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


 
                        THE SAFETY OF HAZARDOUS
         LIQUID PIPELINES: REGULATED VS. UNREGULATED PIPELINES

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

                               (111-124)

                                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

                               __________

                             June 29, 2010

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             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               TOM GRAVES, Georgia
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
     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               TOM GRAVES, Georgia
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)
                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Epstein, Lois N., P.E., LNE Engineering and Policy, Anchorage, 
  Alaska, and Consultant, Pipeline Safety Trust..................     5
Falgoust, Stephen, Director, Asset Integrity, Plains All American 
  Pipeline LP, also on behalf of the Association of Oil Pipe 
  Lines and the American Petroleum Institute.....................     5
Hersman, Hon. Deborah A., Chair, National Transportation Safety 
  Board..........................................................     5
Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous 
  Materials Safety Administration................................     5

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Cohen, Hon. Steve, of Tennessee..................................    30
Oberstar, Hon. James L., of Minnesota............................    31
Richardson, Hon. Laura, of California............................    35

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Epstein, Lois N..................................................    40
Falgoust, Stephen................................................    51
Hersman, Hon. Deborah A..........................................    56
Quarterman, Hon. Cynthia.........................................    64

                       SUBMISSIONS FOR THE RECORD

Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous 
  Materials Safety Administration:
      Response to request for information from Hon. Brown, a 
        Representative in Congress from the State of Florida.....    22
      Response to request for information from Hon. Larsen, a 
        Representative in Congress from the State of Washington..    18
      Response to request for information from Hon. Sires, a 
        Representative in Congress from the State of New Jersey..    12

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  THE SAFETY OF HAZARDOUS LIQUID PIPELINES: REGULATED VS. UNREGULATED

                              ----------                              


                         Tuesday, June 29, 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 2:00 p.m., in 
room 2167, Rayburn House Office Building, Hon. Corrine Brown 
[Chairman of the Subcommittee] presiding.
    Ms. Brown. The Subcommittee on Railroad, Pipelines and 
Hazardous Material will please come to order.
    The Subcommittee is meeting today to hear testimony on the 
safety of hazardous liquid pipeline. Today's hearing will focus 
on which pipelines are regulated, which pipelines are exempt 
from safety regulations, and any gaps that may exist in those 
regulations.
    With almost 200,000 miles of on-shore and off-shore 
hazardous liquid pipelines in the United States, it is critical 
that DOT ensure that all pipelines, regardless of their size 
and location, are being operated in a safe manner.
    A few things have become crystal clear as a result of the 
Deepwater Horizon oil spill. One is that the industry cannot be 
relied upon to regulate itself. It is up to Congress and the 
Federal agencies to establish that high bar of safety that the 
industries must meet and that our constituents expect and then 
to enforce those safety standards.
    Second, although the industry talks a lot about safety, it 
is clear that the culture of safety is not there. This is 
evident in their history of accidents, their lack of compliance 
with existing regulations, and their disregard for worker 
safety.
    What we have also seen is an unhealthy, often cozy 
relationship between the oil industry and the agencies that are 
responsible for regulating them. We saw this when we conducted 
our hazardous materials investigations with DOT, and we have 
seen it in the past with other investigations of the DOT's 
Office of Pipeline Safety.
    And although pipeline releases have caused relative few 
fatalities in absolute numbers, a single pipeline incident is a 
catastrophe. For example, in 1999, a gas pipeline explosion 
killed two children and an 18-year-old man and caused $45 
million in property damage. In 2006, a corroded pipeline in the 
North Slope of Alaska leaked more than 200,000 gallons of crude 
oil in an environmentally sensitive area. And on May 25, 2010, 
during a scheduled shutdown of the 800-mile Trans-Alaska 
pipeline for maintenance, a relief tank overflowed and spilled 
210,000 gallons of crude oil.
    Even with the new low-stress regulations issued by PHMSA, 
there are still gaps in regulating the safety of hazardous 
liquid pipelines, and I don't believe we truly know if the 
industry is prepared to react to an accident. That is why it is 
critical that Congress ensures that PHMSA has all the tools it 
needs to protect our community and environment from harm. It is 
obvious that we have a lot of work to do to ensure that 
pipelines in the United States are made as safe as possible and 
that companies involved in the oil and gas industry are making 
safety their number one priority.
    With this, I want to welcome today's panelists and thank 
them for joining us. I look forward to hearing 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 materials from Members 
and witnesses.
    Without objection, so ordered.
    I yield to Mr. Shuster for his opening statement.
    Mr. Shuster. I thank the Chairwoman and thank you for 
holding this hearing today.
    As the authorization for pipeline safety programs is set to 
expire in September, it is important that we continue to hold 
hearings like this to identify what parts of the law are 
working and what parts need to be revisited.
    I think the situation in the Gulf is certainly a 
catastrophe, and BP needs to be held accountable. When I saw 
the fact that BP has had over 700 willful violations of 
drilling and pipeline safety out in the Gulf, and the next 
closest violator is Sunoco with eight, there certainly is a 
problem with what BP is doing, and we need to make sure that we 
are safe in what we are doing out there in the Gulf.
    We need to, obviously, first of all, stop the spill, stop 
the oil from coming out into the Gulf; second, focus on the 
cleanup; and then we will have plenty of time to assess the 
blame and hold those accountable for the situation.
    But as you hold these hearings on pipeline safety that is 
not dealing with deep shore pipelines, it is dealing mainly, 
almost exclusively, with pipelines that are on land or very 
close to the land, it is important to remember that these 
pipelines are the safest mode of transportation. In 2008, there 
were 39,000 transportation-related fatalities. Only eight of 
those deaths were attributed to pipeline accidents, and only 
two were attributed to liquid pipeline accidents.
    Certainly the loss of life, we don't like to see any of 
that, but it is very low. It is very safe. And my view would be 
the only way to stop it, have zero fatalities, is to not ship 
anything. Because when you have even a low amount of risk, you 
are going to have accidents, and we want to make sure that they 
are held to very much a minimum, which it appears that they 
are.
    Pipelines are also the most efficient and environmentally 
sound way to transport petroleum liquids. Liquid pipelines 
transport more than 17 percent of our Nation's freight but only 
account for 2 percent of our Nation's freight bill. In 
addition, for every barrel of oil shipped 1,000 miles by 
pipeline, less than one teaspoon of a barrel is lost.
    But just because liquid pipelines are efficient and have a 
solid safety record does not mean there is nothing left to do. 
Earlier this month, an estimated 800 barrels of oil escaped 
from a leak in the Chevron crude oil pipeline near Salt Lake 
City. Incidents like this have steadily declined over the past 
10 years, but we need to ensure that the pipeline industry and 
our pipeline safety regulators continue to work together so 
that this downward trend in pipeline incidents continues over 
the next 10 years.
    Today, we will be hearing testimony on types of liquid 
pipelines regulated by the Department of Transportation and the 
types of liquid pipelines that are regulated by State agencies 
or other Federal agencies. It is important to remember that 
just because a pipeline is not regulated by the Department of 
Transportation does not mean that the pipeline is not subject 
to any regulation. State regulators and other Federal agencies, 
such as the Coast Guard, the EPA, and OSHA, have the ability to 
regulate certain pipelines.
    I know that some of the witnesses feel there are gaps in 
the regulation of liquid pipelines that must be closed. Others 
believe that DOT has broad enough regulatory authority to 
address any gaps that may exist. So I look forward to hearing 
our witnesses today. Thank you all for being here. I appreciate 
you taking the time.
    And I yield back.
    Ms. Brown. Mr. Sires from New Jersey.
    Mr. Sires. Thank you, Chairwoman Brown and Ranking Member, 
for holding this hearing. I will be very brief.
    Basically, I represent the part of New Jersey, northern 
part of New Jersey, the Jersey City area, Hoboken area; And 
near that area 16 years ado we had the rupture of the Edison 
pipeline. When it was all over, the plume was 400 feet high; 
and it burned something like 1,500 apartments in the area.
    My concern is that, as more and more development takes 
place in those areas, the pipelines are running right under 
some of the most heavily urban areas in the country. We have a 
pipeline that is running through Jersey City and under the 
Hudson River to bring gas to New York. One of the concerns that 
I have is that sometimes even the municipalities do not have a 
hearing concerning these pipelines, although this particular 
pipeline that is running through Jersey City now held public 
hearings, to their credit, and informed the public of what is 
happening. I am very concerned about the safety of people that 
live near these pipes, especially with the experience that we 
had in New Jersey and Edison. They are running closer and 
closer to urban areas, and I am very concerned about the 
safety.
    And now the rest of the remarks, Madam Chair, I would like 
to submit for the record.
    Ms. Brown. Thank you.
    The congresswoman, Grace Napolitano from California.
    Mrs. Napolitano. Thank you, Madam Chair; and thank you for 
holding this really important issue to me and my district.
    There are two major pipeline issues in my area that are 
currently affecting the 30th Congressional. First is the 
pipeline safety project under a railroad track which several 
cities in the district have worked together to close two 
railroad grade crossings that are not only a nuisance but also 
creates a railroad diversion for Union Pacific through Cal Poly 
Pomona University's agricultural fields in order to accomplish 
it. However, this project has $80 million of taxpayer money, 99 
percent complete, but not finished because of a little debate 
between Kinder Morgan and Union Pacific.
    The issue is how to protect the pipeline, which has been 
greatly delayed and is costing some of my project people 
$70,000, $80,000 just because of that delay. The California 
State Fire Marshal has stepped in and directed the Pipeline and 
Hazardous Material Safety Administration to visit, which they 
have done, and to spur them into action. There is an issue 
about what guidelines do they use. Do they use the Federal 
guidelines or the State guidelines?
    I will put these questions when my time comes up for 
questions.
    The second one is, Kinder Morgan is another pipeline in my 
district which has leaked jet fuel over the last 30, 40 years 
into an area that is highly populated. It is a plume that has 
been cleaned up by the Air Force, who is the owner of the 
property, and is spreading on to park and homes. The California 
Regional Water Quality Control Board has been given the 
authority by U.S. EPA to be the lead investigator and be the 
regulator and has conducted tests. But these pipelines--it may 
not be just my area, we have been dealing with it now for at 
least 25 years that I can think of--is what is happening in 
other areas where there is underground piping of fuels that are 
supposedly monitored, supposedly tested on a regular basis--and 
the Ranking Member says a teaspoon of oil, this is a whole leak 
where it has contaminated a small body of water and, according 
to some of the residents in the area, has other health effects 
such as cancer.
    So we need to be ensuring that these old systems, the aging 
infrastructure, is looked at more thoroughly in areas where 
there may be residential people or bodies of water underneath 
that might be tainted and would produce some health effects for 
the people that eventually get that water.
    Thank you, Madam Chairman. I look forward to the questions.
    Ms. Brown. Thank you.
    Congressman Walz from Minnesota.
    Mr. Walz. I thank you, Madam Chair; and I want to thank our 
witnesses for being here. I would like to ask for consent to 
submit a statement for the record, and I will yield the time to 
the witnesses.
    Ms. Brown. I am pleased to introduce our panel of 
witnesses. We tried to schedule this hearing for an earlier 
time, but the room wasn't available. So, due to the time 
constraints, I am going to put all of the witnesses on the same 
panel for this hearing.
    We are pleased to have with us The Honorable Cynthia 
Quarterman, who is the Administrator of Pipelines and Hazardous 
Materials; Mrs. Deborah Hersman, Chair of the National 
Transportation Safety Board; Mr. Stephen Falgoust, Director of 
Asset Integrity, Plains All American Pipeline, also on behalf 
of the Association of Oil Pipe Lines and the American Petroleum 
Industry; and Mrs. Lois Epstein, P.E., Consultant, Pipeline 
Safety Trust.
    With that, Honorable Quarterman, you have the floor.

