed or operated, with equipment, material, or a 
        technique the Secretary [of Transportation] decides is 
        hazardous to life, property or the environment.

    Unfortunately, these enforcement tools are rarely used. From 1987 
to 1989, for example, at a time when over 33 million gallons of 
petroleum were spilled in 580 separate accidents, OPS collected fines 
of only $188,000. That adds up to less than five cents per gallon 
spilled.
    Both S. 2438 and the Administration's bill contain provisions 
increasing potential civil penalties under current law from $25,000 to 
$100,000 per violation. While such increased penalties are helpful, 
OPS' track record strongly suggests that such enhanced penalties will 
never be used.
    Rather than relying solely on such discretionary penalties, the 
NPRC strongly encourages the Committee to look to the Oil Pollution Act 
of 1990 as a model for providing stronger financial incentives for 
pipeline companies to act on their own to adopt operational practices 
that will reduce the likelihood of catastrophic accidents.
    Specifically, we recommend that S. 2438 be amended to include 
mandatory fines for gas and hazardous liquid pipeline releases that 
exceed a minimum threshold amount or when fatalities are involved, 
without regard to fault. Pipeline operators would be authorized to 
recover these mandatory fines from third parties if such persons were 
actually responsible for a release. Repeat offenders would face even 
stiffer statutory penalties.
    In addition, we suggest that the Committee consider enhancing the 
citizens suit provisions under current law. The Act now provides that 
any person can file suit against OPS or a pipeline operator for 
violations under the Act. Congress intended for this section to serve 
as a powerful incentive to ensure compliance with the law. 
Unfortunately, the citizens suit provision has not worked.
    We are unaware of a single instance where anyone has been able to 
bring a successful citizens suit under the Pipeline Safety Act. The 
reason for this is that the Act bars any person from bringing a 
citizens suit so long as the agency is diligently pursuing an 
``administrative proceeding'' to correct the violation. This section 
should be amended to bring it more into line with other federal 
statutes, which provide that violators are shielded from citizens suits 
only if they are already under judicial supervision.
    Finally, we would recommend that a ``whistle blower'' provision be 
added to the statute to protect pipeline company employees who report 
pipeline safety violations. We hear of instances where pipeline company 
employees fear for their jobs if they report violations to state or 
federal officials. Such laws have proven helpful in other areas by 
protecting lower level employees who recognize and seek to correct 
their employer's unlawful conduct.

ISSUE #2--OPS Has Consistently Disregarded Congressional Mandates To 
        Establish Higher Safety Standards, To Protect the Environment, 
        and To Penalize Operators who Violate the Law.
    Although we do not yet have a final report from the National 
Transportation Safety Board on the causes of the Bellingham accident, 
it will undoubtedly conclude, as its reports have repeatedly found in 
the past, that a large part of the culpability rests with OPS. As the 
Committee considers this legislation, we urge you to keep in mind that 
Congress' past efforts to deal with the shortcomings of OPS have been 
largely unsuccessful.
    As noted earlier, Congress has increased civil penalties in the 
past but OPS has refused to impose them. The agency has also been 
derelict in carrying out the major environmental mandate that Congress 
conferred upon the agency in 1992. As you know, OPS was ordered at that 
time to incorporate ``protection of the environment'' into its overall 
regulatory mission and to establish criteria for identifying pipelines 
located in high-density population and environmentally sensitive areas. 
In this way, higher safety standards and environmental protection 
measures could be applied to high-risk areas. The agency was given two 
years, until October 24, 1994, to complete the task. As of today, 
almost six years after Congress' deadline, no final rule on the high-
density population and environmental criteria has been adopted, much 
less any additional safeguards actually put in place. There is simply 
no excuse for such dereliction of duty by OPS.
    As noted recently in the Audit Report of the DOT Inspector General 
(Report No. RT-2000-069, issued March 13, 2000), the Office of Pipeline 
Safety has failed to respond to, much less carry out, various 
recommendations of the National Transportation Safety Board, continues 
to rely on pipeline accident data that is notoriously unreliable, and 
has failed to conduct research on ``smart pigs'' and other technologies 
that could detect pipeline problems before they cause accidents.
    The list of bureaucratic failings goes on and on. For years, OPS 
has ignored calls by the NTSB and Congress to set tougher pipeline 
safety standards. Beginning 20 years ago, in 1980, the NTSB first 
called upon OPS to require gas pipeline operators to install certain 
equipment known as ``excess flow valves'' to isolate failed pipelines 
after they break, thus reducing the risk of fire and explosion. In 
1992, Congress finally required the agency to formulate performance 
standards for such valves and to determine under what circumstances, if 
any, they must be installed. Three years later, in 1995, OPS finally 
concluded that no such valves should be required. Even today, in 2000, 
no such requirement is in place.
    In our opinion, this pattern of neglect shows that OPS, as an 
agency, needs to be fundamentally restructured or ``reinvented.'' 
Instead of seeing itself as an advocate and protector of the industry, 
OPS must refashion itself as an advocate and protector of the public 
interest. To help accomplish this objective, the NPRC recommends that 
the Committee:

        1. Conduct oversight hearings. As NTSB Chairman Jim Hall 
        recently recommended, Congress should convene a series of 
        oversight hearings into the repeated failure of OPS to carry 
        out Congressional mandates and NTSB recommendations, to 
        evaluate the federal-state regulatory partnership, and to 
        examine the peculiarly close relationship between OPS and the 
        industry it is supposed to be regulating. No such hearing has 
        been held within the past decade and could go a long way toward 
        explaining the real reasons for OPS' ineffectiveness.

        2. Mandate tougher safety requirements. We commend the Chairman 
        for including in his bill provisions requiring operators to 
        develop employee qualification and training plans and directing 
        OPS to develop a pipeline integrity management program. We 
        would recommend, however, that these provisions be strengthened 
        and additional ones added to require:

     that by December 31, 2002, all pipeline operators complete 
            internal inspections of their pipelines and take 
            appropriate corrective action when serious anomalies are 
            discovered;

     that OPS mandate minimum operator qualification and 
            training standards;

     that operators develop ``failsafe'' mechanisms to protect 
            pipelines from over-pressurization in the event of 
            equipment failures or other mishaps;

     that all liquid pipelines install emergency shut-off 
            valves, with stiffer requirements for pipelines located in 
            environmentally sensitive areas;

     that pipelines with significant accident histories undergo 
            periodic hydrostatic testing; and

     that OPS develop leak-detection standards for all 
            pipelines and require operators to utilize such systems.

    Many of these issues have been addressed in the past by Congress, 
NTSB, GAO, and other outside studies, but OPS has either failed to act 
on them or has been so dilatory in pursuing them that Congress should 
proceed and set the standards itself.

ISSUE #3--Congress Needs To Enhance, Not Reduce, the Role of State and 
        Local Governments in Protecting the Public From Pipeline 
        Accidents.
    As you know, the Pipeline Safety Act envisions that regulation of 
the design, construction, maintenance and operation of gas and 
hazardous liquid pipelines should primarily be a federal 
responsibility. This is appropriate, given the impact of pipelines on 
interstate commerce. There is an obvious need for uniform standards in 
our interstate transportation system. But the current law also 
envisions a strong federal-state partnership in which the federal 
government sets and enforces national safety standards for interstate 
pipelines but states may perform day-to-day inspection and 
administrative duties and can even adopt more stringent safety 
standards for intrastate pipelines.
    Specifically, the Act currently provides that OPS can ``certify'' 
states to assume federal jurisdiction over intrastate pipelines if they 
have adopted federal standards and do not impose more stringent 
standards that are incompatible with federal standards. Certified 
states also enjoy full enforcement authority over intrastate operators.
    In addition, under a separate program, OPS may designate certified 
states as its ``agent'' to administer the interstate pipeline programs, 
except that all enforcement authority over interstate facilities 
remains with OPS. States have been actively encouraged in the past to 
assume federal responsibilities under both the intrastate and 
interstate programs through a cost-reimbursement formula that enables 
them to recover up to fifty percent (50%) of their costs from the 
federal government.
    This bifurcated federal-state regulatory system has produced a 
confusing regulatory maze. As of 1999, 49 states were certified to 
implement the intrastate gas program, 9 served as agents to administer 
the interstate gas program, 4 were permitted to inspect intrastate gas 
or liquid facilities but not to enforce federal standards, 12 were 
certified to implement the intrastate liquid program, and 4 served as 
agents to administer the interstate liquid program. Now OPS has 
indicated that it intends to phase out the entire interstate agent 
program within the next several years.
    The Office of Pipeline Safety has put forth several rationales for 
phasing out the interstate agent program, including claims that 
additional Congressional appropriations for OPS preclude the need for 
interstate agents and that some states are doing an inadequate job of 
regulating intrastate pipelines. The NPRC suspects that the real reason 
for OPS attempting to reduce the states' role in pipeline safety arises 
from a demonstrated commitment by a number of states, including ones 
such as Washington, Minnesota, and Virginia, to take a more aggressive 
approach on a whole range of issues.
    As someone who has been personally involved in this issue from a 
local government perspective for the past 10 years, I can tell you that 
the state pipeline regulators with whom I have dealt are far more 
vigilant in conducting inspections, monitoring new construction, and 
enforcing regulations than is OPS. As a group, they generally favor 
tougher safety standards than those approved by OPS and are more 
willing to take strong enforcement action against recalcitrant 
operators. Their help should be welcomed, not discouraged.
    The Administration, in Section 6 of its bill (S. 2409), has put 
forward a proposal titled, ``Enhanced Ability of States to Oversee 
Operator Activities.'' Such a title constitutes a total 
misrepresentation of what the bill actually does. Instead of enhancing 
state authority, it actually limits state activities to ``special 
investigations involving new construction or incidents'' and to ``other 
activities overseeing interstate pipeline transportation that 
supplement the Secretary's program and address issues of local 
concern,'' provided OPS makes certain findings that such state 
activities are consistent with ``the Secretary's program for 
inspection.'' In addition, it would place the imprimatur of Congress on 
OPS' ongoing efforts to cancel the interstate agent agreements already 
in place. Given OPS' public announcement that it intends to eliminate 
the entire interstate agent program within three years, how can the 
Administration's bill possibly state authority?
    The NPRC strongly believes that states should be encouraged to 
assume a much larger role in promoting pipeline safety than is allowed 
under current law. This should be true for interstate, as well as 
intrastate, pipeline facilities. There are several reasons for this.
    First, the record reflects that states have generally done a better 
job of carrying out federal regulations affecting intrastate gas and 
liquid pipelines than OPS has. Several states have gone beyond the 
minimum federal standards and promulgated their own standards to 
enhance public safety for intrastate facilities or taken the stronger 
enforcement actions against violators than OPS ever has. For example, I 
invite you to look at the record of the Virginia State Corporation 
Commission in administering the federal program for intrastate liquid 
pipelines; it far surpasses the track record compiled by OPS prior to 
Virginia's certification.
    Second, each state has unique conditions that may warrant slightly 
different regulatory standards. For example, states suffering risks 
from flooding or earthquakes may need different operational or design 
standards to protect the environment from natural disasters.
    Third, states can allocate additional resources and personnel to 
conduct more rigorous inspections that OPS has been willing or able to 
do.
    The NPRC proposes that S. 2438 be amended to grant states the 
authority to develop and administer their own pipeline safety programs 
for interstate pipelines, provided they do not overburden interstate 
commerce or compromise public safety. OPS would still rightfully be 
entrusted with primary authority over interstate pipelines but states 
would be given a legitimate partnership role in protecting the public 
from pipeline accidents.
    Finally, the NPRC would encourage the Committee to include two 
other measures in S. 2438 to enhance state and local involvement in 
pipeline safety:

        1. Creation of regional advisory councils. The Oil Pollution 
        Act of 1990 provides a model for fostering long-term 
        partnerships among industry, government, and local citizens in 
        monitoring compliance with safety and environmental mandates. 
        Under that statute, Congress established regional advisory 
        committees comprised of local elected officials and other 
        community representatives for the purpose of working with the 
        Alyeska Pipeline Company to promote their mutual goals of 
        reducing oil spills and protecting the environment. By all 
        accounts, the program has been very successful.
          The NPRC urges the Committee to consider extending this 
        concept to pipeline safety by allowing communities interested 
        to form similar regional councils. The membership of the 
        councils would consist of representatives of local government, 
        tribes, property owners, emergency responders, and other 
        interested parties. The governor of the host state would 
        certify each council. The duties of the councils would be 
        purely advisory but they could provide invaluable assistance on 
        a variety of pipeline safety issues. Federal agencies such as 
        OPS would be required to consult with the councils on issues 
        affecting that state. To ensure technical competency, each 
        council would be assured a continuing source of funding under 
        the statute.
          Such a program would, for the first time, create a true 
        partnership among industry, government, and the public on 
        pipeline safety issues. It would provide a vehicle for industry 
        and localities to work with each other instead of against each 
        other. It would provide a continuity of expertise and local 
        involvement instead of the sporadic public hysteria that often 
        arises out of pipeline accidents or proposals for new 
        pipelines. We believe that such a vehicle could prove to be a 
        constructive means of promoting dialogue on these difficult and 
        technically complex pipeline issues.

        2. State and local government study and grants. The NPRC also 
        urges the Committee to amend S. 2438 to require OPS to 
        institute a program aimed at encouraging state and local 
        governments to take a more active role in utilizing their 
        existing legal authority to promote pipeline safety. Most 
        cities and counties in America are largely unaware that large 
        transmission pipelines run through their communities or that 
        such facilities may pose significant threats to their citizens 
        and the environment.
          The fact is that state and local governments can and should 
        play a much larger role in pipeline safety. Local governments 
        largely control land use, both as it affects existing and 
        proposed pipelines, yet few localities adequately address 
        pipelines in their comprehensive land use plans, zoning and 
        subdivision ordinances, or building codes. Even localities such 
        as Fredericksburg and Bellingham that have suffered serious 
        accidents often do not comprehend what sort of risks pipelines 
        pose or how their local laws should restrict human activities 
        near pipelines. They need federal guidelines and technical 
        assistance to help them make such sound, scientifically based, 
        decisions.
          In addition, few states or localities set minimum easement 
        widths for new pipelines. We see many instances of existing 
        transmission pipelines having been built within rights-of-way 
        that are entirely too narrow. Now, new buildings, schools, 
        hospitals, and homes are being built within 15 or 20 feet of 
        these hazardous facilities. Who's protecting the hapless people 
        who happen to live and work right next to these facilities?
          We urge the Committee to direct the National Research Council 
        to conduct an independent risk assessment study to determine 
        the public safety and environmental risks posed by new and 
        existing transmission pipelines and to develop model standards 
        for easement widths, building setbacks, fire codes, and other 
        measures that state and local governments can use to protect 
        their citizens and the environment.

    Mr. Chairman, thank you again for permitting the National Pipeline 
Reform Coalition to participate in today's hearing. We have worked very 
hard, over a very short period of time, to scrutinize these various 
bills and to formulate our own reform proposals. We look forward to 
working with you, the Office of Pipeline Safety, the National 
Transportation Safety Board, the pipeline industry, and other 
interested parties to reduce the likelihood of accidents such as the 
one that has devastated and continues to haunt the people of 
Bellingham.
    Thank you.

