[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







 THE AMERICAN ENERGY INITIATIVE, PART 11: THE PIPELINE INFRASTRUCTURE 
                  AND COMMUNITY PROTECTION ACT OF 2011

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           JULY 15 & 21, 2011

                               __________

                           Serial No. 112-77







[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]






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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
ROBERT E. LATTA, Ohio                JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            JOHN BARROW, Georgia
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky              Islands
PETE OLSON, Texas                    KATHY CASTOR, Florida
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 _____

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JAY INSLEE, Washington
GREG WALDEN, Oregon                  JIM MATHESON, Utah
LEE TERRY, Nebraska                  KATHY CASTOR, Florida
MICHAEL C. BURGESS, Texas            JOHN D. DINGELL, Michigan
BRIAN P. BILBRAY, California         EDWARD J. MARKEY, Massachusetts
STEVE SCALISE, Louisiana             ELIOT L. ENGEL, New York
CATHY McMORRIS RODGERS, Washington   GENE GREEN, Texas
PETE OLSON, Texas                    LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
CORY GARDNER, Colorado               CHARLES A. GONZALEZ, Texas
MIKE POMPEO, Kansas                  HENRY A. WAXMAN, California (ex 
H. MORGAN GRIFFITH, Virginia             officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)













                             C O N T E N T S

                              ----------                              

                             JULY 15, 2011

                                                                   Page
Hon. John Sullivan, a Representative in Congress from the State 
  of Oklahoma, opening statement.................................     1
    Prepared statement...........................................    40
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................    41
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................    44
    Prepared statement...........................................    46
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................    48
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    48
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................    49
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   176

                               Witnesses

Hon. Denny Rehberg, a Representative in Congress from the State 
  of Montana.....................................................    50
Hon. Jackie Speier, a Representative in Congress from the State 
  of California..................................................    52
Cynthia L. Quarterman, Administrator, Pipeline and Hazardous 
  Materials Safety Administration, Department of Transportation..    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   177
Randall S. Knepper, Director, Safety Division, New Hampshire 
  Public Utilities Commission....................................    70
    Prepared statement...........................................    72

                           Submitted Material

Discussion draft, dated July 8, 2011, titled H.R. --------, To 
  amend title 49, United States Code, to provide for enhanced 
  safety and environmental protection in pipeline transportation, 
  to provide for enhanced reliability in the transportation of 
  the Nation's energy products by pipeline, and for other 
  purposes, submitted by Mr. Sullivan............................     3
Letter, dated July 14, 2011, from James W. Glasgow, State's 
  Attorney of Will County, Illinois, to Mr. Rush, submitted by 
  Mr. Rush.......................................................    42

                             JULY 21, 2011
                               Witnesses

Andrew J. Black, President, Association of Oil Pipe Lines........    90
    Prepared statement...........................................    92
    Answers to submitted questions...............................   180
Daniel B. Martin, Senior Vice President, Pipeline Safety, El Paso 
  Pipeline Group.................................................   108
    Prepared statement...........................................   110
    Answers to submitted questions...............................   187
Eric Kessler, Vice President, Pipeline Safety Trust..............   121
    Prepared statement of Carl Weimer, Executive Director, 
      Pipeline Safety Trust......................................   123
Charles F. Dippo, Vice President, Engineering Services and System 
  Integrity, South Jersey Gas Company............................   134
    Prepared statement...........................................   136
    Answers to submitted questions...............................   190
Gary Pruessing, President, ExxonMobil Pipeline Company...........   146
    Prepared statement...........................................   148
    Answers to submitted questions...............................   193

 
 THE AMERICAN ENERGY INITIATIVE, PART 11: THE PIPELINE INFRASTRUCTURE 
                  AND COMMUNITY PROTECTION ACT OF 2011

                              ----------                              


                         FRIDAY, JULY 15, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:37 a.m., in 
room 2322, Rayburn House Office Building, Hon. John Sullivan 
(vice chairman of the subcommittee) presiding.
    Present: Representatives Sullivan, Shimkus, Terry, Burgess, 
Bilbray, Olson, McKinley, Gardner, Griffith, Upton (ex 
officio), Rush, Inslee, Castor, Green, Gonzalez, and Waxman (ex 
officio).
    Staff present: Gary Andres, Staff Director; Charlotte 
Baker, Press Secretary; Michael Beckerman, Deputy Staff 
Director; Maryam Brown, Chief Counsel, Energy and Power; Andy 
Duberstein, Special Assistant to Chairman Upton; Garrett 
Golding, Legislative Analyst, Energy; Cory Hicks, Policy 
Coordinator, Energy and Power; Katie Novaria, Legislative 
Clerk; Jeff Baran, Minority Senior Counsel; and Caitlin 
Haberman, Minority Policy Analyst.

 OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF OKLAHOMA

    Mr. Sullivan. I want to thank everyone for being here.
    Today marks the 11th day in our American Energy Initiative 
hearing. While these hearings have allowed us to examine a 
multitude of issues regarding energy production, regulation, 
and consumption, today we will focus on what can be done to 
improve the safety and secure delivery of oil and natural gas 
via pipeline.
    Several tragic pipeline accidents have occurred over the 
past year, which demonstrates the need to reauthorize and 
enhance current safety laws. Despite this committee room 
frequently being the site of many tense debates and 
discussions, pipeline safety is an issue I hope we can all work 
together on to produce meaningful and effective legislation to 
ensure the safety of our oil and gas pipeline infrastructure 
for the future while protecting the American people and our 
environment.
    Over the past several years, we have been able to pass 
bipartisan bills on pipeline safety, sometimes under suspension 
on the floor. This is because our pipeline infrastructure 
touches every congressional district, and accidents can happen 
anywhere, anytime.
    Before us at the witness table, we have a Democrat from 
California and a Republican from Montana. Both have dealt with 
major accidents recently, and both understand Congress must act 
to strengthen current pipeline laws.
    It is critically important that our pipeline infrastructure 
is both reliable and durable. And to this end, the discussion 
draft under examination today makes many important 
modifications to existing law that will promote greater 
pipeline safety standards.
    [The discussion draft follows:]


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    Mr. Sullivan. We are glad to have an opportunity today to 
hear from the experts how this discussion draft might be 
improved or otherwise modified to ensure pipelines remain a 
safe and economical means of transporting energy supplies and 
help power our economy and create jobs.
    With that, I yield the balance of my time to Ranking Member 
Rush.
    [The prepared statement of Mr. Sullivan follows:]


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 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman.
    And I want to thank all of you who are panelists who are 
gathered here today with us.
    In the past, the issue of pipeline safety has been one that 
we have worked on in a bipartisan manner. And it is my sincere 
hope and expectation that we will continue on in that tradition 
as we tackle reauthorization of this bill, as well.
    I look forward to today's hearing with such a stellar 
lineup of expert witnesses. And I commend you, Mr. Chairman, 
for holding this hearing today with such distinguished 
panelists.
    I would be remiss if I did not acknowledge Representative 
Speier and Representative Rehberg, both of whom I know have a 
personal interest on the subject of pipeline safety. 
Representative Rehberg represents Montana, where they are 
dealing with the aftermath of the Silvertip pipeline spill in 
the Yellowstone River. And Representative Speier represents the 
district of San Bruno, where last summer's pipeline explosion 
claimed the lives of eight people.
    So, while we so far have been fortunate to avoid loss of 
life in my own home State of Illinois, we have recently been 
experiencing pipeline leaks due to old and decrepit lines. Just 
yesterday, I had a conversation with the State's attorney of 
Will County, Illinois, where he informed me that recently there 
were three separate pipeline spills: two oil leaks and one 
butane leak. And he warned that future leaks are a real 
possibility due to the aging infrastructure.
    Will County State's attorney's letter for the record, Mr. 
Chairman, on this condition of aging pipelines--I would like to 
introduce into the record these letters from the Will County 
State's attorney, dated July 14th, and signed by State's 
Attorney Jim Glasgow. I request unanimous consent that this 
letter be entered into the record.
    Mr. Sullivan. No objection.
    [The letter follows:]


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    Mr. Rush. And so I look forward to hearing from all of our 
witnesses today, including our House colleagues, to gauge their 
thoughts on the draft bill we are discussing here.
    Additionally, I am interested to hear Representative 
Speier's ideas on what elements of her own bill, H.R. 22, the 
Pipeline Safety and Community Empowerment Act of 2011, that we 
may be able to incorporate to strengthen the legislation that 
we are considering in this subcommittee.
    As far as the discussion draft, Mr. Chairman, I am 
committed to working with you in good faith to improve and 
strengthen this legislation where necessary in order to ensure 
that we have the strongest bipartisan bill possible moving 
forward. As I understand it, many elements of this discussion 
draft mirror provisions in the Senate bill, but there are some 
outstanding areas where I think we could make some vital 
improvements so that we have a stronger bill that can gain 
bipartisan support on the subcommittee, the full committee, as 
well as when this bill reaches the floor.
    Some areas where I believe this bill can be strengthened 
include ensuring that there is regulation for gathering lines 
when appropriate, tightening up the integrity of management 
system requirements, and ensuring that information regarding 
emergency response plans and industry-developed safety 
standards are indeed available to the public at large.
    Mr. Chairman, if we are able to do this work on this bill 
together and include input from both the majority and the 
minority sides, then I am confident that we can move forward 
with this legislation from this subcommittee to a point where 
it can actually pass the Senate and also maybe the President 
will sign it in to law.
    The issue of pipeline safety, in the face of everything 
that currently takes place, from various spills and explosions 
to the debates over fast-tracking various pipeline proposals, 
is one that we must act on because this Nation needs updated 
and comprehensive pipeline safety.
    So, once again, Mr. Chairman, I applaud you and I applaud 
Chairman Whitfield in his absence for holding this timely 
hearing today. And I look forward to hearing from all of our 
witnesses.
    Thank you, and I yield back the 32 seconds.
    Mr. Sullivan. Thank you, Ranking Member Rush.
    And next I would like to recognize the chairman of the full 
Energy and Commerce Committee, Congressman Upton, for 5 
minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you very much.
    Today, this subcommittee will examine a discussion draft of 
the Pipeline Infrastructure and Community Protection Act of 
2011.
    Pipeline safety is an issue that crosses regions, politics, 
and parties--yes, it does--and it affects all of us and our 
constituents in the same manner. Though pipelines remain the 
safest means to transport oil and natural gas, over the past 
year we have witnessed a number of accidents that have 
destroyed property, ecosystems, and, most importantly, lives of 
innocent people.
    Last summer, an old pipeline ruptured and spilled into a 
stream and river which flows through my district. The spill 
sent over 20,000 barrels of oil into Talmadge Creek and 
Kalamazoo River. Different alarms sounded in the operator's 
control room for nearly 18 hours before the leak was confirmed. 
And, after that, it took an hour and 20 minutes for the initial 
call to the National Response Center to be placed.
    In September of last year, a gas pipeline in San Bruno, 
California, exploded, killed 8 people in addition to destroying 
37 homes. It took over an hour for technicians to manually shut 
off the flow of gas, which continued to feed the fireball.
    And, of course, last month, a pipeline buried beneath the 
riverbed of the Yellowstone River near Laurel, Montana, 
ruptured and spilled up to a thousand barrels of oil into the 
Nation's largest undammed river.
    I look very much forward to testimony from ExxonMobil and 
Congressman Rehberg, as well as their answers to our many 
questions concerning the recent spill in Montana. Though the 
discussion draft does not specifically address some of the 
preliminary issues raised by the incident, I hope that what we 
learn today can provide better understanding on the adequacy, 
or lack thereof, regarding current pipeline safety standards 
related to water crossings.
    What all of these incidents tell us is that pipeline safety 
laws must be enhanced to prevent tragedies like these in the 
future and better prepare us for response and containment once 
they occur.
    The Pipeline Infrastructure and Community Protection Act is 
the Energy and Commerce Committee's initial offering into this 
year's drive to reauthorize pipeline safety laws. We are fully 
committed to working in a bipartisan, bicommittee, and 
bicameral fashion to get a pipeline safety bill signed this 
year in to law. The public demands it, and so does our 
responsibility as their elected leaders.
    Among its many provisions, the discussion draft under 
examination today seeks to: one, set a 1-hour time limit for 
operators to report incidents to the National Response Center, 
similar to legislation in the last Congress that was passed on 
the House floor; two, require the use of automatic or remote-
controlled shutoff valves that can stop leaks and spills in a 
fraction of the time needed for manual valves; three, require 
better leak-detection technologies for the monitoring and 
assessment of leaks; four, substantially increase civil 
penalties on pipeline operators who have major accidents; five, 
require highly enhanced inspection techniques and technologies 
which cover more pipeline mileage than before; and, six, 
increase the number of pipeline inspectors at the Department of 
Transportation. Perhaps also, the idea that we will require 
pipelines to be buried further underneath waterways, as 
probably was the cause in Montana.
    This discussion draft is an important first step in getting 
a companion House bill out of the starting blocks and on a 
trajectory to merge with existing Senate legislation. It is my 
intent to move a bill through this subcommittee over the next 
couple of weeks and have full committee action upon our return 
from the August recess.
    I look forward to the conversation today and yield the 
balance of my time to the gentleman from Nebraska, Mr. Terry.
    [The prepared statement of Mr. Upton follows:]