 TESTIMONY OF THE HONORABLE CYNTHIA QUARTERMAN, ADMINISTRATOR, 
  PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION; THE 
 HONORABLE DEBORAH A. HERSMAN, CHAIR, NATIONAL TRANSPORTATION 
  SAFETY BOARD; STEPHEN FALGOUST, DIRECTOR, ASSET INTEGRITY, 
PLAINS ALL AMERICAN PIPELINE LP, ALSO ON BEHALF OF ASSOCIATION 
  OF OIL PIPE LINES AND THE AMERICAN PETROLEUM INSTITUTE; AND 
 LOIS N. EPSTEIN, P.E., LNE ENGINEERING AND POLICY, ANCHORAGE, 
         ALASKA, AND CONSULTANT, PIPELINE SAFETY TRUST

    Ms. Quarterman. Good afternoon, and thank you.
    Chairwoman Brown, Ranking Member Shuster, Members of the 
Subcommittee, thank you for the opportunity to appear here 
today and for your continued interest in pipeline safety. We 
very much appreciate it. Safety is our number one priority at 
PHMSA and one that we share with Secretary LaHood and the rest 
of the Department. I want to thank the Chairwoman for her 
leadership and the attention given to this issue by the 
Subcommittee.
    Examining the regulatory framework and the oversight of the 
Nation's hazardous liquid pipeline system is important in light 
of changing industry practices and new technologies. Our 
discussions today will identify current and needed protections 
for public safety related to hazardous liquid pipelines.
    For years, PHMSA has worked to utilize the authority given 
to it by Congress to enhance the safety of hazardous liquid 
pipelines. PHMSA's oversight of America's pipeline 
transportation is broad and covers the vast majority of 
pipelines located within our borders. Unfortunately, this 
oversight is not unlimited, and PHMSA can only provide 
protections from pipelines under our jurisdiction.
    PHMSA has used responsible and methodical approaches to 
focus on high-risk infrastructure issues first and provide 
effective solutions through enforcement and rulemakings. This 
tiered approach has helped PHMSA devise and implement effective 
rulemakings, like the one in place and the one proposed for 
low-stress lines.
    For hazardous liquid pipelines, PHMSA's jurisdiction 
includes the movement of highly volatile or other hazardous 
liquids through pipelines meeting certain specifications, 
including those crossing commercially navigable waters. 
However, PHMSA does not have complete authority to regulate 
certain gathering lines, a safety concern we share with the 
National Transportation Safety Board.
    PHMSA is in the process of developing legislation that 
would address our jurisdiction over the transportation of 
hazardous liquids by pipeline in the future. We would like to 
collect more fulsome data related to the safety of hazardous 
liquid pipelines and study the regulation of the transportation 
of nonpetroleum hazardous pipelines, such as biofuels and 
chlorine by-pipeline.
    Finally, we are reviewing all instances where PHMSA has not 
historically exercised its jurisdiction to determine whether 
those exceptions still make sense or should be revoked.
    The support of Congress is critical to the safe and 
effective regulation of the transportation of hazardous liquid 
pipelines. PHMSA looks forward to working with Congress to 
address any issues you may have concerning its pipeline safety 
program and the regulation of hazardous liquid pipelines. We 
very much appreciate the opportunity to report on our authority 
over hazardous liquid pipelines and the opportunities that 
exist to strengthen our oversight.
    Thank you, and I would be happy to answer any questions you 
might have.
    Ms. Hersman. Chairwoman Brown, Ranking Member Shuster, and 
Members of the Committee, thank you for the opportunity to 
discuss the issue of pipeline safety.
    The NTSB is responsible for determining the probable cause 
of transportation accidents and promoting transportation 
safety. The Board now has 18 open recommendations to PHMSA 
regarding the gas and liquid pipeline industry.
    Today, I am going to focus on two concerns in my oral 
testimony. One of those concerns gained much attention 
following corrosion failures on a BP exploration low-stress 
pipeline in 2006. While this leak in Alaska resulted in 
improved regulations for low-stress pipelines, the Board 
believes that more can be done.
    This slide shows the complex system of low-stress and 
gathering lines regulations prior to the BP incident, then to 
the phase one PHMSA role and the proposed phase PHMSA role. 
Last week, PHMSA released phase two, which proposes to extend 
regulations to additional low-stress pipelines and use risk-
based monitoring as a means to conduct oversight. The NTSB 
believes that a risk-based approach can work if effective 
oversight is exercised by PHMSA and the pipeline operators. 
This rulemaking does not address offshore pipelines or on- or 
off-shore gathering lines.
    As mentioned previously, an area of concern is risk-based 
pipeline safety programs which require that the operators 
develop, implement, and evaluate individual programs and plans. 
PHMSA has the responsibility to review these plans for 
regulatory compliance and to conduct audits to evaluate their 
effectiveness. However, in recent investigations, the NTSB has 
seen indications that PHMSA and the operator oversight has not 
been adequate.
    This photo is from a November 1, 2007, rupture of a propane 
pipeline in Carmichael, Mississippi, that resulted in two 
fatalities, seven injuries, and over $300 million in damage. It 
is the responsibility of the pipeline operator to raise public 
awareness about the pipeline. The operator hired two 
contractors to administer its program, but the mailing list did 
not include all residential addresses within the mailing area. 
This mistake was not caught until after the accident. The NTSB 
recommended that PHMSA initiate a review of all public 
education programs.
    Likewise, consideration of leak history is an important 
factor in determining an operator's integrity management plan. 
But in a 2004 anhydrous ammonia pipeline rupture in Kingman, 
Kansas, we discovered that the operator left out the factor 
assessing leak history. PHMSA did not catch the omission, and 
it resulted in a deferred inspection. The pipeline ruptured 2 
years before it was scheduled to be inspected.
    As a result of these accidents and other investigations, 
the NTSB believes that PHMSA must establish a more aggressive 
oversight framework so that risk-based integrity management 
programs are not only effectively designed but effectively 
executed as well.
    Thank you very much.
    Mr. Falgoust. Thank you, Chairwoman Brown, Ranking Member 
Shuster, and Members of the Subcommittee. I am Stephen Falgoust 
of Plains All American Pipeline, representing the Association 
of Oil Pipelines and the American Petroleum Institute. We 
appreciate the opportunity to participate in this hearing.
    I am Director of Asset Integrity for Plains, and I have 
over 20 years experience in pipelines for petroleum 
transportation. My experience is in regulatory compliance and, 
to a greater extent, asset integrity.
    Plains is a publicly traded master limited partnership 
engaged in the transportation, storage, terminal ling, and 
marketing of crude oil, refined products and liquefied 
petroleum gas and other natural gas-related products. Plains 
operates 12,000 miles of pipeline to the United States.
    I am pleased to provide an overview of key components of 
hazardous liquid pipeline safety regulations. A mix of Federal 
and State oversight ensures the safety of our Nation's 
hazardous liquid pipelines. I will first discuss the primary 
Federal safety regulator in the Office of Pipeline Safety and 
then discuss other regulatory oversight of pipeline safety.
    OPS's liquid pipeline safety regulations cover the vast 
majority of pipelines engaged in transportation of crude oil, 
petroleum products, and other hazardous liquids. OPS is charged 
with inspection and enforcement of pipeline safety regulations 
over interstate pipelines and intrastate pipeline 
transportation. In many instances, individual States also 
enforce stringent pipeline safety regulations over intrastate 
pipeline transportation within their boundaries. Lines not 
subject to OPS's liquid pipeline safety regulations fall within 
the purview of State agencies, such as State oil and gas 
commissions and other State and Federal agencies.
    Pipeline facilities involved in the transportation of 
liquids or carbon dioxide in or affecting interstate or foreign 
commerce, including pipeline facilities on the Outer 
Continental Shelf, are covered by 49 CFR 195 and regulated by 
OPS. All pipelines subject to Part 195 must meet numerous 
requirements, including corrosion control, damage prevention, 
public awareness, reporting, design standards, construction 
methods, operational controls and limitations, pressure 
testing, maintenance standards, qualification of personnel, and 
emergency response. OPS's safety regulations also apply to 
related pipeline facilities such as breakout tanks, valves, 
meters, pumping units, pressure regulating devices, and other 
equipment.
    In addition to all of the other provisions of Part 195, 
operators of pipelines that could affect high-consequence 
areas, or HCAs, are required to develop an integrity management 
plan. Pipelines are to perform integrity assessments of the 
condition of their pipelines regularly and mitigate features 
that could reduce pipeline integrity detected by those 
assessments. This is an extra layer of oversight based on the 
fact that consequences of a release are potentially greater if 
there is an impact on such areas.
    Certain liquid pipelines are regulated by State agencies 
and Federal agencies other than OPS. For example, pipelines 
that serve oil and gas production facilities within a local 
producing area or that traverse between production facilities 