    Senator Gorton. Senator Murray, you must go to the floor of 
the Senate, so it is your turn.
    Senator Murray. Thank you very much, Mr. Chairman. I truly 
appreciate that.
    Let me just ask the panel this. One of the issues that has 
come before us consistently from our State is the need for a 
public right to know provision. And I am sure all of you are 
aware of the different provisions in the bills before us. One 
of the ideas that has been put forward is for the industry to 
collect the information into a summary of problems with the 
pipelines and submit that information to local officials and 
emergency responders in the area that is being impacted.
    Can you put some information together in a way that is 
easily understood by the local governments so that this can be 
useful for them?
    Mr. Reiten. Senator Murray, Dick Reiten.
    Yes, we can. We already have the information and mapping 
where our systems are, both high-pressure and low-pressure. We 
do make that available to the local jurisdictions upon request. 
And I am sure we could revise that in some way, although it 
would be an enormous burden to provide maps of everything to 
every jurisdiction on a continuous basis. We would rather have 
it that it is available to them and that they can access it at 
any time that they would need to.
    Senator Murray. I think the second half of that question is 
just as critical, which is what Senator Gorton and I heard when 
we had our hearing in the State. Which was that it could be 
understood by the local governments in an easily readable way.
    Mr. Reiten. Right, I think so. And I think we could revise 
that. I think we could also do more to advise local officials 
of the various jurisdictions where the local distribution 
companies and interstate pipelines operate, about where the 
lines are and how to access the information and the 
terminology, so that they are equipped to get the information 
and interpret it quickly when required.
    Senator Murray. Mr. Wright?
    Mr. Wright. Thank you. Phil Wright.
    I would just add to that, and recognize, as someone else 
did earlier today--I cannot remember exactly who--that with the 
technology we have available to us to affect Web sites and the 
like for easy access, that in putting up those kinds of 
facilities we can have a more efficient distribution than sort 
of just blanketing every jurisdiction, as Dick pointed out.
    Senator Murray. Mr. Haener?
    Mr. Haener. Let me add that I think that the interstate 
industry is doing a lot of that. But I think we do need to be 
careful, when you said putting technical data out in an 
understandable form. We can certainly tell you where the 
pipeline is, what the operating pressure is, those kinds of 
things. But putting out maintenance data in a simple form that 
people understand I think would be very difficult and it would 
not serve to improve safety.
    Senator Murray. When the local agency's main goal is to 
protect the citizens in their communities, it is really 
important that they have information that is understood. So, 
hopefully we can work with all of you to make sure that that is 
available to those communities so they can do that.
    Mr. Chairman, I do have to go to the floor to manage a 
bill. I will submit the rest of my questions as post hearing 
questions.
    Senator Murray. And I want to thank Senator Gorton, the 
other members of this Committee, and Chairman McCain for 
working so diligently to have this hearing today. I want to 
especially thank Senator Gorton, who has been working with me 
in a very cooperative, bipartisan manner, to move legislation 
that I think will ensure the safety of many families. I also 
want to thank the families, again, who have travelled here and 
have so diligently worked for so long to make sure that we 
continue to do the right thing here.
    My hope is this Committee will pass a bill out before the 
end of this month. My true hope is that the Senate can pass a 
bill out before the anniversary of June 10th. And hopefully we 
can have a bill by the end of this Congress on the President's 
desk. I think that would be a true tribute to the courage and 
integrity of the families and the community of Bellingham, but 
also, as Mr. Pates said, to the many other families that have 
suffered tragedies in this country.
    Thank you very much, Mr. Chairman. And again, thank you to 
all of the witnesses.
    Senator Gorton. One question to each of you, following up 
on the question that I asked to the previous panel. I 
understand that there is a pipeline company that has expressed 
support for granting Federal immunity for criminal charges for 
workers who cooperate with government investigators. And I 
would like to know the views of each of you on that subject, 
both from the point of view of getting that kind of cooperation 
and whether or not, internally, those of you who represent 
companies have any penalties for operators or employees who 
refuse to cooperate when legitimate inquiries are being made.
    Mr. Wright. Senator, I will start. First of all, I think 
that you and Senator Breaux were on the right track on the 
issue of ordinary negligence. Certainly, if there is egregious, 
willful misconduct, that is an issue that perhaps should be 
segregated from the issue of ordinary negligence. I am not a 
lawyer and should probably not wander off too far into that 
arena, but it has been problematic, as we have seen firsthand 
in trying to get to the bottom of the issues in Bellingham. 
Nobody wants to know more than we in the liquid pipeline 
industry precisely what the causes were in that catastrophe, 
and we cannot do that, given where we are right now, as people 
are attempting to protect their rights.
    As to your second question with respect to penalties within 
the company, certainly part and parcel to a person's 
accountability that is operating a pipeline system is to do 
those things that comply with the law and with the agencies 
that are accountable for regulating our systems. And if there 
is some kind of misconduct involved, apart from protecting 
their given rights under the Constitution, yes, there are 
disciplinary actions that logically should be taken.
    I am not aware of us ever having to do that at my company, 
but I am confident that we would if challenged with that.
    Mr. Reiten. I cannot add a lot to that except to say that, 
in our company, we have standards for forthrightness and 
honesty in all matters. Certainly, there is a difference 
between willful negligence and human error, and you have to try 
to separate between the two. There is also the issue of 
personal rights under the law, and we have to recognize those.
    But I think it is important, and it is almost hard to 
believe that we could go a year after a major accident and not 
have the critical information necessary to evaluate it. And 
something is wrong with a system that allows that to happen.
    Senator Gorton. Mr. Haener?
    Mr. Haener. Let me say that I am an engineer, so I 
apologize for that part of it. But I think it is a very 
critical point. And as I sat here today, I hear that the 
solution to pipeline safety is stiffer penalties, fines, throw 
people in jail. And I think the priority needs to be to find 
out what the problem is so we can fix it and correct it.
    And sitting here and not knowing the final cause of an 
accident a year later because of people's rights, that is a 
problem. So if we need take those kinds of steps so we can get 
the facts sooner, I think we should do those kinds of things.
    As I understand it, some of the penalty provisions that are 
proposed get into contractors and the One-Call system. I think 
everyone on this panel has agreed that third party damage is a 
problem and we need to improve the system. But if we propose a 
penalty to a contractor that hits our pipe because he did not 
call the One-Call system, but he hit our pipe so he had to 
report to us. And by his reporting to us, we know he did not 
report that he was digging there he is going to get a $100,000 
fine, I think you may hurt safety.
    Because that contractor is going to say to his partner--and 
some of these are small people--gee, I forgot to call this 
morning as I took my kids to school, we have hit this pipe, if 
we call in now, we are going to get a large fine. Well, they 
are going to cover it up and move on to the next location. I 
want them to call. I want to get out there. I want to open that 
pipe up and I want to see if there is a problem. And if there 
is a problem, we will fix it.
    So I think we need to be careful how we do this, and we 
need to promote safety, not punishment.
    Mr. Pates. Mr. Chairman, I guess my short response would be 
I do not think I would trust OPS to give immunity to anybody. 
But, second of all, it raises an important issue. And that is 
we have seen an increase in the last several years of the 
number of criminal prosecutions brought against pipeline 
companies.
    I think that it would be a very, very good subject of 
discussion for an oversight hearing to talk about why that is. 
How many criminal referrals has DOT sent to Justice for 
pipeline accidents? And to hear from the U.S. Attorney from 
Washington, to know why that case is not moving forward. I 
think those are all very good questions. But I doubt that the 
answer lies in granting immunity.
    Mr. Kenow. Mr. Chairman, the only comment I have is not 
specifically on immunity. But there is a need to strengthen 
some of the language in the national One-Call law. And I 
believe some of that is in the administration bill. Because the 
State of Minnesota was involved in that case where there was an 
intentional cover-up of a third part hit of a pipeline, where 
240,000 gallons of liquid was spilled. The Justice Department 
was involved with that, but had difficulty prosecuting under 
the One-Call law. They did use the Oil Pollution Act.
    Our State inspectors who were part of that interstate agent 
agreement did the investigation for that and supplied that 
information to the Justice Department. So there is an example 
of us being on site, being able to participate. Unfortunately, 
because of the way the law was written, there were very light 
penalties, and it was definitely an admission of guilt. We had 
to evacuate an entire town of 240 people. And in the same farm 
field, another line broke about a month later, as well. And 
that one is still under investigation.
    Senator Gorton. Yes, Mr. Reiten.
    Mr. Reiten. Senator, I would like to make just maybe one 
final point, picking up on what Bill commented on. And that is 
that, as stated in a number of testimonies, two-thirds, or 
nearly two-thirds, of all the incidents in both local 
distribution lines and interstate pipelines are caused by other 
than utility personnel. These are contractors and other people.
    So they are outside our control with respect to management, 
our companies' standards. So the One-Call legislation, the 
training of contractors and so on, would address the majority 
of the people who are causing the problems. And it really does 
not lie--only one-third of the problem lies with employees of 
the utilities and pipeline companies.
    Senator Gorton. Thank you. This hearing will be adjourned. 
I want to emphasize to this panel and to the earlier panels 
that I believe that action in this Committee is likely to take 
place very promptly. If you have any other suggestions, 
critiques of the various bills or suggestions for their 
improvement, the Committee will welcome them, but they need to 
be submitted promptly.
    Senator Gorton. With that, thanks to this group, to the 
others, especially to the parents. The hearing is adjourned.
    [Whereupon, at 1:15 p.m., the hearing was adjourned.]

                            A P P E N D I X

      Response to Written Questions Submitted by Hon. John McCain 
                         to Hon. Kelley Coyner

Question 1. The Bellingham accident is not the only accident involving 
the Olympic Pipe Line Company. In August 1999, 3500 gallons of 
petroleum product spilled from a broken pump at another Olympic Pipe 
Line control center.

a) Why does the Research and Special Programs Administration (RSPA) 
continue to permit Olympic Pipe Line to operate south of the Bayview 
station?
    Answer. RSPA and the National Transportation Safety Board (NTSB) 
worked together to identify the circumstances surrounding both 
accidents. We issued a corrective action order requiring Olympic to 
address the identified safety issues. The operating pressure of the 
pipeline is restricted to 80 percent of the pre failure (June 1999) 
maximum operating pressure until internal inspections are completed and 
any necessary repairs are made.

b) Are Olympic Pipe Line employees who were working in the pipeline's 
control room at the time of the Bellingham accident, and who are not 
cooperating with the existing investigations by pleading the 5th 
Amendment, still working on product operation positions at Olympic?
    Answer. Yes. We do not have enough information to conclude that any 
individual's actions were responsible for causing the spill. We are, 
however, taking specific and comprehensive action to ensure the 
pipeline can safely operate. We can require removal of specific 
individuals from performing certain functions if they fail a drug or 
alcohol test. However, the employee controlling the pipeline when it 
failed and a computer specialist who attempted to fix the 
malfunctioning control system both passed a post accident drug test. 
Our Corrective Action Order requires a training program for controllers 
including classroom, practical exercises and, as appropriate, the use 
of simulators specific to the Olympic control system. The training 
program will address responding to abnormal operations and the starting 
up and shutting down of the pipeline system. Further, we are requiring 
a review of the qualifications of each controller in performing their 
duties, recognizing conditions that are likely to result in 
emergencies, and predicting consequences of facility malfunctions or 
failures such as those occurring on June 10, 1999.

c) As a safety measure, OPS has limited Olympic Pipe Line from 
operating its line in excess of 80 percent operating pressure. Was the 
80 percent operating pressure threshold in force at the time of the 
August 1999 spill?
    Answer. Yes. The August 1999 release was due to a mechanical 
failure of a piston in the pump at a station. It is unrelated to the 
Bellingham failure, which the 80 percent pressure reduction was 
designed to address.

d) What is the current status of Olympic's request to reopen the entire 
line?
    Answer. Olympic is internally inspecting the pipeline under close 
scrutiny by RSPA. After each section of pipeline is tested, the 
pipeline will be shut down again until various company and government 
experts have reviewed the internal inspection results and assured that 
all needed corrective action is completed.

e) What has OPS done to ensure the safety of the communities along this 
pipeline?
    Answer. RSPA ordered the company to shut down the pipeline in some 
areas and restrict use in other sections until a series of integrity 
verification tests and corrective actions were completed. These actions 
are designed to prevent recurrence of the Bellingham tragedy. RSPA has 
ordered the best technology and testing methods available and has 
devoted considerable resources to closely monitor these corrective 
actions. We have met with state and local representatives on a variety 
of occasions and in public meetings to hear and address their concerns 
wherever feasible. For example, RSPA assisted the City of Bellingham to 
monitor Olympic's performance of an agreement between the two. We have 
permanently stationed an inspector in the state of Washington and have 
conducted, in cooperation with the state pipeline safety program, a 
joint review of all pipeline facilities in Washington.

Question 2. The Administration's pipeline safety reauthorization 
submission proposes to increase the maximum amounts or civil penalties.

a) In recent years, how often has OPS used the maximum civil penalty 
currently authorized by statute?
    Answer. RSPA has assessed the maximum civil penalty for individual 
violations four times in the past few years for overpressure of a 
pipeline. The maximum civil penalty is restricted to $25,000 for each 
day the violation exists. Overpressure of a pipeline, which usually 
occurs in minutes rather than days, is a serious and preventable 
violation. However, the civil penalty restriction limits the maximum 
assessment to $25,000 per event. RSPA has not assessed the maximum 
aggregate civil penalty of $500,000.

b) What does OPS do with the money it collects from civil penalties?
    Answer. The funds collected from civil penalties go directly to the 
Department of the Treasury and are deposited into the general fund.

c) How much did OPS collect from civil penalties last year and how much 
does OPS anticipate collecting annually if the higher penalties are 
enacted?
    Answer. OPS collected $16,500 in civil penalties last year. RSPA 
has finalized new standards for protection of tanks and operator 
qualification and expects to finalize new standards for corrosion and 
integrity management this year. While it is difficult to estimate in 
advance the extent to which operators will comply with these standards, 
we expect that some operators may have difficulty. We plan to enforce 
compliance, and penalties are likely to increase on that basis alone. 
The number and magnitude of civil penalty actions are not true measures 
of the safety impact of the RSPA compliance program. We continue to 
take strong enforcement action, including civil penalties and 
compliance orders, for a serious noncompliance. Enforcement is not the 
only means to achieve the desired safety impact. We focus on the best 
safety solutions.

Question 3. The Administration's reauthorization bill includes a 
section that directs DOT to support ``international efforts to share 
information about the risks to the public and the environment from 
pipelines and the means of protecting against those risks.'' The 
Administration's section-by-section document accompanying the 
submission acknowledges that pipeline safety is primarily a national 
issue, but that environmental issues ``may have'' worldwide impact.

a) Is statutory language necessary since the submitted section-by-
section states that the Secretary already provides technical assistance 
to foreign governments?
    Answer. The Department's involvement in international pipeline 
safety matters has been limited and has usually been at the request of 
other agencies, such as the Department of State. A statutory provision 
is not needed to continue current practice. However, as the world gets 
smaller, there will be more opportunities to become involved in the 
international arena than the agency can accommodate. The 
Administration's proposal provides a statutory basis consistent with 
the Nation's pipeline safety needs upon which to base decisions on 
participation.

b) What international meetings involving pipeline safety issues has the 
Secretary attended and where have those meetings taken place?
    Answer. The Secretary did not attend any international meetings 
having to do with pipeline-specific issues.

c) For the record, please identify the DOT Presidential appointees, the 
DOT civil service employees, and the total travel expenditures that 
were associated with attending those meetings. Please provide a chart 
listing those expenses and individuals involved for the record.
    Answer. Not applicable.

d) In your opinion, what should take precedence as Congress considers 
reauthorizing the pipeline safety act, enhancing U.S. community 
awareness efforts or international outreach?
    Answer. Although U.S. community awareness clearly takes precedent, 
the Administration's proposal on international outreach is fully 
consistent with and supportive of that effort. One of the 
considerations for international activities is the extent to which the 
knowledge gained will benefit the public. For example, international 
activities could increase our understanding about issues that are 
important to communities, such as new monitoring and detection 
techniques or the performance of pipelines in particular environments, 
such as earthquake or flood zones. This knowledge would put us in a 
better position to respond to community concerns in those areas.

Question 4. At the beginning of this year, RSPA revoked interstate 
pipeline agent delegation status from Arizona and Nevada--whereby the 
states inspect the interstate lines, report their findings, and the 
department is responsible for enforcement actions. RSPA also announced 
its intention to revoke this status from other states in the future.

a) What has been the safety record in the states that have requested 
and received delegation status for the program been to date?
    Answer. Currently, we do not have mileage information by state, so 
we are unable to compare normalized incident rates by state on a per 
mile basis at this time. Without normalizing on a per mile basis, 
comparing a large state with high mileage to a small state with low 
mileage, one would expect to see more incidents in the larger state. 
Definitive conclusions about the relative risk of the two states can't 
be drawn without normalizing on a per mile basis. A comparison of the 
state incident rate against the national average provides a useful 
comparison methodology.
    We have prepared three charts for states with interstate agent 
status showing national and by-state average number of incidents for 
the ten-year period from 1990-1999. The first chart compares intrastate 
vs. interstate jurisdiction for states with hazardous liquid programs. 
The second chart compares intrastate vs. interstate jurisdiction for 
states with natural gas programs. The third chart compares natural gas 
distribution and transmission incidents, and hazardous liquid incident 
rates.

State Agencies Acting as Liquid Interstate Agents
1990-1999--National average--3.9 incidents/year/state

             1990-1999 Incidents per Interstate Agent State
------------------------------------------------------------------------
                                                     Total
                                                 Transmission   Average
         State                Jurisdiction         Incidents   Incidents
                                                  (1990-1999)   Per Year
------------------------------------------------------------------------
California State Fire    Intrastate                   156         15.6
 Marshall \1\
------------------------------------------------------------------------
                         Interstate                    54          5.4
------------------------------------------------------------------------
                         Total                        210         21.0
------------------------------------------------------------------------
Minnesota                Intrastate                     1           .1
------------------------------------------------------------------------
                         Interstate                    31          3.1
------------------------------------------------------------------------
                         Total                         32          3.2
------------------------------------------------------------------------
New York                 Intrastate                     1           .1
------------------------------------------------------------------------
                         Interstate                    16          1.6
------------------------------------------------------------------------
                         Total                         17          1.7
------------------------------------------------------------------------
Arizona \2\              Intrastate                     3           .3
------------------------------------------------------------------------
                         Interstate                     5           .5
------------------------------------------------------------------------
                         Total                          8           .8
------------------------------------------------------------------------

State Agencies Acting as Gas Interstate Agents
1990-1999--National average--1.5 incidents/year/state

             1990-1999 Incidents per Interstate Agent State
------------------------------------------------------------------------
                                                     Total
                                                 Transmission   Average
         State                Jurisdiction         Incidents   Incidents
                                                  (1990-1999)   Per Year
------------------------------------------------------------------------
Connecticut              Intrastate                     0          0.0
------------------------------------------------------------------------
                         Interstate                     2           .2
------------------------------------------------------------------------
                         Total                          2           .2
------------------------------------------------------------------------
Minnesota                Intrastate                     2           .2
------------------------------------------------------------------------
                         Interstate                     7           .7
------------------------------------------------------------------------
                         Total                          9           .9
------------------------------------------------------------------------
Ohio                     Intrastate                     3           .3
------------------------------------------------------------------------
                         Interstate                     7           .7
------------------------------------------------------------------------
                         Total                         10          1.0
------------------------------------------------------------------------
Iowa                     Intrastate                     1           .1
------------------------------------------------------------------------
                         Interstate                     9           .9
------------------------------------------------------------------------
                         Total                         10          1.0
------------------------------------------------------------------------
New York                 Intrastate                     7           .7
------------------------------------------------------------------------
                         Interstate                     4           .4
------------------------------------------------------------------------
                         Total                         11          1.1
------------------------------------------------------------------------
West Virginia            Intrastate                     2           .2
------------------------------------------------------------------------
                         Interstate                    19          1.9
------------------------------------------------------------------------
                         Total                         21          2.1
------------------------------------------------------------------------
Michigan                 Intrastate                     5           .5
------------------------------------------------------------------------
                         Interstate                     8           .8
------------------------------------------------------------------------
                         Total                         13          1.3
------------------------------------------------------------------------
Arizona \2\              Intrastate                     1           .1
------------------------------------------------------------------------
                         Interstate                    11          1.1
------------------------------------------------------------------------
                         Total                         12          1.2
------------------------------------------------------------------------
Nevada \2\               Intrastate                     3           .3
------------------------------------------------------------------------
                         Interstate                     0          0.0
------------------------------------------------------------------------
                         Total                          3           .3
------------------------------------------------------------------------


              National Ten-Year State Averages (1990-1999)
------------------------------------------------------------------------
                                                                Net Loss
                          Acc/  Deaths/  Injured/   Property     (Bbl)
     Pipeline Mode        Year    Year     Year      Damages     Liquid
                                                               Operators
------------------------------------------------------------------------
Natural Gas               1.6      .02      .24     $396,960
 Transmission
------------------------------------------------------------------------
Natural Gas               2.4      .34      1.5     $350,059
 Distribution
------------------------------------------------------------------------
Liquid                    3.9      .05      .25     $786,205   1,570
------------------------------------------------------------------------


