[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE SAFETY OF HAZARDOUS
LIQUID PIPELINES (PART 2): INTEGRITY MANAGEMENT
=======================================================================
(111-128)
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
__________
July 15, 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 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)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Adams, Richard, Vice President, U.S. Operations, Liquids
Pipelines, Enbridge Pipelines.................................. 18
Guttenberg, Hon. David, House District 8 - Area of Fairbanks,
Alaska, Alaska State House Minority Whip....................... 18
Jones, Greg, Senior Vice President, Technical Support Division,
Alyeska Pipeline Service Co.................................... 18
Kuprewicz, Richard B., Public Member, PHMSA's Technical Hazardous
Liquid Pipeline Safety Standards Committee and President of
Accufacts, Inc................................................. 18
Quarterman, Hon. Cynthia L., Administrator, Pipeline and
Hazardous Materials Safety Administration...................... 2
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Richardson, Hon. Laura, of California............................ 45
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Adams, Richard................................................... 51
Guttenberg, Hon. David........................................... 57
Jones, Greg...................................................... 60
Kuprewicz, Richard B............................................. 70
Quarterman, Hon. Cynthia L....................................... 79
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HEARING ON THE SAFETY OF HAZARDOUS LIQUID PIPELINE (PART 2): INTEGRITY
MANAGEMENT
----------
Thursday, July 15, 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 10:00 a.m., in
room 2167, Rayburn House Office Building, Hon. Corrine Brown
[Chairman of the Subcommittee] presiding.
Ms. Brown of Florida. The Subcommittee on Railroads,
Pipelines, and Hazardous Materials will come to order.
The Subcommittee is meeting today to hear testimony on
pipeline operation management of the safety of hazardous liquid
pipelines, more common known as ``integrity management.'' This
hearing is the third in a series of oversight hearings the
Subcommittee will hold as we look toward reauthorizing the
Department's pipeline safety program.
On February 1, 2000, in the wake of several tragic pipeline
ruptures, PHMSA issued a Final Ruling, requiring pipeline
operators to develop and implement a written Integrity
Management Program. Under the program, operators are required
to identify all of their pipeline segments that could affect a
high-consequence area, such as a high-population area, an
environmentally sensitive area, evaluate the integrity of such
pipeline segments and repair and report certain defects
identified as a result of these evaluations.
A lot of successes came out of the Integrity Management
Program. For example, operators have reported to PHMSA that
they have made more than 31,000 repairs to hazardous liquid
pipeline segments, that if left unaddressed, could have
resulted in a spill. Of these, about 7,000 detects were
considered to be so serious that immediate repairs were
required under the regulations. Another 25,000 detects had to
be repaired within a 60- to a 180-day time period.
This is a real success, and I anticipate that we will see
similar successes from the gas Integrity Management Program,
but there is always room for improvement, and that is why we
are here today.
I hope we can get some of the areas that might need some
refined tuning up front. We do have concerns about the
Integrity Management Program of BP Exploration and Alyeska
Pipeline Service. BP, as evidenced by the Deepwater Horizon
spill, has a long history of taking too many risks and cutting
corners to pursue economic growth and profits. BP Exploration
was invited to this hearing, but could not attend.
Recent press reports allege that Alyeska, at the direction
of BP, which owns almost 50 percent of the company, is
following in BP's footsteps by making dangerous cuts in safety
and inflating the amount of money the company is spending on
corrosion control. A day after these reports surfaced, the
Alyeska President, who has worked for BP for almost 27 years,
announced his resignation. Alyeska stated that his retirement
was already planned, but the timing of this most recent
announcement is questionable.
I am concerned about a few recent incidents at Alyeska, one
of which was a near miss indicident that resulted in the
release of flammable vapors. According to PHMSA's Corrective
Action Order, Alyeska did not verify the safety of the pipeline
before it restarted operations.
Another incident occurred at Pump Station 9, which lost
power during firing testing. As a result, the station dropped
off the radar screen at Alyeska Pipeline's control center.
Crude oil began to flow without anyone realizing it, and in the
end, 22,000 barrels of oil flowed into a relief tank and then
spilled over, spilling another 5,000 barrels of oil onto the
ground. Alyeska seemed to minimize the significance of this
spill in its written testimony, stating that, because the oil
spilled into secondary containment, no environmental damage or
injuries occurred. The fact is, while the lining of the
containment area is designed to prevent oil from leaking into
the soil, when crude oil meets the air, it releases toxic gas.
These gases have been proven to cause significant health
effects in humans, and workers involved in the cleanup of this
spill suffered the highest level of exposure.
This last month, the National Institute of Environmental
Health Sciences testified before Congress that, historically,
the workers involved in the cleanup have reported the highest
level of exposure and most acute symptoms when compared to
subjects exposed in different ways. So I would caution Alyeska
against minimizing the impact of this incident.
With that, I welcome today's panelists, and thank you for
joining us. I look forward to this hearing.
I am pleased to introduce the Honorable Cynthia Quarterman,
who is the Administrator of the Pipeline and Hazardous Material
Safety Administration.
Welcome. We are pleased to have you here with us this
morning. Your entire written statement will appear in the
record. Madam Administrator, please proceed.
STATEMENT OF THE HON. CYNTHIA L. QUARTERMAN, ADMINISTRATOR,
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
Ms. Quarterman. Thank you. Good morning.
Chairwoman Brown, Ranking Member Shuster, if he should show
up, and Members of the Subcommittee, thank you for the
opportunity to appear today.
Secretary LaHood, the employees of Pipeline and Hazardous
Material Safety Administration, and the entire Department of
Transportation all share public safety as their top priority.
The Department is committed to preventing spills on all
pipelines through aggressive regulation, oversight and
enforcement.
PHMSA is focused on improving the integrity of pipeline
systems and reducing the risk of pipeline failure. Integrity
Management Programs were created to ensure pipeline integrity
in areas with the highest potential for adverse consequences,
promote a more rigorous and systematic management of pipeline
integrity and risk, improve the government's prominent role in
the oversight of integrity plans, and assure the public's
confidence in the safe operation of the Nation's pipeline
network.
PHMSA's regulations consist of prescriptive measures
pipeline operators must follow and perform at standards that
consider a pipeline's unique characteristics and operating
conditions. Together, these regulations seek to prevent the
leading causes of pipeline failure, and require operators to
implement corrosion prevention, leak detection, and leak
containment technologies.
Integrity Management Programs ensure pipeline operators
adequately identify, evaluate, and address risks of the entire
pipeline systems. The integrity management rule specifies how
pipeline operators must identify, prioritize, assess, evaluate,
repair, and validate the liability of hazardous liquid
pipelines in or near high-consequence areas. That rule also
emphasizes the prompt detection of leaks through the monitoring
of operational parameters and engineered leak detection
systems. In addition, Integrity Management Programs are
intended to improve an operator's analytic processes and risk
management. We are proud to say integrity management is
working.
Since this program has been mandated, all hazardous liquid
pipelines within high-consequence areas have been assessed.
That assessment resulted in the identification and repair of
over 35,000 dangerous conditions. In addition, 86 percent of
hazardous liquid pipeline mileage has been assessed, and an
additional 78,000 anomalies outside of high-consequence areas
have been remedied.
PHMSA has also ensured that operators comply with corrosion
standards through inspection and aggressive enforcement. Since
2000, PHMSA has issued 657 probable violations or procedural
inadequacy notices involving corrosion, and has proposed $1.7
million in fines.
PHMSA has taken unprecedented steps to inform the public
and all stakeholders about the protections provided by the
Integrity Management Program and PHMSA's oversight. PHMSA has
an integrity management Web site to provide information to the
public on the rule as well as PHMSA's oversight of the program.
This publicly accessible Web site includes hundreds of
frequently asked questions to explain the rule's provisions and
PHMSA's expectations. This transparency helps PHMSA improve its
oversight and increase its stakeholder understanding and
evaluation of its program.
PHMSA looks forward to working with Congress to address
issues related to hazardous liquid pipeline safety, including
finding ways to be more effective in preventing pipeline
failures and mitigating the effect of any failure. PHMSA very
much appreciates the opportunity to report on hazardous liquid
pipeline Integrity Management Programs.
I would be happy to answer any questions that you might
have today. Thank you.
Ms. Brown of Florida. Thank you.
Mr. Walz, you can ask any questions or make any opening
statement that you want.
Mr. Walz. Thank you, Madam Chairwoman, and thank you for
holding this important hearing. I certainly wish more of my
colleagues were here.
Ms. Quarterman, thank you for coming back here again. You
have been a regular up here, and I appreciate that. Just a
couple of thoughts for you.
In 2006, the Inspector General over at DOT reported
concerns about operators' overreliance on integrity management
assessments. Is that a concern of yours or have we fixed that
in the subsequent 4 years?
Ms. Quarterman. I don't believe there were any specific
recommendations that came out as a result of the IG's findings.
However, the program did go in and try to remediate the
concerns that were addressed by the Inspector General by
following up on reporting errors that had been made by
operators, and now it is a regular part of our inspection
protocol that they should review reports that have been made
and whether the data has been accurate or not.
Mr. Walz. OK. Tell me through this procedure, if you can,
Ms. Quarterman: How do I know of the integrity and of the
safety of the pipelines in southern Minnesota today? How would
I go about finding that out? How do I know? How do I verify?
How do I assure that somebody is not just checking the block on
a form? How do I know that that integrity is real, in the
ground, and how do we verify that?
Ms. Quarterman. Well, the operator is the first person
responsible for ensuring that the integrity of a pipeline is
sound. Historically, the program had produced a series of
regulations that were very prescriptive in nature and
essentially required or allowed a pipeline operator to just
comply with those minimal technical requirements. The
inspectors at the time would go out and do what you said,
essentially check a box to make sure that those prescriptive
requirements were met.
The Integrity Management Program was intended to create a
systematic approach for pipeline operators, one in which the
inspectors could check what they were doing. The Integrity
Management Programs should take into account the individual
characteristics of each operator's pipeline--size, location,
product being shipped, all of that.
As a result of that program being in place, we have created
a new inspection protocol, and I will tell you our Integrity
Management Program inspections usually include three to five
engineers on a team, and they go out for 3 to 4 weeks. This is
the inspection protocol that they go through. It is extremely
thorough, extremely complicated.
Mr. Walz. This comes to a good point, and I was going to
ask: Are all pipeline operators created equal? Obviously not in
terms of size, product and all that. Are they created equal in
their culture of safety?
Ms. Quarterman. Unfortunately not.
Mr. Walz. OK. Does the Integrity Management Program
compensate for that in terms of assuring public safety if we do
have--for lack of a better term--a bad actor in this business?
Are we capturing that or does it come back to the issue, as you
said, of fundamentally when I asked the question of southern
Minnesota, and you said it basically falls upon the operator?
Ms. Quarterman. Well, that is the first line of defense. We
do have inspectors to go out and inspect, obviously. The
purpose of the Integrity Management Program was to do just what
you said, to try to help embed into the industry a culture of
safety by requiring them to look at the details of their
operations and go through an assessment of their pipeline and
of the situation surrounding their pipelines to come up with
the best plan for their particular pipelines as opposed to just
abdicating responsibility altogether and saying, OK, well, our
pipeline meets a certain recommended practice in terms of the
type of steel, and that is it.
Mr. Walz. Is it unfair for us to draw conclusions to
Deepwater Horizon and how the integrity management there was
given over to the operators, obviously, to a point where we
didn't catch an error? Is that unfair? Is it apples to oranges
here or is it similar in terms of the culture and the
redundancies of safety to say, yes, Deepwater Horizon should
show us something about pipelines?
Ms. Quarterman. Well, I think there are lessons for all of
us to learn from the Deepwater Horizon incident.
One of those lessons--and I know there is an ongoing
investigation, but based on the public information that has
been made available is the role of contractors in industry, and
it is not just in offshore operations. It is true across all
industries, and it is also true in the pipeline industry and
one in which we have to take a very close look at how operators
are managing their contractors.
We are reviewing opportunities to create a further system
for quality management systems to ensure the contractors that
are hired by companies meet the same requirements as those
people who are on the ground every day--or who should be on the
ground.
Mr. Walz. Very good. Thanks, Ms. Quarterman.
I yield back.
Ms. Brown of Florida. Thank you.
Mr. Shuster.
Mr. Shuster. I thank the Chairwoman, and I welcome the
administrator. You have become a regular guest with us here. I
appreciate your coming up here and spending time with us.
I really don't have any questions for you. I think I will
probably ask you many times over all the questions that I have.
I am not going to read my whole statement, but I would like
for the entirety to be put in the record.
I would like to point out that, of course, today's hearing
is on Integrity Management Programs and that pipelines are only
required by law to test the high-risk areas, but in practice,
many of them do much more than that. Our next witness from
Enbridge will talk about how only 40 percent of their system is
in high-risk areas, but they perform internal inspections on
nearly 100 percent of their pipelines. Only 40 percent of the
Transatlantic Pipeline passes through high-risk areas, but they
hold the entire pipeline to the high-risk standard. So I think
that is important to point out.
Again, thank you, Administrator Quarterman, for being here,
and I look forward to hearing our other panel of witnesses.
I yield back.
Ms. Brown of Florida. Thank you.
Mr. Cummings.
Mr. Cummings. Thank you very much, Madam Chairlady, and
thank you for holding this hearing.
Ms. Quarterman, let me just ask you a few questions.
According to your Web site, since the integrity management
rule was implemented in 2001--is that right? Was it 2001?
