[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                         IMPLEMENTATION OF THE
PIPELINE INSPECTION, PROTECTION, ENFORCEMENT AND SAFETY ACT OF 2006 AND 
             REAUTHORIZATION OF THE PIPELINE SAFETY PROGRAM

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

                               (111-113)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

             RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              May 20, 2010

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure





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20402-0001







             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania  ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York               AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin               PETE OLSON, Texas
STEVE COHEN, Tennessee               VACANCY
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
HANK JOHNSON, Georgia

                                  (ii)






     SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                   CORRINE BROWN, Florida Chairwoman

DINA TITUS, Nevada                   BILL SHUSTER, Pennylvania
HARRY TEAGUE, New Mexico             THOMAS E. PETRI, Wisconsin
NICK J. RAHALL II, West Virginia     JERRY MORAN, Kansas
JERROLD NADLER, New York             GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         HENRY E. BROWN, Jr., South 
GRACE F. NAPOLITANO, California      Carolina
JASON ALTMIRE, Pennsylvania          TIMOTHY V. JOHNSON, Illinois
TIMOTHY J. WALZ, Minnesota, Vice     SAM GRAVES, Missouri
Chair                                JIM GERLACH, Pennsylvania
MICHAEL A. ARCURI, New York          CHARLES W. DENT, Pennsylvania
CHRISTOPHER P. CARNEY, Pennsylvania  LYNN A. WESTMORELND, Georgia
ALBIO SIRES, New Jersey              JEAN SCHMIDT, Ohio
MARK H. SCHAUER, Michigan            CANDICE S. MILLER, Michigan
BETSY MARKEY, Colorado               VERN BUCHANAN, Florida
MICHAEL E. McMAHON, New York         BRETT GUTHRIE, Kentucky
THOMAS S. P. PERRIELLO, Virginia     AARON SCHOCK, Illinois
PETER A. DeFAZIO, Oregon             ANH ``JOSEPH'' CAO, Louisiana
JERRY F. COSTELLO, Illinois          PETE OLSON, Texas
BOB FILNER, California               VACANCY
EDDIE BERNICE JOHNSON, Texas
LEONARD L. BOSWELL, Iowa
RICK LARSEN, Washington
MICHAEL H. MICHAUD, Maine
DANIEL LIPINSKI, Illinois
STEVE COHEN, Tennessee
LAURA A. RICHARDSON, California
JAMES L. OBERSTAR, Minnesota
  (ex officio)

                                 (iii)













                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Black, Andrew, President and CEO, Association of Oil Pipe Lines..    28
D'Alessandro, Rocco, Executive Vice President, Nicor Gas, 
  Naperville, Illinois, on behalf of American Gas Association....    28
East, Dan, Regional Manager, Reynolds, Inc., Albuquerque, New 
  Mexico, on behalf of National Utility Contractors Association..    28
Metro, Paul, Gas Safety Supervisor, Pennsylvania Public Utility 
  Commission, on behalf of the National Association of Pipeline 
  Safety Representatives.........................................    28
Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous 
  Materials Safety Administration................................     3
Sypolt, Gary L., Chief Executive Officer, Dominion Energy, 
  Richmond, Virginia, on behalf of the Interstate Natural Gas 
  Association of America.........................................    28
Weimer, Carl, Executive Director, Pipeline Safety Trust..........    28

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Cohen, Hon. Steve, of Tennessee..................................    49
Larsen, Hon. Rick, of Washington.................................    50
Richardson, Hon. Laura, of California............................    55

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Black, Andrew....................................................    58
D'Alessandro, Rocco..............................................    68
East, Dan........................................................    89
Metro, Paul......................................................    94
Quarterman, Hon. Cynthia.........................................   111
Sypolt, Gary L...................................................   148
Weimer, Carl.....................................................   159

                       SUBMISSIONS FOR THE RECORD

D'Alessandro, Rocco, Executive Vice President, Nicor Gas, 
  Naperville, Illinois, on behalf of American Gas Association, 
  response to request for information from Hon. Brown, a 
  Representative in Congress from the the State of Florida.......    80
Metro, Paul, Gas Safety Supervisor, Pennsylvania Public Utility 
  Commission, on behalf of the National Association of Pipeline 
  Safety Representatives, response to request for information 
  from Hon. Brown, a Representative in Congress from the the 
  State of Florida...............................................   104
Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous 
  Materials Safety Administration, response to request for 
  information from Hon. Brown, a Representative in Congress from 
  the the State of Florida.......................................   129
Weimer, Carl, Executive Director, Pipeline Safety Trust, response 
  to request for information from Hon. Brown, a Representative in 
  Congress from the the State of Florida.........................   173

                        ADDITIONS TO THE RECORD

American Public Gas Association, written testimony...............   138

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



 
   HEARING ON IMPLEMENTATION OF THE PIPELINE INSPECTION, PROTECTION, 
ENFORCEMENT AND SAFETY ACT OF 2006 AND REAUTHORIZATION OF THE PIPELINE 
                             SAFETY PROGRAM

                              ----------                              


                         Thursday, May 20, 2010

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 9:30 a.m., in 
room 2167, Rayburn House Office Building, Hon. Corrine Brown 
[Chairman of the Subcommittee] presiding.
    Ms. Brown of Florida. Good morning.
    Will the Subcommittee on Railroads, Pipelines, and 
Hazardous Materials come to order.
    The Subcommittee is meeting today to hear testimony on the 
Implementation of the Pipeline Inspection, Protection, 
Enforcement and Safety Act of 2006, and Reauthorization of the 
Pipeline Safety Program.
    We planned this hearing long before the Deepwater Horizon 
oil disaster. In fact, we planned this months ago, but it 
offers a perfect opportunity to examine the progress the 
Department of Transportation has made in implementing the PIPES 
Act as well as the safety performance of gas and hazardous 
liquid pipeline operators. Pipeline accidents are rare, but as 
we are seeing from the oil spill in the Gulf, they can be 
totally devastating to the economy and to the environment. The 
National Pipeline Safety Program was strengthened and 
reauthorized through 2010 through the Pipeline Inspection, 
Protection, Enforcement, and Safety Act of 2006.
    The act requires DOT and certain pipeline operators to 
develop and implement an integrity management program for 
distributing pipelines, installing excess-flow valves and 
ensuring that all low-stress pipelines are subject to the same 
standards and regulations and other hazardous liquid pipelines. 
It strengthened DOT's authority to ensure corrective action 
from pipeline operators and to help restore pipeline operators 
during disasters.
    The legislation also increased inspectors by 50 percent and 
reported improvement in the program but one that the DOT is 
still struggling to meet. I don't know why. I just had a job 
fair. I had 12,000 people there, so we have lots of people who 
want jobs.
    What is so disturbing to me is that a main mandate in the 
legislation regarding low-stress pipelines was included to 
address concerns that arose out of two BP oil spills on the 
North Slope of Alaska in 2006. This is the same company 
responsible for the Deepwater Horizon spill we are dealing with 
today. The same company that was responsible for the explosion 
in Texas that killed 15 oil workers and injured 170 others and 
was fined by the Occupational Safety and Health Administration 
as having organizational and safety deficiencies in all levels 
of the corporation. As a result, BP received the largest fine 
in OSHA's history--$87 million.
    This is also the same company that was found guilty of one 
of the felony counts for illegal disposal of hazardous waste in 
1999 and that as recently as May 5 was fined by the State of 
Washington for 13 serious safety violations. DOT also found, 
just prior to enactment of the PIPES Act of 2006, that BP had 
failed to properly maintain and inspect their pipelines in 
Alaska's North Slope. Eventually, BP was forced to replace 
those lines because of so much corrosion.
    This behavior is unacceptable. Let me repeat, this behavior 
is unacceptable. We need to change the mindset of corporate 
boardrooms and ensure that all pipeline operators are putting 
safety before profit.
    I want to also know what DOT is doing to ensure that the 
second phase of rulemaking for low-stress pipelines is fully 
implemented as Congress intended in the 2006 Act.
    Finally, we as a Committee need to hear what is working and 
what isn't working as DOT continues to implement this 
legislation.
    With that, I want the welcome today's panelists and thank 
them for joining us. I am looking forward to their testimony.
    Before I yield to Mr. Shuster, I ask that Members be given 
14 days to revise and extend their remarks and to permit the 
submission of additional statements and material by Members and 
witnesses.
    Without objection, so ordered.
    I yield to Mr. Shuster for his opening statement.
    Mr. Shuster. Thank you, Chairwoman Brown, for holding the 
hearing, and thank you for yielding to me.
    Welcome, Administrator Quarterman. Thank you for being 
here.
    In our last hearing on pipeline safety, which was held in 
June of 2008 we highlighted DOT's failure to meet key deadlines 
that were set in the Pipeline Safety Reauthorization bill 
passed by Congress in 2006. Today, we will revisit DOT's 
progress in implementing key provisions in the 2006 bills, and 
we will hear from industry groups and pipeline safety advocates 
on their thoughts for reauthorizing the pipeline safety 
programs.
    The Pipeline Inspection, Protection, Enforcement and Safety 
Act of 2006 expires on September 30 of this year. That leaves 
us only 4 months to move a pipeline safety reauthorization bill 
through the House and the Senate. Today's hearing will serve as 
a jumping-off point for us to begin the reauthorization 
process.
    I am happy to say that, after a slow start, DOT is well on 
its way to fully implementing the 2006 pipeline safety bill. 
The Department has recently completed a key rulemaking that 
addresses fatigue in pipelines, control rooms and the 
Secretary's prescribed minimum standards for pipeline Integrity 
Management Programs, and issued guidance on the installation of 
excess-flow valves.
    Overall, most people in the pipeline community feel that we 
are moving in the right direction on pipeline safety. The 2006 
bill made some significant changes as to how the Department of 
Transportation oversees the pipeline industry and to how 
pipeline companies operate their facilities.
    I expect that the next pipeline safety reauthorization bill 
will build on the successes of the 2006 bill. Many of the 
provisions from the bill were only implemented in the last year 
or two, so it does not make sense to rewrite those provisions 
until we have had a chance to evaluate their effectiveness. We 
should address the parts of the law that we know to be flawed, 
but for the most part I expect we will continue down the path 
the 2006 bill put us on.
    Again, I want to thank the Chairwoman for holding the 
hearing today, and I look forward to hearing our witnesses 
today.
    I yield back.
    Ms. Brown of Florida. I want to welcome Ms. Quarterman, who 
is the Administrator for the Pipeline and Hazardous Materials 
Safety Administration.
    Ms. Quarterman, just to remind you, your oral statement 
must be limited to 5 minutes. We have a Joint Session of 
Congress starting at 11 o'clock, so we want to allow enough 
time for Members to make their opening statements and for the 
second panel of witnesses to testify, but your entire written 
statement will appear in the record, so please proceed, and 
Members will get an opportunity when they ask their questions 
to give their opening statements, if that is OK.
    All right, Ms. Quarterman.