                                     Ten-year Averages by State (1990-1999)
----------------------------------------------------------------------------------------------------------------
                                                                                                        Net Loss
                                                                    Acc/                    Property     (Bbl)
           State                         Pipeline Mode              Year  Deaths  Injured    Damages     Liquid
                                                                                                       Operators
----------------------------------------------------------------------------------------------------------------
Connecticut                  Natural Gas Transmission                .2    0.0      0.0        $9,600
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               1.2    0.0       .6      $278,500
----------------------------------------------------------------------------------------------------------------
                             Liquid                                  .2    0.0      0.0      $295,000       29
----------------------------------------------------------------------------------------------------------------
Minnesota                    Natural Gas Transmission                .9    0.0       .2       $32,100
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               2.1     .8      1.6       $71,960
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 3.2    0.0       .2    $1,976,503    2,105
----------------------------------------------------------------------------------------------------------------
Ohio                         Natural Gas Transmission               1.0     .2      0.0      $446,900
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               4.1     .4      3.0      $528,641
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 3.4    0.0       .2      $790,205      557
----------------------------------------------------------------------------------------------------------------
Iowa                         Natural Gas Transmission               1.0     .1       .1       $56,380
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               1.8     .8       .5      $193,669
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 4.7    0.0       .4      $511,717    4,124
----------------------------------------------------------------------------------------------------------------
New York                     Natural Gas Transmission               1.1    0.0      0.0       $76,514
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               6.2     .7      4.4    $1,517,800
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 1.7     .2       .5      $352,285      151
----------------------------------------------------------------------------------------------------------------
West                         Natural Gas Transmission               2.1    0.0       .6      $145,520
  Virginia
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               1.1     .1      1.3       $18,327
----------------------------------------------------------------------------------------------------------------
                             Liquid                                  .1    0.0      0.0            $0        0
----------------------------------------------------------------------------------------------------------------
Michigan                     Natural Gas Transmission               1.3    0.0       .4       $44,920
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               5.5    1.3      2.8      $642,531
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 2.1    0.0       .1      $160,788      295
----------------------------------------------------------------------------------------------------------------
Arizona \2\                  Natural Gas Transmission               1.6    0.0       .4      $177,576
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               1.3    0.0       .4       $65,500
----------------------------------------------------------------------------------------------------------------
                             Liquid                                  .8    0.0      0.0       $63,500      237
----------------------------------------------------------------------------------------------------------------
Nevada \2\                   Natural Gas Transmission                .3    0.0       .1       $31,196
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               1.3    0.0      1.0      $216,997
----------------------------------------------------------------------------------------------------------------
                             Liquid                                  .2    0.0       .3       $40,800       34
----------------------------------------------------------------------------------------------------------------
California \1\               Natural Gas Transmission               2.9     .1       .6      $743,163
----------------------------------------------------------------------------------------------------------------
                             Natural Gas Distribution               9.2    1.0      3.5    $4,398,970
----------------------------------------------------------------------------------------------------------------
                             Liquid                                 21.0    .1       .9    $7,661,170    4,118
----------------------------------------------------------------------------------------------------------------
\1\ Without normalizing incident rates on a per mile basis, skewing may occur. California may appear to have a
  higher incident rate than smaller states, but we do not know if this is true on a per mile basis.
\2\ Arizona and Nevada are no longer interstate agents but are included for comparison purposes.


b) Are either Arizona or Nevada being prevented from participation 
based on safety performance?
    Answer. No. This year, Arizona and Nevada are not participating as 
interstate agents in the pipeline safety program because there are no 
major system inspections or construction projects within those states. 
System inspections are coordinated team inspections of entire pipeline 
systems. Different pipeline systems are selected each year for these 
comprehensive inspections. None of the pipeline systems scheduled for 
this year cross into either Arizona or Nevada. Both of these states 
have performed well in the past as interstate agents.

c) Does RSPA currently have the resources to take over the work of the 
states that have historically carried out the interstate inspections?
    Answer. No. We hope to continue current interstate agent programs 
with a different type of interstate agreement that would be mutually 
beneficial for safety oversight on interstate pipelines. These 
agreements would focus on the development of annual plans to utilize 
the states' expertise in addressing local concerns, such as new 
construction, damage prevention and emergency response activities.

d) How many RSPA inspectors are needed to carry out all of the 
interstate inspections, what is the federal funding level for the 
necessary FTEs, and how many pipeline inspections are completed solely 
by federal inspectors each year?
    Answer. We currently have 58 federal inspectors that perform 
approximately 800 pipeline inspections annually and we requested four 
additional positions for federal inspections. These positions will 
require $100,000 per FTE, or $200,000 in FY 2001.

e) How do you intend to utilize states to oversee pipeline safety?
    Answer. The Administration's legislative proposal outlines its 
continuous commitment to working with its state partners on pipeline 
safety. It offers an expanded role for all states to participate in 
numerous ways to improve oversight of interstate pipelines. We invite 
states to work with us on the evaluation of interstate pipelines, 
especially on new construction, accident investigation and major 
rehabilitation projects and, are proposing to fund, for the first time 
up to 100 percent of the costs associated with those inspections. The 
Administration's proposed legislation has provisions for state 
participation in federal inspections and other activities that will 
contribute to improved safety and environmental protection, 
particularly in the areas of identifying local issues of concern, 
broadening damage prevention activities, and improving community 
outreach and emergency response planning endeavors.
    We would work with each participating state agency to establish an 
annual work plan to support these various functions and to agree on how 
we would share responsibilities. As examples, for new pipeline 
construction, the state would monitor the pipeline construction and 
report noncompliance issues to OPS. For accident investigations, the 
state may evaluate inspection results and witness testing. The state 
may audit an operator's risk management demonstration project or 
initiate or participate in ongoing damage prevention projects. They may 
assess or recommend improvements to response planning and procedures. 
They may work with local officials who need to understand specific 
pipeline risk assessments and remedial actions.
    We would expect to keep participating states in the program as long 
as their intrastate programs are in order. We believe this proposal 
promotes federal/state collaboration and more efficient scheduling of 
interstate pipeline inspections which all contribute to greater safety. 
We believe this expansion will improve our national understanding of 
the pipeline infrastructure, the risks to it and the public, and will 
improve our ability to evaluate the adequacy of operators' system-wide 
safety and environmental performance.

f) In April, DOT proposed legislation to reauthorize the pipeline 
safety program that includes provisions to allow states to participate 
somewhat in the oversight of interstate pipelines. What are the 
differences between the state partnership program you are canceling and 
the new one you are proposing?
    Answer. The Department is proposing improvements to its policy 
relating to interstate agents and plans to put in place a different 
type of interstate agreement that would be of mutual benefit to both 
the Federal Government and the States in safety oversight of interstate 
pipelines. The current interstate agent program limits funding to 50 
percent of a state's costs for performing inspections on our behalf and 
turning over the results to OPS for possible enforcement action.
    DOT's proposed legislation would substantially expand the state 
oversight role. States could participate in the oversight of interstate 
pipeline transportation. Accident investigation and new construction 
would be major roles but a state would also work on other areas of 
local concern. Under this new proposal, the Department would be 
authorized to reimburse up to 100 percent of the states' cost in 
investigating accidents or inspecting new construction. Other 
activities related to interstate pipelines would be funded at the 50 
percent level. We hope that damage prevention, local preparedness, and 
community right-to-know activities will be enhanced through this 
program. This program will be open to all states, not just those 
already having interstate agent status.

Question 5. On April 24, 2000, RSPA issued a notice of proposed 
rulemaking proposing that hazardous liquid pipeline operators that have 
pipelines in high consequence areas (environmentally sensitive areas, 
populated areas, and navigable waterways) develop plans for enhanced 
protection of these areas from pipeline rupture.

a) How does RSPA intend to evaluate the adequacy of these plans and 
whether the operators are following the plans?
    Answer. One year from the effective date of each integrity 
assessment rule, OPS plans to begin field review of (1) operators' plan 
for baseline assessment of all pipelines that could affect a high 
consequence area and, (2) a framework addressing the required program 
elements. In reviewing the baseline assessment plan, OPS will evaluate 
timelines for internal inspections, pressure tests, or equivalent 
alternative technology to determine the integrity of the pipeline in 
high consequence areas; methods; and explanations of risk factors 
considered, and priority given, to material, manufacturing information, 
local environmental factors, activities in the area, coating, product, 
repair history, previous test data, corrosion and leak history. In 
reviewing the program framework, OPS will review the process the 
operator establishes for continuous evaluation; the process for 
integrating information, including potential for excavation damage, 
data from past integrity assessment, results of inspections and tests, 
including corrosion control monitoring and cathodic protection surveys 
on the pipeline, and the consequences of a failure; repair criteria and 
prioritization; identified preventive and mitigative measures to 
protect high consequence areas; methods used to ensure the 
effectiveness of the program (e.g., performance measures); and a 
process to ensure that qualified personnel will review and interpret 
assessment results and data. More important, we will begin to observe 
how operators implement their plans.
    In examining integrity assessment plans, field inspections will 
include review of documents that support the analyses and decisions 
made and actions taken to implement the plan. In reviewing this 
documentation, we will closely examine how well an operator's program 
addresses the main elements of the integrity assessment rules. We will 
follow these reviews with subsequent field inspection of the testing, 
repair, prevention, and mitigation actions an operator makes. RSPA 
inspectors and contractors will verify that assessments have been 
conducted according to an operator's plan, and identified weaknesses 
that could affect the integrity of the pipeline have been repaired, and 
that the operator has taken the planned mitigative and preventive 
measures.
    We anticipate that our performance-based rules will be supplemented 
by consensus standards (liquid pipeline standards are currently being 
developed under the auspices of the American National Standards 
Institute). We expect these standards to be specific and articulate the 
range of testing methodologies and repair criteria. We will monitor 
performance in accordance with these standards.

b) To what extent will this approach require additional federal 
resources?
    Answer. Actual implementation of integrity reviews will begin in FY 
2002. A decision on additional resource requirements will be made at 
that time. RSPA currently has 58 inspectors on staff. We anticipate 
requiring additional resources for this effort. Of the resources 
needed, significant support may be supplied through technical 
contractors and third party experts. The initial three-year period will 
include review of each pipeline operator's framework and plan and then 
subsequent inspection of the testing, repair, prevention, and 
mitigation activities. Because we are issuing separate rulemakings to 
address each of the major pipeline types, such as large hazardous 
liquid, small hazardous liquid, interstate and intrastate natural gas 
transmission pipelines, the compliance dates will likely be phased in 
up to six months or one-year apart, due to the time needed to complete 
the rulemaking process.

Question 6. The Accountable Pipeline Safety and Partnership Act of 
1996, sponsored by our distinguished Majority Leader, authorized the 
Secretary of Transportation to implement a risk demonstration program 
to test the use of a risk management approach to pipeline safety. The 
act further required the Secretary to report by March 31, 2000, on the 
results of the projects carried out under this program, including an 
evaluation of the safety and environmental protection provided by the 
projects.

a) What is the status of the program? Has OPS issued a report?
    Answer. The report required by Congress is now in clearance within 
the Department. The report, entitled ``Beyond Compliance: Creating a 
Responsible Regulatory Environment that Promotes Excellence, 
Innovation, and Efficiency,'' describes the Pipeline Risk Management 
Demonstration Program and its progress to date and outlines 
recommendations for future activities based on lessons learned. It 
describes our experiences exploring different applications of risk 
management. Its fundamental conclusion is that OPS's near-term focus 
should be on regulatory approaches that use risk management programs, 
processes, and tools in combination with, rather than as a replacement 
for, existing regulations. This finding is consistent with, and 
provides a foundation for, the integrity management/high consequence 
area rulemakings now underway.

b) Has OPS evaluated whether the projects have provided safety and 
environmental protection beyond that provided by current pipeline 
safety regulations?
    Answer. Yes. Each demonstration project accepted into the program 
includes risk control activities that exceed current regulations or 
that produce better performance than could be achieved through 
compliance with the current regulations. Specific examples:

        Implementation of the Equilon Risk Management Program (covering 
        its Cortez Pipeline) is resulting in improved emergency 
        response capability and enhanced public and emergency personnel 
        protection and awareness. These new risk control activities 
        exceed the current regulations and even go beyond the risk 
        control activities included in Equilon's original proposal.

        Equilon will test the ``First Call System,'' a high speed 
        community emergency notification network. The First Call System 
        immediately phones both emergency officials and local residents 
        in the event of a leak or rupture. Emergency officials would be 
        informed about the location and nature of the event, who to 
        contact for further instructions and information, where to 
        report, what emergency precautions need to be taken, etc. 
        Landowners would be provided current, up-to-date information on 
        the incident and on what precautions they should take. Upon 
        validation, this notification network will be used elsewhere, 
        including other Equilon pipeline systems.

        Equilon will also develop and distribute an emergency response 
        guideline tool to employees, emergency responders, and the 
        public. This tool provides the necessary safeguards and 
        protective actions to be taken in the event of a release in an 
        easy-to-understand format. The tool uses the results of 
        Equilon's latest carbon dioxide and ethylene dispersion 
        analyses performed as part of the risk management program to 
        identify distances from the pipeline and type of leak for which 
        various protective actions are required.

        Phillips' Excavation Risk Assessment Process has resulted in a 
        number of benefits. For example, in some instances outside 
        parties have rerouted or altered proposed projects to reduce 
        the likelihood of hitting Phillips' pipelines during excavation 
        activities. This has reduced the risk of outside force damage 
        during excavations and has improved safety and service 
        reliability. Through the use of performance measurement, 
        Phillips' project has significant potential to demonstrate 
        superior performance, and provide valuable input to OPS's 
        damage prevention initiatives.

        Northwest has implemented a comprehensive geologic hazards 
        program that helps identify where land movement might be a 
        threat to pipeline safety, and implements activities that are 
        designed to prevent failures in these locations. A key feature 
        of this program is the use of instrumentation to measure 
        precursors to land movement including pipe strain, soil 
        movement, and moisture level. Company personnel regularly 
        monitor these instruments to obtain advance indication of 
        potential land movement. Using this early warning, the company 
        is able to relieve stress on the pipe and prevent ruptures. The 
        company has evidence that this advance warning and remediation 
        was able to prevent at least three ruptures in recent years.

        Columbia has been able to expand its internal inspection 
        program through risk management. Columbia will be able to 
        internally inspect and repair more miles of its system, 
        focusing on those segments identified as most susceptible to 
        corrosion or other material defects. These inspections and 
        associated repairs will reduce the likelihood of corrosion 
        failures, improving safety and reliability.

        As part of a major project to reverse the direction of flow on 
        part of its Salt Lake Products System, Chevron used its risk 
        management process to identify and address the risks associated 
        with operation in this new configuration. A review of the risks 
        at major river crossings indicated that installation of new 
        valves at these locations would minimize the volume of products 
        that would be discharged into the river should a failure occur 
        at or near the river crossing. As a result, Chevron installed 
        valves to provide an additional level of protection for these 
        waterways.

c) Why does the Administration's submission include provisions to 
statutorily enact certain conditions contained in an executive order 
the President signed when he signed the 1996 reform Act into law?
    Answer. These conditions--relating to the compliance record of the 
operator and the level of safety and environmental protection provided 
by the project--have been part of the risk management demonstration 
program from the beginning. Therefore, it is appropriate to include 
them in any limited continuation of the individual projects.

Question 7. RSPA data show the leading cause of pipeline failure is 
outside force damage. What is the leading cause of pipeline product 
spills and what is OPS doing to reduce pipeline product spills?
    Answer. Outside force damage and corrosion run about even as the 
leading causes of liquid pipeline accidents by total number. Spills 
from outside force damage, however, have higher consequences.
    Over the past 10 years, more than 25 percent of all reportable 
liquid accidents, resulting in nearly 40 percent of all releases to 
water, and more than 40 percent of total property damage from these 
incidents, were caused by outside force damage. Hazardous liquid 
pipeline accidents attributable to outside force damage result in 
nearly double the average net loss of products than occur from 
accidents attributable to other sources of pipeline failure.
    OPS has several program initiatives in the areas of damage 
prevention, corrosion regulation, and response planning underway to 
target both outside force damage due to excavation and corrosion, as 
well as to better prepare for any accidents.

   Our national Dig Safely damage prevention education 
        campaign, promotion of the best practices identified by all 
        stakeholders in our widely heralded Common Ground damage 
        prevention effort, the work of the Common Ground Alliance (the 
        nonprofit organization we are helping to establish), and our 
        current smart pig research program is all squarely focused on 
        preventing or identifying previous damage to pipelines, as well 
        as to other critical underground facilities (water, electric, 
        telecommunication, sewer, etc.).

   OPS will, this summer, propose new regulations to modernize 
        corrosion regulations based on our collaboration with the 
        National Association of Corrosion Engineers.

   OPS requires, reviews, and approves emergency response plans 
        for all liquid pipeline operators. Further, we conduct about 20 
        tabletop and field deployment exercises each year to ensure 
        that these plans can translate to action, if needed.

    OPS has issued several recent rulemakings that strengthen existing 
spill prevention and planning regulations including:

   Final oil breakout tank rule: April 1999.

   Operator qualification final rule: October 1999.

   Unusually Sensitive Areas (USA) proposed rule: December 
        1999.

   Enhanced Protection for High Consequence Areas proposed 
        rule: April 2000.

Question 8. What are the existing training requirements for federal and 
state pipeline inspectors and do those training standards meet the 
recommendations issued by the NTSB?
    Answer. Federal and state pipeline safety inspectors are all 
required to take a minimum of nine weeks of training at DOT's 
Transportation Safety Institute focused on the pipeline safety 
regulations and specialized safety issues (e.g., corrosion and cathodic 
protection). These same inspectors are required to take and 
periodically refresh training in occupational safety and emergency 
response. In addition, specialized training (e.g., reading in line 
inspection tool results, breakout tank standards, etc.) is provided on 
an ad hoc basis. Most OPS inspectors and many of those employed by the 
states are professional engineers, many with graduate degrees in 
engineering. Further, OPS inspectors have an average of 10-15 years of 
related experience, mostly in pipeline and utility systems engineering 
and inspection.
    We are not aware of any NTSB recommendation addressing training of 
the Federal and State pipeline safety inspection workforce. OPS 
continues to support the NTSB during significant accident 
investigations and to conduct those where NTSB chooses not to become 
involved. The NTSB has many times complimented OPS on the helpfulness 
and thoroughness of our inspectors. We continue to work with NTSB 
wherever and whenever possible so that we can both successfully 
discharge our responsibilities to the public.
    We are currently working to address recommendations of DOT's Office 
of Inspector General (IG) on improving the training of pipeline safety 
inspectors in interpretation of in-line inspection tool results. We 
have already begun using available funds for this purpose, and will 
accelerate this specialized training for Federal inspectors over the 
next two fiscal years. This training will ensure that our inspectors 
are fully prepared to monitor compliance with our integrity management 
rules.

Question 9. The DOT-Inspector General (IG) has highlighted the fact 
that RSPA has not implemented Congressional safety mandates, and in 
some cases, is at least five years overdue and counting. How do you 
defend this poor performance?
    Answer. The DOT-IG report highlighted several authorities provided 
to RSPA by the Congress. It also noted that RSPA has recently taken 
regulatory action to fulfill several Congressional mandates: (1) 
defining Unusually Sensitive Areas (USAs), (2) providing enhanced 
protection for USAs and populated areas, and (3) requiring periodic 
inspection of pipelines in high-consequence areas. This action is 
intended to respond fully to these outstanding mandates. These three 
mandates were the focus of the DOT-IG's recommendations.
    Our response to these mandates was delayed due to the complexity of 
the USA issue (on which our response to several mandates rests), the 
lack of in-house environmental expertise, the required consultation 
with all federal environmental agencies, and our decision to seek broad 
public involvement. In addition, Congressional direction to RSPA on 
some of these items changed in 1996 to allow RSPA more flexibility in 
its responses.
    RSPA has recently completed pilot testing of the proposed 
definition of USAs in the states of California, Louisiana, and Texas 
(which represent 45 percent of total pipeline mileage). This pilot test 
is being peer-reviewed by ecological and drinking water experts from 
each of these states, other federal agencies, and academics. The pilot 
test results and summary of the peer review are available to the public 
on the OPS Internet web site. The comment period for the proposed USA 
definition ends in late June 2000. RSPA is working to issue a final 
rule on the USA definition by the end of the year.
    In April 2000, RSPA published the first in a series of rulemakings 
to focus company and regulatory attention on pipeline protection in 
high-consequence areas, including USAs, populated areas, and waterways. 
These rules will satisfy the Congressional mandates and build on RSPA's 
ongoing risk management demonstration program, integrity-based 
inspection program, and risk-based regulations to add additional 
pipeline safety protection. These initiatives supplement RSPA's 
comprehensive pipeline safety inspection program. These rules will 
address several Congressional mandates and will: (1) require pipeline 
operators to periodically inspect their lines; (2) integrate the 
results of these tests with other available information regarding 
threats to pipeline integrity; and (3) provide for governmental 
oversight of the company's testing protocols, schedules, and results. 
The first proposed rule in this series addresses larger hazardous 
liquid pipelines, which account for 87 percent of total liquid pipeline 
mileage.
    We expect to issue a similar rulemaking to the operators of smaller 
liquid pipelines and natural gas pipelines later this year. We are also 
considering a rulemaking to require pipeline communities to communicate 
more detailed pipeline safety information to local communities.