Ms. Quarterman. It essentially started around 2000, 2001,
2002. There was a layering of who it was applied to.
Mr. Cummings. Since that time, pipeline operators have made
almost 32,000 repairs to hazardous liquid pipeline segments
that could have affected a high-consequence area if there was a
release. How does PHMSA verify that each of these repairs has,
in fact, been made and made to a standard that would be
satisfactory?
Ms. Quarterman. During our integrity management inspection
process, we review the data that the operators have that show
where these particular anomalies were and the fact if they were
repaired or not. There may be spot-checking on a particular
repair, but we certainly are not there every day to review it
as a repair is done. We do, during our inspection process, do a
thorough review of those particular incidents where they should
have done a repair to ensure that it has been performed.
Mr. Cummings. But is that spot-checking? I mean do you
actually go out and look at each situation?
Ms. Quarterman. We don't have the personnel to go out and
look at each situation.
Mr. Cummings. So it is just a matter of taking somebody's
word. Is that basically it?
Ms. Quarterman. On an annual basis, the management of each
pipeline operator has to certify the reports of repairs that
have been performed on their pipeline. So, while we can't go
out there individually, if it were the case that someone
fraudulently wrote down that they had done a repair, we would
be, obviously, able to go after them on criminal charges.
Mr. Cummings. Well, you know, one of the things that we
have seen with BP is--and I am trying to put this nicely. There
have been some questionable integrity issues, and the sad part
is, when these issues come along, they cannot only be harmful--
they can be deadly--and I guess sometimes management has to say
to themselves, you know, do I take the risks? I mean is profit
more important than safety?
I guess I am just asking: Has there ever been a time when
folks actually went out and even spot-checked, I mean at any
time? Do you follow me?
Ms. Quarterman. Yes, I follow you.
Mr. Cummings. We are talking about verifying. Just going
back to Ronald Reagan, you know, you can believe them, but you
have got to verify.
I guess the only reason I am raising this is because of the
situation that we find ourselves in right now where we assume--
see, sometimes in this country, I think we assume too much. We
assume, assume, assume, and we assume that when the rubber
meets the road that everything is going to be fine. Then when
the rubber comes to meet the road, we discover there is no
road. I think that is what happened in Katrina. I think that is
what has happened here.
Also, as Chairman of the Coast Guard Subcommittee, I talk
about this whole idea of making sure that there is integrity in
all of our systems. So I was just wondering.
Go ahead.
Ms. Quarterman. Yes, we do do field inspections that spot-
check repairs. When an inspector goes in to look at the
integrity management plan, they look at the list of locations
where these significant anomalies were found as well as the
repair record to double check and make sure that there is
support for the fact that a repair was done. In addition, there
are spot-checks done in the field.
Mr. Cummings. You know, the IRS, when you talk to them
about why they audit people, there are certain things that they
put in their computer, certain information that triggers
inspections. I was wondering, is there any triggering
information, mechanisms, data, whatever, that would
automatically cause alarm bells to go off and for you all to do
these spot checks you are talking about other than your routine
ones?
Ms. Quarterman. Well, certainly, if in looking at the
paperwork something were to appear to be amiss--and I can tell
you there has been an instance where some welding records were
amiss, and we are following up on that--then they would go and
check it.
So, yes. The inspectors are engineers, and they are trained
to look at this data, and if something looks weird--for
example, if a record keeps repeating itself over and over and
over again and it is clear it is not addressing the issue--
then, yes, there are triggering mechanisms.
Mr. Cummings. Thank you very much, Madam Chair.
Ms. Brown of Florida. Thank you.
Mr. Teague.
Mr. Teague. Yes. Thank you, Madam Chairwoman, for having
this meeting and for letting me be here.
A couple of questions, I guess, were already asked, but I
wanted to ask them a little bit differently.
In talking about the integrity test that we run, is there a
standard frequency of time that we run those tests depending
upon the size of the line or the pressure of the line?
Ms. Quarterman. Under the Integrity Management Program,
there was a requirement that operators do an assessment, most
of which were inline inspections with pigging instruments
within a certain time period. That time for most operators
ended either at the end of 2008 or at the beginning of 2009,
and this was in high-consequence areas, and then they had to
reassess again 5 years later. They had to start with their
riskiest 50 percent and then do the last 50 percent, look at
those assessments and determine which ones, based on our
standards, were the most problematic, fix those first, and go
from there. Most operators are now in that reassessment period,
meaning that they are beginning to do a second run of those
high-consequence areas.
Mr. Teague. Do we know the way that it is set up in that 5-
year time frame? Is every single line tested?
Ms. Quarterman. Every line that is in a high-consequence
area must have a test, and I said 5 years. Five years is the
outlying number. If an operator determines that, because of the
attributes of their particular line that it should be tested
more frequently than that, then they should do that. That would
be part of their plan. In 5 years--or I think it is 68 months
at the outside--they must be retested.
Mr. Teague. But we know that every line is tested at least
once every 5 years?
Ms. Quarterman. Right. In high-consequence areas, yes.
Mr. Teague. Are we ever on site when they test the lines?
Ms. Quarterman. Not always, no. Occasionally, we go after,
usually, the assessment has been done to see what has occurred
and what anomalies have been found and how they have remediated
it.
Mr. Teague. When do we get the test results? Like, if they
test the line today, when do you get the test results?
Ms. Quarterman. We do not receive the data in-house at the
time it is tested. When we go out on an inspection, we review
their records there, so we don't have a repository of their
data.
Mr. Teague. When you do go out and do the on-site testing,
do you just go to their office and review the test results from
that or are you actually there like when they put the pig in
the line and drive down the road and be there when they pick
the pig up?
Ms. Quarterman. Most of what we do is reviewing the paper
records. We do do spot tests, and we are there on occasion when
people are pigging their line. We simply don't have the
resources to be at every assessment.
Mr. Teague. But you are at some on-site tests to see them
put the pig in and see them take the pig out?
Ms. Quarterman. Yes. Yes.
Mr. Teague. Are there any other tests or requirements to
the pipeline as to the type of material, the wall thickness or
anything else when it is installed?
Ms. Quarterman. Before a pipeline is installed, this is in
the construction phase, it has to go through a hydrostatic test
to ensure they can operate above the maximum allowable
operating pressure on the line.
Mr. Teague. You said a while ago that we had collected a
large amount of money, millions of dollars in fines. What
happens with that money?
Ms. Quarterman. That money is returned to the Treasury.
Mr. Teague. OK. You know, there was a question asked about
how comparable this should be to the Deepwater Horizon, and was
it apples and oranges. You know, I do think that it is apples
and oranges. I don't think there is much more comparison to
this and the Deepwater Horizon than there is to this and
driving unless, maybe, the Pipeline and Hazardous Material
Safety Administration--we are not in any comparison to MMS or
anything in the way that we are operating.
I mean, if there are comparisons to pipeline safety and
Deepwater Horizon, is there a comparison also to Pipeline and
Hazardous Material Safety Administration and MMS?
Ms. Quarterman. MMS regulates drilling operations, and
PHMSA regulates pipeline operations. The differences between
the two are that, in the instance of a drilling operation, as
we have seen it in Deepwater Horizon, there is the opportunity
for a blowout, which has an unlimited flow of oil. In the
instance of a pipeline, it is sort of like a garden hose in
that it has a finite amount--well, it is not like a garden hose
in that it is finite, but it does have a finite amount of
product in it. There are valves that can be shut off, so there
is a finite amount of spill that can occur as a result of an
incident.
Mr. Teague. OK. In regards to our testing and spot-checking
and stuff like that, do you think we are a lot more efficient
than MMS apparently was in what they were doing?
Ms. Quarterman. I can't really speak to that.
Mr. Teague. Thank you.
Ms. Brown of Florida. Ms. Richardson.
Ms. Richardson. Thank you, Madam Chair, and thank you for
having this very timely hearing in the series that we have been
going through.
Administrator, thank you for being here. I have about four
or five questions if we could go through them as quickly as
possible.
From 2000-2008, the U.S. DOT Pipeline and Hazardous
Material Safety Administration reported on its Web site that 21
oil spills occurred in my district, California's 37th
Congressional District. Between 2005-2009, the national average
stated that 68 percent of the total incidences were reported to
your administration but were not made public via your Web site.
My questions are:
How many oil spills or incidents have occurred in the 37th
Congressional District? I would like to know the number of what
was reported and not reported.
Ms. Quarterman. I will have to get you the details for your
particular district. I can tell you that the reporting
requirements have changed and have been reduced over time, so
now 5-barrel spills are being reported, and maybe that is the
difference between the data, but I am not sure about that. We
would have to verify that for you.
Ms. Richardson. Who are they reported to besides your Web
site? Are the Members notified?
Ms. Quarterman. They are reported to us, and we put it on
the Web site, and it is available to the public. If you would
like to have notification of every instance that occurs in your
district, we would be happy to do that.
Ms. Richardson. Well, I think, for this Committee's
jurisdiction, it might be helpful to have an ongoing report on
a periodic basis and then, that way, Members who have this
interest would have the ability to check, but I would like my
district's information.
Ms. Quarterman. Absolutely.
Ms. Richardson. My next question is: Do you believe that 21
spills are large enough to change the current process and
consider that that is probably not an acceptable number and how
communities should be maybe more engaged in what is happening?
Ms. Quarterman. Well, I think there should be no spills,
and that is our goal and what we are working towards. I can
tell you that the number of spills has been reduced by about 50
percent over the past decade or so.
Ms. Richardson. These were 21 within this decade, 2000-
2008.
Ms. Quarterman. I am just saying from the beginning of the
decade until today that the number of spills has gone down
dramatically, but it has not gone to zero, which is our
ultimate goal.
In terms of how communities can be involved, there are a
number of grants that PHMSA provides to communities, especially
those interested in being involved in the pipeline safety
program, one of which is a base grant to a State if they would
like to assist by having an agreement with PHMSA. California is
a State that has an agreement with PHMSA to oversee the
pipelines within their State. On top of that, there are State
damage prevention grants that are provided to States so they
can help ensure that pipelines are not damaged within their
communities.
There are also 811, or One Call Grants, that are useful,
because one of the leading causes of pipeline incidents is
excavation damage, and that is to assist communities in
providing information to the public about calling 811, so
before they dig, they know the location of a pipeline. There
are also----
Ms. Richardson. I am down to a minute and 30 seconds. If
you could supply that to us, that would be sufficient.
Ms. Quarterman. Absolutely.
Ms. Richardson. I have several other questions along the
same line.
After the first round of operator-performed assessments
that were completed in February of 2009, pipeline operators
reported to your organization that they had made 31,855 repairs
in high-consequence areas. My question is:
How many repairs were performed in my district, and do you
have a map or data that informs people of exactly where the
repairs are made?
Building on that same question, in my district we contain
643 total pipeline miles, and 558 of those consist of hazardous
liquid pipeline. My question is:
Are these pipelines regulated? Have they been inspected?
What type of inspection has been done, and what is the
condition that has been found?
Then finally--I have got about 34 seconds--I recently had
the opportunity this last weekend to spend some time in the
Gulf for about 2-1/2 days. One of the things that I saw that
seemed to be a problem is we could have had the companies
better required to have the resources in place to handle a
spill better. I don't know if that is a shared resource that
companies in the area all have, you know, those devices. So my
question would be and if you could supply it to this Committee:
What materials are required? If in the event you were to
have an incident, what are those that you know of?
One of the things we found out in the Deepwater Horizon
situation is we found out that many of the things we were using
weren't effective. So to what degree has your group documented?
What resources would be needed? Are they being stockpiled
appropriately in the areas that need them? Because we didn't
have enough booms. We are still in, you know, day 80-something,
and we don't have enough boom material. We don't have enough
skimmers. They are now getting this air-conditioned kind of mat
material, and we shouldn't be doing that after the incident. We
should know what is needed, and it should be sufficiently
available so we can respond.
So, if you could provide this Committee that information,
it would be helpful. Thank you very much for your time.
Ms. Quarterman. Sure. Thank you.
Ms. Brown of Florida. Would you like to respond to any part
of her questions?
Ms. Quarterman. Well, as to the specifics with respect to
the district, we will provide that to the record.
On the oil spill response, I will say that PHMSA issued a
safety advisory a few weeks ago to all of the onshore oil
pipeline operators. That is our responsibility to make sure
that those plans are in place, asking them to review their oil
spill response plan in light of Deepwater Horizon to make sure
that their worst case spill is accurate and that the personnel
that they have identified and the resources they have
identified are available and capable of responding to a spill
if it is a worst case spill. We gave them an exception for,
obviously, a response that is necessary for Deepwater Horizon,
but we want to make absolutely sure that the oil spill plans
that are in existence for the onshore pipelines are the best
they can possibly be.
Ms. Richardson. Madam Chair, if I could just respond to
that very briefly.
I think, though, the problem is we need more than a plan.
We need to know: Do you physically have the boom? Do you
physically have the skimmers? Do you physically have whatever
it is, and is someone within your organization checking to see
that it is there? Because, if there is anything we have
learned, it is that we need more than a plan. We need to know
that it is not just a plan and that it is actually something
that is ready to do.
Thank you, though, and I do appreciate your efforts in
these tough times.
Ms. Brown of Florida. Thank you, Ms. Richardson.
If the Members would like, we could have another round.
Mr. Sires.
Mr. Sires. Thank you, Madam Chair, for holding this
hearing, and I apologize if this question was asked before.