   TESTIMONY OF THE HON. CYNTHIA QUARTERMAN, ADMINISTRATOR, 
     PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION

    Ms. Quarterman. Thank you. Good morning.
    Chairwoman Brown, Ranking Member Shuster, Members of the 
Subcommittee, thank you for the opportunity to appear today. 
Your interest in pipeline safety is very much appreciated.
    Like Secretary LaHood, safety is my top priority at the 
Pipeline and Hazardous Materials Safety Administration. The 
lessons learned from past tragedies have significantly 
influenced the safety policies underlying the laws and 
regulations related to pipeline safety.
    Thanks to Congress and especially this Subcommittee, the 
Department has made tremendous strides in improving its 
pipeline safety program. I am pleased to update you on PHMSA's 
progress in implementing the mandates from the PIPES Act of 
2006 and its role in maintaining a safe and reliable pipeline 
transportation network.
    Thanks to your help, PHMSA has developed a forward-leading 
Pipeline Safety Program. A reauthorized program in 2010 
promises to build on that progress. PHMSA has worked 
aggressively to respond to congressional interests and 
implement the PIPES Act. It has made significant progress in 
implementing its statutory requirements to build safer 
communities. PHMSA has been working with many governmental 
partners to promote safety, such as the National Transportation 
Safety Board, the Department's Office of Inspector General, and 
the Government Accountability Office, implementing strategic 
approaches to address their safety recommendations.
    Since its last reauthorization, PHMSA has gone from a high 
of 16 open NTSB recommendations to today's low of nine open 
recommendations, having closed seven since the beginning of 
this year. Of the nine remaining open recommendations, none are 
classified as unacceptable. Several recommendations should 
close before the year's end. There are no outstanding IG 
recommendations for the pipeline program, and the two 
outstanding GAO recommendations should also be closed later 
this year. PHMSA has made great progress in strengthening its 
industry oversight program and increasing the transparency of 
its enforcement processes.
    PHMSA's pipeline staff has been growing and continues to 
grow. By the end of fiscal year 2010, we expect to have 206 
Federal pipeline safety personnel on hand, an increase of 65 
over 2006. PHMSA has instituted a new, more aggressive 
recruitment strategy to promptly seal vacant inspection and 
enforcement positions, with incentives that will assist us in 
overcoming obstacles in obtaining the most qualified candidates 
possessing specialized skills.
    PHMSA has taken advantage of higher penalty authority by 
imposing and collecting larger penalties where appropriate. 
PHMSA has set records in its enforcement program, processing 
$19 million in civil penalties since 2006, on average $183,000 
per proposed civil penalty, compared with $57,000 before 2006.
    PHMSA has added integrity management requirements to 
natural gas distribution networks, similar to those required of 
gas transmission pipelines, to address pipelines where safety 
risk most impacts citizens.
    PHMSA has also worked to improve the internal operation of 
pipeline companies' control rooms. Operators are now required 
to establish human factors, management plans and implement new 
requirements on graphic displays, alarm systems and controller 
training. These actions remove the pipeline program's control 
room standards from the NTSB's top 10 list and replaces it with 
NTSB praise. PHMSA has modified its Web site and databases to 
provide on-the-spot information to its stakeholders.
    PHMSA has established valuable State partnerships on 
oversight, emergency response and damage prevention. Funding to 
State pipeline safety programs has increased. In 2010, PHMSA 
will cover 54 percent of State pipeline safety programs' cost, 
totaling $40.5 million, compared with 45 percent coverage in 
2006. We project a further increase to 65 percent in 2011.
    PHMSA and its partners have done a good job helping reduce 
the number of pipeline incidents related to excavation damages 
over the past few years. Since 2006, excavation damage has 
decreased from 37.5 percent as the cause of serious incidents 
to 12.7 percent today.
    All of these accomplishments the agency is proud of. We are 
looking forward to working with Congress to address these 
issues and to reauthorize the pipeline safety program.
    Thank you.
    Ms. Brown of Florida. Let me just say that, if we don't 
finish the questions and your statements in the hour and a half 
that we have, we will come back after the 11:00 to 12:00 that 
we have to officially break for the Joint Session.
    Let me just begin by saying that, in 2007, the Bush 
administration submitted a proposal to Congress to eliminate a 
requirement included in the Pipeline Safety Act of 2002 for gas 
transmission operators to reinspect their pipelines every 7 
years. It seems that the Obama administration agrees with that.
    Given the devastation that has occurred, what is the 
administration's position on the elimination of the 7-year 
inspection?
    Ms. Quarterman. The current standard, Lady Chairman, is 7 
years, and that is the period that the Obama administration has 
been enforcing and plans to continue to enforce. At this point 
in time, we do not have a position on whether that period 
should be changed.
    I recognize in our testimony there is an indication 
referring to the report. That was something that has not been 
reviewed in any detail at this point. If someone were to 
propose in legislation a change in the period, we would take a 
position at that time. At this point, we have no position on 
that.
    Ms. Brown of Florida. Change it from the 7-year----
    Ms. Quarterman. Correct.
    Ms. Brown of Florida. --to maybe increasing it to 5 years? 
I mean it goes both ways.
    Ms. Quarterman. Right. My staff has said that there might 
be reason to shorten the time period for some companies, and my 
take on that is the 7-year is a maximum, not a minimum, so we 
are fully able to do that within the existing law.
    Ms. Brown of Florida. So you have the authority to do 
that----
    Ms. Quarterman. Uh-huh.
    Ms. Brown of Florida. --if you had someone who was 
constantly violating the intent?
    Ms. Quarterman. Right. If their Integrity Management 
Program required a shorter period because of the integrity of 
their pipeline, they certainly could do it more frequently.
    Ms. Brown of Florida. Mr. Shuster.
    Mr. Shuster. Thank you.
    My question deals with the number of inspectors. There is 
authorized to have 135. You have less than 100, I believe. Why 
are there so many vacancies? Can we do with 100 and not go to 
the 135 number and save some money if we can still do it 
effectively and efficiently?
    Ms. Quarterman. At present, there are 104 inspectors on 
board, and we recognize there has been a problem filling 
vacancies within the pipeline program.
    One of the things the Deputy Secretary said to me, upon 
accepting this position, was the fact that those vacancies were 
there and we needed to ensure that they were filled as quickly 
as possible. As a result of that, I have been having monthly 
meetings with the staff on both the pipeline and the HAZMAT 
sides of the agency to bird-dog what is happening with the 
openings, and we are seeing many people come in, and we have a 
plan going forward. It is part of the executive management 
performance measures that they fill those vacancies before the 
end of the year.
    Mr. Shuster. With 104, are we hitting our goal of doing the 
inspections that are necessary? I guess my question is: Do we 
need 135? I mean a lot of times you try to figure out in an 
operation 135 seems like the right number. Then, lo and behold, 
you find out, ah, we don't need that many. That is my question.
    Ms. Quarterman. I believe that we do need--I think the 
number may be 136.
    Mr. Shuster. It is 135. OK.
    Ms. Brown of Florida. It is 135, but keeping in mind, if 
you don't mind me interjecting, they only inspect 15 percent of 
the lines. Given the problems that we have, maybe they need to 
be doing more.
    Do you all have the authority to inspect additional 
segments?
    Ms. Quarterman. We certainly have the authority to inspect 
the pipelines that are subject to our jurisdiction, yes.
    Mr. Shuster. Recently, you issued a final rule on control 
room management. Do you feel that that rulemaking will 
adequately address the issue of fatigue in the pipeline control 
rooms?
    Ms. Quarterman. Well, we certainly hope that it does.
    The issue of fatigue is a difficult one and one which not 
just PHMSA but many organizations within the Department of 
Transportation are dealing with, and we are sitting on a number 
of internal panels to address those issues.
    The current rulemaking requires a company to set a maximum 
hour of service, which we think is appropriate, and it also 
importantly requires that a company allow for 8 hours of sleep 
by a person who is working there, but it allows each company to 
tailor its particular operations with respect to that. It is 
something, when we visited with the NTSB, they were very--they 
thought it was forward-looking and forward-thinking. They were 
very positive about that approach. I think the devil is in the 
details, as it is with anything, and we have the opportunity to 
inspect companies and see exactly what they do with that 
requirement, and we will be looking at it closely.
    Mr. Shuster. It is my understanding that a lot of these 
control room operators are working 12-hour shifts, 3 days on, 4 
days off. They have put in treadmills and machines in there, 
you know, to allow them to get a little blood flow going, and 
there are quiet rooms so they can take naps if they need to. So 
it seems to me they are doing a lot of the right things, and 
from what we are hearing from the workers, they like the 3 days 
on/12 hours. That seems to be, you know--make a happy 
workforce, which a happy workforce seems to do a better job. 
So, anyway, I just wanted to point that out.
    The other question I had was--I know now it is 7 years we 
are testing pipelines, and I know, in speaking to some folks in 
the industry, there was some thought to go to a risk-based 
testing program in high-population areas, in sensitive 
environmental areas,you know, how old the pipeline is and what 
is flowing through it; instead of doing 7 years, go to a risk-
based system where some places are going to be tested even more 
frequently than 7 years and some maybe less when there is not 
considered to be high risk.
    What are your thoughts on that?
    Ms. Quarterman. Well, I understand that is the position of 
the prior administration, that they did file a report with this 
Committee, along with, I think, similar recommendations from 
the GAO, suggesting that a risk-based system should be adopted. 
It is not something that I have had an opportunity to review at 
this point.
    Mr. Shuster. OK. Well, I hope you take a look because that 
is something that, I think, we really ought to--it is one of 
the sophisticated tools we have today to determine risk, to 
determine, you know, the various criteria to testing. I hope it 
is something we will consider because I think it would be--
again, 7 years seems like an arbitrary number when you have 
higher risk areas that may need it more frequently.
    Finally, how successful do you believe the 811 ``Call 
Before You Dig'' campaign has been? Do you have any numbers on 
that?
    Ms. Quarterman. I am sorry?
    Mr. Shuster. The 811 ``Call Before You Dig,'' was that a 
success?
    Ms. Quarterman. Oh, it is absolutely a success.
    In my opening statement, I mentioned the drastic decrease 
in the number of incidents of excavation damage associated with 
serious incidents, and it is really something that PHMSA 
developed and has been working with all stakeholders to move 
forward, and it is absolutely a 100 percent success. Hopefully, 
we can find other initiatives like that to go forward with.
    Mr. Shuster. That is great to hear. I am living proof. I 
called 811 before I did digging in my yard, and no utilities 
were damaged, no telephone lines. So if I can do it, anybody 
can do it.
    Thank you very much for being here. I appreciate your 
testimony.
    I yield back.
    Ms. Brown of Florida. Mr. Teague.
    Mr. Teague. Thank you, Madam Chairwoman, for hosting this 
meeting this morning and for allowing me to be here.
    Also, thanks to all of the witnesses for showing up today 
and for taking the time to visit with us and to give us the 
information that we want.
    As everyone knows, pipelines are critical to delivering 
energy to people all across the United States, whether it is 
natural gas or gasoline or whatever the commodity may be, and 
without the pipeline system that we have, operating the way it 
does, we wouldn't be able to enjoy the quality of life that we 
enjoy.
    As we are going to have an increase in the usage of natural 
gas, hopefully for fuel and things, then the pipelines are 
going to play a much bigger role and become much more important 
in getting the natural gas to the sites that we need; but at 
the same time, you know, we need to be sure that safety is 
first and foremost in everything that we do, and I think that 
this hearing today is critical to provide the effective 
oversight for pipeline safety regulation that we need to do.
    The 2006 reauthorization was a comprehensive bill that 
actually resulted in the development of a lot of new safety 
regulations. Most of those have been implemented or are in the 
process of being implemented, I guess, now, and I hope that 
where these safety regulations are working that we allow time 
for them to continue to work for us to see how they are working 
before we change them.
    I did have a couple of questions, and one of them is about 
the Integrity Management Program. You know, I know that the 
current program mandates 7 years, and I think, in 2006, when 
they came up with that number, it was an arbitrary number 
because the House recommended 5 and the Senate 10.
    But do you think that--should it be on a set time frame or, 
with the things like the intelligent PIGs that we have now to 
run through the pipelines, should we just use that information 
rather than have a time frame and take into consideration 
population density and things like that?
    Ms. Quarterman. Well, a few years ago, the administration 
submitted a report, suggesting, along with the GAO, that a 
risk-based system should be put in place. At this point in 
time, I have not had the opportunity to review in any detail 
what is in that report, and the administration, therefore, has 
no position on whether it should be 7 years or risk-based. I 
will take an opportunity to do that if it is something that the 
Committee would like us to do.
    It seems to me that now may be a better time than earlier 
to do a more thorough review since we are beyond sort of the 
first series of tests to see what the results have been and 
what the current integrity is of the gas pipeline system, but 
it is not something that I am prepared to commit to one way or 
the other here today.
    Mr. Teague. OK. I appreciate that answer, but I would like 
for you to--you know, while we are giving the system that we 
are operating in now an opportunity to work, if we could check, 
you know, about the data that they are able to compile rather 
than intelligent PIGs through the line and everything, and 
maybe if we did go to a risk-based, if we are able to truly 
constantly access the risk-based, then I think that, you know, 
it would be better because we are going to have more lines as 
we go toward making natural gas a transportation.
    Are there a lot of discrepancies as you go across the 
country, a patchwork type of regulation from State to State, or 
have most of the States come in line with Federal regulations?
    Ms. Quarterman. Well, all of the States are required to 
adopt the baseline regulations from the Federal Government with 
respect to pipeline safety. There are differences in some 
issues from State to State. For example, with respect to damage 
prevention issues, not all States have adopted full bore 
enforcement requirements as we might like, but we are working 
with them to assist them to do that.
    Mr. Teague. OK, because I do think that that is important. 
You know, it is kind of like pumping your PIG down the line and 
different sizes of lines all along the place. It creates a lot 
of problems, and if we have different regulations as we go from 
State to State, that creates a lot of problems. At the same 
time, I understand States have the right to protect their 
citizens in the way that they deem best, but do you see 
particular economic challenges coming to the gas utilities?
    Ms. Quarterman. I'm sorry. What was that?
    Mr. Teague. Do you see any particular economic challenges 
coming to the gas utilities as they implement these additional 
lines and things so that we can have the natural gas available 
at fuel stops?
    Ms. Quarterman. Well, we are working closely with members 
of industry and the natural gas industry in terms of adopting 
some of these new requirements; for example, the distribution 
integrity management plan as well as the new control room 
requirements, to assist them in ensuring that they are able to 
adopt these requirements without a huge economic impact.
    Probably the biggest impact on natural gas economy at this 
point is the increase in the Marcellus and other shale plays 
throughout the country where we are seeing much more gas coming 
into the natural gas system than was previously expected.
    Mr. Teague. You know, another question that I have--and I 
think it might be better to get it from the industry--but you 
know, I think a lot of people don't realize how many pipelines 
we have, because they are hidden and we don't have to look at 
them like we do other things, but you know, if we could have 
some information for our Committee and for the public in 
general about, you know, how much it costs to transport a 
barrel of oil in a truck, on a train or down a pipeline, say, 
from Houston to Chicago or something like that, if we had an 
apple-to-apple comparison about, you know, the benefits of the 
pipeline versus the railroad or the highways, I think that 
would be pretty beneficial, not just to our Committee but for 
the general population as well.
    Ms. Quarterman. Well, I am sure the industry can supply you 
with financial information. I can tell you that the pipeline is 
far cheaper.
    Mr. Teague. Hopefully, some of them sitting behind you 
picked up on that, and we are going to have the information 
pretty soon. Thank you for your testimony today.
    Madam Chairwoman, thank you.
    Ms. Brown of Florida. Thank you.
    Mr. Cao.
    Mr. Cao. Thank you very much, Madam Chair.