                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                        to John A. Hammerschmidt

Question 1. The NTSB has had on-going concerns over the need for 
adequate pipeline operator training. As you are aware, last August, 
RSPA completed a negotiated rule on operator qualifications, which is 
just now beginning to be implemented.

a. What is the Board's view of the rulemaking outcome? Does the NTSB 
believe the new procedures are an improvement over the previous rules?
    Answer. On January 26, 1999, the National Transportation Safety 
Board (NTSB) provided comments to a proposed rulemaking on the 
negotiated rule dealing with qualification of pipeline personnel 
(Docket No. RSPA-98-3783). Our comments noted that, as proposed, 
operators could determine that an individual was qualified based solely 
on observation of an individual and that the proposed rule failed to 
include strong training and testing requirements. Our comments 
referenced the pipeline accident that occurred in San Juan, Puerto 
Rico, in 1996, and noted that as a result of its investigation the 
Board concluded that the gas company's employees were not properly 
trained in testing for leaks. The Board's comments noted the prevalence 
of accidents in the pipeline industry associated with deficient 
personnel training and urged that the final rule include strong 
training and testing requirements to ensure that employees can properly 
perform tasks. We are disappointed that the proposed rule became a 
final rule, virtually unchanged. No training or testing requirements 
were included in the final rule.
    Previously, there were no training or qualification requirements 
for individuals operating or maintaining gas pipeline systems operating 
under 49 CFR Part 192. The negotiated rule, effective October 26, 1999, 
allows an operator to determine that an individual is qualified based 
merely on observations or work history. Still no testing or training is 
required for individuals operating gas pipeline systems subject to Part 
192.
    Individuals working for hazardous liquid pipeline systems operating 
under 49 CFR Part 195, on the other hand, are currently subject to 
training requirements. Title 49 CFR Section 195.403 requires operators 
to conduct continuing training for operating and maintenance personnel 
and to work with employees annually to ensure the training is meeting 
their needs. However, as a result of the negotiated rule on operator 
qualifications issued by the Research and Special Programs 
Administration (RSPA) last August, this section will be revised. 
Training requirements for all these operating and maintenance personnel 
will be eliminated effective October 28, 2002, and replaced by 
qualification requirements based on observation or work history. Thus, 
Title 49 CFR Part 195, Subpart G, for hazardous liquid operators 
contains the same deficiencies as noted above for Part 192.

b. Aside from providing comments to DOT during the rulemaking process, 
did NTSB participate in the negotiated rulemaking negotiations and, if 
not, why did the NTSB fail to take a more active role given the 
significance of operator performance in accidents?
    Answer. Safety Board staff attended some of the negotiated 
rulemaking meetings on operator qualifications, as observers, to learn 
about proposals being considered and the comments presented. NTSB 
policy has been not to participate directly in negotiated rulemaking 
between regulators and industry. NTSB staff did meet with RSPA's Office 
of Pipeline Safety staff on a regular basis to discuss open safety 
recommendations, including those calling for qualification and training 
requirements. These meetings usually included the Directors of the 
Safety Board's Office of Pipeline and Hazardous Materials Safety and 
the Office of Safety Recommendations and Accomplishments. Through these 
meetings we continuously urged RSPA to move forward on this rulemaking 
and to include strong training and testing requirements. When a 
proposed rule on operator qualifications was issued by RSPA, the Board 
provided comments to the docket.
    About six months before RSPA's final rule was issued, the Board 
classified an open safety recommendation on this issue as unacceptable 
because the NPRM did not require adequate training or testing. Further, 
in testimony before the House Committee on Transportation and 
Infrastructure, Subcommittee on Economic Development, Public Buildings, 
Hazardous Materials, and Pipeline Transportation on July 27, 1999, 
Safety Board Chairman Jim Hall, representing the Board, testified that 
the proposed rule was inadequate for these same reasons.

c. Other than providing public comments and offering suggestions, did 
any NTSB representatives directly work with the parties to improve the 
rulemaking? If not, why not?
    Answer. Safety Board staff meets periodically with representatives 
of the Association of Oil Pipelines and the American Gas Association. 
During these meetings, the staff discusses ongoing safety issues. 
Discussions have included the Board's position on the need for strong 
training and testing requirements for pipeline operator personnel, 
accident investigations conducted by the Safety Board that support NTSB 
recommendations on this issue, and the lack of training and testing 
requirements in the proposed rulemaking.

Question 2. NTSB data show that RSPA has the worst safety 
recommendation acceptance rate for all DOT modes since the NTSB began 
issuing recommendations.

a. Recognizing that acceptance rates differ from one year to another, 
what has RSPA's acceptance rate been for each of the past five years?
    Answer.
                       Percentage Acceptance Rate

1996                                                              73.3
1997                                                              72.4
1998                                                              72.3
1999                                                              65.6
2000                                                              62



b. For the record, provide a chart showing the DOT modal 
administrations' acceptance rates for each of the past five years for 
which statistics are available.
    Answer. A chart is attached (attachment 1) as requested.

    
    
Question 3. I appreciate your overview of the on-going Bellingham 
investigation. You gave a good indication of the difficulties you face 
due to Olympic's employees refusal to cooperate and the interference of 
the Justice Department officials. What has been the Board's experience 
with the Company in general--has Olympic been cooperative?
    Answer. Soon after arriving at the accident site, our investigation 
team began the task of identifying pipeline operator employees that 
could help us gather and understand information needed to determine 
what happened. The day after our team arrived on-scene, a Vice 
President at Olympic Pipe Line issued a memorandum to all employees 
informing them that the company was not requiring or recommending what 
decision each employee should make in deciding whether or not to be 
interviewed by federal representatives. The company noted that it would 
provide an attorney for each employee to consult with before deciding 
whether to agree or decline to be interviewed. This had an extremely 
chilling effect on our ability to obtain first-hand accounts of the 
events leading up to the accident. Most employees, including those 
operating the system at the time of the accident, decided not be 
interviewed by NTSB staff.
    Under the Safety Board's party system for accident investigations, 
companies, government agencies and other organizations that have 
employees, functions, activities or products involved in the accident 
and can provide needed technical assistance may be named as 
``parties.'' Parties assist the Safety Board by offering specific 
technical expertise and relevant information in the development of the 
best possible factual record. As a party to the investigation, Olympic 
Pipe Line Company has provided the Safety Board staff written technical 
information and other documentation specifically requested. However, 
Olympic's participation as a party to the investigation has not been 
typical in that key employees with specific technical expertise have 
not been available to provide technical assistance and information 
about the events that day.

Question 4. In addition to the provisions contained in my legislation 
to reauthorize the Pipeline Safety Act, I am considering a number of 
additional provision to further strengthen safety. Two of these 
provisions are in response to the difficulties NTSB has faced with the 
on-going Bellingham investigation.
    First, I think we should include whistle blower protections for 
pipeline employees similar to the protections afforded for other 
industries. Second, while I fully recognize the right of citizens to 
exercise their rights to protect themselves, I do not believe they have 
the right to continue to carry out the same critical duties during an 
on-going safety investigation if they are not cooperating with the 
investigators. I believe that at a minimum they should be placed on 
Administrative leave.

a. What are your thoughts on these legislative concepts?
    Answer. Uncooperative employees should at least be reassigned to 
other, non-operations positional because their performance at the time 
of the accident cannot be properly scrutinized. However, reassignment 
or administrative leave will not solve the problems uncooperative 
personnel pose for the Board's investigation. The threat of criminal 
prosecution sanctions is far more serious than even unpaid 
administrative leave. Until recently, we were rarely faced with an 
employee unwilling to cooperate with an investigation intended to make 
their industry safer.
    In principle, whistle blower protection may encourage the 
disclosure of legitimate safety issues. We would view any law that 
would provide positive information to the Safety Board as a positive 
action. In other industries, such as aviation, there are mechanisms 
available to obtain safety-related information. The Aviation Safety 
Reporting System (ASRS) permits employees to anonymously report safety 
problems with no fear of reprisal from the Federal Aviation 
Administration for unintentional acts. The Flight Operating Quality 
Assurance (FOQA) is a program for reviewing recorder data. Such 
mechanisms could be considered for the pipeline industry.

Question 5. Your testimony also touches on the Board's concerns that 
RSPA is halting its interstate pipeline inspection program in which 
states are allowed to inspect interstate pipelines. To your knowledge, 
what has been the safety record of the state inspection program?
    Answer. The Administrator for Gas Pipeline Safety, Arizona 
Corporation Commission, is the current National Chairman of the 
National Association of Pipeline Safety Representatives (NAPSR). He 
advised us that until recently Arizona participated as an Interstate 
Agent for the U.S. Department of Transportation's Office of Pipeline 
Safety. That agreement was terminated for the year 2000. The Arizona 
Commission noted that under its inspection program, transmission 
pipeline incidents in Arizona decreased steadily from 1990 to present: 
the Commission noted that from 1989 through 1995 there were 10 
incidents, and for the last 4 years none. The Commission attributes 
this reduction to its ``aggressive and proactive'' audit and compliance 
program. NAPSR notes that in 1999, nine States acted as interstate 
agents for the gas pipeline safety program and four for the hazardous 
liquid program. It advises that State agency duties normally consist of 
operator inspections, compliance and enforcement, training and safety 
programs, accident investigations, and record maintenance and 
reporting.
    The Safety Board does not have quantitative data that can 
demonstrate the effectiveness of State pipeline safety programs. The 
Chairman of NAPSR provided us a report of various State activities. 
Attached is a copy of the Executive Summary of that report (attachment 
2). The information shows that States conducted 652 accident 
investigations in 1998 compared to 128 Federal accident investigations, 
and 461 State accident investigations in 1999 compared to 55 Federal 
accident investigations. Other identified State activities include 
enforcement of one-call laws, participation in other damage prevention 
efforts, training of operators, and inspection activities.

                                 ______
                                 
Executive Summary
    The Pipeline Safety Act (``ACT'')(49 USC 60101 et seq.) authorizes 
the Secretary of the Department of Transportation to administer a 
pipeline safety program for the gas and hazardous liquid pipelines in 
the United States, The Act allows the Secretary to delegate all or part 
of the responsibilities for pipeline safety to interested states for a 
grant of up to 50% of the cost of the states' programs.
    Since the Pipeline Safety Act was signed into law in 1968, the 
States have been very active in assisting the Secretary in carrying out 
the pipeline safety program for the United States. In fact, States' 
pipeline safety personnel represent more than 90 percent of the State/
Federal inspection workforce. These personnel are the ``first line of 
defense'' at the community level to promote pipeline safety and 
underground utility damage prevention.
    For many years now, states have been burdened with providing more 
than 50 percent of the cost of carrying out a partnership with OPS and 
performing the majority of the pipeline safety activities required by 
the Act. States' pipeline safety activities have continued to increase 
due to many new mandates, but grant dollars have not kept pace with 
these demands. The lack of adequate grant funds will result in programs 
that do not protect the public or the environment. For FY2001, the 
States' project a total grant of $17.5 million is necessary to fully 
fund their programs at the 50% level.
    This report details the scope of the states pipeline inspection 
activities for 1998 and the associated costs. As will be noted upon 
reading the report, states continue to perform the majority of the 
nation's pipeline safety activities, despite the inadequate funding 
from the Federal government. The continued shortfall in Federal funding 
discourages states from fully participating in the nation's pipeline 
safety program. It is hoped that this report will provide a better 
understanding of the states' contribution to pipeline safety and the 
need for fully funding the pipeline safety grant for the states' 
pipeline safety activities.

Background
    The statutory basis for the pipeline safety program is found in 
Chapter 601 of Title 49, United States Code. This chapter establishes 
the framework for promoting pipeline safety via federal authority for 
regulation of interstate pipeline facilities and federal delegation to 
the states for all or part of the responsibility for intrastate 
pipeline facilities under an annual certification or agreement. Chapter 
601 also authorizes federal grants-in-aid of up to 50 percent of a 
state agency's costs relative to its pipeline safety efforts. The 
resulting federal/state partnership is the cornerstone for ensuring 
uniform implementation of the pipeline safety program nationwide.
    The Office of Pipeline Safety (OPS) is the federal agency 
responsible for protecting the people and environment in the United 
States through a comprehensive pipeline safety program. Under 
delegation from the Secretary of the Department of Transportation 
(DOT), OPS manages the national pipeline safety program and develops, 
issues, and enforces minimum safety regulations for interstate and 
intrastate pipelines. OPS also administers the grant-in-aid funding to 
those states that assume responsibility for pipeline safety.
    The responsibility for a state's pipeline safety program is 
delegated by the state to the appropriate agency. This agency may be a 
Public Utility Commission, a State Fire Marshal, or a State Public 
Service Commission, among others. States currently have jurisdiction 
over almost all intrastate gas, hazardous liquid, and carbon dioxide 
facilities in the United States. Several states also act as agents for 
UPS relative to pipeline safety for certain interstate pipeline 
facilities. State agency duties normally consist of; 1) operator 
inspections, 2) compliance and enforcement, 3) training and safety 
programs, 4) accident investigations, and 5) record maintenance and 
reporting.
    The States, through their involvement within their respective 
states and two active associations, the National Association of 
Pipeline Safety Representatives and the National Association of 
Regulatory Utility Commissioners' Pipeline Safety Subcommittee, promote 
improved pipeline safety standards, proper education and training of 
operators, and the advancement of pipeline technologies, to enhance 
public safety. For a discussion of these two associations, see Appendix 
1.

Pipeline Safety Activities
Inspections
    While the Pipeline Safety Act (``Act'') requires the federal 
government to ensure pipeline safety throughout the United States, 
state pipeline safety personnel represent more than 90 percent of the 
state/federal inspector workforce. The state inspectors conduct 
inspection activities of more than 10,000 gas operators and 360 
hazardous liquid operators nationwide.
    The state pipeline safety programs ensure public safety through 
periodic inspections of gas and liquid existing facilities, records, 
and construction of new facilities. The inspections are to make certain 
pipeline operators comply with the appropriate regulations and company 
procedures pertaining to pipeline safety, resulting in the safe 
transportation of products to consumers. This attachment also details 
the hazardous liquid facilities that are inspected. In 1998, the states 
inspected approximately 45,000 miles of transmission lines.
    Attachment No. 1 to this report presents the type and the number of 
miles of gas facilities jurisdictional to the states. In summary, the 
states are responsible for inspections of more than 938,000 miles of 
gas pipelines, 47.5 million service lines and 1,851 gas facilities such 
as LNG plants.
    Attachment No. 2 to this report details the number of standard, 
specialized, follow-up and construction inspections, accident 
investigations and operator training conducted by each state during 
calendar year 1998. In summary, the states conducted 25,785 inspection 
person-days of gas facilities and 1,948 inspection person-days of 
hazardous liquid pipelines. Attachment No. 3 presents the percentage of 
inspections for each type of inspection activity in 1998.

Accident Investigations
    In addition to inspections and other proactive efforts by states to 
further improve pipeline safety, states are responsible for 
investigating accidents. The purpose of these investigations is to 
determine probable cause of failures and require action that minimizes 
the possibility of recurrence. These investigations cover incidents 
that are reported as required by Sec. 191.5 of 49 C.F.R. as well as 
those that are reported in response to states' more stringent reporting 
requirements.
    During calendar year 1998, states spent more than 1,400 inspection 
man-days on failure investigations relative to gas systems and 
approximately 150 inspection man-days on failure investigations of 
liquid facilities. In addition to investigating 128 incidents 
reportable under Sec. 191.5, states investigated 652 incidents 
reportable under the more stringent state's reporting requirements. 
These investigations and subsequent findings resulted in a number of 
corrective actions that operators were required to undertake. The 
corrective actions ranged from requiring an operator to join a 
qualified one-call center to requiring hydrostatic pressure testing of 
storage field pipelines. Inasmuch as the actions required by states 
have enhanced pipeline safety, it is appropriate to include the 
majority of the actions taken by states during 1998/99 as an attachment 
to this report (See Attachment No. 4).

Damage Prevention
    Damage to pipelines caused by excavation activities remains the 
leading cause of pipeline failures. It is imperative that all 
stakeholders take action to reduce these damages. The states have been, 
and remain, on the forefront of initiatives that are designed to reduce 
damages to pipelines and other underground infrastructures. The recent 
national initiatives (Dig Safely and Common Ground) sponsored by OPS 
were fully supported by the states. Additionally, states have taken 
other actions to reduce excavation-caused damage to pipelines in their 
own respective states.

Dig Safely
    In September 1996, OPS convened the Damage Prevention Quality 
Action Team (DAMQAT) to develop a national damage prevention education 
campaign. This team is comprised of representatives from the federal 
and state government and the various industries. States were very 
active in assisting DAMQAT to complete its mission and help carry out 
the Dig Safely campaign. Their activities included the following:

   Active participation by NAPSR and NARUC on DAMQAT.

   Conducting research on state's enforcement activities for 
        DAMQAT use.

   Participation in the pilot program by States of Virginia and 
        Tennessee

   Collection and analysis of pilot program data

   Participation in implementing the Dig Safely campaign.

Common Ground Study
    In accordance with the Transportation Equity Act of the 2lst 
century (TEA21), the ``Common Ground: Study of One-Call Systems and 
Damage Prevention Best Practices'' report was prepared. Representatives 
of many stakeholders participated in conducting this study. For nearly 
a year, a number of teams worked to identify, define and agree on more 
than 130 best practices governing all aspects of damage prevention. 
Representatives from states served on many of these teams and provided 
valuable input into this process.
    Currently, the states are working with other stakeholders to 
promote these practices and reduce damages to pipelines and other 
underground facilities in their own states.

Other Damage Prevention Efforts
    States are involved with a number of other efforts that have 
significantly reduced excavation-caused damage to pipelines. These 
efforts range from educational programs for excavators to enforcement 
of one-call laws. In 1998, at least 1,800 inspection man-days were 
spent on damage prevention activities.
    The states' efforts have resulted in reduction of excavation caused 
damage to pipelines. For example, in Virginia, damage to pipelines has 
dropped by 43 percent since 1996. This is an average of 10 percent per 
year since Virginia began enforcing their law.