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   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you, Mr. Chairman.
    It is my hope that both this committee and T&I will move to 
report a very strong piece of legislation by the end of this 
year.
    When we hear of tragedies involving pipelines in San Bruno 
or in Montana, our hearts go out to those affected. But, as 
legislators, it is necessary and important that we quickly 
learn from these accidents and move to write laws that protect 
human health and the environment--bearing in mind that 
pipelines remain the safest and most efficient means of 
carrying vital energy across great distances.
    Pipelines are such an important part of our commerce, and 
all involved must have the confidence that the system works 
well. I appreciate the outline that our chairman made of 
improvements that could be made to pipeline safety.
    And I yield back.
    Mr. Sullivan. Thank you, Mr. Terry.
    Next, I would like to recognize Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    Today, we will examine the safety of the Nation's oil and 
natural gas pipelines and begin to consider legislation to 
update and strengthen our pipeline safety laws.
    During the last 12 months, a litany of tragic failures has 
reinforced the need for stronger pipeline safety laws.
    Since last month's hearing on this topic, ExxonMobil's 
Silvertip pipeline ruptured in Montana, spilling an estimated 
31,500 to 42,000 gallons of crude oil into the Yellowstone 
River. It appears that the oil may have been carried as far as 
240 miles downstream. Pockets of oil have been confirmed at 
least 90 miles down the river. Ranchers are struggling to 
prevent the contamination from destroying their livelihoods. We 
don't yet know the cause of this spill, though much of the 
focus is on whether the pipeline buried beneath the river was 
uncovered by erosion from flooding and became vulnerable to an 
occlusion from debris.
    During May of this year, two serious spills occurred on the 
first Keystone pipeline, which brings Canadian tar sands oil to 
refineries in Illinois and Oklahoma. This is a brand-new 
pipeline. It was predicted to spill no more than once every 7 
years, but in just 1 year of operation, it has reported 12 
separate oil spills.
    In February, a natural gas pipeline in Allentown, 
Pennsylvania, exploded, killing 5 people and damaging more than 
50 homes and businesses. This was an old cast-iron pipeline.
    Last September, a natural gas pipeline on the other side of 
the country ruptured and exploded in San Bruno, California. 
Eight people died; many more were injured. The gas-fed inferno 
spread from house to house, driven by the wind. Thirty-eight 
homes were destroyed, and 70 more were damaged. The explosion 
left behind a suburban street with a massive crater and burned-
out vehicles. The vice chairman of the National Transportation 
Safety Board described it as, quote, ``an amazing scene of 
destruction.''
    Two months before the San Bruno explosion, a crude oil 
pipeline ruptured near Marshall, Michigan. Over 800,000 gallons 
of oil spilled into the Talmadge Creek and then flowed into the 
Kalamazoo River. The cleanup is ongoing a year later and is 
expected to cost $550 million.
    These are just some of the catastrophic pipeline failures 
our country has experienced during the past 12 months. These 
failures have occurred all around the country. From California 
and Montana to Michigan and Pennsylvania, natural gas pipelines 
have exploded; oil pipelines have ruptured. Some failures 
involved old, outdated pipelines. Others involved brand-new, 
supposedly state-of-the-art pipelines. When we step back and 
look at the last 12 months, I think it is impossible to 
conclude that our pipeline safety laws are working as intended.
    We need to seize this opportunity to reauthorize and update 
the pipeline safety statute. The Senate Commerce Committee has 
produced a moderate, bipartisan bill. I think the Senate bill 
is a good place to start, and I hope that we can work together 
to strengthen and improve that bill.
    The discussion draft we will be examining today contains 
several of the same provisions but also weakens some other 
provisions. With the benefit of the testimony we will hear 
today, let us use this discussion draft as a foundation to 
craft a strong bill together. I don't think there is any reason 
for this to be partisan issue. We want to work in a cooperative 
fashion to produce a good bill that will meaningfully enhance 
pipeline safety.
    Mr. Chairman, I want to now yield the remainder of my time 
to Mr. Green from Texas.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Mr. Chairman, thank you.
    I thank both the ranking member of the full committee and 
the subcommittee for giving me time to speak.
    I am pleased we are having this hearing today. Pipeline 
safety is probably an utmost important issue of my 
constituents, because many are employed in the oil and gas 
industry and thousands live in communities near pipelines in my 
Houston-area district.
    As this process moves forward, I look forward to working 
with my colleagues on both sides of the aisle to build 
consensus and move a bill that will update the regulations in a 
way that makes sense. So far, I am pleased with the Senate 
bill, which is moving quickly over there, has garnered 
bipartisan support, and hope that we can have the same success 
here.
    This hearing is a valuable step to analyze the strengths of 
both bills and examine areas that need improvement. And I 
appreciate our witnesses being here, particularly our 
colleagues.
    And, Mr. Chairman, we have to get this right with pipeline 
safety simply because the alternative is putting more trucks on 
the road carrying those same chemicals, or those same products, 
and that is why this is so important.
    I yield back my time.
    Mr. Sullivan. Thank you, Mr. Green.
    At this time, we will hear testimony from our first panel 
of witnesses.
    I would first like to recognize Congressman Denny Rehberg 
from Montana.

STATEMENTS OF HON. DENNY REHBERG, A REPRESENTATIVE IN CONGRESS 
     FROM THE STATE OF MONTANA, AND HON. JACKIE SPEIER, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

                STATEMENT OF HON. DENNY REHBERG

    Mr. Rehberg. Thank you for recognizing me.
    And I want to offer my sincere appreciation to you, 
Chairman Sullivan, for chairing this meeting today; Mr. Upton, 
for calling the meeting; Ranking Member Rush, for your kind 
assistance today and your recognition of the panel that follows 
the two of us, because the staff really put a lot of work in to 
it. And I think you are going to hear a lot about the necessity 
and the opportunities in pipeline safety.
    Your committee must accomplish two critical things today. 
First, we need to share our knowledge in regards to the 
ExxonMobil spill so that we can determine what can be done to 
prevent it from happening again. Second, if Congress moves 
forward with authorization of the Pipeline Infrastructure and 
Community Protection Act of 2011, I want to be absolutely 
certain that we are doing everything that we can to prevent 
future environmental, health, economic impact from pipeline 
failures.
    For many, the Silvertip pipeline breaking was just another 
news story about an oil spill, but for Montanans, this is our 
home. Water and rivers play a big role in the lives of many 
Montanans. For the Maclean family in the famous movie ``A River 
Runs Through It,'' it was the Big Blackfoot River. For me and 
my family, it is the Yellowstone River. I grew up in Billings, 
just a few miles from the riverbanks of the Yellowstone. As a 
boy, I swam and fished that river. I spent time with my family 
and friends floating down it in inner tubes and barbecuing on 
its banks. In fact, I have lost a couple of high school friends 
in separate drowning accidents in that river. You could say 
that, like thousands of other Montana families, the Yellowstone 
is our family river. So this oil spill is a pretty big deal for 
us. We have questions, and we deserve answers.
    As Montana's Congressman, I fly into Billings just about 
every week. I fly over the Yellowstone River, but I also fly 
over the oil refinery that provides so many good jobs to our 
community. Just like the river is a part of Montana's culture, 
so is the energy industry.
    Montana is a warehouse of energy options. We have it all: 
wind, solar, geothermal, biomass, oil, gas, coal, biofuels. 
These energy options help us provide the energy this country 
needs to end our addiction to foreign oil and creates good-
paying jobs.
    The reason I point this out is simple: While there might be 
some people out there who think that we should develop our 
resources without any regard for the environment, that is not 
me. And there are others who think we should stop all human 
impact on the environment whatsoever. That is not me either. 
Neither of these options work for Montana or America.
    I am fifth-generation Montanan. I hope to pass it on to the 
sixth generation. I was a rancher before I came to Congress, 
and I will be a rancher after I leave Congress. And, 
ironically, I have a petroleum pipeline that crisscrosses my 
ranch. It is a Conoco pipeline. And I can't begin to tell you 
what good neighbors they have been. They flag it, they monitor 
it, they work it. I receive no financial benefit. My great-
grandfather actually granted the easement for this pipeline.
    So these kind of pipeline legislations matter a lot to me. 
I want to know that private-property rights are respected, I 
want to know that people are respected, but that the 
environment is respected as well. Because, while I receive no 
financial benefit from a pipeline that crisscrosses my ranch, I 
would have the benefit--or, the failure or any of the problems 
as a sidenote of the failures of a pipeline that exists and 
occurs. So this kind of legislation is important to those of us 
who work the land.
    We must demand a third option, a way to utilize our natural 
resources while doing everything we can to protect the 
environment. It is a reasonable and responsible expectation. 
The United States is leading the way in providing clean, 
effective energy. We are not perfect, but when there is a spill 
or a mistake, you won't find a more scrutinized response 
anywhere in the world.
    This is one of the reasons domestic energy production is 
such a good idea. Our standards and expectations are so much 
higher than the countries we import oil from. A kilowatt hour 
of energy produced in the United States is, on balance, going 
to be cleaner and safer than a kilowatt hour of energy we 
import.
    In Montana, one of our most valuable resources is nature 
itself. Montanans get it. We hunt, we hike. We don't just visit 
the outdoors; we live there. That is why I have always said 
Montanans are excellent stewards of the land and that we don't 
need Federal bureaucrats telling us how to manage our land and 
wildlife.
    This spill was a failure that did not live up to that 
standard, and we want to know why, we want to know what is 
being done, and we want to know how to prevent it in the 
future. And that is what this hearing is about.
    In the meantime, Montanans of all backgrounds have already 
come together in the Yellowstone Valley to clean up this mess. 
ExxonMobil has hundreds of people on the ground working closely 
with local, State, and Federal officials. And they are joined 
by scores of regular Montanans who are volunteering their 
personal time to help clean up the spill.
    Maybe more than any testimony here, I think that speaks 
volumes about the urgency of this response. In Montana, when 
the chips are down, you don't wait for outside help. You roll 
up your sleeves, you join your neighbor on the front line.
    Again, Mr. Chairman, thank you for the hearing today. I 
stand ready to answer any questions from my unique perspective 
of being on the ground from day one of July 1, working with 
Exxon, EPA, and anybody else that will work with us to see 
that, one, we find out what happened; two, we fix the problems; 
and, three, it never happens again.
    Thank you, Mr. Chairman.
    Mr. Sullivan. Thank you, Congressman Rehberg.
    I would just like to make an announcement. I would like to 
announce that the third panel will be testifying next Thursday, 
as we expect a lot of votes on the floor here very soon in the 
next hour. So I apologize for that. But it seems to be able to 
work better if we do that, and I apologize if it inconveniences 
anyone. I know it probably does. Thank you.
    Next, I am pleased to welcome Congresswoman Jackie Speier 
to deliver her testimony.

                STATEMENT OF HON. JACKIE SPEIER

    Ms. Speier. Thank you, Mr. Chairman, thank you, Ranking 
Member Rush and colleagues, for the opportunity to speak to 
you.
    Let me say at the outset that I am thrilled that this 
committee is going to move swiftly to address this issue. I 
have a couple of concerns that I will address this morning, but 
at the outset let me say that, you know, before September 9th, 
I knew very little about this issue. I now feel like I have a 
Ph.D. in it. I hardly knew about the National Transportation 
Safety Board. I knew nothing about PHMSA. I didn't know what a 
maximum operating pressure was. I didn't know what a psi was. 
But I know all about all of those things today.
    I also know that I went to the funerals of eight people in 
my district. I visited the burn center in San Francisco where 
seven victims slept, hung to life for 4, 5, 6 months. This is a 
tragedy not just for the San Francisco Bay area. This was a 
national story; it was an international story.
    And for as much as we are talking about today, there are a 
couple of things that are not in this bill that need to be 
addressed.
    One is, if you look at pipeline safety historically and the 
laws that we have put on the books, we grandfathered in all of 
the pipes that were pre-1970. So all of the older pipes are not 
subject to the kind of scrutiny that newer pipes are.
    This was a pipe that was actually placed in service in 
1956. It has lots of problems. The National Transportation 
Safety Board will come out with its report at the end of 
August. The wells appear to be flawed. The operator didn't know 
what was under the ground, thought it was a seamless pipe when, 
in fact, it was a seamed pipe; didn't have the instrumentality 
to determine that the wells were poor; had maximum allowable 
operating pressures that exceeded what probably should have 
been used. But, having said all of that, they followed the law. 
They followed the law because they were grandfathered in.
    Now, I have introduced legislation that addresses a number 
of these elements. The local operator in my community, Pacific 
Gas and Electric, has implemented every single measure that is 
in my bill. Now, they have done it for a lot of reasons, but 
they are looking at over a billion dollars in liability right 
now. And for all the operators across the country, the kinds of 
steps that we are recommending, I think, are very important.
    One of the things that is not addressed in either bill is 
notice to the residents. PG&E has noticed everyone in their 
region if they are 2,000 feet from a transmission line. Now, 
that is important and good not just for the resident but for 
the operator. If the homeowner doesn't know that they have a 
transmission line in their backyard or front yard and they are 
putting up an in-law unit, they are not going to take the kinds 
of precautions necessary. And, as we know in pipeline safety, 
most ruptures occur from third-party impact.
    So that is a very important feature. PG&E did it. They did 
it swiftly. It was not, I think, an extraordinary cost to them. 
It is notice to not only the residents, but it is also notice 
to the local first responders. The fire chief in San Bruno 
didn't even know there was a transmission line running through 
the middle of the street.
    Now, it took an hour and 30 minutes or more for PG&E to 
turn off the gas. Now, I am passing out to you photographs. 
This photograph shows you the kind of fireball, 30 feet in the 
air or higher. They thought it was a plane that had crashed at 
first.
    But it took an hour and 30 minutes for them to turn off the 
gas because they had to go all the way to another community to 
get the keys to open the gate to get to the valve. If there are 
automatic and remote shutoff valves required in high-
consequence areas--these are areas where you have high 
population and/or seismic risk--that could have been turned off 
within 20 minutes at the very most.
    So the fire raged for an hour and a half, taking lives and 
extensive property. Over 37 homes were demolished. And if you 
look at this, it looks like a war zone in many of these 
pictures. And this community is still trying to recover today.
    So I think it is very important for us to look at putting 
automatic and remote shutoff valves not just on new 
construction; it is the most vulnerable construction that is 
pre-1970 that we should be concerned about. And we should be 
concerned about it in high-consequence areas, where there is 
high population, where population has grown up around 
transmission lines that were put in place many decades ago. It 
is no one's fault at this point. It is just that we have to 
make it safe for the consumers, for the ratepayers.
    And I think as we look at what the costs are associated 
with it, I can tell you as one person who has witnessed this 
firsthand, if it means slightly more on my PG&E bill to make 
sure that there is going to be safety first, then I am willing 
to pay that price to make sure that lives aren't lost.
    Now, I have a written statement that I am not going to 
spend much time on because I think that it kind of speaks for 
itself. But I do want you to appreciate that there has to be 
disclosure of the location of these pipelines to the first 
responders. If they don't know where they are located, if they 
are not trained, then they are sitting ducks when an explosion 
occurs. There has to be notice to the consumer; that automatic 
and remote shutoff valves need to be put in place in high-
consequence areas.
    The language in both bills is really pretty squishy. It is 
basically, you know, they need to use the best technology 
moving forward. Well, I am much more concerned about the older 
pipelines than I am the newer pipelines.
    And for all those operators that have pipelines that they 
do not have paperwork for--and in 30 percent of PG&E's system, 
they do not have paperwork, they do not know what is under the 
ground--in those situations, that pipeline needs to be hydro-
tested, because there is no way of knowing whether or not it is 
safe. There is a whole new technology around what is called 
``smart pigging,'' but if you have pipe diameter that ranges 
from 30 to 24 to 40, you are not going to be able to use smart 
pigging. So the only way to make sure that that is safe is to 
do the hydrostatic testing.
    None of that, frankly, is in the legislation today.
    So I urge my colleagues to recognize--if these pictures 
don't speak a thousand words, I don't know what does. This is 
not anything you want to have happen in your district. And when 
it does, it consumes you for years. And it has been a huge toll 
in my region and something that really needs to be addressed on 
a Federal level.
    I yield back.
    Mr. Sullivan. Thank you, Congresswoman Speier.
    I would like to recognize myself for a question to 
Congressman Rehberg.
    Could you briefly tell us about how the Unified Command is 
working in Montana?
    Mr. Rehberg. Yes. You may have seen some press where the 
Governor pulled out of the Unified Command, but for the most 
part, they have worked extremely well together. And so, you 
know, there is probably some politics over policy involved in 
the situation, but we are really pleased.
    The EPA has done a great job. We have the Coast Guard 
involved, the U.S. Fish and Wildlife Service, the State 
Department of Fish and Wildlife and Parks, the DEQ in the State 
of Montana. And, really, they have worked well together. And 
that doesn't always happen.
    And one of the reasons, I think, is because Exxon stepped 
forward and said, ``We are responsible.'' As you know with the 
gulf situation, you get a lot of finger-pointing. Everybody is 
saying, ``Not me, not me, not me.'' Well, in this particular 
case, Exxon stepped forward and said, ``We are going to make 
you whole. We are going to stay until the job is done. We are 
going to clean up the environment. We are going to pay those 
that have a loss of use on their properties.'' And so, you 
know--to allay some of the fears of the economics. There are 
people that can't graze their pastures because of the oil 
residue. Exxon has got people in there and working to figure 
out a fair settlement so that they can get in and fix it.
    So, for the most part, the coverage has been good, the 
comments have been as good as possible in a very emotional 
situation. But we just appreciate the Federal effort, the State 
effort, the local effort, and the company effort to do the best 
they can.
    Nobody wanted this to happen. Most of all, the company did 
not. But we think the Unified Command has worked very well. It 
has been a good process. And thank you for the question.
    Mr. Sullivan. Thank you, sir. That sounds good.
    And I would like torecognize Ranking Member Rush.
    Would you like to ask a question?
    Mr. Rush. To Congressman Rehberg, as the Representative who 
represents an area where Exelon is based, I am glad to hear 
good comments about the company--oh, Exxon.
    Oh, OK. Well, I represent Exxon. I thought he said Exelon. 
OK.
    All right. Well----
    Mr. Rehberg. Yes, sir, we actually have three refineries in 
the area, so it is a major part of our economy.
    Mr. Rush. Oh, OK. So it is Exxon, OK.
    Mr. Rehberg. It is Exxon, Conoco, and then there is a co-
op.
    Mr. Rush. OK. I am sorry, I misunderstood.
    I just want to--Congresswoman Speier, I want to just 
identify with your comments. I was just talking with a man, the 
State's attorney in my own district, in the Will County area. 
And he is afraid that, whereas we have not had this kind of 
spill or any kind of explosion that you have experienced, we 
are afraid that that is going to happen because of--you know, 
and we have seen those start off, they start off small, and 
then they kind of build until you have a giant explosion.
    And I certainly concur with your attitude about how we can 
strengthen this bill. And I want to just thank you for the 
timeliness of your comments and insightfulness of your 
comments. I think you have helped us to--with your attention, 
your advice, and your consideration, you have certainly helped 
us to strengthen this bill in a lot of ways. And I really 
appreciate it and appreciate the fact that you are doing 
something to help us out.
    But I was curious, in reading this comment on the 
notification to your citizens, you seem to be disappointed, 
very disappointed. How can we reallyassure that those who live 
in the communities, that they have proper response, proper 
alerts, and that they really need and have some prior 
knowledge. I think if they knew or know beforehand that they 
have pipelines running close to their properties, then they 
would be more mindful of some of the things that may give us 
some forewarnings.
    So can you address the issue of prior notification or 
notification of your constituents?
    Ms. Speier. Thank you, Ranking Member Rush. I would be 
happy to.
    It is important to note that the industry has been driving 
policy--not surprising, but very much the case as it relates to 
pipeline safety. Most of the studies that are commissioned by 
PHMSA, 60 percent of them are funded by the trade association, 
and the trade association determines whether or not to do 
certain studies.
    The trade association has also developed the, quote, 
``educational component.'' And in PG&E's case, they paid an 
entity that was somehow related to the trade association to do, 
quote, ``education.'' And they did a survey, and the survey was 
exposed at the National Transportation Safety Board hearing 
that occurred in March on the explosion. And it was shameful 
that how much ever money was spent on the survey to ratepayers, 
they got a response of 15 people. Thousands and thousands of 
surveys sent out; 15 people responded.
    Now, PG&E has taken it upon themselves to notify every 
resident. They did it simply and swiftly. If you are going to 
bill people, you can also send a separate notification out to 
tell them that they are within 2,000 feet of a transmission 
line.
    Now, it is important to the resident, but it is also 
important to the operator, because the third-party digs are the 
most likely occurrence of ruptures. So, right-to-know should be 
very important to everybody--to those that are living next to a 
transmission line, to the first responders. And that is why I 
think that is so critical.
    There has been a lot of money spent on, quote, 
``education'' that has been absolutely pointless. And I think 
that we need to take the next step in terms of right-to-know.
    Mr. Rush. Thank you, Mr. Chairman. I yield back.
    Mr. Sullivan. Thank you, Mr. Rush.
    I would like to thank our panelists, Congresswoman Speier 
and Congressman Rehberg. Thank you so much.
    And now we would like to move to our next panelists, get 
them up here.
    Thanks.
    Mr. Rehberg. Thank you.
    Mr. Sullivan. Well, I would like to thank you for being 
here.
    If you are ready, I would like to recognize Ms. Quarterman, 
the head of PHMSA, for her statement.