I come from a very congested area. Just to give you an
idea, the town that I live in is 1 square mile, and we have
50,000 people, so pipelines going through some of this area is
one of my biggest concerns, especially in a congested area.
I know that we check the pipelines every 5 years. I was
just wondering if it is prudent in heavily congested areas to
increase that and make it less than 5 years. I was just
wondering what you think of that. I am concerned about the
safety feature of it, the safety factor of it.
Ms. Quarterman. I am concerned as well.
A congested area, as you referred to, a highly populated
area--and I live in one as well--is one that would be
considered a high-consequence area. In those instances, the
operator should be considering whether it is appropriate to do
more frequent assessments of those pipelines in those areas
given the situations that they run into in that particular
area. Whether or not doing it more frequently would make a
bigger difference, I don't know. We haven't looked at that
issue.
Mr. Sires. Can you handle more frequent inspections? You
know, can you handle the paperwork and all the things that go
with it?
Ms. Quarterman. Well, now I am talking about assessments.
This is something that the operators, themselves, do with these
tools.
Mr. Sires. Right.
Ms. Quarterman. Then we go in and inspect after the fact.
We would probably require more inspectors in order to do more
frequent inspections, absolutely.
Mr. Sires. What can we do in Congress to make that happen
for you? Don't ask for too much.
Ms. Quarterman. Well, additional resources are always
welcome.
Mr. Sires. Just additional resources?
It is just that, you know, in my district, every time you
dig something up, there is a problem. I am talking now as a
former local mayor. Even to do a sidewalk, you have got to
worry about cables and so forth. So, as to the fact that
excavating in many of these areas may not damage the pipe right
then and there, it might just make it where, down the line, it
would be a problem. So that is when I ask you, in terms of
heavily populated areas, that I think we need to make it more
often. I think I pointed out to you the Edison accident years
ago. That is how dangerous it is.
So I don't have any further questions. Thank you very much.
Ms. Brown of Florida. Thank you.
Ms. Quarterman, according to your Web site, pipeline
operators report 32,000 defects were found outside of high-
consequence areas.
Is this reporting a requirement by regulations or is it
voluntary? If operators find defections outside of that area,
the high-consequence area, do the operators have to repair
these defects in accordance with the integrity management rule?
If not, do you think they should report on it and repair these
defects?
Ms. Quarterman. There is no requirement that they report
that information. I imagine that people are reporting it to get
credit to show that they were doing, not just what is required
by the rule, but above and beyond what is required by the rule.
There are no requirements that those anomalies that have
been found in areas out of high-consequence areas meet the
terms of the integrity management rule. I would say that a
prudent operator and one with a strong safety culture, once
they find the indication of an anomaly of great concern, would
repair those. If not and there were an incident, they would,
obviously, be subject to great penalties from PHMSA, and
hopefully, everybody is aware of that.
Ms. Brown of Florida. What do you think would be our
responsibility as we rewrite the law? Not the rule. Our
responsibility as lawmakers as we move forward.
Ms. Quarterman. Well, I think you are doing the right thing
to hold this hearing to ask questions about how the program is
working and how we might improve it.
We are at a point in time when we have identified that 44
percent of oil pipelines could affect an HCA. It appears as
though operators have assessed about 86 percent of those
pipelines, so the vast majority--86 percent of all pipelines.
Sorry. The vast majority of all pipelines, hazardous liquid
pipelines, have been assessed at least once.
We are in the process of a reassessment. Forgive me for
this analogy, but I think of it a little bit like a mammogram.
You have the baseline, and then the next assessment shows you
the change that has happened and whether there is cause for
concern.
At the end of this reassessment period, which would be 5
years from the end of the first assessment, I think we will
have a much better picture of pipelines in those high-
consequence areas, and we should consider what the next step
should be for the other areas.
Ms. Brown of Florida. You mentioned that DOT issued
enforcement letters for 85 percent of all the integrity
management inspections. What are the top three or four problems
DOT has found?
Ms. Quarterman. The number one problem--and there were
about four or five that were close to the top--was the
evaluation of their leak detection capability to protect the
HCAs. We found that operators had not done enough to ensure
that their leak detection system was adequate. That was number
one.
Shortly after that, we were concerned that they had not
done an adequate analysis and documentation supporting their
program. There was not enough to show that they had gone into
great detail considering, for example, what is a high-
consequence area.
We initially put out some baseline information about the
locations of high-consequence areas, and the requirement was
that operators would go the next step with respect to their
particular line and the neighborhoods associated with it and
look deeper and not just at the immediate vicinity; but if
there is, for example, a water intake point where, you know,
liquid flows down that would flow down further away from the
area that we have identified, they would do a deeper analysis
of that, and we found some inadequacies in those kinds of
analyses.
Third, we were concerned about the process that they used
to qualify personnel for assessment results review. This is a
key part of the analysis. They run the inline inspection tools
or do hydrostatic tests or whatever. It is extremely technical
analysis that is shown, and it is very difficult to determine
what exactly you are being shown in one of these runs. We were
concerned that the people who were reviewing the runs because
we essentially put up this new requirement, and everybody in
industry had to then get up to speed in order to do that, and
some of the people were not as qualified as we might like to
see them.
So those were the top three.
Ms. Brown of Florida. Last question.
If we find a company that is not in compliance, what kinds
of penalties or fines do we have? What kind of enforcement
mechanisms are in place?
Ms. Quarterman. We do have penalties that were instituted
in the PIPES Act of 2006. I would say those penalties have not
been updated according to inflation over time. At the moment,
we are probably maxing out on the penalties at about $100,000 a
day, I think.
Ms. Brown of Florida. OK.
Congressman Young.
Mr. Young. Thank you, Madam Chairman.
My interest in this, of course, is the TAPS line, the
Alyeska line. For the Committee, I am not going to ask her any
questions. I am just going to suggest respectfully--and this is
a creation of myself--that a little history, a little
institutional memory, in this body does serve.
When we discovered oil in Alaska--when I say ``we,'' it was
discovered in Alaska by the oil companies--at that time, we had
to pass the Trans-Alaska Pipeline. In this Congress in 1973,
the industry itself wanted to, in fact, operate the pipeline.
They do not do so. Contrary to what some of your staff have
said, they own parts of the pipeline, but they do not run it.
It is a separate entity, entitled by itself to run itself, and
it does run itself by itself. There have been three incidences
in that pipeline where there have been, in fact, spills.
One was being shot at. It took them seven shots, by the
way, with a .338 Magnum. The problem that arose then was the
fact that they thought it was a terrorist attack, which was
right after 9/11. It was an irate individual who just decided
to do it. If we could have stopped it at that time, instantly,
there would have been no spill at all, but the automatic
shutoff valve did work. The oil did come through the bullet
hole, and by the time they got done, there was a spill. That
was not the fault of the pipeline.
In the recent one that we have had, it worked. There was a
human error factor. There was a breaker that was forgotten to
be checked. The oil that did spill at the pump station was
contained, as it was designed. It worked excellently, and there
was no environmental damage. I have to say that again because,
according to the report I read from your staff, there was. In
fact, there was not.
Thirdly, I take great pride in this pipeline. It was built
in 1976. It was built in 3 years, and it has supplied oil to
the United States of America. It has all gone to America but
two tankers. This pipeline has been under scrutiny constantly,
and to somehow tie this in with BP I think is piling on.
We have a lot of great Americans who work for BP, and for
some reason now, if you work for BP, you are a bastard. I am
saying that is totally wrong. These are honorable people. The
company may have done something wrong in the Gulf. I am not
going to defend them in that area, but as far as the Alyeska
Pipeline, I am quite excited about their record, and I know
some people in this room who are going to testify later will
say, Well, they have transferred people out of Fairbanks. Yes,
they have. I do not like that, but in reality they are a
business, and they have the opportunity and the responsibility
to make sure that the business is run correctly, and they have
not had any damages.
So let's not tie this Alyeska Pipeline in. They have
supplied 17 billion barrels of oil to America--to Americans--to
be utilized there, and they have run this operation
extraordinarily well. I just want everybody to understand that.
This company is dependent on itself. It may be funded by oil
companies, but it is independent on itself, and that is the way
it was constructed.
If you want to check the record, Ralph Nader called me the
most powerful freshman Congressman in Congress because he
didn't think I would vote for that, to have an independent
agency run the pipeline and not the oil companies, themselves.
So I just want to remind people, when we start pointing
fingers, make sure you point them in the right direction. This
is not BP's problem. It is not a problem. This is a good
pipeline. It has supplied us with 17 billion barrels of oil
without any incident at all.
I yield back the balance of my time.
Ms. Brown of Florida. I ask unanimous consent that Mr.
Young be permitted to participate in today's hearing and sit
and ask questions of the witness.
Without objection.
Ms. Richardson.
Ms. Richardson. Well, after that, I will tell you. Welcome,
Mr. Young.
Mr. Young. I always add a little bit of spice to any
Committee meeting. I will guarantee you that.
Ms. Richardson. All right. Well, I won't speak to Alaska
because I don't live in Alaska, and I haven't studied it, but I
have been to the Gulf, and I have been studying that, and I
don't think you can call it ``honorable'' at all.
Ms. Administrator, I just want to go back to my question
and make sure we have your commitment on two things.
One, the raw data of all spills on your Web site today are
perceived by laymen--I am not a chemist. I am not a biologist.
I am not an engineer-- so, in my mind, they are basically
unreadable--a bunch of codes--but it is not really clear. In
fact, the only ones that can really be read are the incidences
and spills that are referenced as ``significant'' or as
``serious incidences.''
It is my understanding that the Committee has brought this
to your attention and that there has been a verbal
understanding that you will make the changes and make sure that
all of the spills and incidences which are listed on the Web
site are readable in layman's terms and are clearly, obviously,
available to this Committee on a regular basis; is that
correct?
Ms. Quarterman. That is correct. The Committee has brought
it to our attention that it could be improved. We appreciate
those comments, and we will ensure that the data is accessible.
The purpose of it is for the public to be able to review it and
understand what it means, and if it is not doing that, we need
to fix it.
Ms. Richardson. Thank you.
Then my last question is: It has also been brought to my
attention that, with your department, many of the regulations
and standards that have been adopted don't provide a specific
certain date that the regulations must be met.
Then, further, if someone in the public or even in my
office, in a government office, contacts and wants to get a
copy of a particular standard, they are told that they have to
buy the information from an industry association, and that
seems completely contrary. Specifically, what I am referencing
are standards--when we were looking into the issue, we couldn't
find the API Standard 1130. When we contacted your
organization, the response was that staff had to purchase it
from API.
Safety advocates have raised this concern with your
organization on numerous occasions, including hearings in this
Committee. They have been told that they have to purchase the
document from the industry association. Needless to say, I
think that is absurd. So I would also appreciate your looking
into that and the information being available to the public,
whether it be electronic or that we be able to get from your
department.
Ms. Quarterman. We had talked about this a little bit at
the last hearing.
The standards that you are referring to are industry
standards across, for example, engineering organizations, and
they are ones that are--there is a statute that requires--or
encourages the government to use these standards. OMB
encourages them to use it. It is not just a PHMSA issue. It is
a government-wide issue. Any organization or government agency,
regulatory agency, that oversees an industry has adopted these
kinds of standards.
I agree with you that it would be more pleasing if they
were available for free to anyone who would want to see them.
They are not available for free. We will commit to looking at
ways in which we might make some of the standards that have
been adopted more available to the public, and we have done
that in many instances by either explaining in detail what is
in the standards or providing them at our offices for people to
come and inspect them or having them available electronically.
Ms. Richardson. Well, it is my understanding my office was
told to buy it from an industry. So we look forward to your
updating and improving that system.
Thank you very much.
Ms. Brown of Florida. Ms. Quarterman, there have been
incidents, to my understanding, involving both Alyeska and BP,
and BP does own 47 percent of the company, and their budget and
management decisions have to be approved. I don't know.
Do you have the information that you can get to the
Committee on the incidents that have occurred?
Ms. Quarterman. Do you mean all pipeline safety incidences
associated with the Trans Alaska Pipeline System?
Ms. Brown of Florida. Yes.
Ms. Quarterman. I think that we can do that to the extent
that they are available.
The most recent incident is still under investigation, and
we are in the process of an enforcement action with respect to
that one, but as to any of the historic incidents, we can
certainly give you information on those, and there have not
been many.
Ms. Brown of Florida. And you said there have not been
many?
Ms. Quarterman. There have not been many.
Ms. Brown of Florida. Well, we have found out from the Gulf
we only need one. You know, one is just too many, and one can
destroy the environment and destroy industry. So what we have
to do is--we can't afford not even one.
Ms. Quarterman. I agree.
Mr. Young. Madam Chairman.
Ms. Brown of Florida. Yes, sir.
Mr. Young. Madam Chairman, may I suggest respectfully, the
recent incident, what they are investigating, was human error.
A breaker was not checked. That is what happened. Then,
unfortunately, there is the double standard there. The breaker
was not checked by a human being.
Again, though, the oil that was spilled there was collected
as it was designed to do so. It has been built to do that in
containment areas. This is a classic example of something that
is engineered to do the right thing. That is why I am so
defensive about the line. We built it. We designed it, and it
has worked through two earthquakes, one an 8.8, and it did not
have any spills.
Now we had this spill caused by human error that was, in
fact, contained as it should be. There was no dispersement of
any oil. So there was no accident in the pipeline, per se.
Is that correct, Madam Quarterman?