Operator Training and Information Dissemination
    Training of operators and information dissemination is an integral 
part of every state's pipeline safety program. States' pipeline safety 
staff conduct and participate in training programs to further pipeline 
safety.
    In 1998, the states spent more than 1,300 inspection person-days 
training more than 25,000 individuals on pipeline safety issues. This 
training addressed, among others, the new operator qualification rules, 
corrosion, LPG, leak detection. master-meter operators, first responder 
training, damage prevention, and training of housing authority 
operators.
    In addition, states disseminated informational material to promote 
pipeline safety and compliance with existing regulations. This 
information included, but was not limited to, guidance manual for small 
operators; damage prevention brochures, videos, etc.; copies of NFPA 
publications; sample operator and maintenance plans; law; rules; and 
regulations.

Industry/Government Committees
    As part of its commitment to the safe operation of pipeline systems 
across the country, the states actively participate in a number of 
industry/government committees. These committees work to address 
certain issues, resolve certain problems or identify better ways to 
promote public safety, A list of some of the Committees and a brief 
mission statement of each committee in which the states currently 
participate is found in Attachment No. 5.

Waivers
    States review applications requesting waivers to certain pipeline 
safety codes. This review involves following each state's specific 
rules of practice and procedures and the OPS' notice requirements. 
These waivers, when granted, achieve the same or enhanced level of 
safety and provide certain relief for the operator.
    In 1998/99, states issued waivers dealing with: excess flow valves, 
inactive service lines, depth of pipe cover, use of polyamide pipe at 
160 psig, frequency of odorant sampling, use of plastic pipe inside 
casings, and uprating of systems.

Resolutions
    States arc very active in communicating important pipeline safety 
issues to RSPA through submission of resolutions. These resolutions are 
reviewed annually at NAPSR and NARUC meetings and, are forwarded to 
RSPA for their consideration. Here are a few examples of issues 
contained in resolutions that have been forwarded to RSPA:

   Study the use of controlled density fill (CDF) around or in 
        proximity to plastic pipe and appurtenances.

   Amend D2513 standard to require sustained pressure testing 
        of plastic pipe fittings that utilize o-rings, gaskets, etc.

   Conduct technical studies to set design, installation, and 
        maintenance criteria for aluminum gas pipe.

    Since 1986, more than 50 resolutions have been submitted to RSPA 
and NAPSR recommending various actions.

Interstate Agent Activities
    In addition to administering pipeline safety and damage prevention 
programs for the intrastate pipeline operators, several states have 
been heavily involved with OPS' interstate pipeline safety program. In 
1999, nine states acted as interstate agents for OPS' gas pipeline 
safety program and four for the hazardous liquid program.
    The interstate agent program has been successful for a number of 
reasons. First, states' pipeline safety personnel live and work in 
close proximity to interstate operators and their facilities as 
compared to OPS personnel. This enables states' personnel to interact 
more efficiently with the interstate operators in the particular state 
during routine inspection and review activities. Second, interstate 
agent states have played a key role in coordination in emergency 
planning and response involving local officials. This is critical in 
effectively planning for response to a major pipeline emergency event. 
Third, in today's environment, the citizens are extremely concerned 
about, and adverse, to large, high pressure pipelines going through 
their communities. This fact is evident from virtually every approval 
process for proposed pipelines in the last 15-20 years. Citizens do not 
trust the large corporations that own and operate these interstate 
pipelines, nor are they willing to trust a Washington-based pipeline 
safety program to guarantee their safety and the protection of their 
environment. The recent high impact accidents involving interstate 
pipelines, such as the Bellingham accident in the state of Washington, 
has further fueled these concerns.
    The OPS' inspection program principally involves advance notice of 
inspection activities. Operators know when inspections are conducted 
and what these inspections involve. States have found that to truly 
gauge compliance, certain unscheduled inspections must be conducted. 
These types of inspections allow the inspector to see how an operator's 
compliance actually is instead of reviewing prechecked, prepared 
records and facilities for an advance-noticed inspection.
    Although states believe the interstate agent program has been very 
effective in enhancing public safety, OPS has put in motion a policy to 
eliminate all interstate agent programs over the next three years. This 
policy is not in the best interest of pipeline safety.
State's Resources to Carry out Pipeline Safety Responsibilities
    As noted previously, Chapter 601 of Title 49, United States Code, 
provides the basis for the pipeline safety program. States, under a 
partnership agreement, conduct the vast majority of pipeline safety 
inspection activities in the US. In exchange for this effort, which 
substantially reduces federal government obligations in this area, 
Sec. 60107(a) authorizes grants to reimburse states for ``not more than 
50%'' of the cost of their pipeline safety program. The grant funds are 
distributed through a performance-based allocation process in which a 
state's grant is reduced if federal performance standards are not met. 
As discussed below, the federal grant has not kept up with the costs of 
the states' pipeline safety programs.
    As a result of the prosperous economy, construction of gas 
pipelines has increased 15-20 percent in the past few years. The 
majority of the new facilities have been constructed by contractors 
with little company supervision. State personnel should be available to 
witness installation and require corrections as needed. State personnel 
who have witnessed construction have reported instances of improper 
procedures used by contractors when constructing new facilities, the 
states are unable, in terms of lack of resources, to provide adequate 
monitoring of construction. Without correcting these problems, at the 
time of construction, it is only a matter of time until corrosion 
occurs at welds and joints, or other types of breaches of integrity 
occur. States are able to cover about 50% of their inspection units 
(7,035 of 13,398 units in natural gas distribution and 343 of 580 units 
in hazardous liquid pipelines). Proper funding of states programs 
should substantially improve inspection coverage to monitor the 
majority of their units, particularly new construction activities.
    Additionally, state inspectors are the first line of defense at the 
community level to educate local officials, excavators, utilities, and 
others on the importance of improvement in damage prevention practices. 
State inspectors are a primary means of encouraging the adoption of 
these practices at the local level, where construction occurs. 
Extensive construction of telecommunications, electric, water, sewer, 
and gas distribution lines in the same right of way increases the 
urgency of getting the Office of Pipeline Safety's best practices 
adopted.
    Attachment No. 6 presents the grant levels requested by the states 
and amounts appropriated by the Department of Transportation for 1992-
1999. It is obvious that the allocated funds have continuously fallen 
short of the program costs. In 1999, the shortfall was more than $1.5 
million or 12 percent of the states' requested level.
    For many years now, states have been burdened with providing more 
than 50 percent of the cost of carrying out a partnership with OPS and 
performing more than 90 percent of the pipeline safety activities 
required by the Act. States' pipeline safety activities have continued 
to increase due to many new mandates, but grant dollars have not kept 
pace with these demands. The lack of adequate grant funds will result 
in programs that do not protect the public or the environment.

Consequences of Not Fully Funding
    Without adequate funding, states will not be able to conduct the 
required inspections of the existing pipeline facilities, conduct 
inspections of new facilities construction, and encourage compliance 
with the safety regulations. As discussed earlier, states have only 
been able to cover approximately 50% of their inspection units. States 
represent 90% of the state/federal inspector work force that oversees 
pipelines nationwide. Grants are an effective way to leverage resources 
and increase total inspection capability since states match or exceed 
Federal funding. A shortfall in Federal funding discourages states from 
taking part in the pipeline safety program. The states' projection for 
FY2001 shows that a total grant of $17,519,000 is needed to fully fund 
their programs at the 50% level. *
---------------------------------------------------------------------------
    * Attachments referred to were not available at the time this 
hearing went to press.
---------------------------------------------------------------------------
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                          to William J. Haener

Question 1. As you know, OPS is attempting to map the national pipeline 
system with information provided by the industry on a voluntary basis. 
Do you believe that your members will be able to provide the mapping 
information to OPS by the end of the year?
    Answer. No, the voluntary mapping data in the format requested by 
OPS will not be available by the end of the year for all interstate 
natural gas transmission pipelines. The previously agreed upon schedule 
for a more detailing mapping system is 10 to 15 years for total 
completion. However, OPS already has mapping information in electronic 
format for all interstate natural gas transmission pipelines. This 
mapping information was compiled by the U.S. Department of Energy. I 
have attached an explanation of the voluntary process and the agreement 
that was reached between the INGAA members and Office of Pipeline 
Safety.

Question 2. I understand that there are many obstacles for gas pipeline 
operators to overcome to conduct extensive internal inspections or 
``pig.'' What percentage of your lines do you currently pig? Can you 
identify some of the problems associated with ``pigging'' your company 
or the gas pipeline industry faces?
    Answer.

Operational considerations for pipeline ``piggability'' (Liquid vs. 
        Gas)
    Natural gas pipelines are not as piggable as liquid lines because 
of differences in the type of product being transported. Liquid lines 
frequently use ``pigs'' (not ``smart pigs,'' but the uneducated kind) 
to separate and move batches of liquid products through a pipeline, or 
to clean out a pipeline. This is why liquid lines are generally 
designed to accommodate pigs, including the instrumented ones that are 
used for internal inspections. Natural gas pipelines carry only one 
product, in a gaseous form, which is far more compressible and able to 
negotiate differing pipeline diameters, valve spaces, etc. Therefore, 
natural gas pipelines were not originally designed to accommodate large 
solid objects moving through them.

Pigging and other corrosion detecting tools
    The solitary reason for installing pig launchers and receivers on 
natural gas transmission pipelines is to permit the use of inline 
inspection tools known as ``smart pigs.'' All natural gas transmission 
pipelines constructed after 1994 have been required by OPS to 
accommodate smart pigs. Pipelines built prior to that time must be 
modified in varying degrees in order to accommodate these devices. Some 
of these modifications are relatively minor, such as installing 
aboveground launchers and receivers for smart pigs. In other cases, 
entire sections of pipe, or valves, must be replaced, causing major 
service disruptions.
    Corrosion protection systems and their accompanying aboveground 
diagnostic procedures are the first, second, and third levels of 
defense to prevent corrosion. These systems are constantly monitored 
and adjusted to maintain effectiveness. Only in rare circumstances do 
these protection systems fail. When this occurs, additional diagnostic 
tests are performed. These could include ``bellhole'' examination 
(digging up sections of pipe to physically look for damage), 
hydrostatic testing (using water pressure to test the integrity of the 
pipeline), and inline inspection. Therefore, the major reason for 
modifying a pipeline for inline inspection is a determination that 
there is a high probability of corrosion on a particular pipeline 
segment.
    INGAA conducted a survey of its members to see how much of the 
interstate natural gas transmission system is piggable. This sample 
reflects responses for about 70% of INGAA's membership. We believe the 
sample to reflect the present state of the interstate natural gas 
transmission system.


------------------------------------------------------------------------

------------------------------------------------------------------------
                  Interstate Natural Gas Pipelines That Can be Pigged
                  Sample Size 103,000 miles
------------------------------------------------------------------------
30.14%            Mileage that is easily piggable (launchers and
                   receivers available)
------------------------------------------------------------------------
24.45%            Mileage that can be pigged without much work (temp.
                   launchers, receivers)
------------------------------------------------------------------------
42.71%            Mileage that cannot be pigged without extensive
                   modifications (new bends installed, significant
                   service disruptions, etc.)
------------------------------------------------------------------------
1.87%             Mileage that cannot be pigged at all (not enough
                   pressure to push the pig through)
------------------------------------------------------------------------
                  Interstate Natural Gas Pipelines That Have Been Pigged
                  Sample Size 103,000 miles
------------------------------------------------------------------------
25.48%            Mileage that has been pigged at least once
------------------------------------------------------------------------
5.34%             Mileage that has been pigged more than once
------------------------------------------------------------------------


Question 3. I note from your testimony that a recent survey revealed 
that the interstate natural gas industry spends approximately $3,500 
per mile of pipe on safety. Can you identify some of the components of 
this safety investment? What about spending on research and 
development?
    Answer. I have included a report of the original survey that was 
referenced in the testimony. The report is structured to show where and 
how the expenditures are used to ensure safety on the natural gas 
pipeline safety system. As you can see in the report there are 
significant expenditures in various categories.
    I have also included a chart on the expenditures of cooperative 
research for natural gas transmission pipeline safety within the last 
ten years. Natural gas pipeline companies have been conducting 
cooperative research since 1953 primarily through the Pipeline Research 
Committee International and the Gas Research Institute.




                                 ______
                                 
     Response to Written Questions Submitted by Hon. Patty Murray 
                          to William J. Haener

Question 1. The McCain bill, my bill, and the administration's proposal 
focus on the public's right to know about what your operations are 
doing. One idea is that it would be up to you guys to collect the 
information about your practices and a summary of problems with your 
pipeline then to submit that information to local officials and 
emergency responders in areas impacted by your operation. Could you put 
such information in a form that would be easily understood and how hard 
would it be to submit that information to these local entities? How 
difficult do you foresee having to submit that information to the 
public at large, such as mailing to people within the right of way on a 
periodic basis?
    Answer. A quick trip to the Office of Pipeline Safety website will 
tell you that a great deal of information is already available to the 
public upon demand. In recent years, OPS has done an excellent job of 
posting information about specific enforcement actions, safety 
statistics, and general information about pipelines, onto the Internet.
    The current regulations for natural gas pipelines require a 
continuing education program for public officials, emergency responders 
and citizens who live near rights-of-way. Our members host local 
meetings with community groups annually, to discuss safety issues and 
emergency planning. We also send information about our pipelines out to 
all those who own property on the right-of-way, to alert them about 
potential hazards, what to do in an emergency, and who to call if there 
are questions.
    Some of the legislative proposals we have seen would require 
pipelines to send technical information about pipelines inspections and 
other activities to the parties near a pipeline. Obviously this kind of 
information would be of a technical nature, and we do not think it 
would be easy for most laypeople to understand. As a result, such a 
general effort would either be ignored by the public, or might even 
alarm them if they did not have a background in engineering or 
mechanics. Pipelines provide inspection information to pipeline safety 
regulators as part of their auditing process. This information is 
complex, lengthy, and potentially confusing to those who are not 
familiar with pipeline operations. We think it would be feasible for 
OPS to disseminate the results of these audits to local officials, 
perhaps through an Internet-based system. Not only would that indicate 
that inspections had been performed, but it would also provide an 
auditing record for pipelines within their respective jurisdictions.
    To generate a large volume of technical information for the general 
public, which we believe would largely be ignored, does not seem like a 
rational use of safety resources, however.

Question 2. This question is for those that work in the natural gas 
business. Senator McCain's bill and the administration's proposal both 
contain mapping requirements. I am aware of the voluntary National 
Pipeline Mapping System (NPMS) and applaud that effort. The 
administration's proposal would require liquid pipelines to provide to 
local officials maps of their pipeline. Senator McCain's bill would 
require both natural gas and liquid pipeline operators to have to 
provide those maps. Do you already map your facilities? I also 
understand that natural pipeline facilities would take longer to map. 
Could we not simply allow natural gas companies more time, but still 
retain a mapping requirement for natural gas lines, to map their 
facilities to take into account the fact that your facilities are more 
complicated?
    Answer. All interstate natural gas transmission pipelines are 
mapped at this time, just not in the particular format currently 
requested by OPS. The U.S. Department of Energy's Energy Information 
Agency has had available mapping information for interstate natural gas 
pipelines in electronic format since 1994. OPS originally decided to 
use the DOE mapping information, but has since determined that it wants 
to use a different format. For the new format, we are estimating a 10 
to 15 year time period for completing that very expensive and time-
consuming effort. See the enclosed mapping information.

Question 3. Another question for the natural gas folks. There has been 
much discussion, which is reflected in the administration's proposal 
that it is difficult to internally inspect with the exception of 
hydrostatic testing many of your lines. What other types of inspections 
do you do? Do you know of any experimental methods being tested to 
internally inspect currently non-piggable natural gas lines?
    Answer. The attached report entitled ``INGAA Pipeline Safety 
Survey'' gives an overview of the various types of inspections that are 
performed on natural gas pipelines. Visual inspections of the right-of-
way, by foot or from the air, are perhaps the most important 
inspections, because they look for leaks or unauthorized excavation 
activity. Close interval surveys, which test the effectiveness of a 
pipeline's cathodic protection, are also a key inspection tool. 
Pipelines can be inspected externally using ``bellhole inspections,'' 
which involve digging up sections of pipe to check and verify its 
condition.
    Some new technologies have been tried recently to impart sonic 
waves on the exterior of pipeline and measure the back reflection. 
Unfortunately, this technology is limited in applicability. Generally, 
the best alternate inspection method to verify a pipeline's overall 
condition is to individually monitor the progress of deterioration 
prevention mechanisms. Several new methods, such as Direct Current 
Voltage Gradient (DCVG) which identifies specific areas where cathodic 
protection is not adequately protecting the pipe from corrosion, have 
shown promise.

Question 4. Do you think you could adjust your personnel qualification 
plans that are due to OPS by April 2001 to address Senator McCain's 
periodic retraining and examination requirements?
    Answer. Since operator training is a component of an operator's 
overall job qualification, we believe the training requirement 
contained in Senator McCain's bill is incorporated in the present rule. 
Therefore, training plans will be a part of the individual plans which 
are scheduled to be completed by April 27th of 2001.

Question 5. I've heard from many of you that your current business 
practice met nearly all of the provisions of these proposals, thus no 
need for legislation. If that is correct, then why oppose it?
    Answer. We do utilize the technologies and techniques mentioned in 
your legislation, and have for many years. It was the natural gas 
pipeline industry, for example, that funded the research which lead to 
the development of ``smart pig'' inspection devices. Our quarrel is not 
with the technologies, but rather, with the idea that technologies or 
techniques should be employed on a ``one-size-fits-all'' basis. Each 
pipeline system is different, and therefore faces different potential 
risks. We believe an individual pipeline operator should be given the 
flexibility to meet the unique safety risks associated with its system 
in the most effective manner possible, rather than being forced to 
employ nationwide mandates which give little weigh to specific 
conditions or potential risk.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                           to Kenneth M. Mead
Question 1. Some of the pending pipeline reauthorization bills call for 
the wider use of internal pipe-defect identification devices, often 
referred to as ``smart pigs.'' Yet your recent audit reports that OPS 
investigators are incapable of interpreting the data reported from the 
internal devices.

a) Where should we focus our efforts, on expanding internal pipeline 
examinations or training investigators in how to interpret the data?

b) Or, should we focus on training the inspectors first and then 
require more widespread use of the devices?
    Answer. Data generated by inspections are critical to determining a 
pipeline's condition and identifying serious defects before a failure 
occurs. Smart-pig vendors use the data to prepare an inspection report 
for the pipeline operator, who reviews the report and takes appropriate 
actions. This critical flow of information should continue--and be 
expanded--concurrent with the Research and Special Programs 
Administration's design and implementation of a training program on pig 
technology for Office of Pipeline Safety (OPS) safety inspectors.

c) Did your audit examine the capabilities of state pipeline inspectors 
to interpret such data?
    Answer. No, our audit did not examine the capabilities of state 
pipeline inspectors to interpret smart-pig data. However, we believe 
Federal and state inspectors need state-of-the-art skills, expertise, 
and the ability to make accurate safety assessments that lower the risk 
of pipeline failures. As we noted in our testimony, state pipeline 
inspectors should receive the same level of training as Federal 
inspectors in order to ensure consistent implementation of pipeline-
inspection regulations.