may be regulated by States, except when they cross Federal 
land, in which case they are regulated by Federal agencies. 
These include pipelines sometimes referred to as flow lines or 
production lines.
    In addition, lines that gather crude oil from producing 
areas and deliver it into a transportation pipeline may be 
regulated by States or by other Federal land management 
agencies. They are regulated by OPS if they cross non-rural or 
are covered by the OPS low-stress pipeline rule.
    The U.S. Coast Guard has safety oversight of pipelines that 
serve as offshore facilities, marine facilities, and terminals. 
Pipelines that operate on the OPS upstream, generally seaward, 
of the last valve on the last production facility, and those 
operated by producers that cross into State waters without 
first connecting to a transportation operator's facility on the 
OCS, are subject to the oversight of the Mineral Management 
Service.
    Intrastate pipelines are subject to OPS jurisdiction, 
unless a State agency is federally certified to regulate and 
inspect intrastate pipelines. Federal law specifically allows 
States to assume responsibility for enforcing regulations over 
intrastate pipelines through an annual certification. States 
may have additional or more stringent requirements in place as 
long as they are not inconsistent with Federal standards.
    If a State does not meet the requirements for 
certification, it can still enter into an agreement with OPS to 
oversee certain aspects of intrastate pipeline safety, but OPS 
retains responsibility of enforcement for any violations on 
intrastate pipelines.
    States also enforce State damage prevention laws. In 2006, 
Congress granted OPS limited authority to enforce Federal 
damage prevention laws in States which did not have adequate 
State damage prevention programs.
    Unfortunately, not every State plan is adequate and 
adequately enforced. As our association witness mentioned on 
May 20, we recommend OPS move forward with its proposal on 
damage prevention and include a minimum requirement that State 
programs must disallow one-call exemptions for State agencies, 
municipalities, and commercial excavators. Third-party damage 
is a leading cause of significant incidents along the right of 
way, and we ask for your continued help in reducing those 
risks.
    Thank you.
    Ms. Brown. Ms. Epstein.
    Ms. Epstein. Good afternoon and thank you for inviting me 
to testify today.
    My name is Lois Epstein, and I am an Alaska- and Maryland-
licensed engineer. My background in pipeline safety includes 
membership for 12 years on PHMSA's Hazardous Liquids Advisory 
Committee, testifying before Congress many times on pipeline 
safety, and analyzing the performance of Alaska's Cooke Inlet 
pipeline infrastructure.
    Currently, I am a consultant for the Pipeline Safety Trust, 
a public interest non-profit located in Bellingham, Washington. 
My testimony today reflects the Trust's views.
    PHMSA regulation of pipelines has progressed greatly in the 
past decade largely as a result of the work of Chairman 
Oberstar and this Committee as well as other Committees which 
provided vigorous oversight and statutory direction in the wake 
of several tragic accidents. Of particular significance were 
the 1999 Bellingham gasoline pipeline accident that killed 
three youths, the 2000 Carlsbad natural gas pipeline accident 
which killed 12, and the costly 2006 BP Pipeline releases on 
Alaska's North Slope. The first two accidents resulted in 
PHMSA's integrity management requirements. The Alaska releases 
resulted in PHMSA finally proposing last week the second and 
final phase of a congressional mandate issued in 2006 dealing 
with unregulated rural low-stress pipelines. This mandate 
followed a 1988 resolution--that was 22 years ago--by the 
National Association of Pipeline Safety Representatives sent to 
U.S. DOT asking for elimination of that exemption.
    What is problematic about PHMSA's history and ominous for 
the future is the reactive nature of its actions and the at-
times overly-narrow and inconsistent nature of its regulations. 
PHMSA does not act proactively in preventing major pipeline 
problems, a circumstance not unlike the now familiar situation 
with the Minerals Management Service.
    In the rest of my testimony, I discuss pipelines that PHMSA 
needs to regulate to prevent future accidents proactively, 
using some examples from Alaska that I am familiar with. 
However, the problems with these types of pipelines occur 
elsewhere as well. Regulating some of these types of pipelines 
requires statutory changes, and others can be addressed 
administratively.
    As we have heard today from PHMSA, its pipeline regulation 
can be described as patchwork at best. Near the end of my 
testimony I discuss two long-standing, important deficiencies 
in PHMSA's transmission line regulation. Please refer to figure 
one showing what pipelines are regulated by PHMSA and which are 
not and also the Alaska scheme for regulating those pipelines.
    Both Congress and PHMSA are responsible for PHMSA's 
extremely limited regulation of so-called ``gathering lines.'' 
Since 2006, the State of Alaska does not use this term at all 
for pipelines that are not facility piping. They are now 
regulated as flow lines or transmission pipelines.
    It is not clear where federally defined gathering lines end 
and transmission line begin. Given these two types of pipeline 
similarities, one would think that PHMSA has sufficient 
technical justification to regulate these similar lines in a 
similar fashion. The Trust believes that Congress should 
require PHMSA to regulate gathering lines as transmission lines 
to prevent releases. NTSB's testimony before the Senate 
Commerce Committee on June 24, 2010 supports this position.
    Flow lines are multi-phased pipelines that take materials 
from wells to separation facilitates. Particularly in the early 
part of winter, Alaska commonly has releases from these 
unregulated pipelines.
    State regulation of these pipelines alone has not stopped 
these spills, largely due, I believe, to the lack of 
enforcement. On November 29, 2009, for example, BP had a 
release of approximately 46,000 gallons from an 18-inch flow 
line. Congress needs to require PHMSA to regulate flow lines 
under 49 CFR 195 rules by a date certain.
    Following separation of oil, gas, and water during crude 
oil production, produced water lines carry briny water 
contaminated with oil to injection wells for disposal. Produced 
water may be considered hazardous liquid. These produced water 
lines can and do fail in manners similar to other pipelines. 
For example, on Christmas day in 2008, at the ConocoPhillips 
Kuparuk oil field on Alaska's North Slope, a corroded pipeline 
released nearly 100,000 gallons of toxic produced water.
    Drilling for natural gas in shale and coal formations has 
grown enormously in recent years and results in large 
quantities of produced water. These pipelines carry toxic 
materials to wells or surface disposal facilities, including 
evaporation ponds. Congress needs to required PHMSA to regulate 
produced water lines under 49 CFR 195 by a date certain.
    On the topic of regulatory deficiencies for currently 
regulated pipelines, in its hazardous liquid pipeline integrity 
management rule PHMSA rejected the comments of NTSB, U.S. EPA, 
and others and chose to leave shutoff valve location decisions 
up to pipeline operators. Congress needs to reiterate its 
previous mandates to PHMSA on shut off valve use and ensure 
they are followed.
    Similarly, there are no performance standards for leak 
detection systems. The Chevron pipeline release near Salt Lake 
City earlier this month is an example of what can go wrong when 
a pipeline with a leak detection system has no performance 
standards for that system, and I included an attachment on that 
leak. Congress also needs to direct PHMSA to issue performance 
standards for leak detection systems by a date certain.
    In conclusion, hazardous liquid pipeline releases can have 
serious adverse public environmental and economic consequences. 
These consequences can nearly be eliminated and certainly can 
be significantly reduced with adequate Federal pipeline safety 
requirements and adequate enforcement, but that is a topic for 
another day. Investing in pipeline safety as a Nation pays off 
over the long term. Thank you very much for your attention to 
these important issues.
    Ms. Brown. Thank you all for your testimony.
    Now Mr. Sires.
    Mr. Sires. Thank you, Madam Chairman.
    Ms. Quarterman, I understand that special permits may be 
requested in certain instances by an operator that can waive 
and modify compliance with an existing regulation. While I 
understand that PHMSA must ultimately approve this request, to 
me this still appears that the industry is given the 
opportunity to regulate itself. Do you know how many special 
permits are approved and do you know what percentage of special 
permits are approved that are submitted?
    Ms. Quarterman. I believe there are about 85 special 
permits that exist in the pipeline program.
    With respect to special permits, there is a requirement 
that those permits equal or better the regulatory requirements 
in the rule. There is a detailed process that takes sometimes 
as much as 2 years before a special permit has been approved. 
It includes involvement of subject matter experts. Our 
engineering group, all of the regional directors for the 
program have to all agree that it is appropriate to have a 
special permit.
    As to the numbers that have been rejected, I don't know 
that. Across the board, I think, in the past year about 22 out 
of--about one-third I think were not approved, but I can get 
those statistics to you for the record.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7251.011
    