Ms. Quarterman. I am sorry. What is your question?
Ms. Brown of Florida. There was an investigation, is my
understanding.
Mr. Young. Yes. The investigation is why the human error
occurred but not on the pipeline, itself.
Ms. Quarterman. The investigation is ongoing.
Mr. Young. Yes.
Ms. Brown of Florida. Yes.
Thank you for your testimony and you will get back with us
and answer those additional questions.
What I would like to do is to call up the second panel. We
have a vote, or should we just wait until we come back?
Mr. Young. Madam Chair, start it because it will be 45
minutes, don't you think?
Ms. Brown of Florida. Let's call up--it is just one vote.
Mr. Young. One vote or two votes?
Ms. Brown of Florida. Let's have the one vote and then come
right back. I thank you all very much, and the second panel,
you can take your seat and we will get started. We can stand
informally in recess, and we are looking forward to a lively
discussion of the second panel. All right.
[Recess.]
Ms. Brown of Florida. Will the Subcommittee come back to
order, please.
I am pleased to introduce our second panel of witnesses.
First, we have Mr. Richard Kuprewicz, who is the Public Member
of PHMSA's Technical Hazardous Liquid Pipeline Safety Standards
Committee and President of ACCUFACTS, Inc.
We have Mr. Greg Jones, who is Senior Vice President of the
Technical Support Division of Alyeska Pipeline Service Company.
And we have Representative David Guttenberg, who is the
House Minority Whip of Alaska State House. He represents House
District 8 in the area of Fairbanks, Alaska.
And we have Mr. Adams, Vice President of U.S. Operations,
Liquids Pipelines, Enbridge Pipelines.
I want to welcome all of you here today and we are pleased
to have you all here this morning. First let me remind each of
you that under Committee rules oral statements must be limited
to 5 minutes. Your entire statement will appear in the record.
Mr. Kuprewicz, you can start your testimony. Did I
pronounce your name right?
Mr. Kuprewicz. Kuprewicz. But I have been called a lot
worse for 40 years. But that is very close, thank you.
Ms. Brown of Florida. OK.
STATEMENTS OF RICHARD B. KUPREWICZ, PUBLIC MEMBER, PHMSA'S
TECHNICAL HAZARDOUS LIQUID PIPELINE SAFETY STANDARDS COMMITTEE
AND PRESIDENT OF ACCUFACTS, INC.; GREG JONES, SENIOR VICE
PRESIDENT, TECHNICAL SUPPORT DIVISION, ALYESKA PIPELINE SERVICE
CO.; THE HON. DAVID GUTTENBERG, HOUSE DISTRICT 8 - AREA OF
FAIRBANKS, ALASKA, ALASKA STATE HOUSE MINORITY WHIP; RICHARD
ADAMS, VICE PRESIDENT, U.S. OPERATIONS, LIQUIDS PIPELINES,
ENBRIDGE PIPELINES
Mr. Kuprewicz. I would like to thank the Committee for the
opportunity to comment this morning. My name is Richard B.
Kuprewicz, and I am President of ACCUFACTS, Incorporated. I
have over 37 years experience in the industry, and I have
represented numerous parties within the U.S. and
internationally concerning sensitive pipeline matters. I am
currently a member of the Technical Hazardous Liquid Pipeline
Safety Standards Committee representing the public.
My comments today focus on two major pipeline integrity
management, or IM, issues and apply to both liquid and gas
pipelines. One, changes are needed in reporting IM performance
measures. And two, pipeline corrosion regulations are
inadequate.
Given the many repairs, more public transparency is
required in IM performance data gathering and reporting to
assure this method is thorough and, more important,
appropriate. This is especially true as more risk-based
performance measures are applied by pipeline companies in both
high consequence and non-high consequence areas.
The Gulf of Mexico offshore release tragedy clearly
underscores what can happen when risk-based performance
approaches step into the realm of the reckless and prudent
regulation and check and balances don't come into play to
prevent such tragedies.
What is missing in the area of IM performance reporting
from PHMSA are summaries by type of repair condition; for
example, for liquid pipelines immediate repair, 60-day, 180-
day, and other; by kind of threat; for example, internal
corrosion, external corrosion, third party damage,
construction, pipe material, et cetera, actually found at each
repair site, by State. Congress should require changes in IM
reporting, as I have just summarized, and should also require
PHMSA to recompile and restate the anomalies repaired to date,
as I believe critically important hindsight will be gained by
this effort.
PHMSA is also now taking a more active role in inspecting
pipeline construction activities and has discovered very
disturbing observations related to some new pipeline--poor
manufacturing quality, poor girth welding and other
construction-related activities that can seriously effect a
pipeline's integrity and IM program over its life cycle.
Congress should assure that PHMSA has sufficient resources
to perform these important construction inspections without
harming other important efforts. All IM programs obviously
should track and report to PHMSA any related new construction,
introduced integrity threats, to assure that they have been
properly rectified or are under control during the long
lifecycle of a pipeline.
In reauthorizing the Federal pipeline safety laws, Congress
should also take stronger action on reducing the risk that
corrosion poses to the integrity of hazardous liquid and gas
transmission pipeline. PHMSA has found wide variation and
operators' interpretation of how to meet the requirements of
pipeline safety regulations in assessing, evaluating and
remediating corrosion anomalies. This raises serious concerns
related to how consistent corrosion anomaly evaluations are and
stresses the importance of modifying the reporting of IM
performance measures as discussed earlier.
It is clear that additional corrosion regulatory standards
are required for pipelines both in high consequence areas and
non-high consequence areas. For example, mandatory uses of
cleaning pigs and avoiding over reliance on corrosion
inhibitors that can become ineffective.
Some companies appear to be diluting their corrosion
control programs to save money as they overly rely or missrely
on IM inspections to catch such risks before failure. It is
incumbent upon the pipeline operator to have corrosion and
maintenance programs to assure corrosion is under control in
all segments of their pipeline and not just rely on IM
inspection. Congress should also require that special
regulatory focus be directed towards the much higher rate
selective corrosion, both internal and external, that can lead
to pipeline failure well before the next IM regulatory
reassessment, and it is not prudently handled correctly in
current regulations.
Given the shortcomings identified in my testimony, it is
too early to address the issue of modifying the IM minimum
reassessment intervals required by Congress. The matter is
especially important for gas pipelines where IM requirements in
many areas are less stringent and cover much fewer pipeline
miles than that for liquid pipelines.
I would especially advise that Congress pay special
attention to gas pipelines, especially those capable of putting
more tonnage of hydrocarbon into residential neighborhoods in a
form that can cause greater destruction than many liquid
pipelines.
Gas transmission pipelines have yet to complete their
baseline assessments, have longer reinspection intervals and
different special requirements for scheduling remediation
reporting than liquid pipelines.
I thank you for your time.
Ms. Brown of Florida. Thank you.
Mr. Jones.
Mr. Jones. Chairwoman Brown, Ranking Member Shuster, and
Members of the Subcommittee, thank you for the opportunity to
appear to discuss the Alyeska Pipeline's Integrity Management
Program. I am Greg Jones, Senior Vice President of the
Technical Support Division for Alyeska Pipeline. My division
includes engineering; health, safety and environmental quality;
projects and security.
I have worked for Alyeska for 13 years. Before joining
Alyeska, I served for 20 years as an officer in the United
States Coast Guard. I am here representing the 1,600 people who
operate and maintain the 800-mile Trans-Alaska Pipeline System,
transporting crude from Alaska's North Slope to Valdez, where
it is shipped to the West Coast.
Safety and integrity of the pipeline are core values at
Alyeska and a top priority for every employee. Over the past
decade we have continually improved our safety and
environmental performance, with 2009 being our best year on
record. Although we are proud of our progress, we know that we
have to perform well every single day. Regrettably, we did have
a significant incident recently, which I will discuss in a
moment.
We are here today regarding the integrity management
regulations that govern liquid pipelines. We have found the
current pipeline safety regulations rigorous, comprehensive and
appropriate. Federal regulations require a comprehensive
corrosion control program. Alyeska's program is extensive and
is monitored by PHMSA.
Our Integrity Management Program is also closely monitored
by the Joint Pipeline Office, a unique consortium of 11 Federal
and State agencies that provide oversight of TAPS. Our program
is subject to inspections by PHMSA. The most recent inspection
occurred on August 2009. The inspection team's written exit
summary included the following statement: The Alyeska Integrity
Management Program document is well organized and addresses the
important management system characteristics that are required
for a successful program.
Our Integrity Management Program is focused on maintaining
the integrity of the pipeline and protecting public safety and
the environment. While Alyeska implements and complies with
Federal standards, many internal procedures exceed these
requirements. We monitor the pipeline through visual
inspections, overflights and valve inspections; we conduct
internal inspections using smart pigs every 3 years. The
regulatory standards require runs every 5 years.
We are required to investigate pipeline segments that could
affect high consequence areas when our data tells us there is a
wall loss of 50 percent or greater. We actually go by a more
rigorous standard of 40 percent. In addition, our corrosion
control program includes numerous other elements. A cathodic
protection system protects the below ground pipe from external
corrosion. Other program elements include our valve maintenance
program, river and flood plain maintenance and control. We also
have an earthquake preparedness program, a leak detection
system, and an over pressure protection system.
Should TAPS experience a pipeline discharge, we have worked
diligently to be prepared to respond to an incident. We
exercise our personnel and equipment on a regular basis through
company and agency-directed drills and under the scrutiny of
regulators.
Our spill response preparedness was demonstrated on May
25th, when during a scheduled shutdown of the system a breakout
tank overflowed, resulting in a spill to secondary containment
that surrounds the tank. There were no injuries and the spill
did not escape into the environment. While the response went as
required, we clearly find the incident unacceptable. We have
done a full investigation into the event and are now working to
implement recommendations to ensure that it will not happen
again.
As I have outlined, our Integrity Management Program draws
on a number of methods that we believe best protect Alaska's
environment and keeps the pipeline operating safely and
reliably. In Alyeska's 33 years of operations we never
experienced a leak on the mainline pipe due to corrosion. We
credit the skills and experience of our people, the current
regulatory framework, the tools and strategies we use to
protect the pipeline, and our aggressive attention to
investigation and intervening whenever needed in order to
ensure the integrity of TAPS.
I will be happy to answer any questions.
Ms. Brown of Florida. Thank you, Mr. Jones. I want to point
out that Mr. Jones and Mr. David Guttenberg came all the way
from Alaska. So I really, really do appreciate it.
And now the Honorable David Guttenberg, House District 8,
Fairbanks, Alaska.
Mr. Guttenberg. Thank you, Chairwoman Brown, Ranking Member
Shuster, other Members of the Committee and Representative
Young, my Congressman. Thank you for the opportunity to speak
with you today.
As you said, I am State Representative David Guttenberg and
I represent House District 8, which is comprised of the west
side of Fairbanks and goes all the way to the community of
Cantwell, and the district includes the entire Denali National
Park, including Mount McKinley, the highest point on North
America.
I spent 25 years of my life working around the pipeline and
oil industry. As a young man in 1974, I joined the Labors Union
and went pipelining. My first job for Alyeska was with a
clearing crew clearing the right-of-way where the pipeline was
going to be built. Prior to that I worked on a seismic crew out
of Umiat for minimum wage, 14 hours a day at 40 below
temperatures, and that is not unusual but here it certainly is.
The next 25 years I worked for various contractors who
worked for Alyeska, BP, Exxon and whoever else had a contract
with the industry to build whatever was needed to be done. At
one point I worked offshore building an island for development
and exploration. My last job with Alyeska was in 1996, when we
took Pump Station 6 offline.
I am here today on behalf of Alyeska employees that have
contacted me with concerns of the safety and integrity of the
pipeline, and these concerns they feel have been largely
ignored.
My involvement specifically in this began in December of
2009 when I received word that Alyeska was planning to transfer
a group of employees from Fairbanks to Anchorage. The proposed
transfer raised alarms for me. First of all, for two reasons,
they were good jobs and they were leaving my community.
Secondly, I couldn't figure out what standard Alyeska used to
determine that moving these personnel who were responsible for
pipeline safety integrity 350 miles from the pipeline would be
prudent and responsible. My initial thought is that it didn't
make any sense. When something goes wrong, it needs to be
checked on the pipeline. These are the employees who get to the
problem, the problem and location quickly. The pipeline goes
through Fairbanks; it is 350 miles from Anchorage.
When I began speaking out publicly, several Alyeska
employees contacted me and confirmed my concerns. It was
explained to me that many in the company shared my sentiment
and attempts to express those concerns were squashed at the
highest level by senior management who feared retaliation for
going against the mandate of Alyeska's then President. At that
point it became clear to me that Alyeska's open work
environment was not working. Allowing poor decisions to go
unchecked could have severe consequences for the State of
Alaska.
Alyeska's predicted loss of almost 50 percent of the
company's integrity management unit group if the company moved
forward with a transfer. This is a long-term negative impact on
Alyeska's Integrity Management Program, including deteriorating
morale of remaining personnel, a significant loss of expertise
and institutional knowledge, and the return to Alyeska's
previous history of compliance problems with integrity
management issues.
In 1997, under the direction of then Alyeska President Bob
Malone, Alyeska transferred employees from Anchorage to
Fairbanks to increase pipeline safety and enhance environmental
reliability. This was the right move to make and it is
difficult to understand how Alyeska's claim of synergy and
efficiency justified reversing Malone's decision. Common sense
and Alyeska's internal documents suggest that they are making
the wrong decision on this one.