 STATEMENTS OF CYNTHIA L. QUARTERMAN, ADMINISTRATOR, PIPELINE 
 AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION, DEPARTMENT OF 
   TRANSPORTATION, AND RANDALL S. KNEPPER, DIRECTOR, SAFETY 
DIVISION, NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION, ON BEHALF 
 OF THE NATIONAL ASSOCIATION OF PIPELINE SAFETY REPRESENTATIVES

               STATEMENT OF CYNTHIA L. QUARTERMAN

    Ms. Quarterman. Thank you. Good morning, Vice Chairman 
Sullivan, Ranking Member Rush, members of the subcommittee. 
Thank you for the opportunity to appear today to discuss the 
Pipeline and Hazardous Materials Safety Administration's 
oversight of America's vast network of energy pipelines and 
reauthorization of the pipeline safety program.
    PHMSA and our State partners' safety oversight provide 
critical protection for the American people and our 
environment. The Department is actively working to ensure the 
safety and reliability of the Nation's pipeline infrastructure. 
The recent ExxonMobil incident has focused all of our attention 
on the importance of preventing pipeline failures. PHMSA has 
fulfilled all but one of the requirements of the Pipeline 
Inspection Protection and Enforcement Safety Act of 2006, and 
we are in the final stages of addressing that last remaining 
mandate.
    To help combat pipeline vulnerability to excavators, PHMSA 
continues to provide State Damage Prevention Grants for State 
one-call centers, State pipeline safety agencies, and other 
authorized recipients. PHMSA also provides comprehensive 
training for all State and Federal pipeline safety inspectors.
    Through rulemakings and pipeline safety advisories since 
2009, PHMSA has closed a record 12 of the National 
Transportation Safety Board's safety recommendations. During 
that same period, PHMSA also obtained closure on all of its 
pending Office of Inspector General and Government 
Accountability Office recommendations.
    PHMSA looks forward to working with Congress on 
reauthorizing its pipeline safety program. We are pleased that 
the Pipeline Infrastructure and Community Protection Act of 
2011 picked up nearly all of the provisions of the 
administration's proposal. At the same time, we need to 
remember that each new mandate will require rulemakings to be 
developed and published in compliance with the Administrative 
Procedure Act and subject to review of our two technical 
advisory committees.
    As for some of the bill's provisions, PHMSA supports 
increasing administrative civil penalties for violations 
leading to deaths, injuries, or significant environmental 
damage, especially since maximum penalties have not increased 
in almost 10 years. However, we do not support removing maximum 
penalties for incidents that occur in high-consequence areas or 
adding the requirement that those violations be willful and 
knowing.
    Significant spills and incidents also have occurred on 
gathering lines, and we strongly believe that Congress should 
eliminate exemptions to allow PHMSA to regulate the remaining 
pipeline mileage that is currently unregulated. We also do not 
support mandatory removal of class locations before PHMSA has 
had a chance to consider the issue. We support prohibiting 
States from being exempt from damage prevention--creating 
exemptions from damage-prevention laws; however, we suggest 
that Congress take a phased approach to any funding 
restrictions to allow time for States to remove those 
exemptions.
    Reforms to allow for the collection of additional data on 
physical attributes and pipeline locations are also supported. 
In addition, we support reforms to provide us with 
reimbursement from project applicants for design review, 
consulting and field oversight, as well as for costs incurred 
to review special permit applications.
    While Congress works through the reauthorization of the 
pipeline safety program, PHMSA is moving forward and taking a 
hard look at our Nation's pipelines. Many of the provisions 
that are in your bill are things that we are already 
considering and working on regulatory implementation of.
    Under Secretary LaHood's leadership, we have developed the 
Pipeline Safety Action Plan and will ensure the safety of the 
American people and the integrity of the pipeline 
infrastructure.We are also executing this plan in a transparent 
manner, with opportunities for public engagement and a 
dedicated Web site.
    In closing, we look forward to working with Congress to 
address any issues you may have regarding PHMSA's pipeline 
safety program and the regulation of gas and hazardous-liquid 
pipelines. Thank you.
    [The prepared statement of Ms. Quarterman follows:]


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    Mr. Sullivan. Thank you, Ms. Quarterman.
    I would next like to recognize Mr. Knepper. Thank you. You 
are next.