    Mr. Sires. So two-thirds were approved.
    I don't understand why, if it takes 2 years, why do they 
have to file for a waiver, these operators?
    Ms. Quarterman. Well, if they don't file for a waiver, they 
have to follow the pipeline safety requirements.
    Mr. Sires. And how long does that take?
    Ms. Quarterman. Well, that is the existing rules, which is 
straightforward. They can do that immediately.
    Mr. Sires. The other question that I had is, in terms of 
municipalities, how do you inform the municipality that this is 
taking place? Because I understand there are no requirements 
for a municipality to give the approval for these pipes.
    Ms. Quarterman. With respect to hazardous liquid pipelines, 
there is no Federal agency that is responsible for siting 
unless those pipelines cross the international borders, in 
which case the Department of State becomes involved in terms of 
siting. PHMSA is not involved in siting decisions for any 
pipelines.
    Mr. Sires. In other words, if I have a municipality, that 
pipe is coming through my municipality, that municipality does 
not have to give approval in order for that pipe to go through.
    Ms. Quarterman. Well, in order to put a pipeline through a 
State or municipality, a pipeline owner has to obtain the right 
of way. So there can be involvement, usually at a State, 
perhaps at the municipal level, in terms of determining whether 
those State or municipal standards are met.
    Mr. Sires. And the other thing I am concerned about is, 
when you have one of these accidents, usually the first people 
that respond is the fire department. How quickly do you inform 
those fire departments of the kind of chemicals that may be 
going through a pipeline?
    Ms. Quarterman. Immediately. Usually, the fire department 
knows before we do because they are closest to an incident. But 
there is a national incident system whereby we are notified; 
and we immediately notify, if it is in a State, the State 
officials who are involved. The NTSB is also often notified of 
those instances. Of course, the emergency responders.
    Mr. Sires. So you tell them exactly what is in that 
pipeline?
    Because one of the things that happened in my district was 
there was an accident with a railroad car, and the chemical was 
spilled, but the mayor of the town was afraid to send in the 
firemen because he said that it was not proper for the firemen. 
He was afraid for the firemen.
    Ms. Quarterman. In the hazardous material program--and I 
think this probably applies to the hazardous material portion 
of our responsibility--we do fund I think it is $28 million in 
hazardous materials emergency response grants to States to 
assist them in preparing for an instance where there is a 
hazardous material spill.
    As a part of that program, we also have an emergency 
response guidebook, which is a little guidebook that almost 
every fireman carries with him on his fire engine and in police 
cars so that if they notice a hazardous spill they can look 
through it and immediately know whether they should get close 
to it or not based on the information that is contained there.
    Mr. Sires. Thank you very much, Madam Chairman.
    Ms. Brown. In response to your question, that is one of the 
purposes that we are having a hearing, to find out whether or 
not the rule is adequate, whether we need to change the law, 
and what is the procedures in place for waiving the rules. So 
that was a very timely question.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Madam Chairman.
    The question is for Ms. Quarterman. You've heard me in my 
opening statement refer to the issue with Union Pacific and 
Kinder Morgan on a pipeline and its corresponding bend. 
Apparently, there is a bend that they have to deal with. Their 
disagreement has delayed this project for a number of years, 
and your administration had the State fire marshal inspect it.
    The issue is, the pipeline company wants to use DOT load 
standards, and the railroad wants to use the American Railroad 
Maintenance Waste Standards in protecting that pipeline, that 
bend. What is the difference and why would there be such an 
issue--to me, it sounds like Union Pacific wants to move the 
whole pipeline. Well, that can't happen. It is very expensive, 
in the millions of dollars--or more than that.
    UP claims that the pipeline must be protected and continues 
steel encasement of that bended pipe. Kinder Morgan says many 
of the safety regulators, including the State regulators, 
contend that continuous steel encasement is dangerous and leads 
to corrosion and electrical shorts in the pipe.
    Now this can happen at any other place. It isn't just my 
area. But I am looking for clarification. Is this safe or not?
    And the pipeline company wants a full concrete cap. UP 
says. No, we want it moved or we want to do this particular 
kind of encasement. And yet there are questions about the 
safety of that steel encasement creating a short.
    Do disagreements between pipeline companies and the 
railroad happen often? How are they resolved? Do we have any 
way of being able to sit these two--I have already sat them 
down, had them meet, and they are still arguing over which is 
better or what should be done on it. And how can your 
administration help States oversee and regulate pipelines 
safety? Certainly we want to ensure that this is the best 
protection, but if both the State and the Federal agree and yet 
Union Pacific does not.
    Ms. Quarterman. I thank you for your question.
    I am sure that this happens--maybe not frequently, but 
occasionally. In this instance, I believe that our staff has 
been trying to work to help resolve the issue there. The 
primary issue is that it appears that UP is the landowner and 
has that right of way, and they are requiring certain standards 
for the crossing underneath their facility.
    Mrs. Napolitano. Well, that is questionable, ma'am. Because 
the land was Cal Poly Pomona University, and there was 
supposedly an agreement to be able to transfer some land in 
exchange for being able to allow that to happen on their land. 
I can check it out further, but go ahead, please.
    Ms. Quarterman. I don't know the specifics of that, but 
just under the assumption that was the end----
    As to the safety standard, I can tell you that the reason 
that the pipeline that PHMSA and the State have a view about 
the casing is in fact what you stated, is a question of 
corrosion. When you have encased pipeline, you have one metal 
within another metal, there is the opportunity for corrosion to 
be increased and to have corrosion-related events. It may be 
that the railroad is thinking about weight limitations, and I 
am not sure--maybe they just have the notion of having two 
pipes is better than one. I am not exactly sure what their 
rationale is there, but we would be happy to continue to work 
with you and try to reach resolution on that.
    Mrs. Napolitano. I would really appreciate it.
    But, also, you might want to look at it from the standpoint 
of some other areas having the same issue of having a costlier 
resolution to an issue that doesn't really need that higher 
standard. Because if both the Federal and the State are 