Question 2. During your testimony, you highlighted concerns over a lack 
of adequate training of pipeline inspectors and operators. What are 
your views on the August 1999 negotiated rule on operator 
qualifications? Do you believe additional requirements are needed and 
if so, what do you recommend?
    Answer. The intent of the negotiated rule on operator 
qualifications is to ensure a qualified workforce in the pipeline 
industry and to reduce the probability and consequence of incidents 
caused by human error. We support these goals.
    However, pipeline operators are not required to submit their 
qualification programs (to evaluate an individual's ability to perform 
certain work tasks) to RSPA for approval. Consistent with our 
testimony, we support reauthorization provisions requiring operators to 
submit their qualifications programs to the Secretary for approval. We 
also support requirements for periodic retraining and reexamination of 
pipeline personnel. The issue of operator qualifications should not 
focus on the paper record of the training process, but rather on 
assurances that pipeline personnel have the necessary knowledge and 
skills to safely perform their jobs.

Question 3. What are your views on RSPA's actions to halt its 
interstate partnership agreements with the states?
    Answer. We support the reauthorization provisions seeking to 
expand, rather than eliminate, the states' role in interstate pipeline 
inspections and oversight. By sharing the safety oversight role with 
states, RSPA has the opportunity to leverage limited resources to 
increase the number and quality of pipeline inspections. States should 
also be involved in special investigations involving new construction 
or pipeline accidents.
    However, we do not support granting States the ability to establish 
inspection, operations, or maintenance standards for interstate 
pipelines. Where additional standards for interstate pipeline integrity 
and safety are required, they should be established at the Federal 
level.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                           to James M. Pates

Question 1. I understand that certain states exempt certain city-run 
municipal pipeline entities from regulations. For example, Virginia 
exempts the City of Richmond municipal facility and Pennsylvania 
exempts a municipal gas distribution facility in Philadelphia. If 
states won't allow their own pipeline inspectors to inspect certain 
state pipelines, why should those same states be given inspection 
authority over interstate lines?
    Answer. First, let me emphasize that the City of Fredericksburg 
supports the concept that all municipal gas utilities should be subject 
to the same regulatory authority as privately owned ones, whether that 
regulator be OPS or a state public utility commission. However, a 
state's lack of jurisdiction over a handful of public gas utilities 
should not serve as a roadblock to a state becoming a more active 
partner in interstate pipeline regulation.
    In the case of Virginia, for instance, the fact that the State 
Corporation Commission (SCC) lacks jurisdiction over intrastate gas 
facilities in the City of Richmond has absolutely nothing to do with 
the SCC's ability to serve as an effective interstate agent over 
hazardous liquid pipelines.
    Second, the fact that a municipal utility such as the City of 
Richmond has managed to remain subject to the more lax supervision of 
OPS should not allow all public and private utilities in Virginia to be 
held to a lower standard of public safety and environmental protection 
than would be achieved by bringing them under the authority of the 
State Corporation Commission. How could that possibly serve the public 
interest?
    We would encourage the Committee to consider the example of 
Virginia's intrastate liquid program. Up until 1995, intrastate liquid 
pipelines in Virginia were regulated by OPS. That same year, the SCC 
gained certification to administer the intrastate program on behalf of 
OPS and began regular inspections of the main intrastate carrier in 
Virginia, ST Services. The Commission discovered significant violations 
involving the company's Operations and Maintenance Plan and other 
requirements and fined the company $83,000. Most, if not all, of these 
violations existed during the years that the company was subject to OPS 
jurisdiction but that agency had never taken any corrective action.
    This one example is typical of the manner in which most states 
provide better inspections and oversight than OPS. I am absolutely 
confident that if the Commonwealth of Virginia, rather than OPS, had 
been inspecting Olympic Pipeline Company in the years preceding the 
Bellingham accident, that pipeline would not have failed and those 
three boys would not have died.
    In other words, the fact that Virginia lacks the authority to 
oversee Richmond's gas utility should not deprive the citizens of this 
state of a higher standard of safety for interstate liquid pipelines 
than what OPS has been providing.

Question 2. Should state pipeline enforcement enhancements be 
conditioned upon a state's repeal of such exemptions.
    Answer. No, but perhaps OPS could instruct its inspectors to place 
such exempt utilities on the same inspection schedule and subject them 
to the same standard of review exercised by that particular state over 
other intrastate operators. This would remove any ``double standard'' 
that may exist. In other words, this is a problem that could 
undoubtedly be resolved administratively by OPS.

                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                          to Phillip D. Wright

Question. As you know, OPS proposed a rule which attempts to define 
High Consequence Areas last month. Do you believe that this proposed 
rule will provide for accurate assessments of high density and 
unusually sensitive areas?
    Answer. Yes, with some qualifications. The rule depends heavily on 
data from a number of federal, state and private sources. Data from 
multiple sources--for example, state data bases for environmental 
information supporting the definition of areas unusually sensitive to 
environmental damage; heritage programs, such as those of The Nature 
Conservancy; state data bases on drinking water; U.S. Census Bureau 
information on population--are needed to provide a solid basis for a 
definition of HCAs that will withstand professional and legal scrutiny. 
The level of completeness, compatibility, accessibility and usability 
for these sources vary. The Office of Pipeline Safety is working with 
the data providers to turn database information into mapped high 
consequence areas that operators can then use for conducting 
assessments. The information available to pipeline operators will be 
limited by the quality of the original data sources, the resources 
those data providers have applied to collecting and updating the 
information, and OPS's capacity for providing HCA maps. These data 
sources will improve over time, but the quality of HCA definitions will 
always depend heavily on the quality, utility, completeness and 
availability of information from the agencies that have the information 
in the first instance. This said, we believe the proposed definition, 
when properly implemented with adequate data, can capture those areas 
that are, in fact, high consequence areas.

Question. What percentage of your lines do you currently pig? How often 
do these internal inspections take place?
    Answer.
API Survey on Internal Inspection
    In January 2000 the American Petroleum Institute conducted a survey 
on internal inspection practices in the liquid pipeline industry. 
Responses were received from 24 companies operating 129,046 miles of 
liquid pipelines or 82% of the approximately 157,000 miles of pipeline 
mileage regulated by OPS. Because this survey represents such a large 
portion of the total mileage, we have projected our statistical summary 
analysis to the entire 157,000 miles. The time period for information 
on integrity testing is 1990 to 1999. The results for Williams track 
the industry results.
    We estimate that 89% of US hazardous liquid pipeline mileage is 
currently capable of being inspected using in-line inspection tools. 
This means that 11% of US hazardous liquid pipeline mileage has 
significant barriers to in-line inspection tools. These barriers 
include, for example:

   lack of commercially available in-line inspection tools for 
        the particular pipeline diameter, especially small diameter 
        pipe;

   bends with radii too tight for tool passage; or

   restrictions resulting from valve design or changes in pipe 
        diameter.

    This category also includes mileage that is currently being 
maintained, but is not in active service. Of those companies with more 
than 500 miles of pipe, companies varied from a high of 39% of miles 
with barriers to using in-line tools to a low of 0% of mileage with 
barriers to using in-line tools. Most companies fall within the range 
of 2-5% of total mileage that currently has barriers to in-line tools. 
We did not receive sufficient responses from companies with less than 
500 miles of pipe to make any definitive statements.

Summary: Total Use of In-Line Inspection Tools by Hazardous Liquid 
        Pipelines

   Since 1990, 49% of the pipeline mileage regulated by OPS has 
        been inspected using in-line inspection tools.

   Since 1995, 31% of the pipeline mileage regulated by OPS has 
        been inspected using in-line inspection tools.

   The trend is clearly toward increasing use of high-
        resolution tools; however, low-resolution tools continue to 
        have value.

   Based on this survey, we suggest that the current capability 
        of in-line inspection vendors using high-resolution tools to 
        serve the liquid marketplace is about 20% of the total mileage 
        (157,000 miles) over 5 years, or 5% per year (8000 miles) per 
        year. This vendor capability may grow based on demand for the 
        service and capability of a relatively small market to meet 
        demand.

In-Line Inspection with High-Resolution Tools

   Since 1990, 24% of the pipeline mileage regulated by OPS has 
        been inspected using high-resolution in-line inspection tools.

   Since 1995, 22% of the pipeline mileage regulated by OPS has 
        been inspected using high-resolution in-line inspection tools.

   Ultrasonic tools represent the introduction of a new type of 
        high-resolution technology and their use is increasing. The 
        capabilities of ultrasonic tools are also being validated 
        through field application. Since 1990, 3% of the pipeline 
        mileage regulated by OPS has been inspected using ultrasonic 
        in-line inspection tools. Some portion (undetermined by our 
        survey) of the mileage inspected using an ultrasonic tool may 
        also have been inspected using other high-resolution tools.

In-Line Inspection with Low-Resolution Tools Only

   Since 1990, 22% of the pipeline mileage regulated by OPS has 
        been inspected using low-resolution tools only.

   Since 1995, 8% of the pipeline mileage regulated by OPS has 
        been inspected using low-resolution tools only.

   These two percentages indicate that pipeline companies are 
        clearly shifting away from using low-resolution tools and 
        toward the use of high-resolution tools. Low-resolution tools 
        continue to have value and are suitable for certain types of 
        pipeline conditions.

    For additional information, see the API comments to Docket No. 
RSPA-99-6355; Notice 1, the rulemaking on enhanced protection of high-
consequence areas.

Question. As you know, OPS is attempting to map the national pipeline 
system with information provided by the industry on a voluntary basis. 
Do you believe that your members will be able to provide the mapping 
information to OPS by the end of the year?
    Answer. The liquid pipeline industry and the OPS have been working 
to support the National Pipeline Mapping System. OPS readiness to 
absorb various kinds of mapping data is evolving. OPS has commissioned 
a number of state repositories in addition to a national repository. 
State repositories are in various stages of preparedness for handling 
electronic or paper submittals. Each pipeline company is in a different 
stage of preparedness to provide information. Some companies are paper-
mapped based; some companies are electronic-mapped based; many are in a 
transitional phase moving from paper-based maps to electronic GIS based 
maps. Technology is getting better and less costly. Currently the 
liquid pipeline industry has contributed mapping information on 21,823 
miles or 14% of the total liquid mileage of 157,000 miles. Many oil 
pipeline companies have committed to making significant contributions 
by the end of 2000. The proof of course, is in the actual mileage 
filed. We believe that contributions from API and AOPL members will 
approach 50-70% of the total liquid pipeline mileage by year-end. 
Williams expects to have 100% of its mapping data submitted by year-
end.

                                 ______
                                 
     Response to Written Questions Submitted by Hon. Patty Murray 
                          to Phillip D. Wright

Question. The McCain bill, my bill, and the administration's proposal 
focus on the public's right to know about what your operations are 
doing. One idea is that it would be up to you guys to collect the 
information about your practices and a summary of problems with your 
pipeline then to submit that information to local officials and 
emergency responders in areas impacted by your operation. Could you put 
such information in a form that would be easily understood and how hard 
would it be to submit that information to these local entities? How 
difficult do you foresee having to submit that information to the 
public at large, such as mailing to people within the right of way on a 
periodic basis?
    In our experience, there are three ``publics'' that a right-to-know 
program needs to address: local public officials with responsibilities 
along the pipeline corridor; our right-of-way neighbors who live or 
work near the pipeline; and the public generally. An effective program 
should be aware of and fashion its work product to, the needs and 
interests of each of these audiences.

Local Public Officials
    The pipeline industry can provide good quality information in a 
format that can be understood and used by local officials. In fact, we 
have already committed to the Office of Pipeline Safety to prepare 
materials and pilot test the effectiveness of new types of materials 
with local officials in areas impacted by pipeline operations. OPS is 
convening a group of stakeholders to conduct pilot tests of specific 
approaches in several states. We seek a strong partnership with local 
officials along our pipelines. We enhance safety and environmental 
protection when we ensure that these officials are knowledgeable and 
prepared to take action if an incident occurs. In the past, the biggest 
challenge in this area has not been developing or providing the 
information for this audience. The biggest challenge is getting local 
officials to focus on the information when it is provided and to commit 
to being effective in the roles that are available to them in ensuring 
pipeline safety--enacting good state laws on damage prevention; 
supporting quality one-call systems; enforcing damage prevention 
statutes; implementing land use planning that reduces the risks of 
pipeline accidents; and developing effective emergency response 
mechanisms We welcome ideas that will improve the partnership between 
pipeline companies, regulators and local public officials.

Right-of-Way Neighbors
    The pipeline industry is already providing right-of-way neighbors 
with information on a periodic basis under 195.440 and 442. We need 
knowledgeable right-of-way neighbors as a first line of defense in 
protecting the pipeline from damage and in recognizing and sounding the 
alarm about problems that may occur. We want right-of-way neighbors to 
have the information and understanding they need to protect themselves 
in the event of an incident. As an industry we recognize this as a 
communication challenge that it is our responsibility to address, and 
we are open to advice and direction about how to accomplish these goals 
more effectively. The type of information needed for the right-of-way 
public is different than for officials if only because we do not want 
to lose the audience with a message that is off-putting, overly 
technical or otherwise difficult to understand. Nor do we wish to 
overstate safety concerns.
    The industry is committed to the DIG SAFELY campaign as an umbrella 
communications program that will ensure that the efforts of excavators, 
all underground utilities (electricity, water, sewer, cable, telephone, 
pipelines, etc.), one-call notification centers and public officials 
are coordinated under a unified message. The DIG SAFELY campaign is a 
major asset in informing right-of-way neighbors and the public.

The General Public
    Communicating with a broader audience adds additional concerns 
related to purpose, content and the mechanism of distribution of 
information that will be used by and useful to the general public. Our 
experience is that it is both wasteful and counterproductive to 
undertake massive mail campaigns to long lists of addresses. The 
communication that occurs under these schemes appears to us to be 
minima. The information becomes rapidly out of date. As a 
communications vehicle, mass mailings are fundamentally inflexible. 
Rather than enact an affirmative requirement in law that companies 
contact and supply a preset list of data to large groups of potentially 
affected persons, we'd prefer to work with OPS, the states and local 
officials to make understandable information available to those who are 
interested, perhaps in electronic format, and experiment with ways to 
communicate effectively. As part of the OPS's pilot test of 
communications, the stakeholder group is also looking at information 
more suitable for the general public.

Question. Do you think you could adjust your personnel qualification 
plans that are due to OPS by April 2001 to address Senator McCain's 
periodic retraining and examination requirements?
    Answer. Yes, however, we recommend that the plans be made available 
to OPS, for example, as another matter to be reviewed during 
inspection, rather than being formally submitted to OPS as a document.

Question. I've heard from many of you that your current business 
practice met nearly all of the provisions of these proposals, thus no 
need for legislation. If that is correct, then why oppose it?
    Answer. We are not opposed to pipeline safety legislation and 
support reauthorization of the pipeline safety act. Our detailed 
testimony, already provided to the Committee, provides specific changes 
that we feel are necessary and appropriate in achieving Senator's 
McCain's objectives in proposing this legislation.
                                 ______
                                 
 Prepared Statement of Cascade Columbia Alliance, East Lake Washington 
   Audubon Society, Friends of the San Juans, Friends of the Earth, 
Friends of Tolt River, Lake Joy Community Club, The Mountaineers, North 
Lake Joy Estates, Ocean Advocates, Pacific Crest Biodiversity Project, 
   People for Puget Sound, Rainier Audubon Society, Safe Bellingham, 
 Surfrider Foundation, Washington State Chapter, Surfrider Foundation 
  USA, Tolt River Highlands, Washington Kayak Club, Washington Public 
   Interest Research Group, Washington Trout, Willapa Hills Audubon 
               Society, and Grays Harbor Audubon Society

      FEDERAL PIPELINE SAFETY ACT AND PIPELINE SAFETY LEGISLATION

    On 9 June 1999, the Olympic Pipe Line Company (operated by Texaco/
Shell as ``Equilon,'' along with part-owners Arco and GATX) made a long 
afternoon presentation to the Washington State Parks and Recreation 
Commission regarding their application for an easement and right-of-way 
through three State Parks for their proposed 231 mile Cross Cascade 
petroleum pipeline project. This proposed project, from north of 
Seattle to Pasco, WA, would also have crossed hundreds of wetlands, 
aquifers, streams and rivers, two National Forests and a National 
Wildlife Refuge.
    Olympic argued that they should be granted an easement and right-
of-way through three State Parks and defended the environmental and 
safety record of Olympic's existing 400 plus mile pipeline running from 
north Puget Sound refineries down the I-5 corridor to Portland, OR.
    The next day, 10 June, Olympics existing pipeline ruptured in 
Bellingham, WA, sending as much as 300,000 gallons of gasoline into 
Whatcom City Park down Whatcom creek toward the city center. Liam Wood, 
19, was rendered unconscious from inhaling the fumes, and subsequently 
drowned in the creek. Two other children, Stephen Tsorvais and Wade 
King, both 10, died when the gasoline vapor cloud exploded in a 
gigantic fireball. Had this explosion taken place even a short time 
later, even more people would have died. Later it was learned that 
Olympic had run a smart-pig test in 1996, but had ignored signs of 
problems with the three-decade old pipeline.
    Transportation of hazardous materials is regulated by the Federal 
Hazardous Materials Transportation Act (HMTA), which is administered by 
the Research and Special Programs Administration (RSPA) of the U.S. 
Department of Transportation. Congress has failed to reauthorize this 
Act since it expired on September 30, 1997, and the program has been 
continued through the annual appropriations process, but at levels 
below those authorized. For FY 99, a total of $16 million was 
appropriated for hazardous materials, with an obligation limitation of 
$11 million for emergency preparedness grants funded from registration 
fees.
    Petroleum pipeline safety is governed by the Hazardous Liquid 
Pipeline Safety Act of 1979 (HLPSA, Subtitle VIII of Title 49, U.S. 
Code). The program is administered by the Office of Pipeline Safety 
(OPS) within the Research and Special Programs Administration. During 
FY 99, the pipeline safety program is funded at $34.6 million with the 
program funded from annual fees from the pipeline industry (with a 
small amount from the Oil Spill Liability Trust Fund).
    What we have learned as a result of our review of Olympic's 
petroleum products pipeline operations and applications is shocking and 
alarming:

          a) Existing Federal safety and environmental regulations on 
        petroleum pipelines are woefully inadequate.
          b) Efforts to increase safety and environmental standards at 
        the state level are strongly opposed by the oil industry.
          c) Efforts of local jurisdictions to protect their citizens 
        from pipeline routing decisions are strongly opposed by the oil 
        industry.
          d) The Federal Office of Pipeline Safety (within the Research 
        and Special Programs Administration of the Dept. of 
        Transportation) is a captive of the oil industry, relies on the 
        oil industry to establish both standards and self-policing 
        practices and too often refuses to implement either the 
        recommendations of the Department of Transportation and 
        National Transportation Safety Board or requirements of 
        Congress.
          e) In addition, there is a lack of regional liquid fuel 
        energy planning in this country. As a result, hazardous 
        material pipelines are constructed in the absence of clear 
        demonstration of public need and without requiring an 
        examination of the least environmentally damaging alternative.