    I have a question concerning the pipelines along the 
coasts. As you know, many of the pipelines that run from some 
of the offshore rigs to some of the refineries in Louisiana run 
through the delicate marshes and the wetlands.
    I just want to know what procedures have you implemented 
since the oil spill in the Gulf to better monitor. What 
procedures have you implemented in order to more expediently 
address any kind of leaks that would come out from these 
pipelines to prevent disasters from happening?
    What I have seen so far with our response to the oil spill 
in the Gulf and how the devastation has impacted the people of 
New Orleans and the Second District, it seems to me that we as 
the Federal Government seem to have a position where we are 
saying our role is not involved in trying to fix the leak, in 
trying to address the spill, that it is the private sector's 
duty, and therefore, we minimally get involved. I am not sure 
whether or not that is a position that we should be taking. So 
my question to you is:
    What procedures have you implemented? What problem areas do 
you see that you need to address with respect to the pipelines 
that run through the marshes and the wetlands to prevent future 
disasters?
    Ms. Quarterman. Well, let me begin by saying that the 
incident in the Gulf is an absolute tragedy, and my heart goes 
out to the families of those people who have lost their lives 
there and to those whose livelihoods continue to be affected. 
As to pipeline safety in the Gulf of Mexico, PHMSA is 
responsible for those pipelines that are considered 
transportation pipelines coming off of the Gulf of Mexico.
    The difference between a pipeline and a drilling facility 
is very large. A pipeline, a lot like a garden hose, can be 
shut off and on. It has valves throughout it that can stop any 
oil problem----
    Mr. Cao. That is what we are saying with the blowout 
preventer. There are mechanisms to shut off the valves. There 
are methods to shut the oil flow, and as we saw in this 
incident, everything has failed. So do you have a plan of 
action for a worst case scenario in which all of those safety 
mechanisms that you have along the pipelines fail?
    Ms. Quarterman. We obviously do many drills for oil spill 
containment, but again, a pipeline has a limited quantity of 
oil within it. It is not a reservoir full of oil. It has a 
limited--there is a known quantity of oil within it, and there 
are valves throughout it. If one fails, the next one can close, 
so at some point it can be shut off completely; but, yes, we do 
have plans in place to address a spill.
    Mr. Cao. And do you have plans in place to address 
expedient cleanup of a spill?
    Ms. Quarterman. Yes.
    Mr. Cao. OK. Those are all the questions that I have. Thank 
you very much.
    Ms. Brown of Florida. Thank you.
    Maybe I can help clarify a little of his question because, 
basically, it was not your agency's responsibility at that very 
moment. It would have been if the pipeline was finished and the 
oil was being transported back to shore, it would have been our 
responsibility.
    Ms. Quarterman. Correct.
    Ms. Brown of Florida. But at the point it is right now, 
what agency's responsibility was it to make sure that the 
problems that incurred did not happen?
    Ms. Quarterman. The Department of Interior is responsible 
for the oversight of offshore oil and gas production and 
development.
    Ms. Brown of Florida. OK.
    Ms. Quarterman. Exploration as well, which was this 
instance.
    Ms. Brown of Florida. Who had the responsibility for 
ensuring that the safety mechanism--it was not the Coast Guard. 
Was it just----
    Ms. Quarterman. For the oversight, it is the Department of 
Interior. For the cleanup, it is the Coast Guard. The actual 
responsibility to ensure that safety mechanisms were in place 
rests with the operator.
    Ms. Brown of Florida. Well, I am going to Mr. Walz, but 
what we need to do is to--as we look at this issue--and no one 
at this point is trying to blame anyone but to make sure we 
have a handle over how we can work better together to ensure 
that this problem does not happen that would devastate Florida 
and the entire East Coast.
    Mr. Walz.
    Mr. Walz. Thank you, Madam Chair and Ranking Member, and 
thank you, Ms. Quarterman, for being here today.
    Nothing we talk about today can be outside of that frame of 
Deepwater Horizon--that is obvious--of looking at where 
responsibilities lie. Yesterday, a very interesting point was 
brought up--I think we all knew it--but to hear it and watch it 
yesterday, as Mr. McKay was sitting down there, this idea of 
industry self-certification and MMS's procedure on that to 
listen to the folks say, We carried out all inspections under 
the watchful eye of BP, there was silence in here. That is not 
demonizing, but the fact of the matter is: Where was our 
watchful eye?
    I would like you to explain to me, if you could, what is 
PHMSA's integrity management process? How do you know this is 
getting done, and how do you know it is happening? It is one 
thing to have it on paper, but I don't really care what is on 
paper. I care that that pipeline is safe. How do we know for 
certain that the paper is matching up with the reality of the 
inspections?
    Ms. Quarterman. Absolutely, and I agree with you 100 
percent.
    Let me say first that the first responsibility is on the 
operator. They have to be responsible and take ownership for 
the pipeline safety. It is the responsibility of PHMSA to 
ensure that they take that requirement seriously. We have more 
than 100 inspectors who go out and review the integrity 
management plan that they have put in place and ensure that 
they have been, for example, filling places in the line where 
they should be, because there have been holidays in the line, 
that they are going and doing that.
    We, of course, look at the Integrity Management Program 
itself, but we have maybe six or seven different kinds of 
inspections that we do. If a pipeline is being constructed, we 
go out during the construction phase and ensure that the 
construction is being handled well.
    Mr. Walz. So there is physically someone on the ground? It 
is not just somebody checking to see if the box has been 
checked. There is somebody to see if the pipeline has been 
installed correctly?
    Ms. Quarterman. Yes, there is.
    Mr. Walz. How many violations have you found with your 
inspectors? During the integrity management process, how many 
violations have there been or reprimands?
    Ms. Quarterman. I would have to go and provide that for you 
in the record. I don't know the answer to that question. There 
have been many.
    Mr. Walz. OK. Then is there follow-up on that----
    Ms. Quarterman. Absolutely.
    Mr. Walz. --to correct them?
    Ms. Quarterman. Absolutely.
    Mr. Walz. Then we would know the numbers of how long it 
takes to correct them and whether they have been corrected and 
brought up to standard?
    Ms. Quarterman. Absolutely.
    Mr. Walz. So you're comfortable that the process is 
working?
    Ms. Quarterman. I believe it is.
    Mr. Walz. How many miles do we inspect of the total miles?
    Ms. Quarterman. There are about 2 million-plus miles of 
pipeline in the United States. Much of that is inspected by our 
State partners. Our State partners inspect the intrastate lines 
and many of the gathering lines within their States. PHMSA's 
oversight, or inspection, miles are a fraction of those.
    Mr. Walz. Do you know if these State partners are feeling 
any pinch from State budgeting as we see 49 of 50 States 
experiencing pretty serious troubles? Are they being cut or 
impacted by that?
    Ms. Quarterman. They are absolutely feeling the pain.
    Under the Pipeline Safety Act, we do have a series of 
grants that we can use to help the States fulfill their 
pipeline safety requirements. Very recently, we suspended a 
requirement in that law so that, at least for 2009, they would 
be able to get more money from the grants that are available, 
but we are watching that very closely and trying to give them 
as much money as we can. Right now, we are funding more than 50 
percent of the State pipeline programs through the grants.
    Mr. Walz. So, if this gets worse and the States go and we 
are not able to authorize on this site, there will be a gap 
then in inspection on this? That potential lies there?
    Ms. Quarterman. There is a potential that State programs 
could be cut, and we could not fund enough to fill in the gap. 
Ultimately, if the State programs are not able to do what they 
should, we are here to backstop them.
    Mr. Walz. Do you have a contingency plan to do that?
    Ms. Quarterman. Well, when States step out from the 
program, we do. We step in.
    Mr. Walz. OK, because my State alone is facing $9 billion 
next year, and I don't know where they are going to find that.
    So, with that, I yield back, and I thank you again for 
being here.
    Ms. Quarterman. Thank you.
    Ms. Brown of Florida. Would you put up the picture of 
Florida as I call on Mr. Buchanan from Florida? That is Mr. 
Buchanan's great State there.
    Mr. Buchanan. Thank you, Madam Chair.
    Ms. Quarterman, in terms of PHMSA's responsibility 
regarding construction on new pipelines, what is your exact 
role? Are you involved from the beginning to the end or can you 
give me some sense of that?
    Ms. Quarterman. We are responsible for the oversight of 
construction, making sure that the materials are in line with 
the requirements in our act, making sure--I mean we don't 
determine the siting of a particular pipeline. We are there 
only with relation to the construction of the pipeline and the 
oversight of that.
    Mr. Buchanan. In terms of your work with the FERC on the 
construction of a new pipeline, how do you coordinate? What is 
your working relationship with that organization?
    Ms. Quarterman. I think it can be improved. We are not 
usually involved as a coordinator when FERC does it--
coordinating agency when FERC does some of its work on the gas 
side. On the oil side, there is no requirement that FERC be 
involved in the siting of a new pipeline.
    Mr. Buchanan. In terms of improvement, what is your 
thought? I mean what would you do to improve it, the 
relationship? What do you think the improvement needs to be? 
Where does it need to be addressed?
    Ms. Quarterman. Well, the first step, which has not 
happened yet, is I would like to sit down and meet with the 
Chair of the Commission to talk about current working 
relations. It is something that is on my agenda, but it has not 
happened yet. I think we would like to be more involved in the 
decisions that get made there. Often, we just have the results, 
and then we have to go with it from there, so----
    Mr. Buchanan. Yes. I think if you want to improve the 
relationship, you have got to get that first meeting and get 
that going.
    Ms. Quarterman. Yes.
    Mr. Buchanan. I yield back, Madam Chair.
    Ms. Brown of Florida. Thank you.
    Mr. Arcuri from New York. You can take down that Florida 
picture.
    Mr. Arcuri. Thank you, Madam Chair, for conducting this 
hearing.
    Ms. Quarterman, thank you very much for being here.
    Yesterday's hearing was, I think, very enlightening to many 
of us. It certainly opened up some issues that I am very 
concerned with. One of the things that we saw and learned 
yesterday is that the MMS requires an oil spill response plan 
for drilling.
    Do you have a similar type of response plan for each 
particular pipeline in case there is a leak?
    Ms. Quarterman. We do.
    Mr. Arcuri. So, if there were a natural gas pipeline--for 
instance, in my area, we have the Millenium Pipeline.
    Are they required to have a response plan on file with you?
    Ms. Quarterman. Natural gas is different from oil. There is 
no natural gas response plan requirement that I am aware of.
    Mr. Arcuri. OK. So, if there were a leak in a pipe--let's 
say a natural gas pipeline--what would the response be? How 
would we determine whether or not, you know, there were 
problems that were going to result to the environment or to the 
water table as a result?
    Ms. Quarterman. Well, the operator does have to have a 
notion of how to respond to that as part of his operating 
procedures, but it is not within the context of the oil spill 
response requirement.
    Mr. Arcuri. So, do you review the plan that is on file for 
the pipeline?
    Ms. Quarterman. We do.
    Mr. Arcuri. All right. Do you make a determination whether 
or not that is adequate?
    Ms. Quarterman. Yes.
    Mr. Arcuri. All right. What happens if you make a 
determination that it is not adequate?
    Ms. Quarterman. Then it has to be redone.
    Mr. Arcuri. OK. Do you set specifications in terms of what 
the criteria are to make it satisfactory?
    Ms. Quarterman. Yes, we do.
    Mr. Arcuri. Now, one of the concerns that I had yesterday 
from comments is, you know, we constantly practice fire drills. 
We constantly practice HAZMAT cleanups for different teams.
    Is there a process or a procedure that you require or that 
you in some way lay out for practicing a response to different 
possible catastrophes, and can you tell us about that?
    Ms. Quarterman. Absolutely.
    In fact, there was a tabletop exercise going on with 
respect to an oil spill someplace in the country, almost 
simultaneous with this spill in the Gulf of Mexico, and it is 
just that. It is an exercise where all the parties who would be 
responsible for responding get together and say, this is what 
happened. There was a spill in North Dakota, and here is how 
much was released. Then they coordinate how they should respond 
to that given that situation.
    Mr. Arcuri. Are you comfortable with the process that you 
have in place to respond to a potential catastrophe, as they 
were calling it yesterday, a catastrophic situation?
    Ms. Quarterman. Well, I don't think it is possible to in 
advance of a catastrophe really be 100 percent prepared. I 
think we are doing a lot to be prepared. I think we should 
probably take a second look at it given the event in the Gulf, 
but we certainly are trying to be prepared.
    Mr. Arcuri. I have just one more question.
    One of the other things that concerned me is this whole 
idea of worst case scenario. What I may contemplate as a worst 
case scenario may not be the same as what you contemplate as a 
worst case scenario, and what the operator of a particular 
facility may contemplate as a worst case scenario may be 
significantly less because they want it to be significantly 
less.
    So who makes the determination as to what the worst 
possible case scenario is? You know, how do you oversee that to 
make sure that the worst case scenario is truly the worst case 
scenario?
    Ms. Quarterman. This is getting deeper than I can go in 
this area, but I believe the answer is that the agency--well, 
the operator may propose a worst case scenario, and the agency 
has an opportunity to say that is not adequate, but I will have 
to get back to you on that particular question.
    Mr. Arcuri. OK. If you could, I would appreciate that very 
much. Thank you very much for your cooperation.
    I yield back the balance of my time.
    Ms. Brown of Florida. Thank you.
    Mr. Brown.
    OK.
    Does the Chairman of the Full Committee want to say 
something at this time or do you want me to?
    Yes, sir.
    Mr. Carney.
    Mr. Carney. Thank you, Madam Chair.
    Thank you for being here, Ms. Quarterman. I have a number 
of questions along the lines of my colleagues'.
    Mr. Arcuri, Mr. Shuster and I are in the Marcellus Shale 
formation area ourselves. You know, Pennsylvania is a little 
more aggressive in developing than New York right now, but I 
think that is probably going to change at some point, right, 
Mr. Arcuri?
    How many more miles of pipeline do you anticipate being 
created because of the new discoveries in the shale region, in 
the Marcellus Shale region?
    Ms. Quarterman. Perhaps someone from industry could address 
that. I am not sure how many more--we expect quite a few more 
miles of pipeline as a result of those plays, absolutely, 
especially in Pennsylvania.
    Mr. Carney. So, if it is quite a few, I will say, maybe, 50 
percent more-ish?
    Ms. Quarterman. In Pennsylvania or across the board?
    Mr. Carney. Well, across the board. You know, whatever. The 
point is----
    Ms. Quarterman. Some huge amount, yes.
    Mr. Carney. Some huge amount, and we are already 
understaffed in inspection. What are we doing to ramp up for 
the increased miles that we all anticipate, that we all know 
are coming?
    Go ahead.
    Ms. Quarterman. I was going to say the State of 
Pennsylvania does have a program where they would be the ones 
responsible for being the primary inspector within Pennsylvania 
except with respect to gathering lines. We have been working 
with the State of Pennsylvania to expand their authority so 
that they might be responsible for what we expect, primarily in 
Pennsylvania, to be gathering lines associated with this new 
play. One would hope that, as a result of that, they would also 
be asking for additional personnel. Certainly, at the Federal 
level, we have been requesting additional people going forward.
    Mr. Carney. Well, if you are working in Pennsylvania, then 
you know that Pennsylvania is almost like every other State in 
the Union--you know, broke. It doesn't have the resources. You 
said that you backstop States that are broke and that don't 
have the resources, but it appears that you, too, don't have 
adequate resources. I mean you are not even fully staffed for 
what you are required to do now, and then going forward to 
backstop States that don't--you know, and you have got a lot of 
States. You have got 49 States that are in arrears with 
inspectors who are probably dropping off, you know, and we are 
making all kinds of concessions now.
    I think industry is going to get a pass on this somehow, 
and the problem is we rely on them. We rely on their self-
certification. We saw what happened, obviously, and we know 
what is going on in the Gulf. You know, we can talk about that 
all the livelong day.
    I want to talk for a minute about high-consequence areas 
and who gets to define a high-consequence area.
    Can you answer that?
    Ms. Quarterman. There is a rule that defines the high-
consequence area in terms of how many people live there, what 
kind of environment they are in, that kind of thing, so that is 
specified.
    Mr. Carney. OK. How many people live in an area--I mean 
when is it not high consequence? Because I represent a rural 
area.
    Ms. Quarterman. On the gas side, a rural area would be less 
than 10 households, probably.
    Mr. Carney. Less than 10 households. OK.
    So we are making some determination that 11 households is 
high consequence, and 10 isn't. Because I live in a village 
with, maybe, 12 or 14 houses. So am I high consequence or low 
consequence or moderate consequence?