agreeing and the railroad is not, something is wrong.
    Ms. Quarterman. Right.
    Mrs. Napolitano. Thank you, Madam Chair.
    Mr. Walz. [presiding.] Mr. Shuster is recognized for 5 
minutes.
    Mr. Shuster. My question, Chairman Hersman--first 
question--in the Kansas pipeline failure, I believe you said it 
was a failure on the part of PHMSA not going through the 
process properly; is that accurate?
    Ms. Hersman. Yes, sir. There were actually a couple of 
failures. The first failure was that the company needed to take 
a number of factors into consideration when they are assessing 
the risk for the pipeline. One of those is leak history, and 
that would maybe bump it up for an inspection on a faster 
interval. They did not include that in their assessment, and 
PHMSA failed to catch that they omitted that particular factor.
    Mr. Shuster. It wasn't that the regulatory regime that was 
in place was not adequate. It was that the bureaucracy didn't 
go through the process. Is that a proper characterization?
    Ms. Hersman. The requirements were there. They were not 
followed.
    Mr. Shuster. And that is what concerns me, that you are 
proposing these low-stress pipelines and some of these--the 
gathering pipelines and the NPRM phase twos are not under DOT 
regulation. But isn't it true that there is a State--in many 
cases, in some cases, in all cases--are overseeing the 
regulatory requirements on these pipelines?
    Ms. Hersman. I think the primary concern that the Safety 
Board has is that there is a bit of a patchwork system, that it 
is not consistent regulations to all of these different types 
of pipelines. There was actually a gathering line event in 
Garoset, Texas, last month that involved a fatality, and it is 
being investigated by the Texas Railroad Authority. But it was 
a gathering line incident.
    So I think the concern that the Safety Board has is whether 
there are risks to human beings or the environment. The 
diameter of the pipeline is not necessarily the controlling 
factor or the pressure in the pipeline isn't necessarily the 
controlling factor. We saw a large release on BP property in 
2009 that was a six-inch line.
    Mr. Shuster. And when the NTSB makes these recommendations, 
you put them under a cost-benefit analysis to try to understand 
what the cost is going to be, what the benefit is we are going 
to gain?
    Ms. Hersman. Part of our charge from Congress is actually 
not to do that. So we investigate accidents and we make 
recommendations on what we think is best in the safety 
interests. It is up to the regulator and other entities to do 
the cost benefit.
    Mr. Shuster. And I understand that is your charter, and 
Congress chartered you to do that. But sometimes when we put 
these regulatory recommendations out there, at some point, as 
you said, the agency has to do a cost-benefit analysis because 
it--I don't want to see an accident. I don't want to see one 
life lost. But the reality is as long as there are human beings 
doing these types of things--driving cars, flying planes--there 
is going to be human error. There is going to be mechanical 
failure.
    So it becomes a concern of mine when we are looking at an 
industry that is very safe by all accounts to put forth new 
recommendations like this without an agency doing a cost-
benefit analysis. Maybe at some point we need to relook at the 
NTSB's charter and at some point look at those types of cost-
benefit analyses.
    Ms. Quarterman, does the administration plan on developing 
a pipeline safety reauthorization bill?
    Ms. Quarterman. We are working on a bill, yes.
    Mr. Shuster. And, in your view, would you characterize the 
industry as being very safe?
    Ms. Quarterman. I think the pipeline safety record over the 
past 20 years has improved markedly. There is always room for 
further improvement. Certainly, as compared to some of the 
other modes of transportation, it is safer.
    Mr. Shuster. And as we move forward, I certainly would like 
to work with you on this. Because, as I said, I think there has 
been some shortcomings over the years at PHMSA; and I think 
some of that, if not all of that, has to do with a lack of 
staffing and maybe the process not being in place that needs to 
be there.
    But, again, to put a whole new layer of regulations on an 
industry that, as I have said and some of the testimony here 
today, and I think if you go across the country, it is very 
safe. And we need to build upon that but not, again, put a 
whole new layer of regulatory burden on it that, in the end, I 
don't believe is going to make it that much, if any, safer than 
it is today.
    I see my time is ready to expire, so I yield back.
    Mr. Walz. Thank you, Mr. Shuster.
    Mr. Larsen, you are recognized for 5 minutes.
    Mr. Larsen. Ms. Epstein, you recommend fully regulating 
gathering lines and produced water lines. Some say that because 
various lines are regulated by a State or by a Federal 
authority or State or Federal agencies there is no need for 
additional Federal regulation of those lines. Can you respond 
to that?
    Ms. Epstein. Sure. And there was a reason, in addition to 
my having ready access to Alaska data, that I use Alaska as an 
example. Because we do, in fact, have good, comprehensive 
regulations of flow lines, produced water lines, and gathering 
lines in the State. However, we don't do enough enforcement in 
Alaska.
    I think some of that is similar to the situation that is 
now well-known with the Minerals Management Service, where 
there is a conflict of interest in the sense that the State 
gets revenue from leases and having wells produce oil and 
sending it through the Trans-Alaska Pipeline. So, therefore, 
you have a situation where the State is conflicted in terms of 
how it approaches enforcement. But those were very major 
examples of 46,000 gallons released in one case, 100,000 in 
another.
    And with due respect to Congressman Shuster, part of the 
mandate of PHMSA is to approach pipeline safety in terms of 
safety and environmental protection; and these pipelines have 
been unregulated by PHMSA to date. I would argue the produced 
water lines, they have the existing authority to go forward 
with regulating those lines, but in terms of the other lines, 
we would need some help from Congress to ensure that those are 
covered.
    Mr. Larsen. Ms. Quarterman, Washington State has an 
agreement with PHMSA. We have our own pipeline safety agency. 
How many States have requested and received agreement to share 
certain responsibilities with PHMSA?
    Ms. Quarterman. On the hazardous liquid side or more 
generally?
    Mr. Larsen. On hazardous liquid.
    Ms. Quarterman. On hazardous liquid, I believe there are 
about 14 States that have an intrastate agreement. Another two 
have--well, 15 have a certification, two have an agreement, and 
another six serve as interstate agencies on behalf of PHMSA.
    Mr. Larsen. And perhaps you don't have the number now, how 
many inspectors do those States have with authority?
    Ms. Quarterman. I don't have the number.
    Mr. Larsen. Can you get that?
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7251.012
    