    A significant part of the problem lies with Congress. During the 
104th Congress, the Accountable Pipeline Safety and Partnership Act of 
1996, was passed which re-authorized the pipeline safety program for FY 
96-2000. The Act moved the pipeline safety program towards a new 
``risk-based'' approach by incorporating risk assessment and cost-
benefit analysis in the establishment of new pipeline safety standards, 
in accordance with Executive Order 12866. The Act established a risk 
management demonstration program whereby pipeline operators may be 
exempted from any or all safety requirements if the operator submits, 
and DOT approves, a safety plan that will achieve a level of safety 
equal to or greater than that which would be achieved through following 
existing regulations.
    This industry-backed approach, which has moved us away from much-
needed federal oversight and away from compliance based regulations, 
has resulted in a de-emphasis in developing, issuing, and enforcing 
regulations for the safe transportation of petroleum via pipeline.

                            RECOMMENDATIONS

    We, therefore, recommend that Congress:

          a) Increase funding for both the Hazardous Materials 
        Transportation Program and the Pipeline Safety Program.
          b) Require enforceable standards for repair of pipelines 
        after internal inspections.
          c) Require a showing of public need and least damaging 
        environmental alternative before allowing the construction of 
        new pipelines.
          d) Remove the provisions designed to allow industry to self-
        audit and perform risk assessment in lieu of compliance with 
        federal safety standards.
          e) Allow state and local jurisdictions to impose human 
        health, safety, and environmental land use standards as long as 
        not in conflict with federal regulations.

    Thank you for the opportunity to provide this testimony.

                                 ______
                                 
        Prepared Statement of Susan Harper, Executive Director, 
                       Cascade Columbia Alliance

    Thank you Chairman, Senator McCain and Senator Hollings for holding 
this hearing on the Pipeline Safety Act (``Act'') and accepting this 
written testimony on behalf of Cascade Columbia Alliance (CCA). I 
represent with my testimony a coalition of citizens, elected officials, 
environmental and civic groups, labor and businesses in Washington 
State. I am also a board member of the National Pipeline Reform 
Coalition (NPRC). You have heard from Mr. James Pates, NPRC Vice 
President. We wholly support his testimony.
    CCA's association with pipeline victims in other states began in 
1996 when Olympic Pipe Line Company proposed the 230-mile Cross Cascade 
Pipeline. During the siting process we learned many disturbing facts 
about pipelines and the inadequacy of the Federal Office of Pipeline 
Safety (OPS). The most frustrating lesson we learned is that this 
problem had plagued communities for years, and had proper action been 
taken by the OPS, the Bellingham nightmare could have been prevented. 
We urge this Committee to take swift action to set right a tragedy that 
should have never happened by implementing the recommendations for 
safety improvements that CCA, the NPRC and others have presented. I 
would request that the attached material, including letters and 
petitions from concerned citizens be made part of the hearing record.
    Mr. Pates' testimony describes many horrific stories about victims 
of pipeline company and OPS negligence. According to Mr. Pates 
testimony, since 1990, there have been nearly 4,000 accidents involving 
gas and hazardous liquid pipelines reported to OPS, resulting in over 
200 deaths, nearly 3,000 injunes, and at least $780 million in property 
damage. Over 62 million gallons of oil and other hazardous liquids have 
been released into the environment over the past 10 years, making 
pipeline accidents one of the largest point sources of oil pollution in 
the country. In fact, in the report submitted to this Committee by the 
Inspector General they point out the flaws in the OPS reporting 
systems, so this is an understatement of a huge problem that you have 
the power to set right.
    On March 13th, I presented testimony at the Field Hearing held by 
Senator Gorton and Senator Murray. My testimony focuses on the role of 
citizen participation in the oversight, siting and operation of 
hazardous fuel pipelines. Since pipeline accidents happen locally, the 
people who have the most to lose need to play an active role in 
preventing them. In an attached press release by Senator Gorton, he 
expresses his support for such a body.
    After the Exxon Valdez disaster in 1989, a joint citizen, local 
government and tribal oversight body came together in Prince Williams 
Sound. Alaska Governor Knowles credits the Regional Citizens' Advisory 
Council (RCAC), formally established and funded in OPA-90, as creating 
the safest oil transport system in the United States. OPA-90 also 
encouraged the establishment of other regional citizen and local 
government monitoring bodies elsewhere. Given the current climate 
surrounding the Office of Pipeline Safety and the public mistrust of 
the agency, establishment and funding for Regional Advisory Council's 
(RAC) to monitor hazardous pipelines is essential to a comprehensive 
reauthorization of the Pipeline Safety Act.
    In Washington State a loose coalition has been working together to 
oversee the safety action plans of Olympic Pipe Line Company as they 
work with OPS and the National Transportation Safety Board to discover 
the cause of the explosion and prevent future spills from the same 
pipeline. An article about that effort is attached to this testimony.*
---------------------------------------------------------------------------
    * The information referred to was not available at the time this 
hearing went to press.
---------------------------------------------------------------------------
    Something must be done now, before another tragedy like Bellingham 
happens again. The OPS has not acted on recommendations that were made 
many years ago because of their cozy relationship with the industry. 
The public needs to be assured this will not happen again. Citizens can 
play a positive role in preventing pipeline accidents. A Regional 
Advisory Council (RAC) will help regulators do the right thing and not 
succumb to industry pressure. The diverse membership comprised of 
representatives of local governments, tribes, surface and groundwater 
protection agencies, pipeline right-of-way property owners, emergency 
responders, and environmental organizations assures that the RAC 
represents the broader public interest. We are pursuing the 
establishment of an RAC in Washington State, and encourage other states 
that have had problems with the pipeline industry and OPS to do the 
same.
    Thank you again for this opportunity to present this additional 
testimony. I am happy to provide additional information upon request.

                                 ______
                                 
 Prepared Statement of Edward J. Holmes, Chair, NARUC Committee on Gas 
  and Commissioner, Kentucky Public Service on Behalf of the National 
        Association of Regulatory Utility Commissioners (NARUC)

    As Chairman of the Committee on Gas with the National Association 
of Regulatory Utility Commissioners (NARUC), I am pleased to be given 
this opportunity by the Senate Committee on Commerce, Science, and 
Transportation to offer NARUC's comments concerning the reauthorization 
of the Pipeline Safety Act (49 USC 60101, et seq.).
    NARUC is a quasi-governmental nonprofit organization founded in 
1889. Its membership includes the State public utility commissions for 
all States and territories. NARUC's mission is to serve the public 
interest by improving the quality and effectiveness of public utility 
regulation. NARUC's members regulate the retail rates and services of 
electric, gas, water and telephone utilities. We have the obligation 
under State law to assure the establishment and maintenance of such 
energy utility services as may be required by the public convenience 
and necessity, and to ensure that such services are provided at rates 
and conditions that are just, reasonable and nondiscriminatory for all 
consumers.
    The majority of State regulatory agencies have various 
responsibilities concerning the safe construction, maintenance and 
operation of natural gas and hazardous liquids pipeline facilities in 
the States. In most cases, this regulatory responsibility concerning 
intrastate pipeline facilities is exercised at least in part under 
partnership agreements with the Office of Pipeline Safety, Research and 
Special Projects Administration, and U.S. Department of Transportation. 
In several States, also, partnership agreements are in effect in which 
State pipeline safety personnel inspect interstate pipeline facilities 
as agents of the Office of Pipeline Safety and report their findings to 
QPS for enforcement action by OPS.
    NARUC supports the pipeline safety programs of OPS and is strongly 
supportive of the OPS/State agreement programs. The Commissioners 
believe that the States have continually demonstrated strong commitment 
to enforcement of pipeline safety regulations. The States have brought 
to State/OPS partnership programs invaluable knowledge of local 
conditions, facilities and operators within their jurisdictions. The 
OPS/State intrastate partnership programs have been very important in 
ensuring the safe construction, maintenance and operation of facilities 
within the States. NARUC has consistently and strongly supported full 
authorization of funds to enable OPS to fully fund 50 percent of the 
States' intrastate agent program costs.
    The States also have been very active with OPS in informing 
operators of the importance of safe excavation practices, especially 
calling the State One-Call agency to obtain marks of existing 
underground facilities prior to new excavation.
    This year, NARUC, at its March 2000 Winter Committee Meetings, 
adopted a resolution recommended by the Committee on Gas concerning the 
interstate agent program. The resolution expressed the concern of NARUC 
about the termination of some, and possibly all, of the interstate 
agent programs. NARUC urges that, regardless of which of the bills now 
before this Committee might ultimately be enacted, and regardless of 
such authority as might be conferred on OPS to ultimately change the 
interstate agent programs, that any changes to the program be made only 
after full consultation with the States. I have attached a copy of the 
resolution for your review.
    NARUC thanks the Committee for this opportunity to comment on these 
matters.

                                 NARUC

        National Association of Regulatory Utility Commissioners
                               resolution
               Resolution In Support Of Interstate Agents

WHEREAS, The States have a vital interest in the safety of the 
interstate pipelines within their respective States; and

WHEREAS, The Congress of the United States has provided a means for 
States to take an active role in the safety of interstate pipelines by 
becoming ``interstate agents'' for the U.S. Department of 
Transportation, Office of Pipeline Safety (OPS) via Section 60117(c) of 
49 U.S.C.; and

WHEREAS, The States of Arizona, Connecticut, California, Iowa, 
Michigan, Minnesota, Nevada, New York, Ohio, and West Virginia 
currently have interstate agent status which enables them to conduct 
safety inspections of interstate pipelines operating within their 
States, and other States including New Hampshire, Oklahoma, Texas and 
Virginia have requested but were denied interstate agent status; and

WHEREAS, By letters to the interstate agent States dated December 23, 
1999, OPS announced that the States of Arizona and Nevada were being 
terminated as interstate agents, and that the entire interstate agent 
program would be phased out over three years; and

WHEREAS, This action was taken unilaterally and without notice to or 
consultation with the affected States, and in the case of the 
terminations the rationale given contained incorrect information; and

WHEREAS, In ending the interstate agent program OPS appears to presume 
it could be replaced with a ``temporary agent'' program, which has not 
been formalized or discussed with the States; and that it will receive 
substantial additional resources from the current Congress, which is 
not assured; and

WHEREAS, The States strongly believe their inspections are critical to 
ensure that interstate pipelines are operated, constructed and 
maintained safely; and that State activities which promote pipeline 
safety should not be arbitrarily supplanted by unknown, unproven, and 
uncertain alternatives; and

WHEREAS, The resources the States expend inspecting interstate 
pipelines in no way diminish the safety inspection of local 
distribution companies or other intrastate operators; and

WHEREAS, The National Transportation Safety Board (NTSB) has encouraged 
the inspection of interstate pipelines by State inspectors; and

WHEREAS, The National Governor's Association has adopted a Proposed 
Policy on Pipeline Safety encouraging greater State oversight of 
interstate pipelines; and

WHEREAS, Washington State Governor, Senators, Congressional 
Representatives and the Washington Utilities and Transportation 
Commission all desire a greater role in the oversight of the interstate 
pipelines through their State; now therefore be it

RESOLVED, That the Board of Directors of National Association of 
Regulatory Utility Commissioners (NARUC) convened in its March 2000 
Winter Meeting in Washington, D.C., urges the U.S. Department of 
Transportation to stay any change in the pipeline interstate agent 
program as historically administered, that any changes to the program 
be made only after full consultation with the States and the 
finalization of alternatives, and that OPS be instructed to accept 
additional interested States as interstate agents.

Sponsored by the Committee on Gas
Adopted by the NARUC Board of Directors March 8, 2000
                                 ______
                                 
     Prepared Statement of Governor Gary Locke, State of Washington

    I appreciate the opportunity to provide testimony on the critical 
topic of pipeline safety. As you know, the tragedy in Bellingham, 
Washington has focused tremendous public attention on the need to 
ensure that pipeline safety laws, regulations and practices at the 
state, federal and local levels are as effective as they can be. 
Washington communities, government agencies, and others involved in gas 
and hazardous liquid transportation have made pipeline safety one of 
their highest priorities.
    I am pleased that the Senate Committee on Commerce, Science, and 
Transportation is holding this hearing on reauthorization of the 
Pipeline Safety Act. I hope this effort will result not only in a new 
law to increase pipeline safety, but will also ensure strong, thorough 
and consistent enforcement of pipeline safety requirements.
    I also want to thank the Committee for holding a field hearing in 
Bellingham in March. Some members heard direct testimony from the 
families and the community on the devastating effect of last summer's 
pipeline tragedy. They also heard about our state's commitment to a 
strong and effective pipeline safety program. That commitment has been 
underscored by new state legislation on pipeline safety. Now we are 
seeking a stronger federal partnership to protect our citizens and 
those across the nation.
    I believe any pipeline safety bill that is passed must incorporate, 
at a minimum, the following five fundamental principles:

   Increased state role in regulation. A critical component of 
        any effort to improve pipeline safety is the strengthening of 
        states' ability to oversee pipeline operator activities and 
        compliance. Many states, including Washington, are eager to 
        participate in a full partnership with the Office of Pipeline 
        Safety (OPS). As effective partners, states need the authority 
        to develop and impose standards that may be more stringent than 
        federal standards without interfering with interstate commerce. 
        They also need the authority to inspect operations and to 
        enforce federal and state standards. Specifically, each state 
        must have the authority to work directly with all pipeline 
        operators in the state. That authority needs to be supported by 
        the free flow of data regarding pipeline operations between OPS 
        and its state partners.

   High standards. I urge you to adopt a bill that will require 
        state-of-the-art safety standards for the construction, 
        testing, operation, and maintenance of pipelines. In addition, 
        standards need to be toughened for prompt public reporting of 
        spills and leaks. We would also like to see increased standards 
        for certifying pipeline operators.

   Effective oversight and enforcement of the federal program. 
        The bill you pass should include an effective and independent 
        mechanism for oversight of the federal government's activities 
        related to pipeline safety. An effective pipeline safety 
        program requires that the federal regulatory body be held 
        accountable for any shortcomings in its activities. For 
        example, ``risk management'' or ``integrity assessment'' plans 
        could be a valuable means for the industry to develop standards 
        and practices to ensure pipeline safety. But they will fulfill 
        this promise only if OPS exercises its independent judgment 
        that the substance of the plans, not just the process of 
        developing them, advances public safety. While the main burden 
        here falls on OPS, I believe that Congress will need to 
        continue active oversight of that agency's pipeline safety 
        activities to ensure that the program goals are being met.

   Communities' right to know. Another important aspect of any 
        new legislation is strengthening communities' access to 
        information about the pipelines located beneath them. Both 
        pipeline companies and their regulators should be required to 
        provide education and outreach activities to those communities 
        and their residents. Communities in Washington, for example, 
        are eager to participate in activities ensuring safe excavation 
        around pipes. Our recent state legislation directs that an 
        improved mapping system be established so that pipelines can be 
        clearly and easily located. We need a similar commitment from 
        the federal government to make pipeline information more 
        accessible.

   Adequate funding. Adequate funding is essential for the 
        success of a pipeline safety program. Sufficient federal 
        funding is required for better federal regulation for increased 
        state involvement and enforcement in pipeline safety efforts, 
        and for a greatly expanded program of research and development 
        on technology improvements, such as internal inspections for 
        small diameter pipes and distribution systems.

    At the National Governors' Association Winter 2000 meeting, I 
sponsored, and NGA adopted, a policy on Improved Pipeline Safety, 
specifically identifying five recommendations for the reauthorization 
of the Pipeline Safety Act. Those recommendations include requirements 
for:

   increased state authority,
   Congressional oversight,
   more effective rules,
   appropriate funding, and
   intergovernmental cooperation.

    I urge you to consider these NGA recommendations as you work to 
adopt a pipeline safety bill; a copy is attached to this testimony.
    Thank you for the opportunity to comment on this very important 
issue. I look forward to working with your Committee in the next few 
weeks. Together, I hope we can ensure passage of an effective pipeline 
safety bill that will give the people and the environment of this 
country the protection they need and deserve.
                                 ______
                                 
       Prepared Statement of John W. Somerhalder II, President, 
                     El Paso Energy Pipeline Group

Introduction
    Mr. Chairman and Members of the Committee, I am John Somerhalder, 
President of El Paso Energy's regulated pipelines. I am submitting this 
written testimony on behalf of El Paso Energy, the nation's largest 
natural gas pipeline operator.
    El Paso Energy operates nearly 40,000 miles of natural gas 
pipelines that are regulated by the federal Department of 
Transportation. Our pipelines stretch from California to New England 
and from the Canadian border to the Gulf of Mexico. We operate in 25 
states and bring natural gas to fuel American homes and businesses.
    The natural gas pipeline transmission industry is a safe industry. 
By continuously monitoring and inspecting our pipelines, we work to 
ensure that transportation by pipeline is the safest mode of energy 
transportation. I appreciate the Chairman's recognition of this fact. 
Operating and maintaining a safe system is embedded in every aspect of 
our business. The benefits of developing and implementing safety 
programs are widely recognized within our industry and are at the core 
of what we do. We are continuously working to improve our record of 
safety--for like you, we believe one fatality is one too many. It is 
with this thought in mind that I can say that our interests are 
directly in line with what this Committee and the public at large are 
interested in--reliable delivery of natural gas through safe pipelines.
    I now would like to comment on a number of areas in Chairman 
McCain's bill and the Administration's bill with which we have 
concerns.