                STATEMENT OF RANDALL S. KNEPPER

    Mr. Knepper. Thank you. My name is Randy Knepper. I work 
for the New Hampshire Public Utilities Commission, and I am 
here on behalf of the National Association of Pipeline Safety 
Representatives.
    For the majority of the people in the room that don't know 
what that organization is, we are the inspectors for the State. 
We have about 325 inspectors, we have about 50 program 
managers, and some administrative clerical help. And in 
laymen's terms, we are the boots on the ground. We are the 
field soldiers that do the inspections at the State level. So I 
am very appreciative of being here today to be able to talk 
about these things that we see firsthand.
    As far as the bill, we have looked it over really quickly. 
And I will keep this very brief. There are four components that 
we talked about in our testimony. And one of them that is very 
dear to me is the State damage-prevention language that talks 
about not having any exemptions for mechanical excavation and 
any governmental entities.
    We, as States, are--there is no Federal underground damage-
prevention program. States are the ones that have them. We have 
differing laws in each State. But we do believe that there are 
some exemptions that make sense. In my own State, we allow 
farmers to use their own property to plant and for tilling of 
agricultural and seeding. We think that makes sense. The 
language that is in there would prevent that.
    There is language just for the pipeline operators 
themselves that would be excused. If they were to respond to an 
emergency themselves to fix their own, we allow them to fix the 
pipe, respond to that emergency, and don't have to call the 
one-call, because we think you are trading one safety 
prerogative over another.
    So there is some language in there that we think that 
exemptions do make sense in limited situations. And States have 
put that in to their own respective laws where they make sense, 
and so I would be very careful and mindful of that.
    The second thing that we think that can be very helpful to 
States is the maintenance-of-effort clause that is in there. We 
strongly believe in maintenance of effort. States contribute 
almost $15 million of their ratepayers' money to handling these 
things, and we just think that the language should be updated 
from the years of 2004 through 2006 to the latest, the 2009 and 
2010.
    We think that is the best way to get some of the PHMSA 
money into the States since we are the front lines. You know, 
we are 75 percent of the workforce, and we inspect almost 90 
percent of the Nation's pipelines. So those are the pipelines 
that go right up to people's homes and businesses and actually 
enter some of the buildings sometimes. So we are there, front 
and center.
    We do have concerns with the language about class locations 
for integrity management. We think the language there, as 
written, should be either stricken or should be studied. We 
think class locations apply much more than integrity 
management. They apply to design, such as valve spacing, 
whether that valve is 10 miles away or 2 miles away; 
odorization and operations, leak surveys, patrolling. Class 
locations is a much broader concept than just integrity 
management, so we do have concerns on that.
    And then last, but not least, is we did want to bring up 
when you want to have a quicker response time for the 
notification centers. Being a State where I get notified all 
the time, at a much lower level, long before there is incidents 
that rise to the definitions at the Federal level--we get 
notified for outages of 50 customers or less, or we get 
notified of a single evacuation. So we are getting notified all 
the time.
    Most States have already written into their laws a 
specified time period, usually about 2 hours. So, much of the 
time, being on the receiving end of those calls, there is not a 
lot of information that is available in an hour. So it is 
very--assessments haven't been done. There is a lot of 
confusion and things like that. So we would like the committee 
to take that in to consideration.
    And I can see that my time is about up, so I will leave it 
at that.
    [The prepared statement of Mr. Knepper follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Sullivan. Thank you for your comments.
    Now we will move in to questions. I recognize myself for a 
question.
    To Ms. Quarterman, the discussion draft proposes that the 
automatic and remote-controlled shutoff valves be mandated for 
pipelines that are constructed or entirely replaced.
    One of the witnesses on the next panel testifies that these 
valves should be placed in all high-consequence areas. Does 
PHMSA have a sense of what this sort of retrofitting would 
cost? And if so--even if it is feasible.
    Ms. Quarterman. We have not done an economic evaluation of 
how much that would cost. I would say that we are--last year, 
we put out an advance notice of proposed rulemaking for 
hazardous liquids where we asked the question about where it 
would be appropriate to put these kinds of valves. We have 
plans to do similar rulemaking on the transmission side.
    In the short term, I think we are planning to have a 
workshop later on this year or early next year to begin to 
flesh out issues with respect to replacement or placement of 
those valves, but at this point we don't have that data.
    Mr. Sullivan. Do you do cost-benefit analysis on these 
regulations?
    Ms. Quarterman. Oh, absolutely. It is mandatory.
    Mr. Sullivan. OK.
    Also, Ms. Quarterman, I have anotherquestion. The 
discussion draft requires a study on leak-detection systems and 
requiring leak-detection systems for hazardous-liquid pipelines 
located in high-consequence areas.
    One of the witnesses on the next panel commented in his 
testimony that we should set a standard now for what the 
minimum leak-detection capabilities under various circumstances 
should be. Does PHMSA have the information it needs to do that 
for now? Or would it make more sense to study technical 
capabilities first?
    Ms. Quarterman. At the same time that we are looking at the 
placement of valves, we are considering the question of leak 
detection and where it is appropriate.
    Again, that was also included in the advance notice of 
proposed rulemaking that went out on hazardous liquids. So that 
is something that will be a part of this technical working 
group that we are planning for shortly.
    Mr. Sullivan. And I have one more question. Regarding your 
concerns on gathering-line exemptions, what significant spills 
and incidents related to gathering lines can you share with us? 
Can you describe to us what regulations are already in place 
for gathering lines?
    Ms. Quarterman. I will get you a list of significant spills 
or incidents. Just off the top of my head, there was, in 2009 
or 2010, an incident in Oklahoma involving a gathering gas line 
that was 20 inches, about, where I believe 3 people were 
killed. So these lines do have or have the potential to have 
significant consequences.
    We would like to be able to gather data about incidents on 
these lines, since they are currently not regulated, and be in 
a position to determine what regulation is appropriate.
    Mr. Sullivan. Thank you.
    Mr. Knepper, the bill would link removal of damage-
prevention exemptions to the Federal grant dollars. After more 
than a decade of incentivizing States to improve these 
important safety programs, why shouldn't we be holding States 
to the highest standards when Federal grant dollars are 
involved? These accidental dig-ins are, after all, the leading 
cause of death and injury associated with pipelines; is that 
right?
    Mr. Knepper. I believe accidental--I believe you are very 
correct. We are not asking for that. What we are asking for is 
to make sure that the language isn't too far-reaching and 
broad.
    As a person in my own State, I investigate every single 
dig-in that occurs, 400 in my State a year. Every Thursday, I 
meet with every excavator and every operator. So I know 
firsthand what the reasoning is. I do not wish to hide behind 
the fact that there are exemptions and things. I know which 
exemptions make sense and which don't. I just think that 
putting this into the bill and doing it by giving through the 
grant process will not accomplish that goal at all.
    In fact, first of all, it might be contrary. If I am not 
allowed to use and apply for a one-call grant because I have a 
minor exemption for someone digging in a sandpit or a quarry, 
where it doesn't make sense and we have never had that, I can 
no longer apply for that grant, I can't use that grant for 
public education purposes and promoting dig safety.
    So I do feel that the language there is too far-reaching 
and that the States should be consulted first about how that 
works. There is not a scintilla of evidence in my State where 
that makes sense. I am the only one that has that data. It is 
not available on a national basis. So you would have to go on a 
State-by-State basis to see where that works.
    Mr. Sullivan. Well, you are critical of the incident 
notification section because it would lead to too many false 
alarms. However, since the rules will be subjected to a process 
of regulation, won't such a possibility be taken in to account? 
Won't public input and comment allow PHMSA to prevent issuing a 
rule that allows something like a customer-suspected gas leak 
to count as a moment of discovery?
    Mr. Knepper. I believe that we are only critical in the 
fact that we just wanted to be aware of it. It will raise up a 
lot more false alarms that occur out there. It is the same 
resources that are applying. It is people like myself. After 
this hearing tonight, when I go back, I am on call tonight. So 
I will be getting that 3:00 a.m. Call that happens. So we just 
want to be wary of the implications of that.
    I am not opposed to--I would rather much more focus on the 
quality of the information that comes in within that first 
hour, versus focusing on whether it is a 1- or 2-hour 
notification.
    Mr. Sullivan. Thank you very much.
    And I would like to recognize Ranking Member Rush for 
questions.
    Mr. Rush. Thank you, Mr. Chairman.
    Ms. Quarterman, it is good to see you again. Thank you for 
once again appearing before this subcommittee. You seem to be a 
regular witness here. And we certainly appreciate your 
testimony and your input.
    Congresswoman Speier, in her testimony, was quite critical 
of the relationship between industry, agency, or regulators. 
Can you respond to that general criticism?
    Ms. Quarterman. Thank you, Ranking Member Rush.
    Yes, I would, because our agency has close to 500 people, 
of which about 200 or so are in the pipeline safety program. 
And we have heard this criticism in the past, and it is 
something I came in the door having heard. And having spent 
time with the employees within the agency, I know that, you 
know, they may have some concerns about upper-level leadership, 
but in terms of their commitment to the mission, it is the 
highest, number-one thing on their mind.
    I removed all doubt of any concerns about that when I have 
been to the field and visited with our inspectors there. To a 
person, their concern is safety and safety of the public. When 
they have the obligation to go out and visit a site like the 
one in San Bruno, which I got to see, which was absolutely 
devastating, the inspectors who were out there said it was the 
worst scene that they had seen in their career. It is 
impossible not to be affected by that and not to put the safety 
of the public foremost in their mind.
    I mean, I think to a certain extent it is a creature of the 
time and that people are, by definition, concerned about their 
public officials, their government, and forget the kind of 
commitment these folks have, working 24/7 to respond to these 
issues.
    Mr. Rush. Right.
    What percentage of America's pipelines, do you know or can 
you estimate, are grandfathered into the law that is up for 
reauthorization? And the second part is, should we maintain 
that grandfathered status in the reauthorization, or should we 
eliminate it?
    Ms. Quarterman. I don't have a percentage. That is a number 
that we are trying to ascertain ourselves. We are, as I 
mentioned earlier, in the process of doing an advance notice of 
proposed rulemaking on gas transmission pipelines. One of the 
things that I think you will see there are questions about 
precisely this provision. It was put in to effect many years 
ago and affected very old pipe then, and it has continued 
forward.
    The grandfathering, I think the notion was at some point 
the grandfather would pass away and we would move forward with 
a safety program. We need to know exactly how many pipelines we 
are talking about there, how much it would cost to get those 
pipelines hydro-tested or otherwise inspected or replaced. But 
that is something that is top of our agenda.
    Mr. Rush. Do you have enough inspectors on the ground, 
enough boots on the ground, or should we be trying to include 
additional dollars for more boots on ground?
    Ms. Quarterman. The administration's proposal in 2010 would 
ask for 10 additional inspectors per year for the 5 years of 
the reauthorization, so 10 new ones every year.
    Our biggest challenge is actually hiring people, in that we 
don't have direct hire authority and there is a lot of 
competition for engineers. They are all engineers.
    Mr. Rush. Thank you, Mr. Chairman. I yield back.
    Mr. Sullivan. Thank you, Mr. Rush.
    And I would like to turn to our chairman, Fred Upton, for 
questions.
    Mr. Upton. Well, thank you. And in the interest of time, 
knowing that we are going to have votes soon, I will try not to 
use all my 5 minutes.
    Ms. Quarterman, what are the current regulations regarding 
the burial of pipelines under waterways? It is my understanding 
that it is a minimum of four feet. Is that true?
    Ms. Quarterman. With respect to pipelines that are in a 
stream that is greater than 100 feet wide, the minimum 
requirement is 48 inches unless there is rock to be blasted 
through, in which it is an 18-inch requirement for hazardous-
liquids pipelines.
    Mr. Upton. And that is in more than 100 feet wide. Is that 
just at that particular point? Does it look at the flood stage 
status? I mean, as I have talked to Congressman Rehberg and the 
folks at Exxon, I knew that that area was flooded just like my 
area in Talmadge Creek was flooded when we had that burst last 
year.
    Ms. Quarterman. It doesn't specifically address flood 
stages. However, for example, in the Montana spill, it was an 
area that was in a high-consequence area, and there are other 
rules that would apply. When you design a pipeline, you have to 
also ensure that it is capable of withstanding certain stresses 
and external loads.
    And since it is in a high-consequence area, it would be 
subject to the Integrity Management Program requirements, which 
are continual requirements upon the operator to ensure that all 
local conditions, including climatic, like flooding, are taken 
in to account.
    Mr. Upton. OK. And it is my understanding that that was 
because of--that standard was designed by a 1970s ASME 
standard.
    As we look to the future, will the ExxonMobil pipeline be 
rebuilt? As it is rebuilt, will it use those same traditional 
excavation techniques? And as I understood it, as I talked to 
Exxon immediately afterwards, that they did excavate and then 
lay the pipe down. Do you know what type of replacement will be 
used when that pipeline is reopened?
    Ms. Quarterman. We issued a corrective action order on July 
the 5th requiring that they replace that pipeline using 
horizontal drilling technology, which would put the pipeline 
substantially below the riverbed.
    Mr. Upton. ``Substantially below'' being how far? Ten feet 
below? Twenty feet below?
    Ms. Quarterman. We have not yet received a plan from Exxon 
as to where they would like to put that pipeline. I read 
someplace that they were talking about 30 feet, but we have not 
received that plan yet.
    Mr. Upton. OK. Question: Do you know what percentage of 
pipelines across the country are remote versus manual in terms 
of close-off valves?
    Ms. Quarterman. We don't have that data, no.
    Mr. Upton. Do you have any idea?
    Ms. Quarterman. No, I don't.
    Mr. Upton. Back-of-the-envelope?
    Ms. Quarterman. No, I don't.
    Mr. Upton. Forty percent? Twenty percent? Eighty percent?
    Ms. Quarterman. I don't have any idea.
    Mr. Upton. Is there any way to get that information?
    Ms. Quarterman. We would have to survey the operators. We 
don't maintain that kind of data.
    Mr. Upton. The last question, Mr. Knepper, because the 
bells have run for votes. It is our understanding that 
ExxonMobil did not meet the 1-hour deadline for requirement for 
reporting. As you deal with your other PUC commissioners, what 
are your thoughts as to what it should be?
    Mr. Knepper. Well, I mean, for our own State, you know, 
where the Federal leaves it kind of up to discretion, we 
specify in our State, you know. Response times have to be 
within 30 minutes, 45 minutes, and 60 minutes.
    I would not expect the Federal Government to have across-
the-board response times. It is all dependant upon the 
landscape and what the expectations are of that public in which 
you are serving. So we have determined in our State what it is. 
And many other States have gone to that same type of thing; 
they determine what the specifics are.
    So I think that is the best approach, and it is 
implemented.
    Mr. Upton. OK.
    Let me just finish up, Ms. Quarterman, by saying that, as 
you are looking at pipelines as they go underneath streams and 
riverbeds, if you would work with our staff, because we are 
going to be looking to add this piece, I think, to our 
discussion draft, in terms of a minimum of what should be. If 
you could share with us what you think the fair standard ought 
to be, and, obviously, feasible, we would certainly appreciate 
that.
    Ms. Quarterman. Absolutely.
    And I would add on your last question about shutoff valves 
that one of the provisions in the legislation that we put 
forward, and I believe here, relates to data and the ability to 
collect some of this data that you are asking about.
    Mr. Upton. I yield back.
    Mr. Sullivan. Congresswoman Castor for 5 minutes.
    Ms. Castor. Thank you very much, Mr. Chairman.
    And thank you to the witnesses for your testimony and 
insight.
    One of the most important developments in the regulation of 
pipelines during the last decades has been implementation of 
integrity management programs. Under these programs, pipeline 
operators are required to continually evaluate the threats to 
each pipeline segment's integrity and the consequences of a 
failure. Inspections are required and operators must take 
prompt action to repair any defects that could reduce a 
pipeline's integrity. Since 2001, over 34,000 defects have been 
detected and repaired.
    But under current law, these programs only apply in so-
called ``high-consequence areas'' with high populations or 
sensitive environments. That means that these programs only 
apply to 44 percent of hazardous-liquid pipelines and 7 percent 
of natural gas transmission pipelines.
    Are those numbers correct, Administrator Quarterman?
    Ms. Quarterman. I believe they are.
    Ms. Castor. OK. An important priority for safety advocates 
has been to expand the miles of pipeline covered by integrity 
management programs. There is a separate set of requirements 
called ``class location requirements'' that protect areas with 
high population densities in a variety of ways.
    Industry has argued that these two sets of requirements are 
redundant. The Senate bill would require PHMSA to evaluate 
whether integrity management programs should be expanded beyond 
high-consequence areas and whether class location requirements 
would no longer be needed. Then the agency would issue the 
appropriate regulations based upon the evaluation.
    The discussion draft takes a different approach. It 
includes the evaluation of whether integrity management 
programs should be expanded beyond the high-consequence areas, 
but it wouldn't allow the agency to act on this evaluation. At 
the same time, the draft requires the agency to roll back the 
class location requirements.
    Mr. Knepper, the discussion draft approach seems to be on 
balance. Do the State regulators think it is a good idea to 
require PHMSA to eliminate class location requirements for 
pipelines that are subject to integrity management?
    Mr. Knepper. No, we don't.
    Ms. Castor. Why not?
    Mr. Knepper. Because we think class locations goes beyond 
integrity management. It goes into the initial design of it. So 
integrity management, like you said, only applies to a certain 
percentage, those in Class 3, Class 4 locations, high 
population centers. But class location also goes in to--it 
affects operations, such as odorization. It affects maintenance 
about how often things are leak-surveyed. It affects the 
patrolling of pipelines, things outside of the integrity 
management section.
    So we think eliminating that, I would not even use the term 
that it is ``redundant,'' would be a problem.
    Ms. Castor. Administrator Quarterman, what do you think, 
are these two sets of requirements redundant? Or do you agree 
with Mr. Knepper, should we roll back the class location 
requirements without further study?
    Ms. Quarterman. I agree with Mr. Knepper.
    Ms. Castor. OK.
    Mr. Chairman, I think this is an area where the discussion 
draft needs to be improved. This provision I think is weakening 
safety protections, when it should be expanding and 
strengthening them.
    I now yield back the remainder of my time.
    Mr. Sullivan. Thank you, Ms. Castor.
    Next, I would like to recognize Representative Lee Terry 
from Nebraska.
    Mr. Terry. Thank you.
    Yes, Ms. Quarterman, I am a little confused on your last 
comment. Just regarding integrity management, can you describe 
what your position is on how integrity management programs and 
class location requirements are not redundant? When issuing 
integrity management rules, didn't PHMSA draw the conclusion 
that IMP makes class location rules obsolete?
    Ms. Quarterman. I don't know what the original rulemaking 
said, but the position that we have taken in our draft and in 
the Senate bill would require us to do a study that takes some 
consideration of this issue. And I think that is the 
appropriate course. I don't think it is appropriate just to 
eliminate----
    Mr. Terry. To do a study of what, specifically?
    Ms. Quarterman [continuing]. How to deal with class 
locations, whether or not to----
    Mr. Terry. Should it be fully Federal or have a mixture of 
State?
    Ms. Quarterman. I am not following, I am sorry.
    Mr. Terry. OK. Go ahead. How much time do you think a study 
would take? And would that delay our ability to pass a 
comprehensive pipeline safety bill?
    Ms. Quarterman. No, I believe the approach that is in the 
Senate bill would permit us to do a study and proceed as 
appropriate following that.
    Mr. Terry. OK.
    In regard to detection, we have had discussion about older 
pipelines, newer pipelines. It seems to me that the technology 
that is being used, in the type of electronic equipment that 
can monitor, inspect, do you feel that the bills properly 
address increasing the level of inspections and they could be 
for both older and newer? What are your recommendations?
    Ms. Quarterman. I recommend that we proceed apace to 
continue to look at the question of leak detection. I mean, for 
me, in the past year, noticing the number of incidents, I have 
been concerned that large spills occurred before anyone knew 
what was happening.
    And I think it is an appropriate time for us to take a 
closer look in terms of making the requirements more 
prescriptive than they currently are. Right now, they are, in 
the integrity management program, more a question of people 
deciding what to do. Maybe we need to set some standards here.
    Mr. Terry. In regard to setting standards, Mr. Knepper, 
does that impact the States? You mentioned in your testimony 
that you think the States are in a better position because you 
have knowledge of what a reasonable time to shut off or 
inspect--or, not to inspect, but if there is a problem, once it 
is detected, to actually resolve.
    Mr. Knepper. We just have to be careful about which segment 
of the Nation's pipelines and infrastructure we are talking 
about. The vast majority of transmission lines are inspected by 
the Federal Government, not the State, although the State does 
a big portion. So I would say that, when I was gauging and 
talking about emergency response times, that was more for 
distribution-type--the vast majority of pipelines that are out 
there.
    I think your question has to do with the transmission lines 
and what we feel about that. I guess I think that, here is an 
area where a lot of States will defer to the Federal Government 
for some of the things because they are the inspection force 
that is out there most often looking at those. We do that, 
although it is a small percentage of the amount of pipelines 
that we look at. So I would----
    Mr. Terry. Well, let me just interrupt.
    Thirty seconds, Honorable Quarterman. Should we put 
something in this bill that says, on detection, after 
detection, you have 1 hour to respond? Thirty minutes to 
respond? Is there something like that that would be 
appropriate?
    Ms. Quarterman. I may have misinterpreted your last 
question. I thought we were talking about leak-detection 
systems.
    In terms of the timing, we currently, on a Federal level, 
have an advisory bulletin that says between 1 and 2 hours 
people should notify after something happens, they should 
notify the National Response Center.
    Mr. Terry. And if they don't, a fine?
    Ms. Quarterman. A potential fine if it is not reasonable.
    Mr. Terry. OK. That is all. I yield back.
    Mr. Sullivan. Thank you, Mr. Terry.
    I would like to thank the witnesses.
    And we stand adjourned.
    [Whereupon, at 10:51 a.m., the subcommittee was adjourned.]