    Ms. Quarterman. Well, if you are 12, you are probably high 
consequence, or you are covered.
    Mr. Carney. OK. So my neighbors down the road who are in 
the nine-house area are low consequence?
    Ms. Quarterman. Well, I don't want to use the words ``high 
consequence,'' really, but you are covered by the rulemaking--
--
    Mr. Carney. It is an unofficial term, I think.
    Ms. Quarterman. Yes.
    You are covered by the rule that relates to the gathering 
pipelines in rural areas. I don't think the language is ``high 
consequence'' for that particular rulemaking.
    Mr. Carney. Who helps define them? Is it the industry 
working with PHMSA or who makes this determination? Who defines 
nine or 10 houses? Is it the industry? Is it PHMSA? Is it the 
government? Who is making this determination?
    Ms. Quarterman. It is a combination of the two.
    Mr. Carney. OK. All right.
    Now, Homeland Security, DHS, has a role to play in this, 
too, as I understand. You know, PHMSA is in charge of safety. 
Homeland Security is in charge of security.
    Ms. Quarterman. Correct.
    Mr. Carney. I was at a hearing--we conducted a hearing from 
the Homeland Security side a few weeks ago in Florida. That 
distinction, according to the first responders on the ground, 
who had to respond to a natural gas pipeline leak, said it 
caused confusion; it caused a lack of adequate reaction time. 
You know, we had a pipeline spill that went on for 44 hours, I 
think they said, because there were no clear lines of 
communication between PHMSA, DHS, and the first responders on 
the ground.
    How do we address that?
    Ms. Quarterman. Well, TSA has the primary responsibility 
for security issues with respect to pipelines.
    Having said that, I have to say that we work very closely 
with them on pipeline issues, and we often go with them to 
inspect facilities, and we are in daily contact with TSA on 
pipeline issues. Whenever there is a spill of any consequence, 
we are talking to them.
    Mr. Carney. That is not according to the first responders. 
I mean, in a real-world scenario, you talk about tabletop 
exercises, which, respectfully--you know, they are OK, but they 
don't necessarily shake out the lines of command on the ground. 
When we had a real-world example, we didn't have a chance. You 
know, the report was bad. I mean the first responders said that 
this was a distinction without a difference as far as they were 
concerned.
    How do we address that? You know, what are your 
recommendations to address that?
    Ms. Quarterman. Well, obviously, we need to find out what 
the circumstances are of the particular instance that you are 
referring to and try to assign someone as the lead. I don't 
believe that PHMSA was the lead in this particular instance, 
but there needs to be clear demarcation of who is the lead.
    Mr. Carney. The guys on the grounds don't care.
    Ms. Quarterman. I understand that, but on the ground there 
needs to be a standard so that everybody knows that, when 
something like this happens, X is the lead, whoever that may 
be, and that is the person who is in charge. I mean it sounds 
like it was not well-coordinated, because nobody knew who 
should be the individual or the organization in charge.
    Mr. Carney. That is right.
    I am sorry. Thank you for the indulgence, Madam Chair.
    Ms. Brown of Florida. Thank you.
    Let's see if we can clear this up.
    The National Association of Pipeline Safety Representatives 
asked the Secretary of Transportation to grant the Pipeline Act 
to provide the States with more grant funding, and I understand 
in the past it was like 80-20.
    What is the status of that? Because, back to his question, 
you know, the States don't have any money, and we need our 
partners fully engaged, and at this time, you say you waived it 
for, what, 2009?
    Ms. Quarterman. 2009, yes.
    Ms. Brown of Florida. Well, this is 2010. What is the 
status of that request?
    Ms. Quarterman. Well, we are sort of a year behind in terms 
of how it works, so the 2010 request has not come forward yet 
so.
    Ms. Brown of Florida. Does the 2009 request----
    Ms. Quarterman. The 2009, the request affects the 2009 
periodic because of the way it is funded forward; 2010 is not 
yet up for funding, our request for suspension is not yet ripe 
for that period.
    Ms. Brown of Florida. OK. But what is the status of it? Are 
we going to grant this waiver to get our partners busy?
    Ms. Quarterman. I don't think we have a request for a 
waiver for that next year. When the next year comes, then we 
will, we will consider that, yeah.
    Ms. Brown of Florida. OK, I guess I am confused. My 
understanding, you waivedfor what year? How many grants have 
you granted, for example Pennsylvania and other States?
    Ms. Quarterman. There are 50, I believe, State partners who 
get funding, and this year, in 2010, they are being funded for 
2009, so, in this year, 2010, we have waived or suspended the 
requirement. Now next year, they can ask again to be suspended.
    Ms. Brown of Florida. OK. Ms. Markey.
    Ms. Markey. Thank you, Madam Chair.
    Thank you for being here. You mentioned that there is over 
2 million miles of pipeline that you are responsible for 
regulating. What percentage would you say that you are able to 
actually inspect that are not in high consequence areas?
    Ms. Quarterman. I don't have the actual breakdown of what 
percentage is in high consequence areas versus not. There are 
about 173,000 miles that are hazardous liquid and a large 
percentage of those are in high consequence areas. The 
remaining distribution pipelines are about 2 million miles, and 
most of those are high consequence areas. Transmission 
pipelines, about 323,000 miles, and it is a much smaller 
percentage. I don't know what for transmission pipelines.
    Ms. Markey. I also want to ask you a little bit about your 
waiver policy. TransCanada has asked recently for a waiver for 
its proposed pipeline. It is going to run 2,000 miles from 
central Alberta into the Gulf of Mexico. And I know that they 
have asked for a waiver to have thinner pipes.
    What is--the concern being, we heard extensively that MMS 
has used industry standards as they are developing their 
regulations, meaning industry essentially writing their own 
regulations. So this is a concern when industry, when companies 
come in and ask for waivers. So can you talk a little bit about 
the criteria you look at when you are looking at waivers to 
existing policy? And what standards do you use?
    Ms. Quarterman. Certainly. There are special permits that 
have, or waivers, as you call them, that may be requested. Back 
in 2009, there were published procedures for how waivers might 
be granted. At current, there are about 85 active special 
permits. About 31 are pending before us. These are, in our 
view, they have to meet an extremely high standard in that they 
have to meet or exceed the pipeline safety requirements. They 
take about 8 months to 2 years for us to review these permits. 
They are filed in the Federal Register, so that there is public 
comment on them. And when they are granted, there are a number 
of conditions and requirements that are added that are beyond 
those that are in the current regulations. We analyze the 
request.
    There are things that are obviously completely off the 
table that are not acceptable. We do a review of the fitness of 
the operator who is making a request. We look at the pipeline 
segment that is at issue and its history of failure. We look at 
the enforcement history of the company and whether or not they 
have any outstanding actions, what their safety profile is. It 
requires concurrence of all the regional directors in the 
field, the inspector fields. It requires concurrence of the 
engineering group, the regs group, the legal department, and 
certain subject matter experts.
    The special permits are not usual. I don't know the details 
of the TransCanada request that you referred to. But I would be 
happy to look into it if you would like.
    Ms. Markey. Yes if you could look into it.
    Do you also have a public comment at all from the area's 
landowners that are affected, for instance?
    Ms. Quarterman. Of course, yes.
    Ms. Markey. If you could get back with me specifically on 
that issue I would appreciate it, and I yield back my time 
Madam Chair.
    Thank you.
    Ms. Brown of Florida. Thank you. Mr. Larsen.
    Mr. Larsen. Thank you, Madam Chair.
    And thank you for holding this hearing.
    Before I start, I want to recognize Carl Weimer from the 
Pipeline Safety Trust. He is going to be on the second panel. 
He is from Whatcom County in my district, the City of 
Bellingham area, where there was obviously a major tragedy 
about 11 years ago next month. And Carl will be on the next 
panel. I look forward to hearing from him, the Pipeline Safety 
Trust.
    Administrator Quarterman, the agency, in your testimony, 
says you finished phase one on low stress. And in the fall of 
'1992, PHMSA testified that you would be in the rulemaking 
process for phase 2 , the low stress pipeline rule, but that 
rulemaking does not seem to have begun a year and a half later. 
Can you explain why that is and what your plans are for phase 2 
and low stress? Phase 2?
    Ms. Quarterman. Absolutely. There was a rulemaking on low 
stress one, as you are aware of. When I started at the agency, 
which has not been very long now, the issue arose about whether 
or not to proceed with low stress 2. I believe that a cost-
benefit analysis had been done in prior years that suggested 
that the rule might not be cost-beneficial. We convened a group 
of the rulemaking team to review the current cost-benefit 
analysis and have determined that the numbers now support going 
forward with the rule. It is in the process of being drafted 
and should be out this summer.
    Mr. Larsen. So some time in June or July?
    Ms. Quarterman. Right.
    Mr. Larsen. Also in the outstanding work that you have left 
to do, why has it taken over 3 years for PHMSA to begin the 
rulemaking process for proposing regs to establish a criteria 
for State enforcement for pipeline damage prevention laws, and 
will that rule address the issue that several of our witnesses 
on the next panel will raise, which is whether States should 
exempt municipalities or State departments of transportation 
and railroads from their Damage Prevention One Call rules?
    Ms. Quarterman. That rulemaking just went out for an ANPRM, 
or an Advanced Notice of Proposed Rulemaking last year where it 
asked a number of questions. I don't believe the questions 
include the question of an exemption, which is something that I 
firmly believe there should not be exemptions to the One Call 
rule, and I support that. I don't believe that ANPRM includes 
that.
    That doesn't mean that the notice of proposed rulemaking 
will not address that issue. My understanding of the reason for 
why it has taken so long is that we have a very good--and the 
agency has had a longstanding working relationship with the 
States, and they have been trying to encourage them to make 
changes to the State laws dealing with enforcement without 
having the hammer of having a requirement in the law that says, 
or in the regs that says, you have to do these things. So they 
have been doing what I would call a softer approach to get the 
States to come along to change their laws.
    At this point, we think we have gone as far as we can with 
that approach and need to go forward with the rulemaking. I 
don't think the program would like to be in a position where 
they have to say that a State's program is inadequate, and 
therefore, the Federal Government is stepping in. We prefer 
that the States come along without having to do that.
    Mr. Larsen. Just to change subjects a little bit on 
Technical Assistance to Communities Grant program. I know you 
are receiving applications from a variety of folks, and I 
understand you might be receiving applications from pipeline 
operators. Does PHMSA think that pipeline operators are 
eligible for these grants? I think you might find community 
folks would say they are not.
    Ms. Quarterman. Yes, I am not familiar with the applicants 
for that. I know that we are in the process of reviewing it, 
and I don't believe that was the initial intent of it so----
    Mr. Larsen. I am not sure either that it is.
    The question came up on the 7-year versus the risk 
assessment, and it is disappointing to me that the 
administration does not seem to be providing us any guidance on 
the administration's position on that. We have been debating 
this issue well probably longer than I have been here, but I 
was here when we wrote the 2002 bill, and we have been debating 
firm timeline versus a risk assessment since then and probably 
before that.
    And it seems to me that if we are just going to move 
forward on a straight authorization, we could just change the 
dates in the PIPES act and move on. I don't know that we are 
going to do that. I am not sure if the Chairman's intent is on 
that. But it does seem one of these outstanding issues that we 
keep coming back to and coming back to and now coming back to, 
is a firm timeline on inspections versus using some level of 
flexibility on risk-assessment. And I say that, I don't try to 
say that with any weight towards one or the other. I am saying 
that it is an issue that we go around and around and around on 
with the communities, with the industry, amongst ourselves, and 
to hear the administration yet does not have some guidance on 
that particular point is, again, it is disappointing. It is 
sort of like waiting for Godot; it just never shows up.
    Ms. Quarterman. Let me clarify a little bit. The current 
requirements in the law is 7 years, and that is what we are 
enforcing, and that is what we are proposing to enforce going 
forward. The administration has no plans that I am aware of to 
change that.
    Mr. Larsen. OK.
    Madam Chair, thank you for the opportunity to have some 
questions. And I will be back after the Mr. Calderon speaks, 
and of course, I will submit my opening statement for the 
record. Thank you.
    Ms. Brown of Florida. Mr. Cohen.
    Mr. Cohen. Thank you, Madam Chair.
    And I also will submit an opening statement as we go along.
    And I thank the witness, Ms. Quarterman.
    I appreciate your coming before us today.
    I have got two statements I would like to enter into the 
record, and I would like to ask the Chair if it would be so 
permitted. One is a letter signed by more than 1,100 
organizations nationwide concerning our environment and the 
potential call for leadership on clean energy and climate, and 
the other is an article by Mr. Friedman in yesterday's New York 
Times that also addresses the oil spill and the need for the 
administration to use this as an opportunity to look at more 
alternative forms of energy and an energy policy that will get 
us clean of fossil fuels and move forward.
    With permission, I would like to enter those in the record.
    Without objection.
    Mr. Oberstar. Madam Chair, my suggestion is that the letter 
should be accepted for the hearing record, but the staff should 
review to see how voluminous the accompanying material is that 
may be more appropriate for the Committee file.
    So, I would not object to the Chair's accepting, but my 
practice has been to be careful about the volume of material we 
have in the hearing record. The letter probably is brief 
enough, but I don't know about the 1,100 signatories to it.
    Mr. Cohen. There are only about six pages. They are small 
type.
    Mr. Oberstar. With that caveat, I would not object.
    Mr. Cohen. Thank you, Mr. Chairman, and Madam Chairman.
    I would like to ask the witness, there has been an issue, 
which I know Ms. Markey kind of referred to, concerning the 
proposed Keystone XL Pipeline, stretching 2,000 miles from 
Canada to the Gulf Coast, which would bring tar sands oil to 
the Gulf refineries. What stage or is there a stage that you 
are involved in or that you know of that we could review or 
have any kind of look at this process to see whether or not we 
should permit such a pipeline to bring in this material that is 
even worse for our environment than the present oil that we are 
using?
    Ms. Quarterman. Well, we are not in a position at PHMSA to 
make any, have any impact on whether or not the pipeline should 
go forward. We review the safety of the pipeline, the 
construction of the pipeline.
    With respect to their request for a special permit, that 
has--should at this point have been published I think in the 
Federal Register, but we welcome comments beyond that and would 
be happy to take those. But we can't influence whether or not 
the pipeline goes forward.
    Mr. Cohen. Who can influence that? Who can determine 
whether or not we permit this?
    Ms. Quarterman. This is an oil--is it an oil or gas 
pipeline? I am sorry.
    Mr. Cohen. It is some kind of tar sands oil pipelines.
    Ms. Quarterman. Oil pipelines do not require any sort of 
permitting through the FERC, so it is the siting requirement 
are on a State by State basis, so each individual State has the 
opportunity to weigh in on whether or not right-of-way should 
be given to that pipeline.
    Mr. Cohen. How about the safety, you look at the safety?
    Ms. Quarterman. We look at the safety, correct.
    Mr. Cohen. Has there been final, do you feel comfortable 
that the safety is, that they are secure enough and safe enough 
to carry this material?
    Ms. Quarterman. We don't really have an approval process. 
We can't approve; we don't approve or disapprove a pipeline. We 
can look at the construction requirements and ensure that it 
meets the requirements of the Pipeline Safety Act. So we really 
don't have any authority to stop or start a pipeline unless it 
has a safety-related issue that could then be met.
    Mr. Cohen. Let me ask you if you would look at the safety 
issues and see that they are met, and do you think our 
standards are strong enough, our safety standards for 
pipelines, oil pipelines?
    Ms. Quarterman. I believe that they are. We are always 
constantly looking at them and changing them to address the 
best practices available.
    Mr. Cohen. You have seen what has happened in the Gulf, and 
we heard from Mr. McKay, head of BP Oil, the president, that 
they had all the safety that they could possibly need, and 
therefore, they had no reason to think that they would need 
anything else. Do you think maybe we all should reexamine 
everything that we are looking at that has possible effects on 
our environment?
    Ms. Quarterman. Absolutely.
    Mr. Cohen. Would you might look at this again?
    Ms. Quarterman. Sure.
    Mr. Cohen. I may send you a letter about it, and appreciate 
you looking at it.
    Ms. Quarterman. We will. Thank you.
    Mr. Cohen. Thank you very much.
    I yield back the balance of my time.
    Ms. Brown of Florida. Ms. Richardson.