National Transportation Safety Board Recommendations
    Presently, the National Transportation Safety Board has a number of 
open recommendations to the Office of Pipeline Safety (OPS). This is 
recognized in S. 2438, the McCain bill. I agree that OPS should be 
required to respond to these recommendations in a timely manner, that 
any responses should be open to the public, and that the responses 
should be reported to Congress.
Pipeline System Integrity
    On November 18 and 19, 1999, the Office of Pipeline Safety held a 
public meeting to begin a pipeline system integrity rulemaking. To date 
that effort has resulted in a Notice of Proposed Rulemaking published 
on April 24, 2000, for the hazardous liquid operators with over 500 
miles of pipeline. OPS has indicated they plan to issue a Notice of 
Proposed Rulemaking for natural gas in the fall. The Interstate Natural 
Gas Association of America (INGAA), which represents interstate natural 
gas pipelines including El Paso Energy, is working to have this 
rulemaking technically based. INGAA and El Paso Energy agree that this 
will permit the greatest possible chance of positively impacting 
natural gas pipeline safety. However, this task is difficult. The 
natural gas pipeline safety regulations are much more comprehensive 
than the hazardous liquid regulations, and I believe these regulations 
form a basis for the excellent safety record of the natural gas 
transmission pipeline industry. Unfortunately, we have been so 
effective that simple solutions to improve our safety record do not 
exist. It is our intent in this pipeline system integrity rulemaking to 
comprehensively analyze and propose to OPS a program providing the 
greatest opportunity for improvement to occur.
    It is my recommendation that any legislation recognize the 
differences between natural gas and liquid pipelines, including the 
risks and consequences of an incident and the regulations already 
imposed on these pipelines. Since the legislative proposals before this 
Committee address the issue of pipeline integrity, I offer the 
following comments:

          1. Under no circumstances should the hazardous liquid rule be 
        applied to natural gas transmission pipelines. First, upon 
        release, natural gas and hazardous liquids behave very 
        differently. Natural gas, which is lighter than air, rises and 
        rapidly dissipates, whereas a liquid, let's say oil, that is 
        heavier than air, spills onto the ground causing a variety of 
        environmental concerns. Second, the ability to utilize internal 
        inspection devices to look for a wide variety of potential 
        flaws is very different. Third, the ability to test a pipeline 
        hydrostatically is very different--our reliable gas service 
        would be curtailed where there is only one pipeline serving the 
        public. Clearly a rule tailored to each pipeline product should 
        be considered.
          2. The required use of the ``best achievable technology'' is 
        open-ended and a moving target with which pipeline operators 
        would be required to comply. While in theory this language 
        sounds laudable, it leads people to believe that there are one 
        or two technologies that solve the problem of safety for the 
        pipeline. Natural gas pipeline operators have a number of tools 
        they use to ensure the safety of their systems. These range 
        from non-technical items such as walking the pipeline to look 
        for changes to soil or vegetation to more technical items such 
        as cathodic protection (a small electric current) and smart 
        pigs. Industry voluntarily has been investing in research to 
        continue to pursue better technologies for more than fifty 
        years. Use of ``best achievable technology'' is also a relative 
        term, meaning someone determines what this is whether or not 
        the technology is truly proven.

    If Congress is concerned about OPS issuing a natural gas rule in a 
timely manner, I suggest that OPS be given a timeframe for issuing 
Final Rules. If those dates are not met, Congress should require OPS to 
prepare a report to Congress explaining why those dates were not met. 
Forcing the natural gas transmission pipeline industry to comply with a 
rule that is completely inappropriate for our product because OPS 
failed to act is nonsensical and would not, in the least, result in 
improved safety.

Enhanced State Oversight
    Interstate pipeline operators, like virtually all forms of 
interstate commerce, are under the jurisdiction of the federal 
government. For an operator like El Paso Energy, with operations in 25 
states, this is an important pipeline safety issue. Consistency in the 
application of safety standards is paramount to pipeline safety.
    If individual states were permitted to create and enforce their own 
safety standards, operators like El Paso Energy would be forced to 
approach pipeline safety in a piecemeal manner, rather than on a 
system-wide basis. If pipeline operators were forced to comply with 
individual state requirements, it would actually lessen safety across 
the entire system, because it would reduce needed resources going to 
those areas most in need of risk reduction. Permitting the states to 
dictate specific activities would reduce pipeline safety overall.
    Avenues are already in place for states to supplement the federal 
program and address issues of local concern. Approximately 75 percent 
of the natural gas pipelines in the United States are local 
distribution systems, which supply natural gas to homes and businesses. 
All of these systems, as well as intrastate transmission pipelines, are 
subject to the safety oversight of the states. If a state has a 
specific concern regarding an interstate operator, the states can 
address that concern by bringing it to the attention of the federal 
Office of Pipeline Safety. States also have complete control over the 
various one-call centers, whose primary purpose is to provide a 
mechanism for underground utilities to be marked to prevent accidental 
excavation damage. Third party damage by excavation is the biggest 
cause of pipeline failures.

Operator Qualification
    On August 27, 1999, a Final Rule was published by the Office of 
Pipeline Safety which required operators of pipelines to prepare an 
operator qualification plan and have the applicable operating personnel 
qualified within specific time frames. This rulemaking was based on an 
extensive cooperation and negotiation between the Office of Pipeline 
Safety, natural gas transmission and distribution pipelines, liquid 
pipelines, labor unions, state pipeline safety representatives, 
corrosion experts, emergency response agencies, federal safety 
agencies, and other affected parties. Operators diligently have been 
preparing their qualification plans for over a year to meet the rule 
deadlines. Moving these deadlines up, as some of the legislative 
proposals suggest, would place an undue burden on operators, would 
sabotage some of the benefits expected to be realized by the 
rulemaking, and would have no effect on safety. It would seem best to 
let the existing regulatory process work by allowing the Operator 
Qualification rule to reach fruition.
    I also am concerned that some of the proposals require operator 
training rather than operator qualification. A one-size fits all 
training program is not appropriate for the different systems upon 
which operators work and the varied tasks that operators must perform. 
The parties to the negotiated rulemaking recognized these differences 
and, after much discussion and analysis, agreed to an operator 
qualification rule rather than a training rule. Such a rule allows 
operators the ability to best address the specific concerns of their 
systems. As such, El Paso Energy believes that any legislative proposal 
addressing operators should focus on qualifications, not training. 
Training is only one component used to assure that an operator is 
qualified.

Public Education and Community Right-to-Know
    The existing natural gas pipeline safety regulations require 
operators to provide a variety of information to the public about the 
pipelines. This information includes maps, emergency response 
information, educational materials, and one-call or location 
information. However, even with these efforts, third party damage is 
still the leading cause of pipeline failures, and is believed to have 
contributed to the gasoline pipeline failure in Bellingham, Washington.
    The Office of Pipeline Safety is in a unique position to 
disseminate facility location information to the public. Since they are 
a federal agency, it would appear that they could serve as an 
information clearinghouse for public right-to-know issues, as well as 
many other issues that concern the public about pipelines. OPS could 
utilize accepted forums for information dissemination such as their 
Internet homepage or the Internet-based National Pipeline Mapping 
System for location information.

Improved Data and Data Availability
    The interstate natural gas transmission pipeline industry has, in 
conjunction with the Office of Pipeline Safety, developed a new form 
for reporting incidents. This new form allows better analysis of 
incident trends and better determination of the actual causes of 
incidents. This effort is in line with the DOT Inspector General's 
report and the National Transportation Safety Board's recommendations 
and will result in greater pipeline safety.
    The Office of Pipeline Safety has maintained records on pipeline 
incidents since the early 1970's. These records are available to the 
public on OPS' Internet homepage (http://ops.dot.gov) and are also 
available by contacting OPS.
    Based on the aforementioned facts, it would not appear that a 
legislative effort to improve data or data availability would 
demonstrably improve what is currently being done.

Technology Development
    The natural gas transmission pipeline industry has been conducting 
independent research since the early 1950's through the Gas Research 
Institute (GRI) and Pipeline Research Council International (PRCI), 
among others. This research has led to many advances in pipeline safety 
and is a significant contributor to our outstanding safety record.
    The bills state that the Office of Pipeline Safety should direct 
research attention to work that is ongoing by the industry. If OPS is 
to expand its role in pipeline research, I believe it would be prudent 
to have OPS direct the research funding to existing, proven research 
organizations such as those mentioned above. This would ensure that the 
research is performed in an efficient manner, that OPS funding is in 
partnership with industry funding for increased effectiveness, and that 
all affected parties would have input into the direction of the 
research efforts.

Penalties
    Presently, the pipeline safety regulations permit penalties up to 
$25,000 per incident per day up to a maximum of $100,000. Both bills 
would increase the penalties to $100,000 per incident per day up to a 
maximum of $1,000,000. El Paso Energy complies with the pipeline safety 
regulations because they are the law and because we believe that in 
most cases they increase pipeline safety. El Paso Energy's goal is to 
increase pipeline safety, not avoid penalties. As such raising the 
penalty amounts for non-compliance would not result in El Paso Energy 
or our industry better complying with the regulations.

Authorization of Appropriations
    I believe it is important to note that part of the Administration's 
budget request for FY 2001 already has been authorized in TEA21. TEA21 
authorized $5 million in one-time grants to states that improved their 
one-call systems. In this authorization, Congress recognized that 
natural gas and liquid pipelines generate only about one-fifth of the 
calls made by one-call centers to mark underground facilities. As such, 
Congress required that any sums that are appropriated for state grants 
must be taken from general revenues, not from user fees.
    The bills before the Committee do not break out what amounts should 
come from user fees, the Oil Spill Liability Fund, and the Pipeline 
Safety Reserve. El Paso Energy would be more than happy to work with 
the Committee on this issue.

Conclusion
    I would like to conclude by thanking this Committee for allowing me 
the opportunity to provide this written testimony. I also would like to 
encourage this Committee to remember the outstanding safety record of 
the natural gas pipeline transmission industry and the many efforts 
natural gas pipeline operators already take to assure that we can 
reliably deliver natural gas to consumers in the safest manner 
possible. El Paso Energy appreciates your efforts to pass a balanced, 
constructive Pipeline Safety Act reauthorization and we look forward to 
working with you in making this legislation a reality.

                                 ______
                                 
Prepared Statement of George P. Williams, Director, Government Affairs, 
                             Sempra Energy

Introduction
    Sempra Energy is pleased to offer testimony to the Senate Committee 
on Commerce, Science, and Transportation regarding the reauthorization 
of the Pipeline Safety Act. Although our comments specifically address 
S. 2438, we would be pleased to similarly address S. 2004 and S. 2409 
should the Committee so desire.
    Sempra Energy is a Fortune 500 energy services holding company 
whose subsidiaries include Southern California Gas Company and San 
Diego Gas and Electric Company. Together these two local distribution 
companies operate 3500 miles of transmission pipeline in some of the 
most heavily populated areas of the country. Southern California Gas 
Company is the nation's largest local natural gas distribution company 
serving over 18 million consumers through 5 million meters in a service 
territory stretching from San Luis Obispo to the Mexican Border. San 
Diego Gas & Electric is a combination utility providing service to over 
3 million consumers in San Diego County through 1.2 million electric 
meters and 720 thousand natural gas meters.
    Sempra Energy commends the author and Committee chair, Senator 
McCain, in introducing this legislation to address the serious issue of 
pipeline safety. Sempra Energy also commends the Senators from 
Washington who are co-authoring this proposal and have first hand 
knowledge of the problems that result if a pipeline failure occurs.

Background on Sempra Energy Pipeline Integrity Programs
    Southern California Gas Company and San Diego Gas & Electric have a 
pipeline integrity management program. We have a Pipeline Integrity 
Team that addresses the overall operation of our facilities including 
ensuring strict compliance with local, state and federal pipeline 
safety regulations and evaluating our operations to ensure that the 
risks to our facilities are known and addressed. On a routine basis, 
this team identifies hazards and vulnerabilities of the pipeline 
system, performs specific risk assessments, evaluates data, and 
prioritizes areas to be addressed. In addition, this team evaluates the 
applicability of new technology to our operations. At a strategic 
level, this team works to integrate our operating experience with the 
study of the interrelationships among various failure causes and known 
risks, to ensure resources are directed at protecting public safety and 
maintaining the integrity of our pipelines.
    In addition to internally focused activities, Sempra Energy 
actively participates in industry and government sponsored forums on 
pipeline system management. Southern California Gas Company and San 
Diego Gas & Electric have a long history of active participation in 
regulatory proceedings, including rulemakings, sponsored by the Office 
of Pipeline Safety (O.P.S.) and by other regulatory bodies such as the 
California Public Utilities Commission, O.P.S.'s designated enforcement 
agency for the state. Sempra Energy believes that continued emphasis 
should be placed on improving pipeline integrity and we continue to 
work with other stakeholders to ensure that the risks to pipelines from 
damage due to excavation, failures, etc. are minimized to maintain the 
highest levels of public safety. In addition, we strongly support the 
pursuit of new technology and engineering advances that would lead to 
greater pipeline safety and encourage the authors to consider directing 
resources towards research and development of new technologies.
    Sempra Energy wholeheartedly agrees that public safety concerns 
should be paramount when operating and maintaining the infrastructure 
used to deliver natural gas. We do, however, have concerns that certain 
provisions in this bill may not achieve the desired objectives and in 
fact, may give rise to a false sense of security regarding public 
safety. We ask that you consider the following input as you continue to 
refine this bill.

                      Specific Comments on S. 2438

Internal Inspections
    Section 5 of the proposal requires the Secretary to issue 
regulations that would require natural gas and hazardous liquid 
pipeline operators to evaluate risks to their pipeline facilities based 
upon specific criteria to determine the adequacy of pipelines to 
operate in unusually sensitive areas and high-density population areas. 
We readily agree that pipeline operators should continually evaluate 
the risks to their pipeline facilities. However, although we recognize 
the inherent necessity of vagueness in this type of directive, we are 
concerned about the preliminary references to mandatory ``smart 
pigging'' or other types of internal inspections for natural gas 
pipelines. While there are situations when certain internal inspections 
are warranted and as an operator, we utilize internal inspections to 
assess certain vulnerabilities on a targeted basis, we do not endorse 
the thought that internal inspection should be mandated on a routine 
basis for natural gas transmission pipeline facilities. Overall, we 
believe that a comprehensive integrity management program can be 
completely effective without mandating these types of inspections on a 
routine basis.
    We are actively working with the Office of Pipeline Safety, other 
operators, state regulators and key stakeholders to look at possible 
modifications to the federal pipeline safety regulations as they relate 
to pipeline integrity management. In fact, on April 24, 2000, a notice 
of proposed rulemaking was published in the Federal Register concerning 
an Office of Pipeline Safety proposal to add additional regulations to 
``test, repair and validate through analysis the integrity of most 
hazardous liquid pipelines that could affect populated areas, 
commercially navigable waterways and areas unusually sensitive to 
environmental damage.'' While this notice of proposed rulemaking 
governs regulations under 49 C.F.R. Part 195 for hazardous liquid 
pipelines, this is the first stage of an overall integrity management 
rulemaking process that will then address 49 C.F.R. Part 192 
regulations for natural gas pipelines. Practically speaking, we are 
aware of many inspection and evaluation techniques capable of assessing 
a pipeline's identified vulnerabilities that could be far more 
effective in ensuring public safety than devoting resources to 
performing internal inspection on natural gas pipelines on a routine 
basis.
    As a side note, as you consider the possible mandate of routinely 
``smart pigging'' natural gas transmission pipelines, please keep in 
mind the current capability of ``smart pigs.'' For example, we believe 
that the current capability of smart pigs to find prior mechanical 
damage, on a scale of 1 to 10, is about a 4, a number far from 
infallible. In addition, we analyzed reportable incidents on gas 
transmission and gathering lines filed with the Department of 
Transportation from 1985-1997 and determined that ``smart pigging'' the 
pipeline would not have identified the determined cause of over 70% of 
the failures. This is not to say that smart pigging is without value. 
We do believe that the use of ``smart pigs'' should be part of an 
overall inspection program to ensure pipeline integrity by assessing 
vulnerabilities on a targeted basis. Accordingly, we would support 
language directing the Secretary to give natural gas transmission 
pipeline operators options to allow for the use of, ``internal 
inspection, pressure testing or other evaluation techniques capable of 
assessing the pipeline's identified vulnerabilities.''

Provision of Maps to Local Authorities
    Sempra Energy understands the concerns prompting this particular 
proposal; however, Sempra Energy is very concerned that the widespread 
provision of detailed maps could do more harm than good. In addition, 
we believe that information that will be made available through the 
National Pipeline Mapping System (N.M.P.S.) project sponsored by the 
Office of Pipeline Safety will successfully address many of the issues 
the authors have noted.
    Southern California Gas Company is participating on the M.Q.A.T. 
(Mapping Quality Action Team) sponsored by the Office of Pipeline 
Safety to develop the National Pipeline Mapping System. This project 
was created to address Congress' concerns about having better 
information on the nation's hazardous liquid and natural gas 
transmission pipelines, especially during emergency situations. A 
partnership was created between industry and the Office of Pipeline 
Safety to develop an electronic mapping system that would give the 
Office of Pipeline Safety, as well as other public agencies, 
information regarding the general location of these pipeline 
facilities. Through this system, information regarding the location of 
facilities, within 500 feet, the type of product, and the owner of the 
line will be available through the Internet and readily accessible to 
the general public. Regulatory personnel and public agencies will have 
access to more detailed information. Based on the current schedule, 
this system should be ready for deployment by the end of 2000.
    Sempra Energy is concerned with the authors' proposal to provide 
maps outside of the National Pipeline Mapping System as this material 
could provide local authorities with a false sense of security. Our 
maps are fluid proprietary documents. They are updated on a continuous 
basis. We do not want to take a chance that a local official would rely 
on an outdated map in responding to an emergency. In addition, we do 
not want others that are not ``qualified personnel,'' no matter how 
well intentioned, to operate our system under any circumstances. 
Operating pipeline systems without proper training by unqualified 
personnel could lead to significant public risk.
    Sempra Energy's concern is also based on the very real threat posed 
by terrorists. The United States is no longer immune from terrorist 
attacks, from both domestic and foreign perpetrators. Sempra Energy 
believes it would be extremely unwise to make detailed maps available 
to a public that could include terrorists.
    We do not believe that public safety would be advanced by providing 
either maps or specific details such as operating pressure of our 
facilities to schools or the public. We do however, strongly endorse 
the one-call system and other practices to address damage prevention to 
our facilities and general public safety. Instead of providing local 
officials, and potentially the general public, with detailed maps, 
other than those provided through the National Pipeline Mapping System, 
Sempra Energy recommends that local distribution companies continue to 
work closely with local officials in responding to emergencies. Not 
only do we know our systems the best, but we also have highly trained 
personnel available to assist the local officials.

Operator Training Programs
    Section 4 requires pipeline operators to submit training plans 
designed to enhance training for personnel and to reduce the likelihood 
of accidents and injuries. Sempra Energy concurs with the motivation 
behind this requirement; however, we are concerned that this provision 
is needlessly duplicative of a recent regulatory proceeding.
    The Office of Pipeline Safety issued a final rule on operator 
qualification and training on August 27, 1999. This ruling, ``Pipeline 
Safety: Qualification of Pipeline Personnel'' is designed to ensure a 
qualified workforce which will result in a reduced risk of accidents 
attributable to human error. This rule, effective on October 26, 1999, 
requires that operators have a written qualification program in place 
by April 27, 2001 and complete the qualification of individuals 
performing covered tasks by October 28, 2002. This ``Operator 
Qualification Rule'' specifically requires that operators develop a 
qualification program to ``evaluate an individual's ability to perform 
covered tasks and to recognize and react to abnormal operating 
conditions that may occur when performing covered tasks.''
    Sempra Energy believes that the training programs mandated in S. 
2438 are premature in light of the recent ``Operator Qualification 
Rule.'' We believe that the ``Operator Qualification Rule'' will be 
sufficient to ensure qualified personnel and we encourage the authors 
to consider not requiring implementation of a new training program 
before operators fulfill the regulatory mandates specified by the 
Office of Pipeline Safety on this issue and the results are evaluated.

Conclusion
    In closing, Sempra Energy commends the authors in this effort to 
address the issue of pipeline safety. We believe that we should work 
together to continually strive to reduce the risk to public safety 
through technological advances and improved practices for operating 
pipelines and specifically encourage you to support more resources 
towards research in this area as it would ultimately serve the 
interests of public safety.

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