    Mr. Larsen. And then can you compare that to the number of 
enforcement inspectors that you have?
    Ms. Quarterman. Well, I can tell you how many we have. We 
have authorization for 135. In the President's budget for 
fiscal year '10, we have 136 positions. Right now, we have 102 
people onboard in the inspection and enforcement area. There 
are 18 people who we are in the process of interviewing. There 
are another 10 people that we have essentially--it is out on 
the street. An advertisement is on the street. And I think 
there are another six people who we have made an offer to and 
hope to start soon.
    Mr. Larsen. Ms. Hersman, I didn't see it in your testimony, 
and perhaps I missed it--and perhaps NTSB doesn't have a 
position--the idea of PHMSA being responsible for regulating 
the entire pipeline. When we put this together in 2002 and in 
2006, we really did look at the high-consequence areas, places 
where people live, places where people played, and that kind of 
thing, as opposed to bringing a certain level of regulation to 
the entire length of a pipeline. Does NTSB have a position on 
that?
    Ms. Hersman. The NTSB supports expanding integrity 
management to the entire system.
    One of the biggest concerns that we have is when operators 
fail to identify a high-consequence area correctly. We are 
investigating a gas accident in Florida where a segment of 
pipeline ruptured right close to the Florida turnpike, and it 
was not accurately designated as a high-consequence area in the 
pipeline's plans.
    Mr. Larsen. Mr. Falgoust, in the short time I have left, if 
you can just answer the question: How would you all then see 
that, expanding the integrity management planning to the length 
of a pipeline?
    Mr. Falgoust. Well, OPS, guided by Congress, focuses its 
regulatory efforts on pipelines that pose the greatest risk to 
the environment and to the people. Pipelines have every 
incentive to ensure integrity. There are a lot of millions of 
dollars that are spent on integrity management. And due to 
failure analysis, taking integrity management further beyond 
HCAs will put an economic burden upon the pipeline industry. We 
are investigating the impacts of that right now, doing studies 
for the Association. I believe we are looking into it.
    Right now, every segment of a pipeline is monitored by 
control rooms, SCADA systems, corrosion protection, air and 
ground patrol, damage prevention; and not all pipes have 
capability of running in-line inspections.
    So there are different challenges that we face when we go 
to different areas that go beyond HCAs, and we definitely want 
to keep it to a risk-based platform and putting our resources 
where it is the best place.
    Mr. Larsen. And just if I may, are you going to be able to 
share information back to us at some point in the near future 
about your results of looking at the impact of this?
    Mr. Falgoust. We absolutely will.
    Mr. Larsen. And I just want to know what the timeline is 
for the administration to get us a proposal on the bill.
    Ms. Quarterman. I don't have a particular timeline. We are 
waiting for feedback.
    Mr. Larsen. Well, we will give it to you.
    Ms. Brown. [Presiding.] We have less than 3 minutes before 
it is time to vote, so we are going to stand in informal 
recess. We have at least 30 more minutes of questions and 
answers. We can have a second round if you are interested, Mr. 
Larsen, but what we are going to have to do now is go and vote.
    So we are going to stand in informal recess, and we will be 
back. Thank you.
    Ms. Brown. The Committee come back to order.
    Before I get into my line of questioning, Mrs. Quarterman, 
BP which is in the news every day, had several violations. What 
is the status of their civil penalties or possible decree as a 
result of the 2006 spill? And I want to say that on March 5th, 
there was fines by the State of Washington for 27 violations, 
is that correct? Can you give me an update on that?
    Ms. Quarterman. I can give you a limited update because it 
is in, as I understand it, in the midst of settlement 
negotiations. The Department has been working with EPA and the 
Department of Justice and with BP regarding the incident that 
occurred in 2006. And to be candid, I don't know the ins and 
outs of the negotiations that are going on, counsel's office is 
working with Justice Department on that. It is ongoing.
    Ms. Brown. Washington State had given them 27 serious 
violations on, I want to say March 5th, and the incident 
occurred around March 20th. If the oil had been on leaving the 
well, it would have been our responsibility. It would have been 
you-alls responsibility? If, for example, it is another 
Committee because it was drilling, if they had gotten the oil 
up and it was bleeding.
    Ms. Quarterman. It depends on where it was if you were on a 
transmission pipeline or the pipeline covered by our rules 
then, yes, it would be within our jurisdiction but----
    Ms. Brown. My question is what would have been different 
then? What safety procedure was in place to ensure that we 
could have contained the spill.
    Ms. Quarterman. Well, a drilling operation and a pipeline 
operation----
    Ms. Brown. I understand the difference. I understand if it 
was pipeline and this spill occurred, how could we ensure that 
we would have been able to cut it off?
    Ms. Quarterman. Well, pipelines have shutoff valves to stop 
the flow. Pump stations are shut down and that kind of thing 
occurs. Of course that doesn't mean that a spill would not 
occur, but it would probably not be of a magnitude of a 
drilling spill----
    Ms. Brown. I guess my question is what assurances do we 
have to the public that those cutoff valves work? Who inspects 
them?
    Ms. Quarterman. There is a requirement that they test the 
shut-off valves.
    Ms. Brown. Who is they?
    Ms. Quarterman. The companies who operate them are required 
to test them.
    Ms. Brown. OK, and my question to you, I understand that is 
the problem that we have. We have the fox watching the fox. Who 
is ensuring that the hen is being protected?
    Ms. Quarterman. Our inspectors are responsible for 
reviewing the test records during an inspection for tests of 
that nature. So we are responsible for that.
    Ms. Brown. And well, I guess I want to see the procedures 
in writing as far as ensuring, I hear what you are saying. That 
is part of the problem that we have that the industry inspects, 
and then I guess then they tell us the results. I mean, what 
kind of oversight, what procedures do we have in place to 
ensure that what they are saying is actually what is happening?
    Ms. Quarterman. We will be happy to supply additional 
information to you for the record.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7251.013
    