    Ms. Richardson. Thank you, Madam Chairwoman.
    At what point were you notified of the spill in the Gulf?
    Ms. Quarterman. I probably became aware of it shortly after 
it happened. We do have an internal national response team.
    Ms. Richardson. Was it hours? Was it days?
    Ms. Quarterman. Looking back on it, I can't tell you 
exactly whether it was hours or days. I am sure it was more 
likely hours than it was days.
    Ms. Richardson. And you don't know whether you were advised 
the same day as when the spill occurred?
    Ms. Quarterman. I don't recall. It is not within our 
jurisdiction, and I don't remember. It was probably shortly 
thereafter.
    Ms. Richardson. Have you been asked to do anything 
regarding the spill?
    Ms. Quarterman. No. We have not.
    Ms. Richardson. It is my understanding that you are 
responsible for the construction, to ensure that the 
construction of the pipelines are being done properly.
    Ms. Quarterman. Correct.
    Ms. Richardson. Whose jurisdiction is it to ensure that 
there are safety, proper safety options if--in the event a 
pipeline does not work?
    Ms. Quarterman. We are.
    Ms. Richardson. So then, when I came in earlier, someone 
asked something about responsibility, and you referenced the 
Department of the Interior.
    Ms. Quarterman. That is with respect to the spill in the 
Gulf of Mexico, which is, it is a drilling rig which is 
overseen by the Department of the Interior. It has nothing to 
do with pipelines whatsoever.
    Ms. Richardson. Now, one of my questions is, it is my 
understanding that you verified that pipeline companies 
properly identify all the pipelines segments that could affect 
a high consequence area.
    Ms. Quarterman. Correct.
    Ms. Richardson. Properly identify the risks associated with 
each pipeline segment.
    Ms. Quarterman. Correct.
    Ms. Richardson. And properly evaluate and rank those risks, 
is that correct?
    Ms. Quarterman. Correct.
    Ms. Richardson. And use the most appropriate tools for 
conducting the inspections.
    Ms. Quarterman. Correct.
    Ms. Richardson. So is there a reason why your two 
Departments don't work together or talk or share information, 
or do you?
    Ms. Quarterman. Oh, we certainly do, yes.
    Ms. Richardson. So if you do, what would be in your thought 
of the reason of why we have failed in these areas regarding 
the spill in the Gulf?
    Ms. Quarterman. Our coordination with the Department of the 
Interior is limited to pipeline safety issues. There are 
pipelines in the Gulf of Mexico. And the Department is 
responsible for those that are leading up to the production 
facilities, and PHMSA is responsible for them once they leave. 
But we are, we have no role in terms of the drilling of a 
particular well.
    Ms. Richardson. But your two areas don't talk and learn 
from one another best practices, share the different things 
that you are doing?
    Ms. Quarterman. Oh, certainly, with respect to pipeline 
safety, yes.
    Ms. Richardson. It seems clear now that BP wasn't really 
prepared to respond to a worst-case scenario in the Gulf, as 
they stated. I realize that offshore drilling and the operation 
poses a very different challenge than the transportation of the 
project, which is what you are saying. But what I do need to 
understand is whether you evaluate the pipeline companies and 
whether you feel that they are prepared to deal with their own 
worst-case scenarios?
    Ms. Quarterman. We do evaluate the pipeline companies, and 
part of the criteria that that is considered is whether or not 
they are able to deal with worst-case scenarios.
    Ms. Richardson. And to what extent do you require them to 
demonstrate that?
    Ms. Quarterman. They have to have a plan, an oil spill 
response plan, and we do have drills for oil spill response 
which does involve not just the Federal agents but also 
companies.
    Ms. Richardson. So but I am sure also with drilling in the 
ocean we also have plans. So what confidence should the public 
have that if those plans failed in that scenario, why your 
plans would not fail, is my question?
    Ms. Quarterman. Well, part of the catastrophic scope of the 
spill in the Gulf of Mexico is a result of the inability to 
reach for human beings, for a human being to reach that item 
because it is located a mile or more at the bottom of the 
ocean. And the oil spill response, therefore, is compromised.
    In the instance of pipelines, they are, as I said earlier, 
perhaps like a garden hose, where they can be turned off and 
on. There are several valves along the way that can be shut 
down. No more oil can go into the pipeline. You can stop it 
from going in or out. There might be a spill but you won't see 
a spill where it is just an open well spewing forth oil.
    Ms. Richardson. Let me say this, because my time has 
expired, I would just urge you that I think many of us thought, 
as Members who are responsible ultimately of oversight of the 
various agencies, I think many of us thought in that scenario 
that certain things wouldn't happen, that the blow factors and 
protectors would work and all of that, but I think the day of 
what we think will work, the public isn't going to allow that 
anymore. So we may have to reconsider other items to make sure, 
so if that means we have two and three things in line or 
whatever new items need to be considered, I would just urge 
that we consider all of those. Because I don't think we can 
afford continued mistakes in these areas.
    Thank you, Madam Chairwoman.
    Ms. Brown of Florida. Thank you.
    And Mr. Cummings.
    Mr. Cummings. Thank you very much, Madam Chair.
    And Administrator, I have just one subject matter I want to 
address here.
    We hear a lot about problems with regard to excavation. But 
we also know that the second leading cause of problems is 
corrosion. And I just want you to talk about that for a moment 
and how you deal with that and how we, it seems like every 
city, particularly my city, which we seem to have all kinds of 
problems with old pipes and all kinds of things are getting 
older. And I am just trying to figure out exactly how do you 
all address corrosion at a time when we have seen all kinds of 
infrastructure fall apart? I am just curious.
    Ms. Quarterman. Thank you.
    Corrosion is a leading cause, as well as pipeline failure, 
and it is one that can be addressed, at least in part, through 
the Integrity Management Program that is in place by in-line 
inspections to see if there is a loss in the thickness of a 
pipe.
    In addition to those requirements, there are requirements 
for cathodic protection, and this is something where 
essentially electronic currents can cause on the outside of the 
pipe a less likelihood of corrosion, and companies are required 
to have a cathodic protection system in place and to look at 
the results of interval surveys where they check for corrosion. 
But it is, as you say, quite a problematic issue.
    Another thing the Integrity Management Program is meant to 
do is that an operator is supposed to be looking at its 
pipeline and identifying locations along the pipeline where 
corrosion might be a particular problem, for instance, where 
there is a change in environment, for example you go from a 
rocky area to one where there is a lot of water, or just a 
change in the environment where there might be the conditions 
necessary to promote corrosion.
    We are also working very closely with NACE, which is the 
National Association of Corrosion Engineers to identify leading 
technologies to help us on the issue of corrosion. But it is 
one that we spend a lot of time on and will continue to spend a 
lot of time on going forward because we recognize it is a huge 
issue for pipelines.
    Mr. Cummings. As I am listening to you I am wondering how 
much of this is on the honor system. As I listened to 
Congresswoman Richardson, it reminded me of something that I 
often say that so often people are telling each other that 
things are going to be fine if something goes wrong, nothing is 
going to go wrong. They say, when the rubber meets the road, 
everything is going to be fine. And then when the rubber comes 
to meet the road, we discover there is no road.
    So I am trying to figure out, when we talk about integrity, 
are we talking about an honor system to some degree? Because 
one of the things that I have discovered is that a lot of 
folks, when you put them on the honor system, they are not 
always honest. And so, I just want to know what, how do you, 
assuming some of it is the honor system, I am sure all of it 
can't be, but how do you double check that? Because I have 
noticed that, and we have noticed in this Subcommittee, when we 
were talking--when we talk about various things like drains and 
putting in certain kinds of windows and things of that nature, 
when it comes to safety, a lot of times, folks will pinch 
pennies and give up safety.
    And so I am just wondering, how do we, how you make sure 
that integrity is truly being honored?
    Ms. Quarterman. Right. That is a great question. You are 
right that, in the first instance, it is a question of honor 
because companies put together Integrity Management Plans that 
say they are going to do certain things.
    Now, thanks to the law that was put in place by this 
Committee, nowadays the chief executive has to sign off on that 
plan to say, yes, this is, in fact, a plan that I back and I am 
supporting.
    But then we have inspectors that go in and look at the 
plan. They look at the results from a smart pig, an inline 
inspection tool, that might show that there is a certain amount 
of loss in the pipeline thickness, and then they look at the 
record to see if that was repaired or not.
    A company can say, we repaired all these, but in fact, they 
did not. And that is the job of the inspector, to go behind 
them to make sure that in fact those things have happened.
    Now can we deal with 100 inspectors 100 percent of 
pipelines? No, we can't. But we are doing many of them, and we 
are trying to go to a new method of inspection where we really 
look at where the risks are for a particular company and drill 
down into those risks rather than doing just a checklist and 
inspection program.
    Mr. Cummings. Thank you very much.
    I see my time is up. Thank you, Madam Chair.
    Ms. Brown of Florida. Now, to hear from the Chair of the 
Committee, Mr. Oberstar, who was here late last night. I left 
him here after 7:00 o'clock on a similar subject.
    Mr. Oberstar.
    Mr. Oberstar. Thank you very much, Madam Chair.
    This is a very, very important follow-up hearing to 
yesterday's hearing, but also on the work of pipeline safety 
that this Committee has been engaged in for well over 22, 23 
years, when I held the first hearing on the failure of a 
gasoline pipeline in Mounds View, Minnesota, which is symbolic 
of and showed evidence of widespread failure within the agency 
to do its work properly.
    Now, at the hearing yesterday, I confronted Mr. McKay, the 
CEO of BP, with the results of the Texas refinery failure, the 
pipeline failure in Alaska, that spilled 5,000 barrels of oil 
on the North Slope, the largest pipeline failure in the history 
of oil extraction from the North Slope, and several other 
subsequent failures of that company that required the 
Department of Transportation to change the administrator of 
PHMSA, bring in a retired Coast Guard admiral, put the agency 
back on a sound safety mindset footing, and result in fines, 
including a misdemeanor fine on the company, a misdemeanor 
citing of the company, and a $12 million penalty for failure to 
maintain their system properly and a number of other failures 
of that company over a period of years.
    Have you done a follow-up review of BP's pipeline system?
    Ms. Quarterman. BP is scheduled for an integrated 
inspection this year, and I have requested of my staff that 
they compile a performance review of BP, in particular, their 
history of violations, how good they are doing, how good they 
are not doing.
    Mr. Oberstar. When will that take place?
    Ms. Quarterman. Which one, the inspection?
    Mr. Oberstar. Yes.
    Ms. Quarterman. The date of the inspection, I don't know. 
The documentation review should be ready in the next couple of 
weeks.
    Mr. Oberstar. Will you provide for the Committee the 
guideline review?
    Ms. Quarterman. Absolutely.
    Mr. Oberstar. We would like to, I would like to put my 
hands on it and review it, and of course, it will be available 
for majority and minority as well.
    There are 3,800 drill rigs in the Gulf of Mexico. That is 
660,000 square miles of ocean, and hundreds and hundreds of 
pipelines. They were disrupted during Katrina and Rita, had to 
be repositioned, relocated. We are coming up on hurricane 
season. Shouldn't there be a review of pipeline safety and 
standards? Shouldn't you have inspectors ready to go out in the 
Gulf to take a look at, particularly at any of the pipelines 
that BP might be operating?
    Ms. Quarterman. We are ready. We can do it.
    Mr. Oberstar. Will you do it this year? Will you direct an 
overview of pipeline safety in the Gulf to ensure that there is 
system integrity, that there are, that wherever pigging has 
been required to be done, whether cleaning pigs are required to 
go through the pipelines that has been done, whether there are 
other safety precautions under your rules and regulations, that 
they have been followed?
    Ms. Quarterman. Yes. We are already going to do the BP 
review. We can make it Gulf-wide.
    Mr. Oberstar. I think it is only prudent and precautionary 
in light of what has happened here, should there be a pipeline 
break. Pipeline safety is just one break around the corner from 
being unsafe as we know all too well.
    We have also seen in the hearing yesterday, but not just 
yesterday's hearing, the cozy relationship between government 
and industry. Here is a drill rig built in Korea, registered in 
the great maritime nation of the Republican of the Marianas, 
whose certification was done by a contracted entity located in 
Reston, Virginia, not certified by an independent 
organizations, built to--and a blow-out preventer built to 
American Petroleum Industry Standards or Institute standards, 
certified by industry, operated by industry, not reviewed by 
Minerals Management Service agency. And we found a similar 
pattern in the Coast Guard hearings that we held, that Mr. 
Cummings conducted 2, 3, years ago, on the failure to have 
independent review of industry design, engineering, and 
manufacturing.
    We found a similar problem in the FAA, which I hold up 
always as the highest standard of safety. But there, again, 
there was a customer service initiative, directed by Office of 
Management and Budget to be done by the FAA, in which FAA was 
directed to treat airlines as their customers. That is an 
arm's-length relationship. They are not supposed to be subject 
to the pleasure of the industry. If the FAA, if Southwest 
Airlines is FAA's customer, and the customer is unhappy with 
the service they are getting, they can request a change, and 
they did. And they got the principal maintenance inspector 
shifted from the Southwest ticket to someplace else until 
whistle-blowers brought it to our attention, and we held 
hearings, and we found that some 200,000 passengers were flown 
in unsafe aircraft.
    So here is this, the Coast Guard culture is being changed. 
The standards for safety at the Coast Guard are being changed. 
The standards for safety are being upgraded in the FAA. We need 
the same thing to happen in the pipeline administration, and I 
see evidence of that happening under your leadership. But I 
want you to be aggressive and assertive.
    And I want you to assure that there is independent--no, in 
the pipeline corrosion 2008 pipeline corrosion report, which 
PHMSA ordered, ``PHMSA often incorporates standards in whole or 
in part developed by various industry consensus organizations 
in their regulations.'' The Michael Baker Raymond Fessler 
report, it lists all those standards by national association of 
this, American association of that, among them the American 
Petroleum Institute. Shouldn't there be an independent review 
with certification? Why should PHMSA be accepting industry 
standards?
    Fine, they know what they are doing. They know their 
business. But that needs to be subjected to independent review. 
Are you going to do that?
    Ms. Quarterman. With respect to the safety culture, let me 
just say that one of the first things that I said to my staff 
in our first all-hands meeting was that they needed to be 
clear, as I was, that our customer is the American public. And 
is it is our responsibility to ensure that hazardous materials 
by pipeline or any other mode is safe and that there is a 
tendency in government to think of your customer as being 
someone other than the American public because industry or 
other constituents come in and speak a lot. If there is not 
somebody balancing out on the other side, if you only hear from 
industry representatives, you tend to believe or go native, I 
guess, you begin to think that that is your constituent and 
forget about the American public.
    That may have been the case in the past with the pipeline 
program. I think that has changed, thanks to your help, and now 
they are very much involved with the States and with the 
Pipeline Safety Trust and the other constituents. They have, 
they really tried to speak to all, all parties, all 
stakeholders.
    As to the question of industry standards, yes, they are 
adopted into the existing pipeline standards. Many of those 
organizations are not necessarily industry organizations. They 
are professional organizations with respect to corrosion----
    Ms. Brown of Florida. Excuse me. According to the Rules of 
the House, we are going to have to stand at adjournment until 
after the session that is starting at this time. We are going 
to have to stand in recess, and we are going to come back at 12 
o'clock or as soon as the session is over.
    I was trying to finish up with you. But I don't think we 
are there yet.
    You think we are? OK.
    OK, then we will start with panel two.
    And so any additional comments you can submit to the 
record, I have got to say that, follow up with what the 
Chairman said, if you found BP or any other company in 
violations, what is your recourse? I would be interested in 
seeing that in writing. And we are going to put the question in 
writing.
    Ms. Quarterman. Thank you.
    Ms. Brown of Florida. So thank you very much for your 
testimony, and any additional questions the Committee will give 
to you in writing.
    And at 12 o'clock, or directly after the session is over, 
we will come back, and we are going to stand in recess at this 
time according to the Rules of the House.
    Thank you.
    [11:12 a.m.]
    [Recess.]
    Ms. Brown of Florida. Thank you. I would like to welcome 
and introduce our second panel of witnesses.