Alyeska frequently mentions its recent safety or
environmental record when trying to reflect recent criticisms
related to the management of its Integrity Management Program;
for example, low accident rates. Alyeska's definition of safety
refers to the prevention of bodily harm or fatalities to
employees or contractors performing work. This safety attribute
has little or no bearing on the likelihood of TAPS having a
significant spill, which is the issue that brings us here today
for this hearing.
For example, a pipeline operator could have an excellent
work safety record because there is little or no maintenance
being performed on the pipeline, while at the same time it is
about to fall apart in 20 locations. The same logic could be
applied to Alyeska's environmental record, which can have
little or no bearing on the likelihood of a pipeline having a
significant spill event.
Finally, I would like to address Alyeska's recent public
commentary about emergency spill response capabilities in the
first 12 or 24 hours.
Alyeska no doubt continues to have adequate employee and
contractor support, but it is not the primary concern related
to the transfer integrity manager and personnel. The Trans-
Alaskan Pipeline carries an overwhelming majority of Alaskan
State revenue and is an integral part of the U.S. Energy
infrastructure. With a declining throughput, the line is no
less important now than it was 30 years ago. Even through the
declining input, the line is no less important now. However,
the TAPS infrastructure is rapidly aging and problems are bound
to occur. Now is not the time for Alyeska to skimp on pipeline
safety and integrity lest we have a significant spill.
Thank you.
Ms. Brown of Florida. Thank you.
And Mr. Adams.
Mr. Adams. Thank you, Chairwoman Brown, Ranking Member
Shuster, Chairman Oberstar, my Congressman, and Members of the
Subcommittee. I am Rich Adams of Enbridge Energy Pipeline
Company and appreciate the opportunity to participate in this
hearing. I am Vice President, U.S. Operations for Enbridge
Liquids Pipeline and have more than 20 years of experience
working for Enbridge in various engineering, operating, and
leadership positions with Enbridge's North America natural gas
and liquids petroleum pipeline businesses.
Our liquids pipeline business unit delivers more than 11
percent of overall U.S. oil imports, stretching from Canada
into United States refined hubs, delivering about 50 percent of
the crude oil refined in the Great Lakes region. More
information is included in my written testimony.
The pipeline integrity management regulations respond to
societal expectations of safety and build on advances of new
technology and pipeline operating experience. The result, a
measurable significant reduction infrequency and severity of
releases from liquid pipelines. This is a strong indication
that Congress' passed mandate of a risk-based integrity safety
reg regime is working, and while we are encouraged by this
record, our overall goal is zero. Zero releases, zero injuries,
zero fatalities, and zero operational interruptions.
To continue this encouraging trend, I urge Congress and the
Office of Pipeline Safety to remain focused on a risk-based
approach that has delivered this overall performance. The
current regulations are extensive and recognize that safety
starts with the design stage and continues with a broad range
of operating, maintenance, reporting, inspection, and worker
qualification requirements.
Reduction of risk considers both the probability of a
pipeline failure as well as the potential consequence of such a
leak. Congress was on the right track more than a decade ago in
focusing regulatory and industry attention on high consequence
areas to protect people and the environment. The focus imposed
additional protective measures for pipelines at high
consequence areas, or HCAs, regardless of whether a pipeline
operations in a HCA or non-HCA area, comprehensive Federal
regulations still apply to the entire pipeline regarding
design, construction, operating, maintenance, and emergency
preparedness standards. As such, we cannot agree with those who
suggest that non-HCA segments somehow receive little oversight
simply because they do not fall under the integrity management
plan mandate associated with HCAs.
The whole point of risk management is to aggressively apply
our best engineering skills and science to determine the
probability and consequence of a potential pipeline failure at
any single point along a pipeline.
While only 40 percent of Enbridge's liquids pipeline system
could affect an HCA, nearly 100 percent of the mileage has been
inspected with internal inspection inline devices. So you might
ask why wouldn't the industry just support an expansion of the
integrity management rules beyond HCAs. We believe such a
mandate would effectively take the industry back to a
prescriptive, one-size-fits-all requirement that would abandon
the entire science behind risk management, suggesting that the
likelihood and consequence of a pipeline incident are
essentially the same no matter where they occur.
Collectively, we have been successful at implementing a
risk-based approach that directs additional resources to HCAs
where a potential release would have the greatest consequence
on the public and the environment.
In summary, I think the data shows that Congress, OPS, and
industry have been on the right path in the current
comprehensive pipeline safety rules and the supplementary
Integrity Management Program implementation. When the overall
record and trends are taken in context, we have shown
noteworthy, continuous improvement in pipeline safety, leading
to today's record that is second to none in transportation
safety of petroleum.
This concludes my testimony, and I am happy to answer any
questions that Members of the Committee may have.
Ms. Brown of Florida. Thank you.
The Chairman of Committee the Full Committee has joined us,
Mr. Oberstar, and we want to recognize you for any openings
statements and we are so happy that you are here.
Mr. Oberstar. Thank you. The Committee got disrupted at the
beginning with a vote on the floor. I was delayed getting here
working on other Committee matters, including our aviation
bill. We are hoping to get some progress from the Senate in
reaching an agreement on an aviation bill.
Ms. Brown of Florida. Well, Mr. Chairman, I just want you
to know the whole country appreciates you all moving forward
and the Senate moving forward, the other body. We need that
aviation bill.
Mr. Oberstar. If we can get the Senate to move anything,
including time of day, that would be an achievement.
I appreciate you holding these hearings and the
participation of Mr. Shuster, but also I was having a
conversation, as you turned to me, with Mr. Young, who was
Chairman at the time he wrote the most recent pipeline safety
bill, but I have been involved with this for at least 25 years,
with pipeline safety, from the time that pipeline leaked
gasoline in the City of Mounds View just outside my district. A
7-foot long crack in the pipeline leaked gasoline for hours
until an automatic shutoff valve finally detected and cut off
the flow. But by that time the volatiles had moved up through
the soil to the surface, and because those are heavy aromatics
they stayed close to the pavement surface. And at 2:00 in the
morning a car driving along the street had a loose tailpipe
that struck the pavement, the spark ignited the volatiles, the
entire street erupted in flame, buckled, melted the pavement,
and a mother and her 6-year-old emerged from the house to see
what was happening and they were engulfed by flames as they
emerged from the front door. Their father-husband took their
son and went out the back door and they were the two victims,
but houses were burned, the street melted, trees burned. It was
a horrific scene. Cause: Corrosion, corrosion that went
undetected.
That is what happened with the BP pipeline in 2006,
corrosion. It went undetected. We had hearings on that issue in
this Committee in 2006. 33,000 barrels it turns out spilled,
most of it into a containment vessel but then it spilled over,
5,000 barrels spilled over that containment tank into
understandably a contained area, but it was still on the ground
and the volatiles just evaporated into the air. They are a
hazard to the environment as well. It took three orders from
the Office of Pipeline Safety to get BP to take the action they
needed to take to correct that problem, and an order, and in
fact to DOT's credit at the time, Secretary Mineta, moved the
Administrator of PHMSA out, brought in a retired Coast Guard
admiral, Admiral Barrett, to take charge of pipeline safety and
bring to it the skills of a Coast Guard safety officer, his
career had been in safety, and set the Pipeline Safety
Administration right.
And then they had to order BP to remove that section of
pipeline and replace it altogether. That is something good
management should have done on its own; it should not have
yaken an order. I have said this in all of the areas of safety
under the jurisdiction of this Committee. There has to be a
corporate culture of safety; safety starts in the board room.
The role of government is to set standards that must be met,
but the government doesn't run these corporations. Corporations
have to have people in charge whose first concern is safety.
I grew up with understanding safety in an iron ore miners
family. My father worked in the Godfrey underground mine. The
lives of miners were at risk every day when they were down 300,
600 feet. Now they don't have methane as we have in coal mines,
but you have the risk of cave-ins and failures of pilings, of
support columns or they are using wood that isn't properly kiln
dried and the mine can cave in on people, and there are many
other hazards in the underground mines that require a corporate
culture of safety. We had the Steelworkers Union that insisted
on safety. They didn't have a mine safety and health
organization until I was elected to Congress and I authored
that legislation to create it.
The same with pipelines. Pipelines, we have nearly 3
million miles in America, they run through communities, in many
cases communities built up around the existing pipeline, but
that doesn't mitigate the company's responsibility to be
vigilant and to take action and to watch over corrosion. That
is the enemy of safety. Corrosion is the culprit in most of the
pipeline failures.
And then response by organizations--I just want to ask this
question, Mr. Kuprewicz, Mr. Jones, Representative Guttenberg,
thank you for traveling all the way from Alaska. Mr. Adams, I
was at the ceremony for Enbridge in Carlton in my district
where I saw more steel pipe in one place than I have seen
anywhere in my lifetime. It all looks good now, or then. We
want to watch and see what happens to it after it has been
buried for a while.
What do you mean by risk management? Mr. Kuprewicz, I will
start with you.
Mr. Kuprewicz. Well, I think it embodies the concept of a
corporate culture that knows the difference between speculative
risk and risk based on sound engineering principles that don't
violate the laws of science. If you assume--like an example
would be in corrosion. If regulations have been written, let's
say, for general corrosion, the corrosion rate is 12 mills per
year, 12 thousandths of an inch per year, and you have
selective corrosion like microbiological induced or influenced
corrosion and it is 200 mills per year, you are way out of
line. And I think there is a lot of science and technology out
there that everybody understands and most corporate cultures
and risk management understand general corrosion. What we have
found in too many instances that resulted in failure there has
been a misunderstanding of what I call selective corrosion. And
I believe the Minnesota event you described in 1986 was also an
example of a selective type corrosion attack. And by selective
corrosion it is a different animal. It can really--first of
all, it isn't constant over time and it can change. A lot of
the regulations and standards are written as if we have general
type corrosion. Now I want to be very clear here there are
companies who are way ahead of this curve. They understand this
science isn't rocket science, it has been around for many
decades, and they apply rational risk management, and if they
believe they have selective corrosion they are saying I
reassess at more frequent intervals. That is a long winded way
and I am sorry.
Mr. Oberstar. No, it is very important, but the underlying
issue is can risk management and in fact doesn't it slip into
just a paper management based on historical records, previous
experience, and if you have very few incidents then we are
going to relax the oversight and relax the requirements. Isn't
that an outcome of risk management?
Mr. Kuprewicz. Well, that can be an outcome, but I would
say the more prudent pipeline companies, and they are out
there, I want to be very clear about that, this science has
been around and developing well for 60 years. They don't drop
their guard, they don't make this assumption that it is a paper
science. They will look at it and say, looking at our systems,
we have different types of risk here. And while we need the
paperwork to be sure that we know what we are doing, they don't
drop their guard and they will look for signs. Now after enough
times you can say I don't have selective corrosion of certain
types, for example, but they don't drop their guard, it is a
continual evaluation. So I would say the really good companies
don't just make it a paper exercise it is an integrated
process.
Mr. Oberstar. That is the concern I have and that is where
we need the constant vigilance on management of risk, and in
aviation there was a drift toward this kind of historical
experience, will have confidence in if you have had a good
record of management instead of the constant reporting and
recordkeeping and day-to-day oversight of maintenance.
Mr. Jones, I will give you and Representative Guttenberg
and Mr. Adams on it, and then I will stop at this point because
other Members have questions.
Mr. Jones. I would look at risk management as a way of
looking at the things you have to do, the likelihood of
something occurring, of incidents happening and then of course
the consequences if they do occur. So you are weighing
priorities, and of course a robust integrity management program
does exactly that. And we have that at Alyeska. The program--
when we run a smart pig, we take a look at and we basically
analyze the data and we determine which anomalies need to be
investigated first and we follow that sequence in everything.
We are also more conservative than the regulations and it has
produced very good results.
Mr. Oberstar. Does that also include running cleaning pigs
in addition to smart pigs?
Mr. Jones. Yes, it does.
Mr. Oberstar. That was the problem in 2006, that BP had not
run a cleaning pig through that line and had allowed waxes and
other corrosive elements to build up within the pipeline.
Mr. Jones. Well, my understanding from reading is that is
what happened. For Alyeska we run a cleaning pig every 7 to 14
days, and when we are going to do a smart pig run, we actually
run a series of those ahead of the smart pig to make sure that
we get good data.
Mr. Oberstar. Are those practices what you understand by
and include in risk management, periodic, whether you have had
a failure or not a periodic run of the cleaning pig through the
pipeline and periodic on schedule of running a smart pig
through the line; is that included in the risk management?
Mr. Jones. Correct.
Mr. Oberstar. OK, Representative Guttenberg.
Mr. Guttenberg. Thank you, Congressman. You are always
going to have risk management no matter what you do, but my
concern is when you take it out of the hands of the qualified
engineers that we have on projects like this and put in
budgetary concerns for a yearly budget cycle, it might
influence something on a budget influence instead of what is
the most efficient thing for integrity management and safety.
So when we look at those things and are dealing with them in
that aspect I think that should probably be--not be part of the
review is have the budgetary influence overwhelming the
engineering.
Mr. Oberstar. When you are operating in what is essentially
a hostile environment--I understand that somewhat. We don't
have as many months of hostility in northern Minnesota as you
do in Alaska, but certainly understand a hostile environment--
you need an increased level of vigilance, right?
Mr. Guttenberg. Yes, not just certainly for personal safety
but for everything that you do, because little things turn into
big things very fast, and in Alaska they are in your face all
the time.