 THE AMERICAN ENERGY INITIATIVE, PART 11: THE PIPELINE INFRASTRUCTURE 
                  AND COMMUNITY PROTECTION ACT OF 2011

                              ----------                              


                        THURSDAY, JULY 21, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:17 a.m., in 
room 2322, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Present: Representatives Whitfield, Sullivan, Terry, 
Burgess, Bilbray, Scalise, Olson, Gardner, Pompeo, Griffith, 
Upton (ex officio), Rush, Dingell, Green, Gonzalez, and Waxman 
(ex officio).
    Staff present: Gary Andres, Staff Director; Charlotte 
Baker, Press Secretary; Michael Beckerman, Deputy Staff 
Director; Maryam Brown, Chief Counsel, Energy and Power; Andy 
Duberstein, Special Assistant to Chairman Upton; Garrett 
Golding, Professional Staff Member, Energy; Cory Hicks, Policy 
Coordinator, Energy and Power; Katie Novaria, Legislative 
Clerk; Jeff Baran, Minority Senior Counsel; and Caitlin 
Haberman, Minority Policy Analyst.
    Mr. Whitfield. I will now call the hearing to order.
    As you know, this is a hearing regarding the discussion 
draft, the Pipeline Infrastructure and Community Protection Act 
of 2011. We had to interrupt the hearing the last time. We had 
heard from two panels of witnesses. So, today, we are going to 
hear from the last panel of witnesses; and we do appreciate you 
all taking time to come back and offer us your thoughts on this 
discussion draft.
    On the third panel today we have Mr. Andrew Black, who is 
the president of the Association of Oil Pipe Lines; and he is 
also testifying on behalf of the American Petroleum Institute.
    We have Mr. Daniel Martin, who is senior vice president, 
pipeline safety, El Paso Pipeline Group; and he is also 
testifying on behalf of the Interstate Natural Gas Association 
of America.
    We have Mr. Rick Kessler, who is the--I don't know if he is 
the executive director or not, but he is here testifying on 
behalf of the Pipeline Safety Trust.
    Mr. Kessler. Vice president.
    Mr. Whitfield. Vice president. Thank you.
    Then we have Mr. Charles Dippo, who is vice president, 
Engineering Services and System Integrity, for South Jersey Gas 
Company and also on behalf of the American Gas Association.
    Then we have Mr. Gary Pruessing, who is the president of 
ExxonMobil Pipeline Company.
    Once again, welcome. Thank you for being here. We look 
forward to your testimony. Each one of you will be given 5 
minutes for your testimony.
    Mr. Black, we will begin with you. You are recognized for 5 
minutes.

 STATEMENTS OF ANDREW J. BLACK, PRESIDENT, ASSOCIATION OF OIL 
  PIPE LINES, ON BEHALF OF THE AMERICAN PETROLEUM INSTITUTE; 
 DANIEL B. MARTIN, SENIOR VICE PRESIDENT, PIPELINE SAFETY, EL 
 PASO PIPELINE GROUP, ON BEHALF OF THE INTERSTATE NATURAL GAS 
ASSOCIATION OF AMERICA; ERIC KESSLER, VICE PRESIDENT, PIPELINE 
  SAFETY TRUST; CHARLES F. DIPPO, VICE PRESIDENT, ENGINEERING 
  SERVICES AND SYSTEM INTEGRITY, SOUTH JERSEY GAS COMPANY, ON 
  BEHALF OF THE AMERICAN GAS ASSOCIATION; AND GARY PRUESSING, 
             PRESIDENT, EXXONMOBIL PIPELINE COMPANY

                  STATEMENT OF ANDREW J. BLACK

    Mr. Black. Good morning. Thank you, Chairman Whitfield. I 
appreciate the opportunity to appear on behalf of AOPL and API.
    Advancing the cause of pipeline safety is a goal we all 
share. The subcommittee discussion draft would improve pipeline 
safety by building on the good work in S. 275, the pipeline 
safety reauthorization bill approved by the Senate Commerce 
Committee on a bipartisan basis. We hope S. 275 will be 
approved by the full Senate soon, although there are changes we 
seek to it before it were to become law.
    The draft before this committee today is an improvement 
over S. 275 in certain areas. My written testimony makes 
certain suggestions on how the draft can be improved further.
    I specifically want to commend the draft bill's provisions 
regarding damage prevention. Excavation damage is the leading 
cause of pipeline accidents that kill or injure people. 
Eliminating exemptions to one-call programs that require an 
excavator to call 811 before digging, as the draft would do, is 
a meaningful pipeline safety enhancement. This section will 
save lives, reduce injuries, and protect the environment.
    The draft wisely delegates many technical and engineering 
risk management decisions to PHMSA. Proper pipeline regulation 
involves a technical engineering analysis of risks and 
potential solutions. I encourage the committee to avoid 
presuming new regulations are necessary unless there is 
evidence that the current regulatory framework has failed. In 
many cases, the draft properly avoids presuming such failures 
in advance of study.
    We support the draft's provisions concerning operator 
incident notification procedures to the National Response 
Center and revising PHMSA enforcement processes.
    The draft also requires several studies we do not oppose, 
including on leak detection technologies. The last time leak 
detection was studied, just 3 years ago, PHMSA did not conclude 
that this complex issue was in need of a rulemaking. Leak 
detection is a combination of technologies, practices, and 
systems, often customized, sometimes proprietary, and not one 
off-the-shelf technology. While we all want leak detection to 
improve, priority should be placed on improving the technology 
and capability to match increasing expectations.
    Our members contribute to research on leak detection and do 
not believe Congress should require a rulemaking before knowing 
what the study will conclude. We recommend the committee delete 
the requirement for a rulemaking in the draft but keep the 
study.
    We fully support timely and accurate reporting of pipeline 
incidents, but we want to make sure replacing the current 
reporting standards with a hard deadline does not create the 
potential for more false-alarm notifications just to achieve 
compliance with the deadline. False-alarm notifications cause 
unnecessary deployments of first responders and an unwarranted 
expenditure of resources and manpower by government. We 
encourage the committee to discuss this issue with PHMSA and 
State regulators. You may find the revisions to the reporting 
procedures in the draft by themselves facilitate more prompt 
notification of pipeline incidents.
    A lot of attention now is being given to the pipeline 
incident in Montana earlier this month. Once the root cause of 
an accident is determined, we can identify the proper 
responses, both technical and regulatory. Any premature 
regulatory changes not based on the investigation and 
understanding of the underlying cause of an accident could 
distract regulators and the industry from addressing the real 
cause of the incident. Basing pipeline regulation on solid 
information will help achieve our shared objective of 
minimizing pipeline accidents. Nobody wants to avoid pipeline 
failures more than we do.
    The safety performance of the liquid pipeline industry has 
improved over the past decade but can always improve further 
toward the goal of zero accidents. Our associations and our 
members work hard to prevent pipeline accidents and identify 
and implement lessons that can be learned from them.
    Each of the major causes of pipeline failures decreased 
over the last 10 years, reflecting the success of several 
different strategies to manage risks. The major causes of 
pipeline failures are already addressed by a thorough set of 
Federal and State regulations, including internal corrosion, 
external corrosion, materials and equipment failures, and 
operations errors. Also, PHMSA is an aggressive regulator, 
unafraid to use its many tough inspection and enforcement 
tools.
    We welcome the opportunity to work with members of the 
committee and other stakeholders, including the Pipeline Safety 
Trust, on legislation to further improve pipeline safety. The 
discussion draft is a good start.
    Thank you.
    [The prepared statement of Mr. Black follows:]


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    Mr. Whitfield. Thank you, Mr. Black.
    Mr. Martin, you are now recognized for 5 minutes.

                 STATEMENT OF DANIEL B. MARTIN

    Mr. Martin. Thank you, Mr. Chairman.
    Mr. Chairman and members of the subcommittee, my name is 
Dan Martin; and I am senior vice president of pipeline safety 
for El Paso Pipeline Group. El Paso owns and operates 43,000 
miles of interstate and natural gas pipelines, representing 13 
percent of the total U.S. capacity. Twenty-six percent of the 
natural gas consumed in the U.S. flows through one of our 
pipelines.
    Today I am testifying on behalf of the Interstate Natural 
Gas Association of America, or INGAA. Our members include 
virtually all of the interstate natural gas transmission 
pipelines in the United States, operating about 220,000 of 
large-diameter pipelines that are analogous to the interstate 
highway system.
    Last month, INGAA testified before this subcommittee and 
outlined our perspectives on pipeline safety generally and our 
positions on particular provisions of the Senate pipeline 
safety bill, S. 275, specifically.
    We stated this last month, but it bears repeating, that 
while the safety record of the natural gas transmission system 
is very strong, we at INGAA recognize that continuous 
improvement in the safety of our pipelines is an imperative. 
Our goal is zero pipeline incidents. This is an ambitious goal 
to be sure, but it is only by setting ambitious goals that the 
highest levels of performance can be reached.
    We think that the draft bill being discussed today does 
advance continuous improvement in pipeline safety, and 
therefore we support this bill and offer the following 
comments:
    First, on damage prevention. We think the draft bill is 
extremely aggressive in terms of eliminating exemptions from 
participation. Most, if not all, of the groups at this table 
support comprehensive damage prevention or call-before-you-dig 
programs as the best solution for avoiding the most preventible 
and the most deadly type of pipeline accident. Added to the 
already strong list of prohibited exemptions from the Senate 
legislation is mechanized excavation, which effectively is 
requiring universal participation by all major excavators. This 
is raising the bar significantly.
    Next is the provision on integrity management. Our 
association has embraced the idea of expanding integrity 
management beyond the existing focus on high-consequence areas, 
and we therefore support authorization from Congress for DOT to 
undertake such an effort. We do think that it is important to 
continue to focus on reducing risks in populated areas and 
likewise want to see the Integrity Management Program expanded 
in a manner that reduces risk to an increasing number of people 
living or working near pipelines. The draft bill enumerates 
those components of an expansion.
    The draft bill also requires a rulemaking on removing the 
redundancy between legacy class location regulations to natural 
gas transmission pipes and the newer integrity management 
regulations. Both regulations are designed to address the same 
issue, reducing the risk of an incident in populated areas. The 
difference is that class location requirements were created in 
1970 before pipeline inspection technologies were invented and 
therefore before the development of pipeline monitoring 
capabilities that are a realty today under the Integrity 
Management Program.
    Let me be clear. The Integrity Management Program regulates 
all natural gas transmission pipeline segments located in 
populated areas, including especially the most densely 
populated areas. Our goal is to eliminate the belt and 
suspender situation today, where we have a newer and far 
superior regulation that has been added, while at the same time 
an older regulation to accomplish the same objective has 
remained in place.
    As we mention in our written testimony, when DOT performed 
its cost-benefit analysis on the gas transmission integrity 
management rule back in 2003, it assumed that class location 
requirements would be waived for pipe segments covered under 
the new Integrity Management Program and therefore counted a $1 
billion savings to industry as part of the new rules benefit. 
Rather than depending on waivers to address this redundancy, 
though, there ought to be a consistent policy developed through 
a rulemaking. If integrity management is a program that needs 
to be expanded, then we should also eliminate older, less 
effective regulations designed to address the same issues.
    Mr. Chairman, we have other comments in our written 
testimony, but in the interest of time I will conclude here by 
thanking you and the subcommittee for inviting INGAA to comment 
on the draft bill and, most importantly, for getting this 
reauthorization under way so it can be completed this year.
    I will be happy to answer questions at the appropriate 
time.
    [The prepared statement of Mr. Martin follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Whitfield. Thank you very much, Mr. Martin.
    Mr. Kessler, you are recognized for 5 minutes.

                   STATEMENT OF ERIC KESSLER

    Mr. Kessler. Thank you, Mr. Chairman, and thank you, 
Chairman Upton and members of the committee and subcommittee. I 
appreciate you inviting the Pipeline Safety Trust to speak 
today and provide its views on the draft legislation.
    Now, according to PHMSA's own statistics for the past 10 
years, pipeline accidents kill or hospitalize at least one 
person in the U.S. every 8.7 days on average and cause more 
than $470 million in property damage each year. Even since the 
Trust testified last month before the committee, another 
incident has dumped somewhere on the order of 42,000 gallons of 
crude oil into the Yellowstone River. On top of tragedies in 
Michigan, California, and Pennsylvania, I think it is important 
that we now move forward on a strong bill to address the 
tragedies of the past year and close gaps in pipeline safety 
that have been identified to help restore the public trust.
    I agree with my friend and former committee colleague, Mr. 
Black, in that the draft bill is a good start, but, because 
time is short, I am going to focus on some improvements we 
think need to be made to the bill.
    In Section 2, civil penalties, PHMSA has ample discretion 
in how it applies fines and usually leans toward the low end, 
in our opinion, if a fine is even levied at all. If Congress is 
to create a new major consequence category, the words 
``knowingly, willfully, and intentionally'' must be removed, 
since those are standards that are not only very difficult to 
prove but more appropriate for criminal, not civil, penalties.
    Gathering lines, section 4, PHMSA has already told its 
technical advisory committees that there are problems with the 
regulations of these lines so there is no more need for study. 
Instead, this section should require the necessary rule 
changes; and those changes should include clarifying 
definitions, adding lines to the national mapping system, 
reporting incidents, and bringing these lines under similar 
regulations to transmission pipelines.
    In section 5, the new rules for the placement of remote or 
automatic shutoff valves should be expanded to at least include 
existing lines in high-consequence areas, not just new lines. 
The current draft would have provided no increased safety for 
San Bruno.
    Integrity management, we completely support moving forward 
on expanding integrity management, as INGAA has called for as 
recently as yesterday. Since class locations also are what in 
many ways define which pipelines fall under integrity 
management, at a minimum any change in class location rules 
must go hand in hand with expansion of integrity management, I 
think a point my friend, Mr. Martin, was getting at.
    With regard to cast iron pipelines, while the survey 
required in this section is important, this problem has been 
known for years and continues to kill people. It is time to 
move beyond surveys and put in place rules that will force 
pipeline companies and State rate setting agencies to 
responsibly and expeditiously replace cast iron, bare steel, 
and other high-risk pipelines.
    Leak detection, we feel this section does little to address 
the current leak detection shortcomings. Leak detection is 
already required for pipelines in high-consequence areas, but, 
as we have seen in Salt Lake City, North Dakota, and Michigan, 
leak detection systems in place did little good. What is needed 
is a clear standard to define the size of the leak the system 
is required to be able to detect and the time required for the 
system to issue an alarm.
    Oil flow lines, the limitation in this section that 
precludes PHMSA from regulating oil flow lines needs to be 
removed, in our opinion. There is ample evidence that these 
lines can and have caused significant damage. We just saw this 
recently again in Montana with the FX drilling flow line spill 
which went unreported for a week.
    Special permits limits the Secretary to reviewing only a 
company's regulatory record when considering whether to grant a 
waiver from a safety standard. Certainly they should be 
considering that, but, by limiting it, you leave out a number 
of important considerations, contextual issues like population 
density or environmental sensitivity.
    Maintenance of effort, we question the need to require the 
Secretary to grant a waiver to States who claim financial 
hardship, particularly since most States can make that claim if 
they want to. I have been a State employee. Most States are in 
a crunch. But the Secretary already has the authority to waive 
and has used it. And the reality is that States can charge 
pipeline companies user fees to fund their safety programs or 
find other methods, so excuses of financial troubles should 
have little bearing, and it is also unfair to States that make 
the effort, particularly as pipe infrastructure greatly expands 
in nontraditional areas like the Marcellus shale.
    Section 26 relating to administrative enforcement is at 
best unnecessary, since they address regulations DOT can and 
have started to change on its own initiative. They issued a 
rule just last week. At a minimum, the requirement for hearing 
on the record within 20 days must be removed, because it will 
severely drain very finite sums of resources finitely that 
should be going to safety.
    Finally, in summing up, one critical area covered in the 
Senate bill left out of this draft was a provision on maximum 
allowable operating pressure, which is a real problem in San 
Bruno.
    Thank you again. We stand ready to work with you to move 
this reauthorization forward; and with the changes I have 
outlined here the committee can continue to report the kind of 
bipartisan, balanced bill we did when I worked here in 2002 and 
2006. Thank you.
    [The prepared statement of Carl Weimer follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Whitfield. Thank you, Mr. Kessler.
    Mr. Dippo, you are recognized for 5 minutes.