 TESTIMONY OF CARL WEIMER, EXECUTIVE DIRECTOR, PIPELINE SAFETY 
 TRUST; PAUL METRO, GAS SAFETY SUPERVISOR, PENNSYLVANIA PUBLIC 
 UTILITY COMMISSION, ON BEHALF OF THE NATIONAL ASSOCIATION OF 
 PIPELINE SAFETY REPRESENTATIVES; ANDREW BLACK, PRESIDENT AND 
    CEO, ASSOCIATION OF OIL PIPE LINES; ROCCO D'ALESSANDRO, 
 EXECUTIVE VICE PRESIDENT, NICOR GAS, NAPERVILLE, ILLINOIS, ON 
   BEHALF OF AMERICAN GAS ASSOCIATION; GARY L. SYPOLT, CHIEF 
  EXECUTIVE OFFICER, DOMINION ENERGY, RICHMOND, VIRGINIA, ON 
 BEHALF OF THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA; 
 AND DAN EAST, REGIONAL MANAGER, REYNOLDS, INC., ALBUQUERQUE, 
     NEW MEXICO, ON BEHALF OF NATIONAL UTILITY CONTRACTORS 
                          ASSOCIATION

    Ms. Brown of Florida. We have with us Mr. Carl Weimer, who 
is executive director of the Pipeline Safety Trust; Mr. Paul 
Metro, who is the secretary of the National Association of 
Pipeline Safety Representatives; Mr. Edward Black, president 
and executive officer of the Association of Oil Pipe Lines; and 
Mr. D'Alessandro, on behalf of the American Gas Association; 
and Gary L. Sypolt, chief executive officer of Dominion Energy, 
on behalf of the Interstate Natural Gas Association; and Mr. 
Dan East, on behalf of the National Utility Contractors 
Association.
    We can begin with Mr. Weimer.
    Mr. Weimer. Chairwoman Brown, Ranking Member Shuster and 
Members of the Subcommittee, thank you for inviting me to speak 
today on the important subject of pipeline safety.
    The Pipeline Safety Trust is the only nonprofit 
organization in the country that strives to provide a voice for 
those affected by pipelines.
    With that in mind, we are today here today to speak for the 
relatives of the 56 people who have been killed, the 209 people 
who have been injured, and for those that have been burdened by 
over $900 million in property damage in pipeline incidents that 
have occurred since we last spoke to this Subcommittee in March 
2006.
    We provide many ideas for improvements in our written 
testimony but would like to concentrate on just a few of them 
here today.
    Our priority for this year's reauthorization is the 
expansion of the Integrity Management Rules for more miles of 
pipeline. The Integrity Management has been one of the most 
important aspects of both the Pipeline Safety Improvement Act 
of 2002 and the PIPES Act of 2006. And it is what requires that 
once pipelines are put in the ground, they are ever inspected 
again.
    Currently, only 44 percent of hazardous liquid pipelines 
and only 7 percent of natural gas transmission pipelines fall 
under these important Integrity Management Inspection rules. 
And of all the deaths caused by these type of pipelines since 
2002, over 75 percent of them have occurred on pipelines not 
required to meet these rules.
    This summer will be the 10-year anniversary of the 
Carlsbad, New Mexico, pipeline explosion that killed 12 people. 
In response, Congress passed the Pipeline Safety Improvement 
Act of 2002, which required the Integrity Management of natural 
gas transmission pipelines within certain high-consequence 
areas.
    Unfortunately, these areas are still so narrowly defined 
that they don't even include the Carlsbad pipeline area where 
the 12 people died.
    What this means to people who live around these pipelines 
in rural areas is that their lives are not worth protecting 
with the important Integrity Management rules.
    When Integrity Management was first conceived, inspections 
were limited to high-consequence areas because this was a huge 
undertaking for the 90,000 miles of pipelines that were 
included. At that time, leaders within Congress and PHMSA 
stated that the future of these types of inspection 
requirements would be expanded. We believe the future is now 
and that the industry now has the experience and equipment 
necessary to begin similar inspections of the over 300,000 
miles of pipelines that currently have no such requirements.
    For these reasons, the Trust asks that you direct PHMSA to 
initiate a rulemaking by a date certain to implement a similar 
integrity management program on all the pipelines that fall 
outside of the current management rules.
    In the PIPES Act of 2006, Congress made clear its desire 
that States move forward with pipeline damage prevention 
programs. We hope Congress will encourage PHMSA to move forward 
with its recent proposed rulemaking regarding damage prevention 
and make sure that States understand that exemptions to 
railroads, State transportation departments, and municipal 
governments are dangerous and unwarranted.
    The results of a huge lack of valid data regarding 
excavation damage to pipelines make it nearly impossible to 
implement programs strategically and cost effectively. We hope 
Congress will require PHMSA to initiate a valid mandatory 
reporting requirement for excavation damage.
    Also, after 2 years of work by a multi-stakeholder group of 
more than 150, the Pipeline Informed Planning Alliance is about 
to release a report that makes recommendations for actions that 
local governments can take to protect people and pipelines with 
their land use regulations when new development is proposed 
near pipelines. This effort is a holdover from the 2002 
reauthorization, and will implement the recommendations of a 
congressionally mandated Transportation Research Board report.
    Such development encroachment near pipelines is a growing 
problem nationwide, and the Trust asks that this year Congress 
authorize, just as was authorized in PIPES for the successful 
promotion of the 811 one-call number, $500,000 per year to 
promote, disseminate, and provide technical assistance 
regarding the PIPA recommendations so local governments are 
aware of them.
    Finally, there is still a good deal of work for PHMSA to do 
to finalize the low-stress pipeline mandates of the PIPES Act 
and to institute similar rules for unregulated sections of 
natural gas-gathering and production pipelines, particularly in 
urban areas. Technical assistance grants to local communities 
need to be authorized and funded, and PHMSA needs to have the 
resources necessary to ensure that many miles of new pipelines 
being constructed are adequately inspected during construction.
    Thank you again for this opportunity to testify today. We 
hope that you will consider some of the ideas we have brought 
forward. If you have any questions now or at any time in the 
future, I would be glad to try to answer them.
    Thank you.
    Ms. Brown of Florida. Thank you.
    Mr. Shuster.
    Mr. Shuster. Thank you, Madam Chair.
    I just wanted to take an opportunity to welcome Mr. Paul 
Metro, who is here today. He is the Secretary of the National 
Association of Pipeline Safety Representatives. His day job is 
at the Gas Safety Division of Pennsylvania at the Public 
Utilities Commission.
    I want to thank you for being here today. We know that you 
regulate, inspect and enforce State and Federal regulations in 
the State of Pennsylvania dealing with natural gas and 
hazardous pipelines. So welcome today.
    Thank you.
    Ms. Brown of Florida. Mr. Metro, please.
    Mr. Metro. Chairwoman Brown, Ranking Member Shuster, 
Members of the Committee, thank you for the opportunity to 
appear today on behalf of the National Association of Pipeline 
Safety Representatives, commonly referred to as NAPSR. NAPSR is 
a nonprofit organization of State pipeline safety personnel.
    My name is Paul Metro. I am the national Secretary of 
NAPSR, and I am also the Gas Safety Program Manager for the 
Commonwealth of Pennsylvania. NAPSR members are partners with 
the U.S. DOT in pipeline safety, and we provide inspection 
enforcement of the Federal and State pipeline safety 
regulations in the country.
    Since the Pipeline Safety Act was signed into law in 1968, 
States have been serving as stewards of pipeline safety by 
acting as certified agents for implementing and enforcing 
Federal safety regulations. State pipeline safety personnel 
represent more than 80 percent of the State-Federal inspection 
workforce. State inspectors are the first line of defense at 
the community level to promote pipeline safety, underground 
utility damage prevention, and public awareness with regard to 
gaseous and liquid pipeline systems.
    I have submitted written testimony for the record 
describing the role of the States in maintaining or enhancing 
pipeline safety. The testimony explains a State's focus in 
providing pipeline safety and makes recommendations as to 
Federal assistance that is needed by State programs to 
implement the Federal mandates. The testimony highlights 
NAPSR's view with regard the two key points.
    First, NAPSR recommends that new mandates only be imposed 
by this reauthorization process if it is proven that existing 
mandates do not work. The last three reauthorizations have 
created several mandates in the natural gas and hazardous 
liquid industries and regulatory bodies. The States and the 
industry need more time to fully assess and evaluate the 
effects of the mandates. NAPSR inspects almost 2.3 million 
miles of pipelines and over 9,000 system operators. The 
imposition of additional mandates now would only exacerbate the 
hardships that State pipeline safety programs are currently 
under, which brings me to my second point:
    Because of current revenue shortfalls in their economies, 
many States are having trouble meeting the means test provided 
for in the 2006 Pipeline Safety Act. As a condition for 
awarding Federal pipeline safety grants, the Secretary of 
Transportation is authorized to waive the means test in the 
PIPES Act. However, the condition for such a waiver to be 
granted has not been identified or defined. Facilitating State 
access to Federal grant funds under special circumstances is 
within the purview of Congress.
    As partners with the U.S. DOT and given the regulatory 
priorities recognized in the PIPES Act, the State programs are 
focusing on four major safety elements: performing ongoing 
inspections of pipeline facilities to verify operator 
compliance, supporting excavation damage prevention, ensuring 
pipeline system integrity, and practicing fiscal responsibility 
through the management of risk and pipeline safety.
    Part of fiscal responsibility also lies with the Federal 
Government living up to its original promise made in 1968, 
which provided for 50 percent funding of State expenditures for 
pipeline safety. Most recently, the PIPES Act of 2006 
authorized a thorough funding goal of up to 80 percent of the 
State's program costs. Still, during the calendar year, it can 
be shown that the State's gas consumers funded more than 68 
percent of the State program costs. Adding funding was 
appropriated by Congress in fiscal year 2009 and 2010, but the 
previous mentioned means test and the pipeline safety law 
threatens the availability of future grants funded to States 
that are not able to collect sufficient revenue from their 
residences and businesses.
    In other words, many of the State's pipeline safety budgets 
have been reduced due to severe economic budgetary conditions, 
and the States cannot continue to fund 68 percent of the 
program costs.
    NAPSR recommends a modification to the 2006 PIPES Act, 
which would define specific conditions for which a waiver could 
be granted to a State without significant delay and without 
affecting pipeline safety. The current reauthorization process 
could mitigate the unintended consequences of section 60107(b) 
by changing the requirements of utilizing a rolling average of 
the previous fiscal year's State expenditures to a 3-year 
average of State expenditures computed on the basis of fiscal 
years 2004, 2005, and 2006.
    It is now up to the congressional Committee to adjust 
authorized funding for State pipeline safety grants over the 
next 4 years and to facilitate State access to such funding so 
the States can continue to carry out their programs and fulfill 
the congressional mandated expanded safety programs even during 
times of economic stress.
    Thank you, Madam Chairwoman, and I will be glad to answer 
any questions.
    Ms. Brown of Florida. Mr. Black.
    Mr. Black. Thank you, Madam Chairman, Ranking Member 
Shuster, Members of the Subcommittee.
    I am Andy Black, President and CEO of the Association of 
Oil Pipelines. I appreciate the opportunity to appear on behalf 
of AOPL and API, the American Petroleum Institute.
    I will discuss the oil pipeline industry's commitment to 
safety, our improved safety record and why we believe pipeline 
safety reauthorization should be narrowly focused on existing 
programs, specifically damage prevention.
    Pipelines are the safest, most reliable, economical, and 
environmentally favorable way to transport oil and petroleum 
products to the Nation's refineries and communities, including 
all grades of gasoline, diesel, jet fuel, home heating oil, and 
propane. Transportation rates are low, regulated by FERC, 
generally stable and predictable, and do not fluctuate with 
changes in commodity fuel prices.
    Pipelines have every incentive to invest in safety. The 
most important is the potential for injury to members of the 
public, our employees and our contractors. We could also incur 
costly repairs, cleanups, litigation, and fines, and the 
pipeline may not be able to accommodate its customers.
    On many pipelines, operators use automated systems that 
detect releases or other abnormal operating conditions. 
Controllers are trained to identify signs of leaks and to 
respond quickly to shut off product-flow to isolate an 
incident. Pipeline operators are required to have response 
plans in place, conduct regular emergency response drills on 
worst case discharges, and conduct exercises in cooperation 
with local first responders to ensure that emergency 
preparedness and planning is at a continued state of readiness. 
Pipeline companies perform visual inspections along rights-of-
way, including from the air, 26 times a year, for signs of 
damage, leakage and encroachment.
    Operators are required to develop an integrity management 
plan for segments of pipelines that could affect high-
consequence areas near population centers or sensitive 
environmental areas. Liquid pipeline operators conducted 
baseline assessments prior to March 2008, identifying threats 
to their pipelines and applying technologies to address 
identified threats. This includes inline inspection by so-
called ``smart pigs.'' Full reassessments that are underway for 
liquid pipelines must be done within 5 years and are required 
into the future.
    Pipelines have the best safety record of any transportation 
mode. Still, we had a wake-up call after the Bellingham, 
Washington fatalities in 1999. Congress and the Office of 
Pipeline Safety asked more of pipelines, and industry has done 
more. Pipelines have spent billions of dollars on integrity 
management, far exceeding earlier estimates. More than $1 
billion has been spent by companies representing just 15 
percent of DOT-regulated pipelines over just the past 5 years. 
We expect this upward trend in compliance costs to continue.
    As a result, liquid pipeline spills along rights-of-way 
have decreased over the past decade in both volume of releases 
and number of releases. We are proud of this improved record, 
but we are not content. We still strive for zero releases.
    What could be done to make pipelines even safer?
    We need help preventing excavation damage, which is less 
frequent today but still accounts for 31 percent of all 
significant pipeline incidents on the liquid side.
    Our members helped establish and support one-call centers, 
which serve as the clearinghouse for excavation activities, 
using the 811 national ``call before you dig'' number that 
Congressman Shuster mentioned, but in some cases State laws 
requiring the use of 811 do not exist, are weak or incomplete 
or are not adequately enforced. In many States, State agencies, 
municipalities and other local entities are exempted from 
requirements to use the one-call system. These exemptions 
create a gap in enforcement and safety because the threat of 
pipeline damage is the same regardless of who the excavator is.
    We believe the Office of Pipeline Safety is headed in the 
right direction with its proposal of last year, which draws on 
authority from Congress for Federal enforcement in States with 
inadequate programs. We urge OPS to complete this rulemaking 
and even require termination of these exemptions by the States 
or risk Federal enforcement or loss of grant funds.
    OPS finalized a control room management rule last year. The 
NTSB read it, and removed the issue of pipeline controller 
fatigue from its ``most wanted'' list of transportation safety 
improvements. The industry is hard at work developing 
implementation plans. In 2008, OPS issued regulation for low-
stress pipelines within a half mile of an unusually sensitive 
area. We believe focusing on these areas was the right 
approach.
    Congress has provided OPS with a thorough set of tools to 
regulate pipeline safety. We see no reason for Congress to 
greatly expand the pipeline safety program or impose 
significant new mandates upon OPS or industry. We do believe 
Congress should encourage OPS to complete its rule on damage 
prevention, disallowing any exemptions to one-call 
requirements.
    We look forward to working with Congress, OPS and other 
stakeholders to improve pipeline safety and to reauthorize 
pipeline safety laws. Thank you.
    Ms. Brown of Florida. Mr. D'Alessandro.
    Mr. D'Alessandro. Good afternoon, Madam Chairwoman and 
Members of the Committee. I am pleased to appear before you 
today.
    Ms. Brown of Florida. Pronounce your name.
    Mr. D'Alessandro. My name is Rocco D'Alessandro.
    Pipeline safety is a critically important issue, and I 
thank you for not only holding this hearing but for all of the 
work that you and your colleagues have done over the years to 
ensure that America has the safest, most reliable pipeline 
system in the world.
    I am testifying today on behalf of American Gas 
Association, AGA. Founded in 1918, AGA represents 195 local 
energy companies that deliver natural gas throughout the United 
States. There are more than 70 million residential, commercial 
and industrial natural gas customers in the U.S., of which 91 
percent, nearly 65 million customers, receive their gas from 
AGA members.
    Our message today is a simple one. We believe that the 
current pipeline safety law is working well and that it should 
be reauthorized this year. The 2006 PIPES Act included 
significant mandates that the industry is in the process of 
implementing. Given this, we do not believe there is a need for 
change in the pipeline safety statute at this time, but, 
rather, we urge the Committee to reauthorize current law.
    Safety is our top priority. We spend an estimated $7 
billion each year in safety-related activities. I want to 
assure the Committee that the natural gas industry has worked 
vigorously to implement these provisions that relate to our 
sector. From a regulatory perspective, the past 10 years have 
easily included far more major pipeline safety rulemakings than 
any other decade since the creation of the Federal pipe code in 
1971.
    Specifically, there are four core provisions of the PIPES 
Act of 2006 that are key to enhancing the safety of 
distribution pipeline--excavation damage prevention, 
distribution integrity management programs, excess-flow valves, 
and control room management.
    Excavation damage represents the single greatest threat to 
distribution system safety, reliability and integrity. 
Regulators, natural gas operators and other stakeholders are 
continually working to improve excavation damage prevention 
programs through State legislative changes and regulatory 
actions.
    The 2006 PIPES Act required DOT to establish a regulation 
prescribing standards for integrity management programs for 
distribution pipeline operators. They published the final rule 
on December 4 of last year. The effective date of the rule was 
just February 12 of this year. Operators are given until August 
2 of 2011 to write and implement the program. It will impact 
more than 1,300 operators, 2.1 million miles of pipe, and 70 
million customers.
    The final rule effectively takes into consideration the 
wide differences that exist between natural gas distribution 