Mr. Oberstar. What was the significance of Alyeska moving
personnel from checkpoints along the line out of those areas
where they would be available for quick response and
consolidating them into Anchorage?
Mr. Guttenberg. Well, I think that was the point to begin
with why they were moved there in 1997 by then President
Malone, is that is where the job is, that is where the response
capabilities come from. If you can put somebody there
immediately, you might not have a problem. But if you move them
350 miles away, it is going to take a lot longer to do the
analysis and to get there and to figure out that if you were
there 3 hours ago this would have never happened.
Mr. Oberstar. Mr. Adams.
Mr. Adams. Congressman, I think certainly when Enbridge and
our industry talks about risk management what we are trying to
do is we are trying to apply resources where they will have the
biggest mitigation of risk. And I think we need to look at our
facilities on a case-by-case basis. We have pipelines that have
different risks. We have pipelines because perhaps the product
that carry or the original installation practices that demand a
lot more diligence around corrosion type issues. We have other
pipelines that may run through a very populated area that have
a very--that transport a very friendly product that have
excellent coating, an excellent cathodic protection system that
we focus on third-party damage perhaps.
I think even Congress, in applying what they have done in
recent years, has looked at pipeline management, integrity
management from that risk-based approach. If you look back some
years ago, our risks were around third-party damage. That was
the number one risk that pipelines had. There has been
legislation, there is one called changes that have been enacted
that have reduced that and overall risk and all aspects of
pipelines have dropped, but certainly in that area it has
dropped more than others. We think there are some things that
can be done to even enhance that further, but I think all in
all that is the attack we need to take to mitigate the risk
associated with pipelines.
Mr. Oberstar. Thank you, Mr. Chairman. I yield at this
point.
Mr. Walz. [Presiding.] Thank you, Mr. Chairman. Mr. Shuster
is recognized.
Mr. Shuster. I am going to let myself be passed over for
Mr. Young.
Mr. Walz. Mr. Young is recognized.
Mr. Young. Mr. Jones, how are you picked for the job you
have got?
Mr. Jones. I am picked for the job that I have because at
Alyeska we have to be competent, we work hard, and we have very
professional people, and actually as a leader you surround
yourself with good people. That is what I have tried to do
and----
Mr. Young. How are you specifically picked, you are now
what----
Mr. Jones. You mean to be here today?
Mr. Young. Yes.
Mr. Jones. I am the head of the group that does our
Integrity Management Program as the Senior Vice President of
Technical Support, and Mr. Hostler asked me to come here.
Mr. Young. Who do you respond to, Mr. Hostler?
Mr. Jones. I respond to Mr. Hostler. He is the CEO.
Mr. Young. And he is picked by whom?
Mr. Jones. He is a BP employee.
Mr. Young. But not for Alyeska?
Mr. Jones. He is picked by the board, the board that
basically oversees Alyeska, but he is a BP employee.
Mr. Young. I know, but what I am trying to get across, we
set this up specifically so you are not dependent upon the oil
companies. When you take that job, if you were to take that job
you respond to the Alyeska board and that board is independent
of the oil companies.
Mr. Jones. That is correct.
Mr. Young. And that is the way it is set up?
Mr. Jones. That is correct.
Mr. Young. Now in your statement you said you have never
had a spill since 1976; is that correct? It wasn't--you know, I
admit to two, the one being shot at and the other one the
recent one. I think--when was that, that was last--4 months
ago, 5 months ago?
Mr. Jones. It was May 25th.
Mr. Young. That at a pump station?
Mr. Jones. Pump Station 9.
Mr. Young. Am I correct it was a breaker, someone hadn't
checked the breaker and the pump didn't work or something like
that? Physically there was a person there?
Mr. Jones. Yes, there were people there and it was--we did
have a failure of a circuit breaker that caused total power
loss and that resulted in the relief tank overflowing.
Mr. Young. And the relief tank overflowed into a
containment area.
Mr. Jones. That is correct.
Mr. Young. Now this oil that we pumped through that
pipeline of 600 and I believe, David, you can tell me, 620,000
barrels a day now or 640,000 barrels?
Mr. Jones. About 640,000 barrels a day.
Mr. Young. Are there any additives added to that oil
different than had been added before?
Mr. Jones. No, but what we are experiencing with declining
throughput, we are having to deal with changing crude
characteristics.
Mr. Young. It is a natural change?
Mr. Jones. Right.
Mr. Young. Now is that more corrosive?
Mr. Jones. It can be, yes.
Mr. Young. And In reality are you running your pigs more
often because of that probably added corrosive factor?
Mr. Jones. Yes, we are. In fact we steadily had to reduce
the period there that we are running our cleaning pigs because
we are experiencing more waxing and everything as throughput
comes down.
Mr. Young. You know we have come a long ways though, Mr.
Jones, because I can remember the first time Mr. Chairman,
Madam Chairman, when I was in this chair actually sitting in
this room, I said that we were going to use pigs to go through
the pipeline, and someone said, oh, those poor little piggies.
Had no knowledge of what we were talking about, but that shows
how far we have progressed in this business of pipeline and
safety and what we do to find out.
The question, as Mr. Guttenberg has said, the movement of
people that was not your decision?
Mr. Jones. The movement of people was a decision supported
by the senior leadership team, it was certainly one that Mr.
Hostler made but we basically supported as his executive team.
Mr. Young. Now was that a business decision or was that a
safety decision?
Mr. Jones. It was a business decision and it did not
affect safety.
Mr. Young. Now this is where I question--I happen to like
the idea and I don't like to interfere with his private
business, but when you say it doesn't affect safety, how do you
justify that when the representative said you are 300 miles
away. Did you move the pipeline operators from the stations or
did you move people out of the Fairbanks region that were in
management?
Mr. Jones. We moved people that were in the Fairbanks
office. Their duties were principally office based. We still
have our full complement of people. There are over 200 people
on any given day that are spread throughout the pipeline that
are basically----
Mr. Young. Do you have people on site. Let's say the
question about 300 miles away, do you have people on site that
can respond to the bullet hole?
Mr. Jones. Yes, we do.
Mr. Young. How soon?
Mr. Jones. Well, we have 69 people who are ready basically
for immediate response, they are 24/7, you know both shifts,
all the time.
Mr. Young. All right. The alarm system goes off because of
lack of pressure or increased pressure at one of the stations,
goes through the management arena, you have the whole computer
board, I have seen it. I am in Fairbanks, how long do it take
me to get to pump station let's say--what would it be, Dave, 6,
5?
Mr. Guttenberg. Well, 7 or 8.
Mr. Young. How long would it take me to get there?
Mr. Jones. Well, to go to Pump Station 7 you can drive.
Mr. Young. But the one that I can't drive is what I am
leading up to.
Mr. Jones. Right.
Mr. Young. Between 1 and 3.
Mr. Jones. Between 1 and 3? Well, we would have the
responders that are based out of 4 and we have some people at
Pump Station 3, but we have a response base----
Mr. Young. You have people onsite to respond to that.
Mr. Jones. Right. We have them at all active pump
stations. They all have personnel and----
Mr. Young. You have them in all active pump stations now?
Mr. Jones. Correct.
Mr. Young. And when you say active, the ones that are not
active they have been shut down because of a lack of need of
oil or what is that?
Mr. Jones. Well, yeah, as throughput has been coming down
we don't need the same pumping capacity. So again for business
reasons we take out of service the stations that we don't need.
Mr. Young. And lastly, the Chairman mentioned this, Mr.
Oberstar, the illusion of what happened with BP was they were
collective lines, weren't they, that had the corrosion in them?
Mr. Jones. Correct.
Mr. Young. And they have been replaced?
Mr. Jones. Right now----
Mr. Young. That has really nothing to do with you does it?
Mr. Jones. That is correct. I was going to say, I don't
work with them.
Mr. Young. You don't work with them, that is a different
unit?
Mr. Jones. Correct.
Mr. Young. And this is Alyeska and not the collective
pipelines?
Mr. Jones. That is correct.
Mr. Young. I am out of time. Thank you, Mr. Chairman.
Mr. Walz. Thank you, Mr. Young. I said always with the
Chairman and with Mr. Young here I feel like I should pay
tuition for the lessons and the learning I get. And I want to
commend Mr. Young. I think when he talked about his vision of
having Alyeska having a separate entity was visionary, was wise
in that. I think the point I am trying to get at is since that
time of that inception has there been a morphing, a loss of
that autonomy? That is what I am trying to get at. I certainly
don't want to pile on, I don't want to make the assumption, but
I think it is a fair assumption. Alyeska is a for-profit
company, correct?
Mr. Jones. That is incorrect. We are not.
Mr. Walz. It is incorrect. So you make nothing then. The
issue is to stay there. So the autonomy issue of having these
experts from BP and things is to bring in their expertise but
not to necessarily have day-to-day say over the pipeline
operation?
Mr. Jones. Well, they are one of five companies that
comprise our board, and so they could not dominate the
decisions even if they wanted to. We are an independent
consortium. We run our company, we have a distinct culture. Our
employees are uniquely Alaskan. In fact we are a very diverse
company, we hire 20 percent Alaska Natives, the laborers and
crafts that work on our pipeline actually choose to want to
come work for us due to our safety culture. So we are very
distinct. We are proud of all the employees.
Mr. Walz. I want to get at this point. I think Chairman
Oberstar and many others, and yourself, Mr. Jones, with your
military history, and I spent about a quarter century as a
senior enlisted soldier. There is culture of safety in risk
management. It is the air we breathe. I think the Chairman is
right, it starts at the top, it starts as a culture. It starts
being engrained in every decision that is made. And I just want
to ask you, Mr. Jones, if you can see why some people were
concerned, the statement that out of the Fairbanks paper
November 17th of last year where you indicated--and this move
we are talking about, movement of employees, and am I right
there were integrity management employees that were part of
this move?
Mr. Jones. Yes, sir, there were.
Mr. Walz. OK. It said all support groups should be looking
at Valdez in addition to Fairbanks and asking what the business
purpose is for the staff to be based at these locations, Jones
wrote. The bias needs to be in favor of them working in
Anchorage unless there is a compelling business case to the
contrary. Is there not room also for this idea that there is
not a mutually exclusive delineation between safety and the
smooth running of the company and of the pipeline; why
stressing the business case on this as the sole purpose?
Mr. Jones. Well, we were talking specifically about people
that are based in offices, we were not talking about our field-
based people. And so we had an opportunity to consolidate
office buildings there. We were paying for almost 60 percent
more space than we were utilizing. And so we--and we had also
been involved in a centralization effort back towards Anchorage
since 2002. This was just a continuation of that effort.
Mr. Walz. So the 1997 decision in your opinion was wrong or
the situation changed since that time to warrant a review of
policy?
Mr. Jones. I would say the 1997 decision was right for that
time. Today we are in a different business environment with
throughput declining 6 percent every year, so we need to be as
efficient as we can.
Mr. Walz. So this was Alyeska and their board's decision
alone. What input, explain to me so we can explain to our
constituents, do BP or the other owner companies, what input do
they have, sign off, budgeting, things like that, where do they
have a role in this?
Mr. Jones. Well, we have an approval authority guide that
specifies what levels of authorities and everything that we
have as officers of the company and then what things that we
have to send to the board for approval. But in this particular
case for the office that was an Alyeska decision and it was
supported by the senior leadership team.
Mr. Walz. OK. I want to go to you, Mr. Adams, and ask on
this. Where are your integrity management personnel placed?
Alaska is big, real big. North Dakota is pretty big, and your
pipeline operations. Where are your integrity management people
placed? Do you centralize that location?
Mr. Adams. There is some centralization. We have many of
our integrity management people certainly at higher levels and
technical levels actually out of Edmonton, Canada. They provide
some overall support. And then strategically based throughout
the system within regional areas we do have some integrity
management folks. We do have field folks that have
responsibility for some parts of integrity management, things
such as cathodic protection systems and those sort of things,
and they are on the pipe end themselves, via the technician
level.
Mr. Walz. OK, I just have one more before we move to Mr.
Shuster. Talking about this May 25th incident, and Mr. Young
did a good job of elaborating to us and I think there are some
positives in this in containment. One of the questions--and we
are seeing this again. I think we would be remiss when one of
my colleagues said there is nothing, what is happening with BP
in the Gulf, that has relationship to this. I think there is in
terms of response and in terms of response plans. I know those
best laid plans and I am glad to hear--and one of things, Mr.
Jones, you talked about that they gave you flying colors on
your document when they looked at it. It is still a document,
and I want to know what the indication is on the ground.
My question is the workers that responded to that May 25th
incident, do you have a plan for long range watching their
health concerns? Is there anything we should be concerned about
of vapors, of contact, with was released or anything like that.
Mr. Jones. Well, we do have a plan where we would monitor
that, but in this particular case we kept our personnel away
from the area until the volatiles were able to essentially
flash off. That is one of the things you do in a response, is
you look at the hazards and we keep our people out of harm's
way.
Mr. Walz. Will there be a follow-up on those folks to see
if there is a cohort of these folks who responded to this
thing, if they develop any abnormalities or health conditions?
Mr. Jones. Well, we certainly would, but we were very
careful, we did atmospheric monitoring to make sure that we did
not put our people in harm's way.
Mr. Walz. Last thing I would say, Mr. Guttenberg, would you
respond on any of these that you maybe have a difference of
opinion on these questions that were asked as this applied?