                 STATEMENT OF CHARLES F. DIPPO

    Mr. Dippo. Good morning, Mr. Chairman and members of the 
committee. I am Charles Dippo, vice president of South Jersey 
Gas Company and chairman of the American Gas Association's 
Operating Section. I am here today testifying on behalf of AGA, 
which represents over 200 local energy companies that deliver 
clean natural gas to more than 65 million customers throughout 
the United States.
    Natural gas pipelines transport one-fourth of the energy 
consumed in the United States through a safe 2.4 million mile 
underground pipeline system. This includes 2.1 million miles of 
local distribution pipelines and 300,000 miles of transmission 
pipelines that provide service to more than 175 million 
Americans.
    Industry has demonstrated that it can increase the delivery 
of natural gas while continuously improving safety. Data from 
PHMSA shows serious incidents and leaks have been reduced by 
nearly 50 percent over the last 20 years, but as I remind my 
staff each day, you can never be complacent, because excellence 
in safety requires continuous improvement.
    The pipeline industry leadership has joined Transportation 
Secretary LaHood in his call to action to repair, replace, or 
rehabilitate the highest-risk infrastructure and to raise the 
bar on pipeline safety. To do so, we must keep our focus on key 
initiatives that are already showing success. This includes 
distribution and transmission integrity management, control 
room management, public awareness, excavation damage 
prevention, and voluntary initiatives, such as AGA's Best 
Practices Program.
    Secondly, we have an opportunity to enhance safety through 
better excavation damage prevention programs, establishing a 
data quality committee, reducing hurdles to implementing new 
technology, and adopting the latest consensus standards. Most 
importantly, we must obtain pipeline safety reauthorization.
    AGA has reviewed the discussion draft bill and commends the 
committee for developing a solid, bipartisan bill for pipeline 
safety. AGA is generally supportive of the draft bill. However, 
we want to highlight a few areas because they cause us some 
concern.
    Let me begin with automatic and remotely controlled shutoff 
valves. Transmission pipeline ruptures are rare events and 
operator resources should focus on preventing rather than 
mitigating pipeline releases. The presence of an automatic 
shutoff or a remotely controlled valve on a transmission 
pipeline will not prevent that incident from occurring. The 
benefit of these valves is the potential reduction in the 
amount of natural gas released after the incident has occurred.
    Although both automatic and remotely controlled shutoff 
valves allow for faster closure than a manually operated valve, 
they also introduce the possibility of false valve closures 
with unintended consequences. Nevertheless, AGA supports the 
bill language that requires the Secretary to initiate 
rulemaking that will require the use of automatic or remotely 
controlled shutoff valves or equivalent technology.
    AGA also has concerns that the draft bill's provisions that 
require operators to make telephonic reports to the NRC no 
later than 1 hour after discovery will cause thousands of 
unnecessary reports to be submitted. This will overburden the 
emergency responders, regulators, and other parties that must 
respond to NRC notifications.
    AGA believes Congress has a legitimate concern to assure 
that there is prompt notification of pipeline incidents. The 
record shows that most incidents are indeed promptly reported. 
Operators are responsible for the operational response to 
incidents in coordination with their local emergency 
responders. Standard safety practices and the incident command 
structure mandate that these tasks receive the highest 
priority. Once the preliminary extent of a situation is known 
and local action is initiated, operator personnel will notify 
the NRC. Typically, the call to the NRC will be made in less 
than 2 hours.
    Prompt local emergency response and Federal reporting are 
important issues. AGA believes that PHMSA has the technical 
expertise to promulgate the appropriate regulations on this 
important issue that balances the needs of all parties and to 
implement technically-based notification requirements.
    Finally, it has been suggested that the Transmission 
Integrity Management Program be changed and expanded beyond 
high-consequence areas. AGA believes imprudent expansion would 
be contrary to the intent Congress has for the program, which 
is to focus resources on the densely populated and 
environmentally sensitive areas where an accident will do the 
most damage.
    All pipelines must comply with stringent State and Federal 
safety standards even before the TIM program is applied. As 
part of its regulation on transmission integrity management, 
DOT has already included provisions for pipeline operators to 
have an added layer of protection on low-stress pipelines which 
are outside of HCAs already.
    AGA believes it is reasonable for Congress to direct DOT to 
evaluate the effectiveness of the existing Integrity Management 
Program no later than 1 year after the completion of the 
baseline assessments in December of 2012. The study should 
include the comparisons as presented in the draft legislation.
    In conclusion, the natural gas utility industry has a 
strong safety record, and we are committed to working with all 
stakeholders to improve. To that end, we applaud this 
committee's focus on moving pipeline safety reauthorization 
forward. Passage of this important bill this year will help us 
achieve a common goal--to enhance the safe delivery of this 
vital energy resource.
    Thank you.
    [The prepared statement of Mr. Dippo follows:]


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    Mr. Whitfield. Thanks, Mr. Dippo.
    Now, Mr. Pruessing, help me with your pronunciation.
    Mr. Pruessing. It is Pruessing.
    Mr. Whitfield. You are recognized for 5 minutes.

                  STATEMENT OF GARY PRUESSING

    Mr. Pruessing. Chairman Whitfield, members of the 
subcommittee, last week I had the opportunity to discuss with 
your colleagues on the Subcommittee on Railroads, Pipelines, 
and Hazardous Materials the pipeline incident that occurred 
July 1 in the Yellowstone River in Montana. I appreciate the 
opportunity to do so again with you today.
    Since I submitted my statement to the subcommittee last 
week, we have achieved additional progress in cleaning up the 
spill which I would like to update you on this morning. Before 
I begin, however, allow me to repeat our sincere apologies to 
the people of Montana. We deeply regret that this incident 
occurred and are steadfastly committed to not only complete the 
cleanup, but also to build the learnings from this incident 
into our future operations.
    This requires, first, that we understand exactly what 
occurred. We do not yet know the precise cause of the apparent 
breach in the Silvertip pipeline and will not likely know until 
our investigation is complete. We do know that the pipeline had 
met all regulatory requirements, including a 2009 pipeline 
inspection and a December, 2010, depth-of-cover survey. 
Additionally, as recently as last month, the U.S. Department of 
Transportation's Pipeline and Hazardous Materials Safety 
Administration, or PHMSA, performed a field audit of the 
pipeline's Integrity Management Program.
    Of course, we do know the effects of the incident. The 
pipeline lost pressure the night of July 1, and within 7 
minutes our employees shut down the pumps. Shortly thereafter, 
we began closing the valves to isolate segments of the pipeline 
and minimize any release.
    We estimate that no more than 1,000 barrels of oil spilled. 
We notified the National Response Center and immediately began 
implementing our emergency response plans, drawing upon our 
local resources at the ExxonMobil Billings refinery, as well as 
our experts from across the country.
    A unified command center led by the Environmental 
Protection Agency and involving more than 780 people now 
directs the response. This coordinated effort, combining the 
resources of government, industry, and others, is crucial to 
effective cleanup and recovery.
    I speak on behalf of our entire company in thanking the 
public servants at all levels of government and the volunteers 
from nongovernmental organizations contributing to the effort. 
This includes professionals from PHMSA, the Environmental 
Protection Agency, the U.S. Department of the Interior, the 
Montana Department of Environmental Quality, Montana Fish, 
Wildlife, and Parks, Yellowstone County Commissioners, local 
response organizations, International Bird Rescue, and many 
others.
    As part of our cleanup strategy, we have divided the aerial 
down river of the spill into four zones. In the first two 
clean-up zones, covering a combined distance of approximately 
19 miles, we have deployed over 57,000 feet of boom, 277,000 
absorbent pads, and several vacuum trucks, boats, and other 
equipment to capture oil. Our priority is to ensure that the 
cleanup is safe and effective, a task made more challenging by 
the persistent high water levels in the Yellowstone River.
    On July 17th, we completed a 2-day procedure to remove any 
remaining crude oil from the Silvertip pipeline at the 
Yellowstone River crossing. The work was conducted under the 
direction and oversight EPA and the Montana Department of 
Environmental Quality. At the same time, through the unified 
command, we continue to conduct air and water quality 
monitoring of over 200 miles of the river as well as wildlife 
assessments and recovery efforts. To date, EPA monitoring 
confirms there is no danger to public health and no reported 
water system impacts.
    We have also brought in recognized experts such as 
International Bird Rescue to actively monitor the impact on 
local wildlife. So far, impacts have been limited and small in 
number, and a list is available on our Web site. Monitoring and 
mitigating the impact of the spill on wildlife will remain a 
priority throughout the spill cleanup.
    The Silvertip pipeline plays an important role in supplying 
energy to the Billings area and therefore helps sustain local 
jobs and economic growth. We are committed to replace the 
damaged pipe using horizontal directional drilling techniques 
with a new section that will lay approximately 30 feet below 
the riverbed, consistent with the PHMSA direction.
    Of paramount concern to us is the impact on local 
communities. We established a community information line and 
have received more than 390 calls. About 170 of these calls are 
claims related to property, agriculture, and health; and we are 
actively responding to each one of these. We have also sent 
several teams door to door to visit approximately 250 residents 
in the most impacted areas. It is our goal to respond to 
individual concerns within 24 hours.
    I am pleased to report that these outreach efforts have 
mostly received a very positive response. In fact, about 170 of 
the calls to the information line have been offers of help. 
This outpouring of local volunteer support is immensely 
helpful. It testifies to the resilience, industry, and 
generosity of the people of Montana; and we deeply appreciate 
their understanding and support.
    To repeat, ExxonMobil Pipeline Company takes full 
responsibility for the incident and the cleanup, and we pledge 
to satisfy all legitimate claims. But even then our work will 
not be done. We are equally committed to learn from this 
incident and to build those learnings into our future 
operations.
    Thank you.
    [The prepared statement of Mr. Pruessing follows:]