operators. It allows operators to develop a DIMP plan that is 
appropriate for the operating characteristics of their 
distribution delivery system and the customers they serve. 
Operators are aggressively implementing DIMP.
    The 2006 PIPES Act mandated that DOT require natural gas 
distribution utilities to install an excess-flow valve, EFV, on 
new and replacement service lines for single-family residences. 
Operators have installed an estimated 950,000 EFVs since the 
June 1, 2008 date.
    I do want to emphasize that Congress was absolutely correct 
in limiting the EFV mandate to single-family resident 
dwellings. It is inadvisable to attempt mandatory nationwide 
installation of EFVs beyond the single-family resident class to 
multi-family dwellings, commercial and industrial customers due 
to the inherent uncertainties and complexities associated with 
the service lines and variations in gas. Since EFVs are 
designed to shut down when there is a significant change in gas 
flow, these variations could result in the inadvertent closure 
of an EFV and interrupt gas service for multiple days. An 
inadvertent EFV shutdown of a commercial or an industrial 
facility, like a hospital or a chemical plant, could create 
greater safety hazards than the release of gas the EFV was 
attempting to prevent.
    In summary, many of the mandates within the 2006 PIPES Act 
have just become regulation, and the government and industry 
are working to implement these regulations. AGA believes that 
the congressional passage of pipeline safety reauthorization 
this year will send a positive message that the current law is 
working and emphasize the commitment that Congress and all the 
industry stakeholders have to securing the safety of the 
Nation's pipeline system.
    We look forward to working with you to secure 
reauthorization this year. Thank you.
    Ms. Brown of Florida. Mr. Sypolt.
    Mr. Sypolt. Madam Chair, Members of the Subcommittee, thank 
you for having me testify today on the safety of the Nation's 
energy pipeline network.
    I am Gary Sypolt, CEO of Dominion Energy. I am responsible 
for Dominion's natural gas businesses.
    Dominion is one of the Nation's largest producers and 
transporters of energy, with a portfolio of more than 27,500 
megawatts of power generation, 12,000 miles of natural gas 
transmission, gathering and storage pipelines, and 6,000 miles 
of electric transmission lines.
    Today, I am testifying on behalf of the Interstate Natural 
Gas Association of America, or INGAA, which represents the 
interstate natural gas pipeline industry in North America. 
INGAA's members transport the vast majority of the natural gas 
consumed in the U.S. through a network of about 220,000 miles 
of large diameter pipeline. These transmission pipelines are 
analogous to the Interstate Highway System. In other words, 
these are high-capacity transportation systems, spanning 
multiple States or regions.
    Natural gas is increasingly being discussed in the context 
of the climate change debate as a partner with renewables in 
reducing overall emissions from power and transportation 
sectors. Many of you might also have heard about the recent 
boom in new domestic natural gas supply development, 
particularly from the shale deposits. This all has a safety 
dimension.
    Our industry continues to expand at impressive levels due 
to the growth in both natural gas supply and demand. As we 
expand, though, the natural gas pipeline network is touching 
more and more people, and those people want to be assured that 
this infrastructure is safe and reliable. In other words, 
safety is and always will be our industry's main focus. By all 
measures, natural gas transmission pipelines are safe, but our 
safety record is not perfect. Accidents do happen, and our job 
is to continuously improve our technologies and processes so 
that the number of accidents continues to decline.
    My written testimony highlights some of the statistics with 
respect to accidents in the natural gas transmission sector. 
The main point I would like to make is that our primary focus 
has been on protecting people, and as a result the number of 
fatalities and injuries associated with our pipelines is low. 
We want it to be even lower.
    One of the main programs the industry has implemented over 
the last decade has been the Integrity Management Program, or 
IMP. This program, which was mandated by Congress in 2002, 
requires natural gas transmission pipelines to, one, identify 
all segments located in populated areas, called ``high-
consequence areas''; two, undertake assessments or inspections 
of those segments within 10 years; three, remediate any 
problems uncovered, including precursors to future problems; 
and, four, undertake reassessments every 7 years thereafter.
    We are far along in this process. In fact, we have already 
started to perform reassessments at the same time we are 
finishing baseline work. My written testimony includes some 
data on the results of the work done thus far. There are two 
important takeaways from this work that I would like to share 
with the Subcommittee.
    First, the data strongly suggests that, in reassessments, 
the numbers of precursors to corrosion we are finding are 
significantly lower than those found in baseline assessments. 
Since corrosion is a time-dependent phenomenon that occurs over 
a fairly predictable time frame, these periodic reassessments 
are able to catch corrosion precursors before they manifest 
themselves into failures.
    With all that said, the other takeaway is the technology 
for conducting these assessments, primarily internal inspection 
devices known as ``smart pigs,'' which continue to develop and 
improve over time. A new generation of these devices is 
currently being employed, and it is giving us a clearer, more 
granular view of the condition of our pipeline systems.
    In the last 4 years, there have also been several 
additional improvements in pipeline safety, including a new 
rule on pipeline controller fatigue mitigation. INGAA worked 
with the other pipeline associations and with PHMSA in 
developing a new standard for controller fatigue that meets the 
recommendations made by the NTSB in 2001.
    My written testimony includes some other safety initiatives 
that have been completed in recent years as well. This leads to 
my main point.
    The pipeline safety program, at least with respect to 
natural gas transmission pipelines, is working well to reduce 
accidents and protect the public. PHMSA has the authority it 
needs to improve standards over time. INGAA believes that, 
given this level of performance and in addition to the short 
amount of time remaining in this Congress, the simple 
reauthorization of the Pipeline Safety Act is a logical step 
for Congress to make. We support a straightforward 
authorization that leaves the current programs in place. It 
will be a pleasure to work with you in enacting such a bill. 
However, if you choose to broaden the bill, we would offer the 
following suggestions:
    Damage prevention is critical to our industry. State one-
call programs are essential to avoiding accidents and to 
preventing fatalities and injuries. I am pleased to say that 
our home State of Virginia serves as a model for the Nation. 
However, some States still exempt some of the most significant 
excavators from their programs, such as State highway 
departments and their contractors, municipal governments, and 
railroads. All excavators should have to call before they dig.
    Secondly, as we implement the IMP program, it is becoming 
clear that the 7-year reassessment program requirement mandated 
by the 2002 reauthorization bill is not necessary. In fact, a 
more informed risk-based approach is a more logical form of 
determining the appropriate reassessment period. Both the GAO 
and PHMSA have recommended that Congress update this 7-year 
reassessment requirement. We support these recommendations.
    Lastly, we ask that Congress charges PHMSA with identifying 
and retiring legacy regulations that have become redundant in 
the new integrity management era.
    Madam Chair, we are proud of the safety improvements our 
industry has made over the last decade. We hope that you agree 
that much has been improved. Thank you again for inviting me to 
testify today.
    Ms. Brown of Florida. Thank you.
    Mr. East.
    Mr. East. Thank you, Madam Chair, Ranking Member Shuster, 
and Members of the Subcommittee.
    My name is Dan East. I am a district manager for Reynolds, 
Incorporated, and I am based out of Albuquerque, New Mexico. I 
also serve as the NUCA, or the National Utility Contractors 
Association, Chairman. NUCA represents the contractors, 
manufacturers, and suppliers that rebuild and build America's 
infrastructure.
    We appreciate the opportunity to provide comments to the 
implementation of the Pipeline Inspection, Protection, and 
Enforcement Act of 2006. The PIPES Act will result in the 
evaluation of State one-call and damage prevention laws that 
may be inadequate if and when Federal intervention may be 
required.
    As I have stated, NUCA members work to repair and build 
America's aging underground infrastructure. Ladies and 
gentlemen, we are digging around the clock, but so many times 
we have dealt with underground facility owners and operators 
who mismark or do not mark their facilities. This happens more 
times than not. We understand that the PIPES Act authorizes 
Federal enforcement of State one-call and damage prevention 
laws. We just want to make sure that we hold all parties 
accountable. Now, it might come as a surprise to some of you, 
but we as excavators want to see quality enforcement. We see 
the lack of enforcement all the time.
    Now, what do I mean by ``quality enforcement''?
    One, we have laws in place today that when we, the 
excavator, hit a properly marked utility, we are required to 
make restitution for that utility, but today there are no means 
for the excavator to recoup losses resulting from a mismarked 
utility. What I mean by that is that we can spend hours and 
hours and hours looking for a utility that has been mismarked, 
and we are not able to recoup those downtime costs. After we 
have spent those hours looking for this utility and we move on 
with our excavation for another 5, 10, 15 feet and we hit that 
utility, now we have a serious safety issue, one where people 
can get hurt, and we must spend months defending ourselves 
against that utility.
    For instance, right now I am dealing with year-old 
mismarked utilities in a project in Taos, New Mexico, and it is 
a continual fight to prove ourselves that we were in the right.
    We understand, as excavators, we have to call the one-call 
notification centers, we have to wait the required time for the 
utility to mark their services, and we dig carefully around 
those utilities. We do this day in and day out. What we are 
wanting to see is effective and balanced enforcement, but 
please remember it needs to be balanced.
    NUCA has also been involved with the Common Ground Alliance 
since its inception in 2000. As many of you know, the CGA came 
out of a 1999 Common Ground Study, which proved to be a true 
testament to the spirit of shared responsibility in damage 
prevention among all stakeholders. It is a shared 
responsibility that makes damage prevention truly possible. We 
have represented the excavation community ever since, and we 
are proud to say that we have been a part of its success for 
the last 10 years.
    We see a lot out there, ladies and gentlemen, but I would 
like for you to understand that we need a balanced enforcement 
so that both the utility and the excavator meet their 
responsibilities.
    Again, I thank you for the opportunity to testify before 
you today, and I look forward to any questions that you might 
have. Thank you.
    Ms. Brown of Florida. Thank you all for your testimony.
    Mr. Shuster, do you want to go first?
    Mr. Shuster. Sure. Thank you very much.
    From what I hear from Messrs. Black, D'Alessandro, Sypolt, 
and East--and any one of the four of you can correct me--the 
PIPES Act is--you are pleased with where it is today. It hasn't 
been in place long enough. You haven't been able to implement 
for a long enough period of time to determine whether it is 
very good or good--or maybe there are some things we have 
tweaked in it--and as we move forward on the authorization, you 
want to stay along the same path with some changes here and 
there.
    Is that a fair assessment, Mr. Black?
    Mr. Black. Yes, sir, although we encourage attention to 
damage prevention, as I mentioned.
    Mr. Shuster. Right.
    Mr. D'Alessandro.
    Mr. D'Alessandro. We would just like the chance to keep 
implementing the 2002 and finish up, and the 2006 DIMP plans 
are just being written right now.
    Mr. Shuster. OK.
    Mr. Sypolt. We believe, Congressman, that the rule works, 
and we believe that what we have really seen from the data is 
that it is working very, very well, and the amount of issues 
that we have are certainly declining, and we expect them to 
further decline.
    Mr. Shuster. Mr. East.
    Mr. East. I would also sentiment that agreement, along with 
the other three parties here, that, yes, it is working. 
However, it is at this point a little bit unbalanced toward the 
utility and not the contractor, and that is where we need to 
see some adjustments.
    Mr. Shuster. You would like to see that the exemptions that 
exist today should not exist for railroads, State DOTs, and 
everybody should have to call before they dig?
    Mr. East. That is correct. Yes, sir.
    Mr. Shuster. That is your main bone of contention with it?
    Mr. East. Yes.
    Mr. Shuster. Mr. Metro, I think I heard you say that it 
hasn't been in place long enough to really get a good feel to 
be able to measure it. So you are in somewhat of agreement with 
the rest of the panel?
    Mr. Metro. That is correct. The States would like to see 
some extended time to see if these mandates work.
    Mr. Shuster. Right.
    Mr. Weimer, in fairness, to be fair and balanced, I 
understand you don't see it quite the way the rest of them do, 
so I will give you 30 seconds to just give me a synopsis of the 
major points that you want to see changed.
    Mr. Weimer. We actually agree that the law has done a very 
good job and is moving forward. We just see that it can be 
built upon, and more miles of pipeline can be included so 
people that aren't included under those protections do fall 
under those protections.
    Mr. Shuster. OK. Thank you.
    As far as the control room management rule that DOT 
released, are there any aspects of it you and industry would 
like to see changed? Are you pleased with that?
    I have got an understanding of how the folks work in a 
control room. For most of you, is it fair to say that a lot of 
folks who are working the 3 days/12-hour shifts are happy and 
you are putting some things in place that are keeping them 
alert and not run down?
    Mr. Black, why don't we start with you and go down the 
table.
    Mr. Black. We think it is a good rule. We largely support 
it. We are busy at work implementing it. We would like to iron 
out one issue of a definition of how it is applied to a control 
room and a controller. We think this can be done in upcoming 
workshops.
    Mr. D'Alessandro. Almost the same content. We are in the 
process of writing it. We are happy with the way it is coming 
across. Again, I think our people, the controllers, are happy 
with the hours and satisfied.
    Mr. Sypolt. We would echo that. Certainly, our controllers 
love the schedule. They come back to work well rested and can 
concentrate well on their jobs.
    Mr. Shuster. Mr. East, you don't have control rooms. You 
build them. You build the control rooms.
    Mr. East. Exactly.
    Mr. Shuster. Mr. Weimer, do you have any thoughts on what 
has happened?
    Mr. Weimer. We think it was a good rule, and we are glad to 
see that it is being implemented.
    Mr. Shuster. OK. Mr. Metro, as far as the Marcellus gas 
find and the pipelines, I think Mr. Carney started asking 
questions about this. Do we have any idea what percentage 
increase in Pennsylvania we are going to see in pipeline 
construction?
    Mr. Metro. It is going to be a tremendous increase. In 
2009, Pennsylvania DEP issued 1,854 well permits. So, just 
based on that, we know there are going to be a tremendous 
amount of pipelines being built.
    Mr. Shuster. And you are equipped to handle the inspection 
and all that is going to come with those pipelines coming?
    Mr. Metro. Not at this time.
    Mr. Shuster. Right, and that is what you talked about as 
the shortfall in the State budgets.
    What is the major--is it not enough personnel or the 
mandates you have to go out and----
    Mr. Metro. Pennsylvania has a little bit of a unique 
problem. We are the only State in the Union that does not have 
the extended authority to regulate pipelines that are not 
utilities, so we are working on the process of getting that 
extension with the Pennsylvania legislature. If we can get that 
extension, then we can get full jurisdiction over the non-
utility pipelines, and then we will beef up our personnel as we 
go through; but as you are well aware, Pennsylvania has 
budgetary issues, and we will do the best we can with the 
people that we have, and we use a risk assessment model to do 
those type of inspections.
    Mr. Shuster. I understand that 80 percent of the inspectors 
out there are employed by the States. As I was talking to the 
Administrator earlier, the number is 135 on the Federal level. 
Is 135 the right number? Should it be 185 or should it be 105? 
Your interaction with the Federal Government, how does that go?
    Mr. Metro. Well, from Pennsylvania's perspective and from 
the other States' perspectives, it would be nice to see 
additional Federal safety inspectors in the field. Pennsylvania 
has one inspector that resides within Pennsylvania, a Federal 
inspector, so it would be nice to see additional people.
    Mr. Shuster. GAO has come out and said that a risk-based 
focus on pipeline testing would be a better way to go than just 
the 7 years.
    What are your thoughts on that?
    Mr. Metro. Well, we haven't seen enough data yet to see if 
the 7-year is sufficient. However, I would note that many of 
the States use risk analysis when they perform their 
inspections. So risk analysis definitely would be an issue that 
we would like to look at.
    Mr. Shuster. Right.
    Mr. Weimer, your view on the risk-based?
    Mr. Weimer. Yes, we also think there has not been enough 
data. Congress gave the natural gas industry 10 years to do the 
first set. We are not through that whole 10-year period yet, so 
we think we need to get through a couple of cycles----
    Mr. Shuster. How far along are we, do you know?
    Mr. Weimer. Oh, I think we are into--well, it was passed in 
2002 and then kicked off in 2004, so we are really about 6 
years into the whole cycle.
    Mr. Shuster. And industry, Mr. Black and Mr. D'Alessandro, 
your thoughts on the risk-based. How confident are you that 
that is the way to go?
    Mr. Black. Liquid pipelines are a little farther along. We 
have completed our first baseline assessments. We are in the 
reassessments now. This was not in our testimony, but it is an 
intriguing idea. It sounds like one for the regulator to 
consider well.
    Mr. D'Alessandro. We have completed our first round on our 
transmission, and we have always had a risk-based model system. 
We have also always used a risk-based model system for the 
distribution pipes, which now the DIMP follows a risk-based 
system.
    Mr. Sypolt. We certainly believe the risk-based assessment 
is a better way to go than the 7-year period.
    Basically, we have started reassessments already as we 
complete our baselines, and we find less and less significant 
issues in the reassessment--in fact, less than 10 percent of 
what we found in the baseline, which says the corrective action 
we are taking has been working. So we are very pleased with 
that, and we did get a tremendous amount of data that we looked 
at to help us decide how to determine what risk we really have 
and what period of time we should have.
    Some pipelines actually would be more frequent than 7 
years. Some would be maybe less than that depending on the 
information that we find. What it allows us to really do, 
though, is to take the resources that we have and use them to 