    Ms. Brown. OK, in 2009, there were 331 reported hazardous 
liquid pipeline incidents, 331. Only 100 of those 331 incidents 
was reported to the public Web site meaning 68 percent of the 
pipe line incidents that occurred in 2009 were not reported to 
the public. This is because DOT just provide information to the 
public on serious and significant incidents which meet certain 
criteria. This style of reporting is misleading about the 
safety of the industry. Why not provide information to the 
public on all incidents reported to DOT?
    It seems to me that this sort of information would be 
valuable to the States that we are talking about, Florida, 
Mississippi, Alabama, Washington State, Oregon, so can you 
answer that question?
    Ms. Quarterman. I agree with you that that information is 
valuable, and I believe it is available on a link to that Web 
site. The reporting of the hundred incidents is there, it is 
really sort of a basis for people to be able to compare past 
with past incidents. In 2002 the reporting requirements 
changed, and we have on the Web site sort of a trend analysis 
that goes from before 2002 forward, and I believe that there is 
also a link on that site that shows all incidents. This is--I 
believe those are just showing the serious and significant 
incidents based on the trend which you can go backwards in 
time, but the other incidents should be available there. I will 
verify that.
    Ms. Brown. OK, well, maybe we can get the staff together 
and go over it because my staff tells me it is not readable to 
the public, it is not user understandable, the way it is 
reported.
    Ms. Quarterman. We can check on that absolutely. We try to 
be as transparent as possible.
    Ms. Brown. Yes. The industry standards published in your 
regulation are these industry standards published in your 
regulations, are these published on the Web site or does DOT 
make it publicly available in any way? My understanding is that 
the Committee staff asked DOT for a certain industry standards 
references in regulations. They were told that they would have 
to purchase it from the industry, which is what the safety and 
environmental community is also told. This seems to be 
unacceptable. It is part of the Federal regulations. Can you 
explain? Do you understand what I am talking about?
    Ms. Quarterman. I do understand it, and I agree with you 
that that is a cause for concern as you are probably aware 
there is a piece of legislation that encourages Federal 
agencies to incorporate by reference industries standards into 
their regs. There is also OMB guidance suggesting that, and 
there are many industry organizations that create these 
standards, and we serve on the boards of many of those if they 
are going to affect our regulations. However, because of 
copyright issues, and we also publish them in the Federal 
Register for comment.
    However, when we publish them, we are not permitted to 
publish the entire contents of the standards because of 
copyright concerns, and I think it is something that could be 
improved.
    Ms. Brown. I think so too, because are you saying the 
Federal standards, that you are working with the industry? I am 
confused.
    Ms. Quarterman. There are industry standards, for example, 
when we talk about corrosion, there is a National Association 
of Corrosion Engineers, which are experts in issues of 
corrosion. And they come up with standards with respect to what 
is the best way to protect against corrosion. And those 
standards are ones that are considered industry best practices 
and ones that we would want to include and ensure that the 
industry follow those guidelines. So those are the things we 
are talking about.
    Ms. Brown. I understand that. But if we, let's say you are 
doing a report for me and that is part of the report. That 
should be part of what is made public. And it shouldn't be that 
I have to purchase it from this particular association, if you 
are doing a comprehensive report. I am confused. Would someone 
else like to respond to that? Ms. Epstein or someone else? 
Because I understand you indicated that you have to purchase 
this from the industry? Explain it. I am confused.
    Ms. Epstein. Yes, the industry developed consensus 
standards, and they are for purchase, and they are copyrighted. 
And so in order for the public to get a copy of it, they 
obviously need to buy it and they are fairly costly documents. 
When PHMSA incorporates that full standard, they cite it, but 
they don't include all the details that are in it, and that is 
a problem so industry needs to abide by the standard because it 
is part of PHMSA's regulations. But it is impossible in some 
sense for the public in general to know what is in it because 
we can't just go online and look it up. We need to purchase it.
    Ms. Brown. I guess I am confused because I understand that 
we are working on best practices. But trust but verify. So just 
because it is in the report, how do I know it is accurate?
    Ms. Epstein. Yes I think what you are referring to is the 
industry will say, OK, we are complying with the standard, and 
as I understand how it works, PHMSA inspectors will try and 
look at the paperwork and verify that. But there are definitely 
some instances where the inspectors are not there to ensure 
compliance, and many cases that may not be that critical, but 
in some particular testing operations and other things, it 
could be very critical that the inspectors be there.
    Ms. Brown. Mr. Falgoust, what does the industry have to say 
about this?
    Mr. Falgoust. Well, my experience is when we are applying 
for permits and things of that nature, if we reference an 
industry standard, we generally supply industry standards. We 
supply industry standards and discuss that with PHMSA on a 
regular basis during inspection modes. And I don't know the 
whole framework of how the public has access to all the 
industry standards. There are many of them. However, when we 
use them for representation on things that, for certain 
regulations, we generally make them available, especially 
referenced for a permit or other things of that nature.
    Ms. Brown. I guess if we publish a documentation saying 
that this is the standards, then why is it that the government 
would have to purchase it in order to get a copy of it?
    Mr. Falgoust. I can't speak to that. I would have to get 
API or one of the associations and their standards committee to 
answer that question.
    Ms. Brown. I understand that it could be a standard. But I 
don't know how we just take their standards without verifying 
it in addition. If you are saying that you are doing certain 
procedures, corrosion is a good one, and that you have come up 
with certain procedures and these are the checkpoints, then we 
need to verify that these are the checkpoints. I think that is 
our job. And then we should publish it. And it should be 
available for everybody. Or we get an independent person or 
independent organization to verify. But I think the government 
has a responsibility. What do you think?
    Mr. Falgoust. I believe industry, when they reference 
certain standards, generally will offer that standard up and 
show where they are in compliance with that standard and what 
they are trying to cover. Transparency we view as a very good 
thing. I don't know the whole framework at how that goes and 
access completely. There is many associations and different 
standards that are out there, and they each had their own kind 
of framework there. So that is the best I can speak to that.
    Ms. Brown. Ms. Hersman and Ms. Epstein, DOT reported, and I 
guess this is a follow-up committee that it has incorporated by 
reference in full or part, 69 separate industry standards into 
the pipeline safety regulations and 151 separate industry 
standards into the hazardous material safety regulation. What 
safety concern does this rise for the NTSB and the Pipeline 
Safety Trust?
    Ms. Hersman. The Safety Board doesn't necessarily take 
exception to incorporating professional standards. But what we 
do have concerns about is to make sure that those are adequate 
and that those are followed and that is really the job of PHMSA 
to ensure that that happens. We do sometimes, in our 
investigations, look at some of those consensus or industry 
standards to see if they are effective. And if we find that 
there are problems, as in public awareness, educating the 
public about the pipelines in the Carmichael, Mississippi 
accident, we made a recommendation directly to API to evaluate 
their public education programs. And so the safety board in our 
investigations will look at those standards.
    It is not uncommon throughout the transportation industry 
to incorporate some of those industry standards. But I do think 
the previous questioning that you had, it is very critical that 
everyone understand exactly what those standards are for them 
to be easily accessible and for them to be transparent. If you 
want people to follow them, they have got to know what they 
are.
    Ms. Brown. I guess the follow-up question that I have there 
is that, for example, on the education portion, you made the 
recommendation what was the outcome of the recommendation to 
educate the public, because the question earlier was about the 
firefighters and the community, and we have had lots of 
discussions about how do you notify the community as to what is 
going through the community, so they can be prepared for a 
spill or something that comes up.
    Ms. Hersman. That is a great point. One of the critical 
issues that we see with respect to pipeline safety is actually 
knowledge that the pipeline is there and what it is carrying. 
This comes into play with respect to one call programs and 
excavation and digging, which is one of the big causes of 
accidents.
    In addition, for emergency responders, it is to make sure 
that they have adequate training and awareness and 
familiarization. And then it goes back also to the companies 
that are on that route to make sure that they have good 
communication with operators and law enforcement and first 
responders along that line so that they do have adequate shut-
off if a leak is reported to make sure that they know how to 
shut that pipeline down quickly and safely. And so marking is 
important, making sure that there is inspection and making sure 
people that are educated and have awareness.
    We have seen a lot of improvements over the years with 
respect to those systems and now there is a three digit call 
before you dig system Nationwide, and that has been effective.