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    Mr. Whitfield. Mr. Pruessing, thank you; and I thank the 
panel for your testimony.
    I will recognize myself now for 5 minutes of questions.
    The discussion draft of the bill states that notice should 
be given to the National Response Center at the earliest 
practical moment following discovery of a release of gas or 
hazardous liquid and not later than 1 hour following the time 
of discovery. Now, some of you made reference to that 
notification requirement, and we know that when you pass 
legislation it is not unusual that sometimes you end up in 
courts and then trying to define what it actually means.
    I would just ask each of you to comment briefly on what 
does this mean to you: 1 hour after an operator sees the sign. 
Does it mean something out of the ordinary, or 1 hour after 
confirmation, or is there any ambiguity from your perspective 
and how could we improve it in any way?
    Mr. Black.
    Mr. Black. We understand that to apply 1 hour after 
confirmation of discovery. Right now, it is earliest 
practicable moment in the regulations right now. PHMSA 
interprets that as about 1 to 2 hours, and I believe when the 
administrator was here she didn't suggest a change was needed. 
But if you do do it, we interpret that as 1 hour after 
confirmation of discovery.
    Mr. Whitfield. Mr. Martin?
    Mr. Martin. Yes, that is the same for us. One hour after 
time of discovery is what we would interpret that to be.
    Mr. Whitfield. Mr. Kessler?
    Mr. Kessler. I think, generally, I would be in agreement.
    Mr. Whitfield. OK. Mr. Dippo?
    Mr. Dippo. That is correct. We would also agree.
    The concern with the natural gas distribution industry, 
though, of course, is that there are releases almost every day 
relative to struck mains and services, and our concern would be 
how this would impact the overloading of the NRC.
    Mr. Whitfield. Mr. Pruessing?
    Mr. Pruessing. We agree. It is 1 hour after confirmation.
    Mr. Whitfield. OK. All right.
    Now, last week, Congresswoman Speier testified, and she 
addressed this grandfather pipeline issue that one or two of 
you mentioned in your testimony. I would ask what is needed to 
confirm the maximum allowable operating pressure for those 
pipelines constructed before the 1970 pipeline safety 
regulations were implemented? Do you support the Senate 
provision on this issue?
    Mr. Black?
    Mr. Black. The Senate provision did not cover hazardous 
liquid pipelines. There is not the equivalent grandfathering 
issue.
    Mr. Whitfield. Mr. Martin?
    Mr. Martin. INGAA members commit to a systematic validation 
of records and the maximum allowable operating pressure in 
their pipelines in the highly populated areas.
    Mr. Whitfield. Mr. Kessler?
    Mr. Kessler. The situation was that there wasn't an 
accurate record of the pipe in the ground, and all regulators 
regulate to the record, not so much the actual physical 
properties. So we do strongly support the Senate provision. We 
think it is reasonable.
    Mr. Whitfield. OK. Mr. Dippo?
    Mr. Dippo. Yes. The concern is, of course, that a one-size-
fits-all approach to the maximum allowable operating pressure 
is it does not work for the natural gas distribution utility 
industry. We do believe that, in terms of the records 
validation, that all operators should be doing that with their 
facilities. But we are reluctant to get involved with 
validating MOP through hydrostatic testing of lines that are in 
service.
    Mr. Whitfield. Mr. Pruessing?
    Mr. Pruessing. ExxonMobil Pipeline operates liquid 
pipelines, so, as Mr. Black said, there is no grandfathering 
for the liquid lines.
    Mr. Whitfield. OK. Now, the National Association of State 
Pipeline Self-Regulators, when they testified, addressed 
redundancy between class location requirements and integrity 
management. Can you all elaborate on where these redundancies 
exist and where they do not? Mr. Black?
    Mr. Black. It is not a liquids issue, just gas.
    Mr. Whitfield. OK. Mr. Martin?
    Mr. Martin. Yes, for the gas pipelines, what we were 
talking about, class location requirements are embedded 
throughout the regulations, from design, construction, 
operation, and maintenance; and the focus we were talking about 
with the Integrity Management Program that went into place back 
in 2003, that is really on the area of operation and 
maintenance. And where we see the overlap is we are collecting 
a tremendous amount of information in the new regulation and 
requirements and evaluating the risks and the threats 
associated with our pipelines and taking the appropriate 
action, where the existing class location requirements simply 
state in some cases you must just change out the pipe without 
looking at all this information.
    So getting back to the cost-benefit analysis that was done 
back in the 2003 evaluation, that was the $1 billion savings 
they were talking about, is the redundancy related to the new 
requirements versus changing out the pipe. We think those 
dollars, those safety resources, ought to be expended elsewhere 
in our programs, even if we are talking about expanding the 
HCAs beyond the existing requirements today. Those are 
resources that could be used to do that more effectively.
    Mr. Whitfield. Mr. Kessler?
    Mr. Kessler. Looking at redundancies is something we 
support in that area, but, again, we believe this has to be 
coupled with--you cannot disassociate that from other 
regulations, particularly the Integrity Management Program. So 
you really can't move one block without affecting the other. So 
you need to do both together.
    Mr. Whitfield. OK. Mr. Dippo?
    Mr. Dippo. Yes, I would agree with Mr. Martin's position 
that there is duplication in the regulation. In fact, a 
transmission pipe operated by a local distribution company is 
covered both by transmission integrity management and 
distribution integrity management. We feel DOT needs to study 
this inefficient duplication.
    Mr. Whitfield. Do you have any comment, Mr. Pruessing?
    Mr. Pruessing. No.
    Mr. Whitfield. OK. At this time, I would like to recognize 
the gentleman from Michigan, Mr. Dingell, for 5 minutes of 
questions.
    Mr. Dingell. Mr. Chairman, you are most kind. I commend you 
for this hearing.
    I would like to welcome our panel, particularly my old 
friend Rick Kessler, who has been in this room before, as you 
will well recall. I would like to direct this question first to 
Mr. Kessler.
    Normally, the standard for criminal violation is knowingly 
or willfully violating the law. In the current pipeline safety 
statute, the standard for criminal penalties is knowingly and 
willfully. That appears to me to be an unusually high standard 
to meet. The bill proposes to extend the standard of knowingly 
and willfully to civil penalties. Is that right?
    Mr. Kessler. It does propose to do that, in part.
    Mr. Dingell. It makes it very hard to reach civil penalties 
and apply them to serious misbehavior, does it not?
    Mr. Kessler. It does, Mr. Dingell. In fact, to our 
knowledge, the knowingly and willfully standard currently in 
law has only successfully been applied once, and that was in 
the Bellingham situation.
    Mr. Dingell. Mr. Kessler, section 18 of the draft deals 
with waivers from the law. The discussion draft has only two 
items the Secretary must consider in granting a waiver: one, 
the applicant's compliance history; and, two, the applicant's 
accident history. I am concerned this may preclude the 
Secretary from considering other information, such as whether 
the pipeline runs through a wildlife refuge or other 
environmentally sensitive areas like a national park or 
something of that kind. The Senate version of this legislation 
contains a clause which allows the Secretary to consider any 
information or data the Secretary considers relevant.
    Now, Mr. Kessler, yes or no, do you believe the Secretary 
needs additional authority to ensure that these waivers are 
issued properly? Yes or no.
    Mr. Kessler. Yes.
    Mr. Dingell. Now, Mr. Kessler, do you believe that the 
provision in section 17 dealing with cost recovery for design 
reviews at PHMAS would allow PHMSA to generate significant cost 
recovery? Yes or no.
    Mr. Kessler. Not as currently structured, sir.
    Mr. Dingell. Should it?
    Mr. Kessler. Yes, sir.
    Mr. Dingell. Now, for the rest of the witnesses, starting 
with you, Mr. Black, how many projects have your groups had in 
recent years that cost more than $4 billion?
    Mr. Black. I don't know of any, but I don't have that data.
    Mr. Dingell. Would you submit that for the record? As a 
matter of fact, would our other panel members please do that?
    Now, section 5 of the draft bill requires automatic or 
remote shutoff valves where technically, operationally, and 
economically feasible on new--and I emphasize the word 
``new''--pipeline.
    Starting with you, Mr. Black, yes or no, is this something 
the industry is doing already? Yes or no.
    Mr. Black. On new construction, yes.
    Mr. Dingell. Mr. Martin?
    Mr. Martin. On new construction, yes.
    Mr. Dingell. Mr. Kessler?
    Mr. Kessler. As far as I know, on new construction, yes.
    Mr. Dingell. Mr. Dippo?
    Mr. Dippo. Yes, both on new construction and on existing.
    Mr. Dingell. And our last witness?
    Mr. Pruessing. To my knowledge, yes.
    Mr. Dingell. Now, you all know about the recent San Bruno 
explosion which resulted in eight deaths and the destruction of 
38 homes. It took PG&E 90 minutes to manually shut off the 
valve, resulting in some 35 million additional cubic feet of 
gas being released. I seem to remember this was subject to 
debate some 15 years ago, and I would note that action has not 
been taken on this problem, which appears to continue to exist.
    Now, question: If the San Bruno pipeline had an automatic 
or remote shutoff valve, would this have reduced the amount of 
damage caused by the accident? Yes or no. Starting with you, 
Mr. Black, please.
    Mr. Black. It could have, yes.
    Mr. Dingell. Mr. Martin.
    Mr. Martin. I believe it could have reduced it, yes, but I 
think there still would have been the issue of the gas escaping 
from the pipeline after they were closed.
    Mr. Dingell. Mr. Kessler.
    Mr. Kessler. We believe it definitely would have, just as 
it would have in Edison, New Jersey, 15 years earlier.
    Mr. Dingell. The next witness?
    Mr. Dippo. Yes, anytime the valves are shut quicker would 
reduce the amount of damage.
    Mr. Dingell. Mr. Pruessing?
    Mr. Pruessing. We only operate liquid lines, so I am not in 
a position to speak to the gas systems.
    Mr. Dingell. Mr. Chairman, I have completed my time, and I 
thank you for your courtesy.
    Mr. Whitfield. Thank you, Mr. Dingell.
    At this time, I recognize the chairman of the full 
committee, Mr. Upton, for 5 minutes.
    Mr. Upton. Thank you, Mr. Chairman.
    Again, I want to thank the panel for coming back because we 
had votes last week. So I appreciate your adjusting your 
schedules to be able to be here this morning.
    I have actually a couple of questions.
    Mr. Pruessing, there was a story in today's USA Today and 
some other publications as well that said Federal inspectors 
found a problem in the oil pipeline a month before it ruptured 
in a Montana river, but it was not significant enough to force 
a shutdown, the government's top pipeline regulator said on 
Wednesday.
    Was this rupture--was this problem anywhere close to the 
place where it actually ruptured or not? Can you tell us a 
little bit about this?
    Mr. Pruessing. Those of us that are in the industry 
understand that pipe is manufactured to a certain 
specification, and there is a certain tolerance around that 
pipe. It is not unusual to find some small variations in the 
thickness of a pipe.
    When we did our inspection in this line in 2004 and again 
in 2009, we identified one small area of a pipe that was 
slightly thinner. Again, over that period 2004 to 2009, that 
had not changed. It is likely an original fabrication issue and 
certainly was within tolerance. It did not affect the 
performance of the pipe, and it did not require it to be 
addressed under the regulations. At this point in time, we have 
no reason to believe it had anything to do with this incident.
    Mr. Upton. OK. I only have a limited time. That is good. I 
appreciate your answer.
    I want to go back to Mr. Dingell's question but expand it a 
little bit as regards to automatic shutoff valves in high-
consequence areas. We had a little of that testimony by our 
colleague last week, which I think all of you heard, and that 
is the question as to retrofitting these pipelines in high-
consequence areas. We all liked the answer--I think it is in 
the bill--that any new pipeline has to have this type of 
equipment.
    But let's talk about retrofitting literally the tens of 
thousands of miles of oil and gas pipelines with automatic 
shutoff valves. What are the costs? What percentage of the 
pipelines could be viewed as high-consequence areas and how far 
apart do they have to be if we looked at the issue of 
retrofitting?
    Mr. Black, and we will just go down the line.
    Mr. Black. First, operators are required right now to 
consider the use of remote operate and automatic shutoff valves 
in high-consequence areas, and that analysis and decision is 
available to PHMSA for inspection and audit. So there is a 
requirement for this review right now. And often these valves 
are used upstream at a river crossing.
    But retrofitting, CRS has looked at this issue, and on new 
construction, which is cheaper, they said it can be in the 
hundreds of thousands, potentially even more millions of 
dollars. When you think about 170,000 lines of liquid miles, 
that is tremendously more expensive. Liquid lines don't get 
compressed. What is important is to shut off the pumps and then 
close the valves and try to isolate it.
    But they do analysis right now on the drain-down and 
determine where those valves should be. There is not a specific 
mileage. It should be site specific, and it is today.
    Mr. Upton. As I recall, one of my questions last week was, 
do we know what percentage of the pipelines already have this 
type of equipment on them, and the answer was they did not 
know. I will maybe add to that my question as we go down the 
line.
    Mr. Black. I am not aware of that data. Forty-four percent 
of the liquid lines are in high-consequence areas, so for that 
44 percent this determination is required. But I don't have 
that information. I am not sure if PHMSA does either.
    Mr. Martin. For the interstate natural gas system, 6 
percent of our mileage are in HCAs. So that is the mileage for 
the interstate system.
    Much as Mr. Black said, when we do the Integrity Management 
Program, we do the evaluation on the valves as well. On new 
construction, that is something that is looked at for automatic 
or remote control valves.
    As far as retrofitting existing valves or going beyond 
HCAs, that is something that we are looking at right now. But I 
don't have a cost figure for you for that. It would vary, based 
on the pipeline, the location, availability for power and so 
forth in there for some of these valve operators.
    Mr. Kessler. Mr. Chairman, we believe that there should be 
a requirement that these be used where technically and 
economically feasible, particularly in high-consequence areas. 
I think that is the most important aspect to cover. We are not 
saying--this should be a risk-based type of approach to 
retrofitting. We recognize that this is costly, which is why we 
would agree that technically and economically feasible is a 
good standard.
    Mr. Dippo. Yes, Mr. Chairman. I would just indicate that 
AGA members have--there is a provision, as Mr. Black indicated, 
in the code for adding these additional levels of protection 
for high-consequence areas in terms of retrofitting valves for 
automatic or remote operation. So the costs are very site 
specific, and the spacing would also be very site specific.
    But, as Mr. Kessler had testified earlier, our biggest 
concern would be the entire cost. For AGA members, we have 
estimated that would be over $13 billion to go back and 
completely retrofit, and our concern would be how that funding 
requirement takes away from other fitness-for-service 
requirements such as bare steel or cast iron replacement 
programs.
    Mr. Upton. I know my time has expired, but if you might 
provide that information in terms of how you calculated the $13 
billion to the committee, that would be great. Thank you.
    Mr. Dippo. Yes.
    Mr. Upton. Mr. Pruessing.
    Mr. Pruessing. We already have a number of remotely 
controlled valves along all of our pipelines, and we actually 
used those to isolate this line that we recently talked about.
    In liquid systems, automatic shutoff valves are a bit of an 
issue because of the large mass you have, and you can actually 
over-pressure a line if you slam a valve closed too quickly. So 
automatic shutoffs are a concern about liquid systems, but 
certainly remotely operated valves are something that are used 
broadly already.
    Mr. Upton. Thank you.
    Mr. Whitfield. Mr. Green, you are recognized for 5 minutes 
of questioning.
    Mr. Green. Thank you, Mr. Chairman; and thank you for 
extending the hearing. I know we had it last week, and even 5 
minutes is not enough because most of you know where I come 
from pipelines are just part of our daily life. I have so many 
questions, we will probably submit some in writing.
    Mr. Black, I believe you advocated for taking significant 
care when considering the regulation of offshore gathering 
pipelines. Onshore are not currently regulated gathering 
pipelines.
    Mr. Black. They absolutely are, by States.
    Mr. Green. By States. Do they have any Federal standards at 
all? Or is there some continuity between Federal standards for 
pipelines and what typically the States would have in Texas, as 
an example, or Louisiana or Oklahoma would have, a significant 
amount of gathering pipelines?
    Mr. Black. I can't speak to that. A lot of gathering is 
affiliated with production, and we are representing 
transmission pipelines.
    Mr. Green. Would the situation with Exxon in Montana, would 
that be considered a gathering line?
    Mr. Black. No, that was a transmission line.
    Mr. Green. An actual transmission line from the field to 
the refinery.
    Can you tell me about your concern about offshore 
regulation of the gathering pipelines?
    Mr. Black. Sure. For decades, the law by Congress has been 
that this is regulated by States. If it is only offshore, it is 
subject to the Federal lands agency there. We haven't seen the 
evidence that the regulatory framework has to be changed.
    You are well aware of the hurricanes that have come through 
in the last decade or so, and the pipeline network has proven 
itself quite resilient there. There is a study in the bill, and 
we don't oppose that study. We think it will find that the 
current regulator framework works.
    Mr. Green. OK. Let me ask the total panel for thoughts on 
the 1-hour notification. I guess I have concern about the 
definition, because, as Mr. Dippo talked about, there are some 
releases that are very brief and I would call them a leak if 
they were liquid as compared to a rupture. Is there a 
difference in the 1-hour notification or an hour notification 
if you discover there is a rupture as compared to just a leak 
that you can repair very quickly?
    Mr. Black. Well, operators know the rules. They know what 
types of events need to be reported. If--well, we have been 
talking about improving the reporting procedures to try to 
facilitate prompt discoveries. We think going to 1 hour without 
those particularly could facilitate false alarms.
    But to answer your question directly, there is a specific 
understanding of what types of events need to be reported 
quickly and what do not, because they are small, like you say.
    Mr. Green. In the report to the National Response Center, 
does that trigger some type of national Federal response? 
Because, in all honesty, most of the immediate response is from 
the pipeline owner and their resources and also the local EMS 
and the first responders locally.
    Mr. Black. We think the National Response Center process is 
a good one. It is one call for the operator to make, and the 
National Response Center notifies all of the local and Federal 