their best benefit so that we can address those pipelines that 
we feel are of higher risk than others.
    Thank you.
    Mr. Shuster. Mr. East, do you have any view on that? Though 
you are probably not going to be testing them. You are going to 
be fixing them.
    Mr. East. We are into fixing them, that is correct; but in 
listening to the testimony, risk-based does make more sense 
than a fixed 7-year time period.
    Mr. Shuster. Right. OK. Well, I don't have any further 
questions, so I yield back to the Chairwoman.
    Ms. Brown of Florida. Thank you.
    I have a series of questions. Mr. Weimer, I will start with 
you because we just finished talking, and I want to get you on 
the record.
    Do you oppose a prior Bush, now Obama administration, 
proposal to eliminate this 7-year reinspection requirement for 
gas operators? How do you feel about that?
    Mr. Weimer. Yes, we oppose it. At this point, we think we 
need to get through the whole 10-year period and see a couple 
of the second-year reassessments. It would be nice if the data 
were shared with the public so the public could see, company by 
company, what the real reassessments are.
    We think, in reality, there may be a time in the future 
when such risk-based is a good idea, but that puts more 
emphasis on the regulators then to be able to keep track of 
what the industry is doing, where an automatic reinspection 
interval kind of is better for the public, in our view.
    Ms. Brown of Florida. What percentage do we inspect?
    Mr. Weimer. Well, on the natural gas side, only about 7 
percent of the natural gas transmission pipelines fall within 
the integrity management rules. Now more lines than that are 
being inspected, but those results aren't totally shared with 
the public.
    Ms. Brown of Florida. Mr. Metro, I have a question. I asked 
earlier about the grant program. We are talking about the legal 
mandate that we get up to 134 Federal inspectors, but with the 
grant program, I was asking about the waiver because basically 
we work with the State partners. How does that program work for 
you?
    Mr. Metro. In Pennsylvania, which I can give you an example 
of, we receive about 60 percent currently for funding through 
the State grant. That number has increased over the last couple 
of years. Previously, it has been hovering around 40 percent, 
anywhere from 40 to 50 percent.
    With our States' budgets and the economic situation that we 
are in, more States are looking toward the Federal Government 
to aid them in their budgetary problems. Now, this year, the 
States and the National Association of Pipeline Safety 
Representatives went to PHMSA and asked for a waiver because of 
the economic situation, and PHMSA granted it. We need some help 
on that in the reauthorization. That waiver needs to be made 
easier for the States. The process needs to be made easier.
    Ms. Brown of Florida. OK. I think that that is one way to--
it is all the same money. It is all the taxpayers' money, and 
that is one way to stretch it and make sure we give them the 
safety standards if the State is doing the inspections.
    Mr. Metro. I agree.
    Ms. Brown of Florida. So you are saying that we need to 
look at how we can work with the Department to make sure the 
waiver program works better.
    Mr. Metro. Yes. NAPSR would work closely with PHMSA to try 
to develop some type of program to make this waiver process 
better.
    Ms. Brown of Florida. Mr. Black, you indicated, because of 
the program, that the industry has had to spend about $1 
billion. However, it seems to me that you have identified about 
32,000 repairs that were made, and out of those 32,000 repairs, 
6,800 of them were serious. It seems to me that maybe you all 
have saved billions of dollars, because if the system had not 
worked you could have been faced with the situation that we are 
facing in another category.
    Mr. Black. Yes, absolutely, Madam Chair. We think money 
spent on safety pays off.
    Ms. Brown of Florida. OK.
    Mr. Sypolt, in your testimony, you indicated that you would 
like for us to eliminate the 7-year.
    Mr. Sypolt. Yes, ma'am.
    Ms. Brown of Florida. Would you like us to go to a 5-year? 
I know that is not what you are recommending.
    What are you recommending?
    Mr. Sypolt. What we recommended, Madam Chair, is that we 
look at the reassessment period based upon a risk-based 
analysis rather than a defined period of time, and there may be 
some pipelines based on that risk analysis that you would do 
more often than 7 years and some less often than 7 years. By 
being able to look at the data, to look at the prior 
information from the baseline pig run, you know, we would have 
a better view of where we could get the most benefit from 
spending our resources so that we actually concentrate on those 
lines that may be of higher risk than others.
    Mr. Shuster. Madam Chair, could I just ask a quick follow-
up?
    Ms. Brown of Florida. Go ahead.
    Mr. Shuster. Could you give us a picture of what that looks 
like, risk-based? Is that high population areas? Is that 
environmentally sensitive areas?
    Mr. Sypolt. It would take both of those into consideration. 
It would take into consideration, Mr. Congressman, many other 
things as well--soil conditions. In fact, I think you heard Ms. 
Quarterman this morning talk more about leaving rocky areas and 
going into water or different soil conditions. We look at soil 
conditions. We look at the make of the pipe. We look at the 
wall thickness of the pipe and the pressure at which it 
operates--clearly, what we have seen with regard to the prior 
corrosion on the pipeline system. So it takes into 
consideration a great deal of information. It is not just 
something where we say, Well, we would like to do A at this and 
B at that.
    Mr. Shuster. Thank you.
    Ms. Brown of Florida. What do you think about the fact that 
we are only inspecting from 7 percent to 15 percent? What is 
the possibility of expanding that pool of inspections if we go 
to a less frequent time period?
    Mr. Sypolt. I think, Madam Chair, that is an excellent 
question and one I am glad you asked me.
    The 7 percent really only applies to the regulation in 
those HCA areas. It doesn't mean that is all that our industry 
is doing. You know, the pipeline industry, with regard to 
natural gas transmission lines, actually, through today, has 
actually run smart pigs in about 49 percent of the transmission 
systems in the U.S., and we expect by 2012 to have run between 
60 and 65 percent of that even though only 7 percent is 
required.
    Ms. Brown of Florida. You know, one of the things that we 
are finding--we have got to trust our stakeholders. You trust, 
but you verify, as Ronald Reagan said. What are the best ways 
that we can verify that we are protecting the public?
    I would like to hear from some of the other participants on 
that, because, when I look at this report, what we are talking 
about is British Petroleum. The part of the legislation came 
out of their 2006 spill, but yet they have been fined over and 
over again, and there has been noncompliance. So what is it we 
can do when we find someone in the industry not complying with 
the regulations?
    Mr. Sypolt. Actually, I have found that PHMSA certainly 
does a very thorough job of auditing the natural gas 
transmission pipelines. In fact, I might even think, at times, 
they have been somewhat heavy handed in those audits, but they 
do work very hard to verify the information that we collect in 
the audits that we do, which are lined out, Madam Chair, in 
great detail.
    You know, a pipeline may be required to do, by regulation, 
more than a million investigations set on a certain time frame. 
We have software packages where we set out the schedules for 
when those are to be done. We get notices to our employees so 
that they actually know by when they are supposed to have that 
done. If they get within 2 weeks of it and they still haven't 
completed that investigation, we get a printout that goes to 
their supervisors so that they see that they have not completed 
that investigation.
    Then the dates on which those are there show up on 
printouts that the PHMSA auditors and State auditors have an 
opportunity to come in and review, and they do. Believe me, 
they do review those in great detail. They may come to our 
offices and spend 3 days on an audit, going through that 
information that is laid out in great detail to them. 
Unfortunately, at times they do find a few things. There are 
very few. We strive to comply absolutely with all of those, but 
occasionally they do find things, and they do fine pipelines.
    Ms. Brown of Florida. Well, would anyone else like to 
respond to that?
    Mr. Black.
    Mr. Black. Well, I would just like to agree that the 
Congress has given the Office of Pipeline Safety a lot of 
tools. They have shown they are not hesitant to use them. They 
do inspections. They have enforcement. They do fines. There are 
special permit requests that are denied by the agency. They are 
pretty active in this.
    Ms. Brown of Florida. Mr. Weimer.
    Mr. Weimer. Yes. One of the things that we think that could 
help increase the trust but also allow people to verify is a 
better way for the public to be able to verify that inspections 
have occurred.
    Congress has done a very good job of helping transparency 
as far as incidents. There is a whole incident database now 
that the public can look at. There is an enforcement database 
so you know if a pipeline company has had a problem and has 
been fined, but there is no way that the public can look and 
see if a company has had inspections, what the outcomes of 
those inspections have been or how that has been followed up 
on. So one of the ways transparency could grow would be to put 
up some kind of an inspection database so the public could 
review that.
    I think, overall, if the public looked at that, they would 
find out that the vast majority of pipelines are being run very 
safely, so it would increase the trust in pipelines, but at 
this point the public can't look at that information.
    Ms. Brown of Florida. Mr. East, you mentioned the one-call 
centers. Do you want to expand on that? You say all of the 
States don't have that, but I thought we had a uniform 811 
number.
    Mr. East. We do have an 811 number, and it is working quite 
well, but not all the States have encompassed the 411 or the 
811 for contractors, homeowners--whomever--to make that call to 
get into the utilities, to have their utilities located, but it 
is something that the CGA and everybody is working towards. It 
has been very effective. We are slowly getting there. As part 
of that, though, we also need to make sure we get all 
stakeholders signed up to that 811 or their 411 calls to where 
the municipalities of the utilities--everybody--is a member of 
that one-call system so that we get all utilities located.
    Ms. Brown of Florida. All right. Thank you.
    Mr. Larsen.
    Mr. Larsen. Thank you, Madam Chair. Again, thank you for 
having this oversight hearing as we are considering what to do 
next with the PIPES Act or with the pipeline safety laws. A 
couple questions for Mr. Weimer.
    In your testimony, you pointed out that PHMSA's incident 
database lists only 70 excavation-related incidents. I 
apologize if you mentioned this and I wasn't here, but you also 
noted that the Common Ground Alliance records showed 60,000 
incidents in the same time period.
    Can you explain the discrepancy here?
    Mr. Weimer. I think that discrepancy is explained by the 
PHMSA's database. Companies are only required to report 
incidents if there has been a death, an injury that causes 
hospitalization, or $50,000 worth of property damage, and that 
is $50,000 in 1984 dollars, so it is really more like $90,000-
plus today. A lot of damage caused by excavation probably 
doesn't hit that cost range, so that is probably why there are 
only 70 reported under PHMSA. The Common Ground Alliance 
captures many more because it is voluntary, and they keep their 
results secret. They are saying 60,000, although it is a very 
hit-and-miss system that a lot of regions haven't plugged into 
totally. So there is a big disconnect there if we want to move 
forward with damage prevention programs in a strategic sort of 
way.
    Mr. Larsen. Yes.
    I understand this is a sticking point, perhaps, between the 
opinions of the Pipeline Safety Trust, and maybe others on the 
panel, and I will give others on the panel an opportunity to 
respond to it.
    You brought up a point regarding the idea to extend PHMSA 
oversight to the siting of pipelines. Can you talk a little bit 
about what that would look like and why you think that is 
important?
    Mr. Weimer. Yes. I don't think I recommended that they have 
oversight over siting, but it needs to be integrated better 
with siting--the safety and the siting.
    Right now, depending on whether it is a natural gas or a 
liquid pipeline, FERC might be involved with natural gas. It is 
the States or even the U.S. State Department with liquid 
pipelines, and there is kind of this disconnect when the U.S. 
State Department is doing an EIS on the siting of a pipeline, 
but PHMSA is doing other processes like spill plans that are 
required, the special waivers or permits. Even the high-
consequence areas kind of fall outside of that EIS process. So, 
with the public's trying to be part of that whole process, 
there is this disconnect.
    There are also some concerns. PHMSA did a number of 
inspections about a year ago and held a workshop where they 
went in and inspected 35 sites and found a wide range of 
problems on construction of new pipelines. They found coating 
damage. They found pipes that were bought that were not the 
correct pipes being put in the ground incorrectly, welded 
incorrectly.
    What it really brought to mind was that we need to make 
sure that PHMSA has the resources so they are on site when they 
are building these thousands and thousands of miles of new 
pipeline, and I don't think that is how it has happened in the 
past.
    Mr. Larsen. Mr. D'Alessandro or Mr. Black?
    Mr. D'Alessandro, you have been pleasantly, you know, 
patient, so I will give you a chance to maybe respond to that.
    Mr. D'Alessandro. From our industry point of view, I am 
not--you know, from the distribution point of view, I think I 
would defer to the bigger sized pipes.
    Mr. Larsen. OK. Mr. Sypolt.
    Mr. Sypolt. Mr. Congressman, I was waiting for Mr. 
D'Alessandro to respond. Would you please repeat the question?
    Mr. Larsen. It was basically to respond to Mr. Weimer's 
comments about what role PHMSA would play in the siting of 
pipelines and that there is maybe a disconnect between the 
safety aspects and the siting aspects.
    Mr. Sypolt. I guess I haven't seen PHMSA's role in siting. 
I have seen that more in FERC, in the FERC process. You know, 
public meetings are held where the public can come and find out 
about and learn about the activities of the pipeline 
construction as well as the risks of the pipelines.
    PHMSA, though, does come out and audit the construction 
activity, and I think that is, you know, beneficial for them to 
do that. Certainly, they have the regulation in place that 
allows them to do that today.
    Mr. Larsen. Madam Chair, the clock didn't start, so I am 
not quite sure how much time I have got. OK.
    Just generally, you know, we are considering the 
reauthorization that is up this year. As I said to the first 
panel, we could just change the dates on this thing and move 
on. That is one end of the spectrum. The other end of the 
spectrum would be some level of changes made, probably more 
major changes, but I guess I sense we are not looking at a full 
overhaul, but we are looking at maybe some changes to the act.
    Generally, are the guardrails on this reauthorization kind 
of defined fairly well?
    Mr. Weimer.
    Mr. Weimer. I think that is true. I think, in the last two 
reauthorization cycles we have dealt with a lot of the low-
hanging fruit, and now we are looking at things that are 
already existing, maybe pushing the edges of those and 
expanding those slightly but nothing--no new major initiatives.
    Mr. Larsen. Mr. Black.
    Mr. Black. There is a lot that this agency has done 
recently, and there is a lot that we are implementing. We think 
that is working. The safety record is coming down on liquid and 
gas pipelines. I don't think there is a lot that we ask you to 
do. Pardon me for being repetitive.
    We do encourage you to look at damage prevention. It is an 
interesting policy issue to have the State enforcement of 
damage prevention but have the Federal authority to step in 
when a State doesn't have an adequate plan. That is what the 
Office of Pipeline Safety is working on right now. I hope that 
you all will encourage them to move forward to do that. One, 
but not all, of the issues in there is of the one-call 
exemption. We hope that, of the 41 States that have some type 
of exemptions for one-call, they will either step up themselves 
or find the Federal Government doing it for them.
    Mr. D'Alessandro. We believe we need a chance to get DIMP 
implemented. The plans aren't due until August. Our TIMP, the 
Transmission Integrity Management Plan, we have gone through. 
We are on our second reassessment. We feel we have got enough 
data, that we have got everything we need to move forward. 
Damage prevention numbers are getting better. They are showing 
improvement. So I think we are fine in moving straight forward.
    Mr. Larsen. Yes.
    Mr. Sypolt. Mr. Congressman, we believe that a simple 
reauthorization would actually be beneficial to move forward 
with. We did comment on three things that we might change, 
should the Congress choose to open up the bill, and we have 
basically talked about all those.
    The only one that we haven't mentioned--again, you know, it 
may have been for PHMSA to look at some legacy-type regulations 
that we believe may have been supplanted by the integrity 
management programs of today.
    Mr. Larsen. Right. Yes.
    Mr. East.
    Mr. East. We would concur. However, we do believe that 
damage prevention is going down, but if there is an area to 
tweak in damage prevention we need a little help.
    We would like to see the other States get involved with 
one-call systems so that all stakeholders are involved with 
this. We have worked very hard on the contracting side to work 
with the municipalities and the stakeholders, and if we can all 
come to terms and get all of this put together, I believe our 
damage prevention will be much greater.
    Mr. Larsen. Mr. Metro, I am sorry, I sort of skipped over 
you.
    Mr. Metro. That is fine.
    The States agree pretty much that we would like to see a 
simplified reauthorization process. It is just that the States 
would like to make sure that the revenues and the funds are 
going to them appropriately.
    Mr. Larsen. I also noted from someone's testimony to maybe 
authorize it for a longer period of time rather than for 4 
years. I don't know. It might be helpful for us to start, 
maybe, if we get this done, doing oversight hearings next year 
so we are building up to the next 4 years or whatever time 
frame so that if, in fact, we do a 4-year, by year four, we 
will have gotten that list of things, and we are just ready to 
go.
    Mr. Larsen. We will start negotiating the next 
reauthorization today as opposed to the tail end of the 
reauthorization period. It just seems to me after we did this 
in 2002 in 1998 or 1996, maybe jumping on this a little sooner, 
for the next round because we are going to have about 10 years 
of experience or 12 years of experience, that we should be able 
to say, OK, what would the next iteration look like? This might 
be better timing for that.
    Thank you all.
    Ms. Brown of Florida. Thank you. I want to thank the 
witnesses for their testimony and the Members for their 
questions. Again the Members of this Subcommittee may have 
additional questions for the witness, and we will ask you to 
respond in writing. The hearing record will be held over for 14 
days for Members wishing to make additional statements or to 
ask further questions.
    Unless there is further business before the Subcommittee, 
we are adjourned.
    [Whereupon, at 1:15 p.m., the Subcommittee was adjourned.]

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