Mr. Guttenberg. Well, the placing of personnel is a key
part of this equation that is ongoing for me. If you have
agency people that need to respond with other agency people,
they need to be in proximity to them, but the integrity
management people that need to be in the field or in proximity
to it that is very important. And I think that is a key to what
is a concern for a lot of employees internally. Think there is
something wrong, we have a difference of opinion, we are the
people that do--they are the people that do the work. And the
senior management made a decision that they felt was not in the
best interest in the safety and integrity of the pipeline.
Mr. Walz. You stated, and I will end on this, that there is
a culture of folks--I have looked at some these from screen
names--I know for protection of integrity, afraid of spill, and
some of these folks have written to your and some of the names
have come out there. Is there a culture that they fear
retribution on this? I know in a military setting that Mr.
Jones is familiar with, and everyone else, is that anyone can
call a ceasefire, anyone call a safety violation. You can shut
down an operation from the lowest private to the general based
on that. Do you feel that is not present in this operation?
Mr. Guttenberg. Well, I am kind of the cynic when it gets
to the top anyway. My history in construction is you sit in a
meeting where they say priority is top and the most important
thing and you can stop it right now. But when you get to the
point when you have to do something, it has to get done. But
Alyeska does have a good history, they do have a good dialogue
with employees and project employees over the years, but I am
not in those offices watching and witnessing what happens.
Mr. Walz. OK. Well, I thank you all.
Mr. Shuster.
Mr. Shuster. Mr. Jones, first of all, I just want to point
out based on what the Chairman said and Mr. Walz about your
military background, you are a former commander in the Coast
Guard, which I think brings great knowledge and that culture of
safety to bear on the organization that you work with and work
for.
I understand that Alyeska has a major maintenance shutdown,
is that accurate?
Mr. Jones. Correct.
Mr. Shuster. And how significant is that to the operation,
to the safety and to the integrity plan that you have in place?
Mr. Jones. Well, it is very significant. We have been
actually doing two major maintenance shutdowns per year where
we may do valve work, we may do piping work. And so it is
usually major work to where we have to actually be able to
isolate a valve or piping from pressure, which is why you do
the shutdown, but it is all part of our overall effort for
integrity management.
Mr. Shuster. As an event is it one of the most significant
things you do, those two shutdowns all year?
Mr. Jones. It is a big event and we do tremendous planning
to make sure that we can do that safely.
Mr. Shuster. When will that occur?
Mr. Jones. The next one will be July 31st.
Mr. Shuster. And so I would imagine you have all hands on
deck?
Mr. Jones. It is all hands on deck.
Mr. Shuster. Everybody is working?
Mr. Jones. From top management right on down. It is a
serious thing.
Mr. Shuster. I want to point out to the Committee that
sometimes in Washington in general there is a disconnect on
what goes on in the real world and what goes on in Washington.
I would have hoped that we would have taken that into
consideration and maybe brought you here after the major
maintenance was done, so you probably have spent a number of
hours preparing, researching to be before us here today. So
when we talk about here in Congress a culture of safety it
needs to be start here also in Congress. So again I would hope
in the future that the Committee staff and the majority would
take those kind of events into consideration because taking you
away, being the Senior Vice President for Technical Support,
you probably have a lot to do with the maintenance coming up
and here you are in Washington when you would better serve the
safety culture and the culture of safety back there in Alaska.
I just want to make that point.
The question, back to the moving of the staff, I just want
to put into the record, ask unanimous consent to put in the
Joint Pipeline Office of the Federal-State organization that
oversees, has oversight up there in Alaska, put out this letter
on--I don't know the date--July 14th and just one paragraph, to
read that ``We consider Alyeska's transfer of integrity
environmental staff from Fairbanks to Anchorage is a business
decision because it does not involve first responders.''
So I would like the entire letter to be in the record to
make sure that we have that because as I think it has been
pointed out a number of times this is a business decision, it
doesn't effect safety. And with technological changes from
computers to monitoring devices to the transportation system,
you don't always--in a business model you have got to make
decisions to make sure you are efficient. I want to point out
when you say nonprofit I think a lot of people think you don't
make any money. But a nonprofit has to have more revenue or it
should have more revenue than it does expenses or it is going
to go down the tubes or you will come to Washington, D.C. And
ask for us to bail you out. We need to make sure it is on the
record that people know that you have got to be self-
sustaining. So you have got to have a positive revenue flow
over expenses.
Also, we wanted to ask how does Alyeska spending--how much
do you spend annually on your integrity management activities
to comply with the Federal pipeline safety laws and
regulations?
Mr. Jones. Well, since 2005 coming up to present, we have
had a steady increase in the funding for our Integrity
Management Program. 2005 expenses were right around $45 million
total. And then leading up to today where it will be a little
over $60 million.
Mr. Shuster. Do you exceed the Federal standards, the
Federal requirements, safety requirements?
Mr. Jones. Well, you know, I don't have a breakdown of
that, but that is, you know, comprehensively everything that we
are putting into the Integrity Management Program. The program
is very effective, and, you know, we can see that also in our
performance.
Mr. Shuster. One final question for you.
Have you ever had a leak on the 800-mile pipeline that was
due to corrosion?
Mr. Jones. No, we have not.
Mr. Shuster. If I could, I will ask one final question of
Mr. Adams.
In your testimony, you claim, in the effort to strive
towards the industry goal of zero releases, zero injuries, zero
fatalities, no operation interruptions, that Enbridge holds
managers accountable for those performance measurements
designed to meet those goals during their personal performance
evaluations.
If somebody fails to hit those goals, what actions do you
take to rectify this?
Mr. Adams. Certainly, it depends on the position, but it is
incorporated into our overall performance in terms of our bonus
structure's pay for employees, and it depends on the level of
the organization. Certainly, as you get to higher levels within
your organization, there is a bigger impact on that
compensation related to safety performance and pipeline
integrity performance.
Mr. Shuster. I certainly think our goal should be zero
fatalities, zero injuries. We certainly want to strive to do
that. It is my view, though, that we are going to have human
error and the possibility of mechanical breakdowns in striving
for that goal as we should do; but I think the only way,
realistically, that we can get to that point--and in talking to
a company that has a stellar safety record--is you just don't
do it. That is the only way we get to zero fatalities. It is
the only way we get to zero injuries, unfortunately. I mean
would you agree with that?
Mr. Adams. Absolutely. I think, traditionally, industry is
looked at in terms of safety overall, a pyramid. If you get rid
of the small issues, then you can eliminate the big ones in the
long term. I think that conventional thinking has changed a
little bit as a result of BP and what has happened in our own
company with the issues that we have had. What we find is that
any breakdown in the management system anywhere along the way--
I think Congressman Oberstar mentioned that senior management
in the boardroom has to believe in it, but every single one of
your leaders within the organization has to believe in it, and
when you get a breakdown at any level in that organization, you
can have an issue.
I think we, as an industry, and everywhere can get to the
point where we can't blame anything on human error because, if
our management system works, we have those people trained. We
have the right people in the right place doing the right job.
Mr. Shuster. Well, I just thank both of you for being
here--all four of our witnesses--but these are two great
examples of companies that have cultures of safety.
Again, I just want to reiterate that I hope we on the
Committee here in the future take under consideration when a
pipeline has a major maintenance shutdown, that we bring them
to Washington after they have done this major maintenance
safety situation that they are going under right now and not
drag then down here to Washington to take their eye off the
ball on safety.
So thank you very much.
Mr. Walz. Well, I thank the gentleman.
Also, though, I take my responsibility of oversight
seriously. Maybe the gentleman can arrange for us to get to
Alaska and make it easier for Mr. Jones and to make sure we are
doing our job.
Mr. Shuster. I think Mr. Young has made a standing offer,
and Mr. Oberstar has, I think, participated many times in that
trip up to Alaska to see it firsthand. It should be done by all
Members.
Mr. Walz. We really appreciate it. I think there is little
doubt that this entire Committee wants, as I said, to be able
to move the petroleum that powers our country, at the same time
doing it safely and protecting our workers and the environment.
The one thing I would bring back is this move of employees,
though. I want to get at the decisions that were made in this
because Alyeska asked its engineering director and the
engineering integrity manager, who supervises the Fairbanks
employees, to review the risks of moving integrity management
personnel to Anchorage, which is exactly what was done.
They generated a report, and the findings--and I quote--
stated: There are significant safety and integrity risks
associated with movement of the current IM teams to Anchorage.
What overrode those inputs? I would think the engineering
integrity manager and the engineering director would be pretty
heavyweights in the decision on this. What was the decision
then as it was being balanced out, Mr. Jones, to decide to do
that?
Mr. Jones. Right. Well, of course, this was not the only
consideration, you know, that we looked at.
In the report, they did not have any--we didn't ask them
how to mitigate measures or to look at things, and when we went
through our analysis, we had lots of discussion. We involved
some of those engineers in discussions, and what we came up
with was a balance to where we left some people who definitely
had more of a role in the field. We left them in Fairbanks--
that was three of the engineers--and then the people who had
essentially office responsibilities were the ones who we
brought in to Anchorage.
I had a conversation with one of the authors of that report
just last week, and we talked about this issue. He has assured
me, in how we have handled this, that we do not have a safety
or integrity problem on the pipeline.
Mr. Walz. Would that person be willing to state that to us
for the record and provide that to me?
Mr. Jones. Well, I can't speak for him, but based on what
he told me, I would think he would.
Mr. Walz. OK. I would like to see if we can follow up on
that to get these people who wrote this report. I would like to
see if they have changed their position from this, and you are
stating that they have. I would like to have them say that, if
that is OK.
Mr. Jones. Just to be clear, I am stating that the
integrity management manager, who was one of the authors of
that report, has told me that.
Mr. Walz. Very good.
Mr. Shuster hit on this, the $60 million on compliance and
safety. Is that a greater percentage of your budget or less in
terms of what you put into this? You stated that the number
went up, but I think it is important in the context of things.
Is maintenance being deferred because it is OK to do that and
that the maintenance didn't need to be done at that time or is
it being deferred to keep the costs down?
So Mr. Shuster talked about the $60 million. It sounds like
a lot, but it depends on how big the pipeline is. It depends on
how much needs to be done. It depends on what percentage of the
budget that is.
Are you increasing funding on compliance and maintenance in
terms of your overall expenditures?
Mr. Jones. We have been on our, what we call, baseline
expenses. It has been relatively flat. You would have to look
at individual components.
The bottom line is we fund the essential work, and so we
prioritize it, and we use that risk-based approach. That was
one of the first questions that we had. So we always make sure
that we go after the safety and integrity work. That is
paramount, and it gets our utmost attention. We also know that
if we had to go back for additional funding from the board in
order to do that work that we could do so.
Mr. Walz. The last thing I would ask:
Is there overregulation on pipelines? Is there
overregulation? Are we stepping in there? Are we hurting your
ability to operate by having too much regulation? I hear this a
lot. There is too much government. There is too much
regulation. There is too much cost to you or whatever. Is there
too much? I will ask each of you, if you can. I know it is
subjective, but I would like to hear how you would respond to
it.
Mr. Kuprewicz. Do you just want to go down the line?
Mr. Walz. Yes.
Mr. Kuprewicz. No.
Mr. Walz. OK.
Mr. Jones. What we look for are regulations that provide a
very clear target, that are not moving, and that also get
consistent application and enforcement of those clear targets.
So, to the extent that regulation can do that, then, you know,
we will take that on. We are not afraid of strict standards.
You know, we understand that, but we need things to be very
clear and uniformly enforced.
Mr. Walz. Are they that way now, in your opinion, Mr.
Jones, or not?
Mr. Jones. Well, there are issues. You know, there are
definitely things that can be worked on.
Mr. Walz. OK.
Mr. Guttenberg. Thank you.
You know, my legislative career is similar to yours. One of
the things, the caveats, that I put in is that it has to work.
In some hearings, when people have come in and complained about
being overregulated, some of my colleagues from the other side
of the table have said, ``Give me an example.'' ``Tell me what
the regulation is that is in the way or too cumbersome.'' I
don't see the answer, and I sit on the Reg. Review Committee in
the legislature, and I haven't witnessed a lot of it. So, if
they have something, they should come forward and be specific
about it.
Mr. Adams. My comments would mirror, certainly, Mr. Jones'.
I would just add that I think there are some areas--and I
mentioned them briefly--where I think we could use some
additional regulation, and that is really around third-party
damage and in some of the exclusions that exist out there,
through municipalities or whatever, and I think that is
certainly an area that we would like to see looked at from this
body.
Mr. Walz. Great.
Mr. Shuster, do you have any follow-up? Then we will see if
the Chairman has anything.
Mr. Shuster. Just on the third party, can you elaborate a
little more on that?
Mr. Adams. Yes.
What exists out there--there are a number of different One
Call-type programs from State to State, and there are certainly
some variations.
Mr. Shuster. Speak into the mike more.
Mr. Adams. Yes.
There are a number of One Call Systems that vary from State
to State, certainly, but within those, from municipalities in
some cases, there are exemptions given to certain contractors
that are actually digging out there that aren't required to
utilize those One Call Systems. From an industry perspective,
or at least from an Enbridge perspective, we would like to have
those exemptions eliminated.
Mr. Shuster. And why are they exempted?
I mean, from a commonsense standpoint, if I am a
contractor--well, I just--there was a point a couple months ago
when I was digging up trees in my backyard. I made the call
because I didn't want to make the mistake of hitting a gas line
and blowing myself up or something like that.