    Ms. Brown. 811. My indication is that it is working. But 
can you respond to that a little bit more?
    Ms. Hersman. We have some anecdotal information that the 
number of calls has gone up. But we still see a number of 
accidents. I think the good news is that it is improving. The 
bad news is that this is still one of the highest causes of 
accidents and it is completely preventable. The Safety Board is 
launched on an accident in Texas right now in Clairemont, 
Texas, where there was a fatal event, and then a day later in 
Darrouzett, Texas, there was another fatal accident that the 
Texas Railroad Commission is investigating, and so we remain 
concerned about these preventable accidents and think that 
certainly more can be done.
    Ms. Brown. Ms. Epstein.
    Ms. Epstein. Yes, I would like to raise a number of points 
associated with developing of the standards and implementing 
them to get at your earlier questioning.
    Development of the standards is, as I noted, a consensus 
process and generally that means the industry together comes to 
consensus. There are, if they have the resources, State 
regulators involved and also Federal regulators as well. 
Rarely, if ever, are there members of the public involved. That 
is one concern. So it is a regulatory effort that does rarely 
have enough involvement by people outside the industry except 
when there is sufficient governmental involvement.
    Secondly, because they are consensus standards and 
sometimes there may be just a small number of companies that 
might oppose something more stringent, and so you have a 
situation where at times you could have a lowest common 
denominator. And an example of that may be instead of using the 
language ``shall,'' it may might say ``may'' or ``may 
consider'' in order to get consensus.
    Thirdly, there are certain things that aren't addressed. 
These are gaps in the standards and those are the types of 
things that whether or not consensus is involved, I would 
absolutely encourage them to look for and address through 
regulatory means.
    And the other thing that PHMSA needs to do is make sure 
that the standards are, in fact, enforceable because they can 
be written in a way where there is an enormous amount of the 
discretion on the part of industry, again, the example of may 
consider instead of industry shall do this.
    So if, in fact, there are constructed that way then I 
believe there is an obligation on the part of PHMSA to 
basically put in their regulation something that would take 
that portion and make it enforceable if appropriate. Thank you.
    Ms. Brown. Thank you. Ms. Quarterman, do you want to add to 
that?
    Ms. Quarterman. I would just add that PHMSA is actively 
involved in creation of many consensus standards. I believe at 
the moment we are involved in about 35 different standards that 
are being developed for by consensus on these professional 
organizations.
    Ms. Brown. What procedures do we have in place, when we say 
industry, and I understand that it hasn't been a lot of 
accidents, but we have got to err on the side of the public and 
the safety because we have several drill, deepwater drills, but 
one accident can destroy the lives of the community, the 
environment. So we want to make sure we have the procedures in 
place to protect the environment. I mean that is what we are 
supposed to do. That is our job.
    So what procedures do we have, we say the industry, to get 
input from the public? Do we publish? Do we have a reviewing 
period before we come up with the final documentation?
    Ms. Quarterman. In terms of our rules we, of course, have 
to put them into the Federal Register and have public input.
    I believe with respect to the ANSI standards, they also 
have a public process, so public members can be involved at 
that point in the process.
    Ms. Brown. On the question of 811, how can we improve that 
educational process? I understand it is working. How can we 
make it work better?
    Ms. Quarterman. I agree with Chairwoman Hersman that these 
accidents are absolutely preventable. And you may know that 
PHMSA was responsible for creating the 811 number and making a 
national effort in this way.
    And I would hope that one day it becomes as well known as 
911 so that people will call before they dig, especially 
recently with these two incidents in Texas, I can tell you that 
the Secretary is very much focused on these events and wants to 
ensure that we have a strong campaign through the summer, which 
is a big digging month, for people to pay more attention to 
calling before they dig.
    We have been funding the Common Ground Alliance, which 
really brings all the underground stakeholders together, not 
just pipeline companies, but also utilities, telecom, and 
educating them about calling--being involved in 811. Perhaps we 
need to spend some more money in a public campaign to educate 
people than we are right now.
    Ms. Brown. I guess the last question, both the NTSB and Ms. 
Epstein suggest that DOT should regulate all gathering lines. 
Ms. Epstein recommend regulations of waterlines. In fact, there 
are a number of pipelines that are exempted from Federal 
regulation.
    What is your response to this? Is DOT willing to review 
these exemption? At the very least, why not require reporting 
of incidents of all exemption pipelines so that DOT can see if 
there is a need to regulate? And would this not be beneficial 
to the States?
    Ms. Quarterman. There are three statutory exceptions to 
oversight for pipelines. One of them relates to onshore 
production, refining manufacturing facilities, a second to 
storage or inplant piping systems associated with onshore 
production refining manufacturing facilities, and then there 
are gathering lines which are defined as less than 6 inches of 
low pressure and in not unusually sensitive areas, in rural 
areas.
    And as I said in my opening, the administration is in the 
process of reviewing the existing law and looking for 
opportunities to ensure that pipeline safety covers as much of 
the pipeline system as possible.
    In addition, we are looking internally at exemptions that 
have been in the regulations for many, many years and some of 
which nobody even remembers how they got there todetermine 
whether or not they are still appropriate. So the notion of 
gathering data, reporting data from those entities that are 
responsible for--who own those pipelines, I think, is a good 
one.
    Ms. Brown. What is the name of the trans-Alaska pipelines 
extend 800 miles, there is not any control. They are unmanned. 
We are extending to another company about 1,300 miles. Are we 
going to require a certain man--manned-ing of these? Because in 
a lot of cases when there is problems, we find out because 
someone report and it could go on for a long period of time.
    Ms. Quarterman. As you know there was a recent incident 
with respect to Alyeska Pipeline where----
    Ms. Brown. May 25th.
    Ms. Quarterman. Yes, May 25th incident, and I have had 
conversations with the president of Alyeska about that incident 
and will have further conversations shortly. As you may be 
aware, the production there has gone from about 2 million 
barrels a day to about 600,000 and they are in the process of a 
strategic realignment which includes shutting down many of 
their pump stations and some of which may or may not be manned.
    At this point, I think we are going to continue to work 
with them and talk with them about what is the appropriate 
coverage for that pipeline.
    Ms. Brown. TransCanada is the new company that is coming 
in. They have 1,300 miles. Is it going to be manned, or 
unmanned.
    Ms. Quarterman. I believe you are talking about the 
Keystone XL line TransCanada is from the building from the oil 
sands in Canada down to the Gulf. I don't know the details of 
what their plans are about the pump stations on that system.
    Ms. Brown. Do we have to give them permits?
    Ms. Quarterman. We do not have authority to give them any 
citing permit. They have come to us with a request for a 
special permit to operate that pipeline at 80 percent, and that 
is in the process of being reviewed.
    Ms. Brown. Well, what are some of, and you don't have to 
tell me right now, what are some of the factors that you all 
consider in order to give them the special permit?
    Ms. Quarterman. Well, there are many factors, and each 
special permit varies from one to the other. This would be a 
new pipeline so we would probably go above and beyond, most 
certainly, we would go above and beyond the regular 
regulations, we would probably also go above and beyond the 
requirements under the integrity management plan in terms of 
how often they have to inspect the line for corrosion, run 
pigs, that sort of thing. Obviously it is still in process so 
we haven't reached a determination as to whether or not to 
proceed with it. But I can certainly give you copies of other 
permits, special permits where we have permitted a company to 
go above 80 percent.
    Ms. Brown. How important do you think the manning of these 
stations with personnel if that seemed to be the problem? When 
there is an incident on the line, there is no reporting.
    Ms. Quarterman. I don't think I have the technical 
expertise to answer that question. I will be happy to ask my 
staff to get back to you. I understand many locations can be 
manned with remote control. So I don't know what manning 
requirements there might be.
    Ms. Brown. Well, is there a trigger, and I am not a 
technical person either, but is there a trigger to notify 
someone if an accident has occurred, if there is a breakage in 
the system?
    Ms. Quarterman. There are requirements in the rule for a 
leak detection system. Usually in the instance of a special 
permit, the requirements would be much, shall we say, more 
strenuous than those that are in the regular regs.
    Ms. Brown. Well, I want thank you all of you for your 
testimony today.
    We are going to leave the record open so that Members and 
myself can ask additional questions. But as we move forward, I 
am looking forward to working closely with you and other 
Members to make sure that we are very proactive in our approach 
to dealing with the industry wherein you know it has to be a 
balance but any error should be on the side of the public which 
is our job to protect. With that, this meeting stands 
adjourned.
    [Whereupon, at 4:20 p.m., the Subcommittee was adjourned.]

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