Mr. Adams. Yes, I am not sure why those exemptions exist.
Mr. Shuster. OK. Thank you.
Mr. Walz. Chairman Oberstar.
Mr. Oberstar. Yes. Thank you, Mr. Chairman.
I thank the witnesses for their responses to the previous
questions. I want to come to Representative Guttenberg.
These passages in your statement are very troubling to me,
not troubling that you said them, but troubling about the
condition of safety, that the move of personnel, which Mr.
Jones described as a business decision and you described as a
cost-saving measure, the company said would result in a onetime
savings of $4 million, but then you go on to say that it would
significantly decrease work efficiencies, increase travel
costs. It would be the--and you point to an internal review by
Alyeska that the loss of almost 50 percent of the company's
integrity management group would occur if the company moved
ahead with the transfer and that it would have the effect of
deteriorating morale for the remaining personnel and in a loss
of expertise and institutional knowledge and would return to
Alyeska's previous history of compliance problems with
integrity management.
That seems very much to be at odds with what Mr. Jones is
saying, trying to sort of brush this over as just a little
business decision. This is substantively more than a business
decision, right?
Mr. Guttenberg. Thank you. That is my feeling as well.
I know the report that Alyeska had done, which was
referenced by the Chairman, is where some of that information
comes out of. The morale and the loss of employees is--you
know, they moved people from Fairbanks to Anchorage. Now they
are moving them back. A certain number of them decided not to
take that move. I know they were looking for positions at other
places. Up until today, it has still been an ongoing situation,
but if you are an employee and if you are a highly skilled,
trained, educated, experienced engineer, working in integrity
management, and you see a situation in front of you that says,
``I am not going to be able to do my job if I move to
Anchorage, the way it is defined for me in looking at what I
need to do,'' then doing this job is no longer ever going to be
satisfactory because I am not going to be able to do it. I am
going to have to have more travel time. That is the increased
cost. Then you are going to have a loss, and I think the
institutional memory cannot be undervalued.
Mr. Oberstar. What is the travel time from Anchorage to
these outposts along the pipeline where personnel were
stationed?
Mr. Guttenberg. Well, if you were driving, it would be
about 8 hours. If you were flying, it would be an hour plus.
Mr. Oberstar. But you wouldn't be driving anyone to respond
to an oil spill. You would fly them up there.
Mr. Guttenberg. Well, that is not my decision. That is Mr.
Jones' decision, but how you get there, whether you go by
Glennallen or anywhere in between or any of those small
communities or even north, you know, there might not be an
airstrip for 20 miles.
Mr. Oberstar. That is the other question of mine.
Are there airstrips close to those checkpoints where
personnel were located?
Mr. Guttenberg. Well, since the construction of the
pipeline--and I, you know, was involved in some of that--there
are periodic airports and old construction camps all along the
pipeline.
Mr. Oberstar. Mr. Kuprewicz, you have been involved in
pipeline safety for a great deal of your career.
What do you think about the effect of moving personnel with
the skills, the expertise, and the institutional knowledge, as
Representative Guttenberg stated, and the effect on vigilance
and response time and safety in this environment of the
pipeline in Alaska?
Mr. Kuprewicz. Well, first of all, you need to understand
the history of Alyeska is they have developed issues that have
set some of the original technology because they had serious
corrosion risks and problems. They didn't have leaks, but they
had corrosion, and those are well publicly known issues.
Mr. Oberstar. Yes.
Mr. Kuprewicz. So they have advanced the field in some of
those areas, which are real important, so I don't want to take
that away from them.
The other side of it is, as you tend to create chaos in an
organization, you have to be real careful with this because
there is importance to things likes institutional memory, and
that is one of the roles of government--to be sure, I think,
that you don't reinvent the wheel. Some of the regulations
should set certain minimums, and so you have got to be careful
with all of this chaos, if it is real, and I am not up there,
so I can't say how this has affected that organization, but you
did lose 50 percent of your group.
Now, what was the group, and what were their skills? Those
are the kinds of things.
When you create this kind of chaos for a technically
cultural-based knowledge skill required, you want to be real
careful with that. It doesn't mean you don't have to make those
decisions, but you want to be real careful. In some cases, I
have seen it in other companies. They have missed that. They
have missed that complication with the confusion that they can
cause, and they have had to reinvent through various field
errors--and some of them not always catastrophic, but they have
had to reinvent their learning curve.
So I would just caution folks on that. It is an issue. It
is an issue your folks are pursuing. You need to understand
that and be comfortable with it. That would be my advice.
Mr. Oberstar. Thank you.
Mr. Adams, what is Enbridge's policy on the response and
stationing of personnel? This is a very long pipeline that goes
from Athabasca in northern Alberta, all the way to the
Headwaters of the Great Lakes.
Mr. Adams. Yes.
What we have is we have our own emergency response
personnel. Effectively, those emergency response groups are
spaced probably 3 or 4 hours apart within our pipeline system.
So, really, we can get people to the site sooner than that
because we have technical-type people that are on call, but the
emergency response crew, with equipment and certainly boom and
recovery equipment, can be there in a 3- to 4-hour period
typically.
Mr. Oberstar. Three to 4 hours apart by what measurement?
Mr. Adams. By initial reporting, reporting of the leak or
the area of the leak. In some instances, that can be a phone
call from a third party. It can be our own pilots or aviation
observing that there is a leak along the pipeline or an issue.
There are a number of different ways we can get notified
through our control center.
Mr. Oberstar. When the Koch Pipeline burst near Little
Falls in Minnesota, it was a person driving by, going home from
work, who saw this black geyser shooting into the air alongside
Highway 10. He was astute enough to realize that they don't
have oil. There are no oil wells there. It is not likely that
oil just spurt out of the ground, and he realized it and
smelled it.
He called the county sheriff's office, and the sheriff's
office then had a phone number for the pipeline company, called
``Pipeline Company.'' Then they called their office in Oklahoma
to shut off the valve that controlled that segment of the
pipeline.
You know, the time frame was relatively short, but I just
wonder what would have happened if that had been the dark of
night and no one had seen that going. I asked that question of
Koch, and they said, Eventually our sensors would have detected
a decrease in pipeline pressure, and eventually that would have
caused a shut-off.
Is that what you are talking about? Are those the kinds of
automatic valves that are periodically located along the
pipeline?
Mr. Adams. Yes. We certainly have valves along our pipeline
system, and in recent years, we have had programs where we are
installing additional valves, automatically operated valves, on
each side of the sensitive areas.
Mr. Oberstar. But, that 3 to 4 hours, is that response time
from the time someone hears or knows of it and is on scene?
Mr. Adams. Yes, that would be getting people on scene.
Mr. Oberstar. By driving? By flying?
Mr. Adams. By driving, typically, in most of our areas.
Mr. Oberstar. You measure your response time in hours on
the road, driving?
Mr. Adams. Yes, a response to have people physically at the
site. Certainly, our response time from our control center can
be almost instantaneous, and our large leaks are typically
detected by our control center personnel. They have enough
experience and training that, with usually a leak of any size,
they can view that there is a change in the operating system,
and there are provisions that, if there is uncertainty, they
have to shut down within a period of time, and that would
include the closing of automatic valves.
Mr. Oberstar. The valve structure that you have on your
pipeline and the frequency of valves is that there are more in
urban settings and fewer in rural areas. Is that by your
standards or are those by the Office of Pipeline and Hazardous
Material standards or by State standards or what?
Mr. Adams. Yes, there are some standards in place, but we
go beyond those standards and set our own standards. We have a
risk management group that evaluates our pipeline flows. It
evaluates the terrain that the pipeline is going through.
Obviously, if you are on flat terrain, if there is a leak that
drains up, even if the pipeline is shut down, is relatively
small. If you are in a large area where there are large hills,
you probably would want to install more valves. You would want
to install valves on each side of a river, for example. If,
indeed, there were a break in the river, you would close those
valves.
So it is very dependent, again, on where the pipelines run
and the terrain, and we try to be prudent and, again, looking
at where we can minimize the impact if, indeed, we did have a
leak.
Mr. Oberstar. Now, Mr. Jones, you said in the course of
your testimony that there was no effect on people of that
spill. Yet the reports that we have are that an employee
reported smelling crude, so somebody had to be affected by it.
Clearly, somebody was--at least one person, maybe more--and
volatiles are carried by wind, and they go considerable
distances.
Mr. Jones. Well, that is true that volatiles do travel with
the wind. I am not familiar with that particular case.
What I do know is, in responding to that incident, we made
safety and the concern about those vapors basically boiling
off--you know, since it was a pool in secondary containment, it
was important to us to not let our people, you know, get in
there, and we waited a considerable amount of time. Then we did
atmospheric monitoring, and we made sure that our people were
outfitted in the appropriate gear before making site entry.
That is a standard part of our response procedures. We actually
had a very excellent response in this. It was very timely.
Mr. Oberstar. Well, as to the cost-saving measure or
business decision you made to bring personnel from the various
locations on the pipeline into a consolidated area and to
reduce the number of personnel, what is your time frame of
moving personnel on scene?
You heard what Representative Guttenberg said. What is your
plan? Do you fly them? Do you drive them? Do you use a fixed-
wing or a helicopter to get people on site? Have you done a
risk management evaluation of time frames and moving personnel
on scene in case of failures?
Mr. Jones. We actually do extensive planning to know how
long it takes us to respond to certain sites, and we have----
Mr. Oberstar. What is that time?
Mr. Jones. Well, it varies depending on where you would
have a spill, but we actually get into looking at all of the
sensitive areas, and we develop very detailed plans to know
exactly what we would need to do for a given scenario.
One thing I need to correct here--and this is where I think
there is some confusion--is that the people that we moved from
Fairbanks to Anchorage were office-based. They were not part of
our initial response team that we have. We have not changed any
of our response capability for first responders. We have 69
people, as I said earlier, 24/7 that are ready to go
immediately. They are dispersed throughout the stations, along
the pipeline and also at the Valdez Marine Terminal. I would
rate our response capability as ``best in class.''
Mr. Oberstar. So how many integrity management personnel
does that leave on the pipeline on scene at various
checkpoints?
Mr. Jones. We don't have integrity management personnel at
the pump stations. We never did. These personnel were in the
Fairbanks office. There are about 20 total that are in the
group. We currently have six vacancies. We have interim
measures in place to cover those duties, and we are going
through hiring and are actually doing interviewing right now.
So I am very confident that we will replace the talent gap that
we have, and we will not have safety or integrity impacted.
Mr. Oberstar. So your plan is to fill those positions and
bring it up to full steam.
Does that satisfy you, Representative Guttenberg?
Mr. Guttenberg. We will just have to see, at the end of the
day, who is there. You know, where it hits the road is when
something happens, and then you discover whether there were
competent people in place who could actually do the response,
not just the first response, but the secondary response to
assess and take action on a spill or a problem.
Mr. Oberstar. Now, your constituents in the area of the
pipeline where they have seen spills, are they comfortable with
these management decisions now?
Mr. Guttenberg. You know, Alyeska has been there for a long
time. There is a history of taking care of problems. You know,
there haven't been any major spills. Spills at Pump Station 9
were contained within the bladder, but there were problems with
how that happened as well.
People are concerned, but, you know, we are an oil State at
the end of the day, and we look upon that as our flow of
revenue, and people are at times really concerned about what
would happen if there was a problem. So we are all over the
place as far as how we review Alyeska.
Mr. Oberstar. I think what this hearing shows us all is
vigilance, consistency, a high standard of safety management by
the company, a high level of oversight by the Pipeline Safety
Management Agency, both Federal and State in a cooperative
relationship, particularly in a hazardous environment, all of
which were absent in the Gulf.
It is just intolerable that the Minerals Management
Service, under the previous administration, exempted BP from
filing a blowout failure response plan. None was prepared. None
was developed. They are showing today, even today, this very
day, that they are still experimenting with containment and
protection because they didn't think of it and they weren't
required to think of it ahead of time. They were exempted from
thinking about how to contain a failure at the wellhead and in
the water column.
That failure jeopardizes 50 percent of the fish and
shellfish resources of the United States, 300,000 jobs and the
future livelihoods of millions of people in the Gulf area, and
it stretches all the way up to the Chesapeake Bay where
oystermen were counting on oysters from the Gulf off Louisiana
to serve their customers here.
I was up on Eagles Nest Lake last week, just after the 4th
of July, just on the edge of the boundary waters of the Cuyuna
area, with my son and granddaughters, listening to the call of
the loons. In 4 months, those loons are going to be migrating
to the Gulf, and they are going to meet with a terrible fate if
that oil isn't cleaned up, and it won't be cleaned up by that
time because that is where they winter. They will be flying
right into those marshes where the oil is gathered, and they
are going to be Minnesota casualties, Minnesota loon
casualties. If those loons don't return next spring, then BP is
going to be to blame.
I will leave it at that.
Mr. Walz. Well, thank you to the Chairman for that
summation.
I want to thank each of you on behalf of myself and the
Committee for being here, helping us to understand this,
helping to be partners in getting this right, as we said, to
move a precious resource to fuel our country as well as doing
it in a safe manner. It is invaluable.
To Mr. Jones and Mr. Guttenberg, thank you. I don't want to
make light of the long travel you made. It truly was.
The hearing will be open for 14 days for Members who wish
to make additional statements or to ask further questions.
Unless there is further business today, this Subcommittee is
adjourned.
[Whereupon, at 12:55 p.m., the Subcommittee was adjourned.]
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