agencies and first responders along the right-of-way that need 
to be known. The Senate bill somehow confuses this and might 
place the requirement of an operator to notify State and local 
responders. We think the important thing is to get, as this 
committee did, get one call made to that National Response 
Center, as is done now.
    Mr. Green. And the responsibility of the National Response 
Center would also be the network that they have on the State 
level?
    Mr. Black. They know who to call, depending on the issue 
and where it is.
    Mr. Green. OK. In the current regulation concerning 
notification, obviously, you feel like it is preferable. Is 
there anything else we could do, any suggestions, including Mr. 
Kessler, on the difference between the 1 hour and the current 
requirement?
    Mr. Kessler. A little confusion here I think is that the 
bill language, much like the committee-passed and House-passed 
legislation last year on this subject, does reference and take 
as its baseline the existing regulation. So if you are getting 
false alarms, if you are going to get false alarms after we 
move the reporting requirement up to an hour, those are the 
same false alarms you are getting now. That is not going to 
change. What is going to change is the timeframe and also how 
you report these things, which is something industry had asked 
for, how you categorize them.
    Mr. Green. Mr. Pruessing, you said--and I have to go back 
to your testimony--but Exxon actually notified the National 
Response Center within the hour, or within an hour?
    Mr. Pruessing. When we actually had identified we had a 
leak and identified where that was, we had called the National 
Response Center within 34 minutes of that time.
    Mr. Green. OK. So you fit the newer standard at least for 
liquid pipeline, and I understand there is a substantial 
difference between natural gas and liquids.
    Mr. Pruessing. Yes.
    Mr. Green. Mr. Dippo, this is just for my own reference. 
South Jersey gas distribution, in your testimony you talked 
about the additional discovery of natural gas. Are you actually 
receiving natural gas from some of the shale plays that we see 
in West Virginia and Pennsylvania?
    Mr. Dippo. Yes, sir.
    Mr. Green. I guess because we have heard in the last few 
weeks some concern about our shale plays being a little over-
dramatized in the success of them, but we are actually cooling 
homes, I assume, in New Jersey today with that natural gas.
    Mr. Dippo. Yes, sir. Cooling and heating, of course.
    Mr. Green. Thank you, Mr. Chairman. Obviously, 5 minutes 
for a Texan is not long enough.
    Mr. Whitfield. Thank you, Mr. Green.
    Mr. Olson, you are recognized for 5 minutes.
    Mr. Olson. I thank the chair. We are going to have the 
Texas run here, it looks like. My colleague after me is going 
to be another one from Texas.
    I want to thank the panel today for coming back, for your 
patience, your expertise, and your perspectives.
    At the last hearing, I made a statement that no member 
cares more about pipeline safety than the one who represents 
the 22nd Congressional District of Texas. That is me. And since 
a picture is worth 1,000 words, I have brought little pictures 
for you all today.
    The first one here is a PHMSA product. This is the pipeline 
system in Harris County, Texas. The little red Post-It note 
down here is where I grew up, and the one on the right side of 
the chart is where I live now and where I am raising my family. 
Those of you who have been to Houston rush hour may not believe 
it, but the gold lines are the transportation infrastructure 
for cars and trucks. The red and the blue lines are the 
transportation and infrastructure for our petrochemical 
industries. The blue lines are gas transmission pipelines. The 
red lines are hazardous liquid pipelines.
    Focusing a little more on the area right over here in 
southeastern Harris County, you might know what that is. 
Bearing down a little, this is the pipeline infrastructure that 
supports the Port of Houston. It is the Nation's most busiest 
port in terms of foreign tonnage. Again, Harris County is the 
third most populous county in the country. Houston is the third 
most populous city. The place where I grew up is right there. 
So you can see how important this pipeline infrastructure, 
having a safe infrastructure, is to the people of the greater 
Houston area and also to our economy.
    I just want to invite any of my colleagues, if you want to 
come down and see a pipeline infrastructure firsthand, give me 
a call. I am happy to take you down there and take you around 
and show you how it really works down there.
    I just have a couple of questions for you, and this is for 
Mr. Martin and Mr. Black. The discussion draft proposes that 
automatic and remotely controlled shutoff valves be mandated 
for pipelines that are constructed or entirely replaced, and 
Mr. Reamer testified that these valves should be placed in all 
high-consequence areas.
    Do you have a sense of what this sort of retrofitting will 
cost--a couple of questions--if it is feasible? And then just 
one example. There is a great company in the district I 
represent, in the greater Houston area, Spectra Energy. I 
toured their facility. They have incredible remote-sensing 
valves all throughout their pipeline going up to the northern 
and eastern part of the United States. Would they be asked to 
somehow retrofit the current system they have got there, or 
would they be held to some sort of new standards?
    Do you have any sense of what would happen to companies who 
already have got a tremendous system that can guarantee that 
the flow from some sort of drop in pressure will be shut off, 
nothing will escape for the next 15 minutes, something that 
would have been very beneficial out in California?
    Mr. Martin. I would just say on the automatic and remote, I 
think there are some applications, that it is appropriate to 
have those installed, and I think that is what we are proposing 
to look at, is doing a study. Where it is technically and 
economically feasible to install those, those should be looked 
at, focusing on the high-consequence areas. That is obviously 
where you would want to focus your time and your resources on. 
So that is something that the INGAA companies are looking at 
and certainly support as far as the bill goes.
    As far as costs, we have talked about that. There are so 
many variables in there about what the actual costs would be 
that I couldn't give you a number now. We really would have to 
look at that in some great detail to determine what some sort 
of cost would be for those. But that is certainly a significant 
consideration that has to be given for any requirement to do 
that on a broad basis.
    Mr. Olver. Mr. Black, anything you want to add?
    Mr. Black. On liquid lines, remote-controlled valves are 
used pursuant to a risk and engineering analysis that is 
required in high-consequence areas and elsewhere. You will see 
them used. They are prevalent on new construction.
    These can be costly. You have got the valve itself, the 
dig, the lost use of the assets. Whoever is getting the product 
from you doesn't get it during that time. And then, as Mr. 
Martin said, the cost of bringing power and communications 
there just increase it.
    We don't have specific costs, because these are costs 
determined by the location and the use. But in retrofits they 
are much more expensive, and we think on existing high-
consequence area lines there is not a gap. That determination 
is required.
    Mr. Olson. I see that I have used up the balance of my 
time. Again, I would like to extend, if anybody here on the 
panel or any member of this committee would like to get out of 
the D.C. heat and trade it for the Houston heat, cooler, come 
on down. I will help you out.
    I yield back.
    Mr. Whitfield. We will let you know about that, Mr. Olson.
    Mr. Gonzales, you are recognized for 5 minutes.
    Mr. Gonzalez. Thank you very much, Mr. Chairman.
    Again, I also want to wish to thank the panel and seeing 
Mr. Kessler here today, but especially for the delay, just the 
way things happen around here.
    I am glad, I think Mr. Dippo pointed out, just to put 
things in perspective, if you are looking at 2.5 million miles 
of pipeline that are carrying natural gas, hazardous liquids, 
and crude oil throughout this country, compare it to basically 
any federally funded or any highway that receives any Federal 
funds--and that is just about every road out there--would only 
comprise half that amount, about 994,000 miles. So you can 
imagine what is underground and such that needs to be regulated 
and inspected for many, many reasons.
    Yet we did have Administrator Quarterman here last week, 
and I think--I didn't write it down, maybe my colleagues would 
remember--but I think she said PHMSA has maybe 500 employees, 
200 that are assigned to pipeline safety and such. So we 
understand the partnership that is absolutely necessary by the 
enormity of the challenge, and that is you have got to have, 
obviously, industry but all of your State officials and 
regulators. So whatever standard we set here, we are really 
passing it off to be executed by others. I think that is the 
greatest challenge.
    I am going to start off with oil, and the reason for that 
is just looking into the future and where we are and hopefully 
increasing domestic production. But, presently, we import 
1,930,000 barrels per day of crude from Canada, followed by 
Mexico, 1,140,000, and then Saudi Arabia, 1,080,000.
    I would ask Mr. Pruessing and I believe Mr. Black, my oil 
guys, what is the special challenge of the Canadian crude, and 
that is tar sand crude, that it presents in the way of 
pipelines and moving it through the pipelines? And, again, any 
additional challenges, things we need to be preparing for, 
things that are or are not adequately addressed under the 
present regulatory scheme? Mr. Black?
    Mr. Black. When diluted bitumen or oil sands crude is moved 
through a pipeline, it is just like every other heavy crude 
from California or Venezuela. No special corrosion risk. There 
is a study. It is in this discussion draft.
    Mr. Gonzalez. But to get it to flow does take a process, 
doesn't it? It is diluted. What is that process?
    Mr. Black. They mix the bitumen with a condensate that is 
part of the natural gas processing and convert it into diluted 
bitumen. That is one way to process oil sands crude.
    That is not really a concern. The concern for us accessing 
western Canadian crude is just increasing pipeline takeaway 
capacity. A lot of that crude is stranded right now, and the 
market is calling for more access to it.
    Mr. Gonzalez. Mr. Pruessing.
    Mr. Pruessing. The technology is actually well established. 
We have been running heavy crudes in the industry for a very 
long time; and, as Mr. Black has indicated, these heavy crudes 
just need to be diluted so they can be pumped.
    Mr. Gonzalez. Now I want to ask Mr. Kessler and then--off 
of Mr. Kessler's questioning regarding it is going to be a new 
category. I think Mr. Dingell also touched on major consequent 
violations for on the civil side. And I agree with Mr. Dingell. 
I don't understand why the standard, if it is going to be of 
major consequence, that you just have a knowingly standard. 
Because I would imagine that much happens as a result of 
negligence. And so--but what is the logic? What would be the 
reasoning, as you see it, to create a major consequence 
violation category under civil and then have a standard that 
really applies to criminal prosecution when it comes to the 
willful and knowingly.
    Mr. Kessler. I see none. As I said, the provision in 
current law of knowingly and willfully is an aberration because 
it is generally knowingly or willfully. And the standard has 
only been successfully prosecuted once with Bellingham. And 
then to put it in a civil penalty section, I have just never 
seen it. I don't--I believe the chair and others who came up 
with the proposal are trying to do something good here, but I 
think the standard is misplaced as well as intentionally. Those 
are all things that generally apply to criminal. They get to 
state of mind, not negligence or gross negligence.
    Mr. Gonzalez. My time is up, so I thank everyone.
    I yield back, Mr. Chairman. Thank you.
    Mr. Whitfield. We appreciate you all raising that issue on 
the standard on the civil penalties. A number of people on both 
sides of the aisle have expressed concern about that, and we 
appreciate you all mentioning that.
    Mr. Pompeo, you are recognized for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman. I am close enough I am 
not sure I need this.
    One of the things--I am new to all of this. One of things I 
see done in the regulatory environment is we just keep adding 
standards, and I understand we want to continue to improve 
safety where we can. I know industry wants that, too.
    Mr. Kessler, I am interested, it sounds like you have a 
history on this committee and the issue is pretty deep. Is 
there anything in this piece of legislation or in the existing 
rules that you would say, yes, that doesn't make sense anymore, 
we are driving costs, we are forcing pipeline distribution 
companies, these folks, to spend money, and it no longer makes 
sense? We can either let them not spend the money or spend it 
more effectively on safety someplace else?
    Mr. Kessler. Absolutely. As I alluded to earlier, I think 
if you couple the repeal of redundant or unnecessary class 
location with expanded protections, integrity management, then, 
yes, that is something that you should be getting rid of, but 
it has to be done in context.
    Also, similarly, I think some of the--I lost my train of 
thought. I am sure there are things. This is a statute that is 
kind of all over the place. It always has been. It has always 
been a desire, I think, of the members of this committee to 
make it make more sense, which a good thing.
    So I think there are some things in the bill. One thing I 
think was inadvertent in the bill--and this isn't our issue--
but you asked a question that gives PHMSA arrest authority, and 
I think that probably doesn't make sense. It is a nice 
sentiment, I think leftover from days when the Coast Guard was 
at DOT, but probably--PHMSA's never been a law enforcement 
agency.
    Mr. Pompeo. Gotcha. Thank you.
    For Mr. Black and Mr. Dippo, you came through with various 
things that you would like to see changed. If you were to 
prioritize and say, hey, here is the most important thing I 
would like you all to go back and look at. Seriously, can you 
kind of--I cut the list, but could you prioritize and say, here 
are the two things I think are most critical that I think you 
need to go revisit from this draft legislation.
    Mr. Black. I think two of the most costly things that could 
be done in this industry and reauthorization is a leak 
detection standard without knowing what PHMSA would do and then 
some retrofit requirement for remote control valves beyond what 
is considered today. You don't have the remote control valves 
issue unsatisfactorily to us in the draft, but you do require a 
leak detection rulemaking before even PHMSA has completed a 
study and concluded one is necessary. So that would be our top 
priority.
    Mr. Dippo. Yes, and our concerns would be expansion of the 
transmission integrity management regulations beyond the 
current high-consequence areas, particularly before PHMSA has 
had the opportunity to review the effectiveness of the existing 
program, which is not scheduled to have baseline assessments 
completed before 2012.
    And then, of course, the concern about the extreme costs 
associated with retrofitting existing valves for automatic or 
remote-controlled actuation in high-consequence areas and the 
effect that that may have on pulling funding away from other 
replacement programs that we are involved in.
    Mr. Pompeo. Great, thanks.
    I have just got 1 more minute. Mr. Dingell asked Mr. 
Kessler about Section 19, the waiver provisions, where there is 
just two considerations. I don't think anyone else had a chance 
to chance to speak to that. It just gives two things that the 
administrator can consider in Section 18 when granting special 
permits. Did anyone else have a view?
    Mr. Kessler's view was there ought to be potentially other 
things that the administrator could consider. Anybody else have 
a view of if we got it right?
    Mr. Black. Well, S. 275 section on special permits we 
thought gave PHMSA the authority to be subjective rather than 
objective on special permit applications. I haven't seen a 
proposal like Mr. Kessler is talking about, about additional 
contextual information. We think risk of the special permit 
proposal should absolutely factor into the decision. Where we 
want S. 275 to improve is make sure the Secretary and the 
administrator are using objective information.
    Mr. Pompeo. You want to know what you are up against.
    Mr. Martin. I don't have any additions.
    Mr. Kessler. I think Mr. Black makes a good point. I mean, 
there does need to be certainty for industry. It is just that 
if a gas pipeline goes through an earthquake zone, high-density 
population area, in granting a waiver for that segment you 
should look at that, or an oil pipeline through a national park 
or refuge. So we are saying those should be enumerated, and the 
industry does deserve certainty on these things.
    Mr. Pompeo. Thank you. Thank you all.
    I yield back.
    Mr. Whitfield. Thank you.
    At this time, I recognize the gentleman from Illinois, Mr. 
Rush, for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Kessler, in our last hearing on pipeline safety we 
discussed the issue of transporting diluted bitumen such as the 
type of Canadian crude Keystone XL pipeline carried through the 
middle of the country if it is approved. The discussion draft 
calls for a say on this subject, but it doesn't take the next 
step of requiring PHMSA to update its regulations. The study 
shows there is an increased risk when transporting diluted 
bitumen.
    In your opinion, do you believe that this discussion draft 
goes far enough in ensuring that we will have the necessary 
procedures and mechanisms in place to safely transport diluted 
bitumen through the heart of the country, or do you believe 
that there are additional steps that we can include in this 
bill to ensure that we are being proactive and taking every 
precaution on this subject?
    Mr. Kessler. Thank you, Mr. Rush.
    We do support the study in the bill and would support that, 
whatever recommendations are made from that, that they be 
implemented. We don't take a position on the oil sands, tar 
sands bitumen itself, but we do believe there are unique 
characteristics that must be addressed and engineered, too. We 
have seen something like a dozen leaks from the XL pipeline in 
the last year, and this can be and should be addressed. It is 
something that we are right to study, and then PHMSA should 
take the necessary steps based on that study.
    Mr. Rush. I want to divert my questions to another matter 
that are very seldom discussed in these type of hearings. I 
just want to ask Mr. Black, you represent the Association of 
Oil Pipe Lines and also on behalf of the American Petroleum 
Institute?
    Mr. Black. Yes, sir.
    Mr. Rush. How many minority contractors are members of the 
Association of Oil Pipe Lines?
    Mr. Black. Could you repeat your question?
    Mr. Rush. How many minority or women-owned businesses are 
members of the Association of Oil Pipe Lines?
    Mr. Black. I don't have that information.
    Mr. Rush. Can you get it to me?
    Mr. Black. Yes, sir.
    Mr. Rush. The same on the American Petroleum Institute.
    Mr. Black. I will be happy to ask for that.
    Mr. Rush. Mr. Pruessing, you are president of ExxonMobil 
Gas.
    Mr. Pruessing. ExxonMobil Pipeline Company, liquid 
pipelines.
    Mr. Rush. How many minority contractors--minority and 
women-owned contractors do you contract with?
    Mr. Pruessing. I will have to get that information for you, 
sir.
    Mr. Rush. OK, all right, OK.
    Mr. Pruessing, ExxonMobil estimated that its Silvertip 
pipeline spilled up to 42,000 gallons of crude oil into the 
Yellowstone River in Montana, and the cause of the rupture is 
not yet known. This pipeline was buried beneath the river and 
crossing, and because of severe flooding the river was moving 
very quickly.
    Prior to the rupture, in the city of Laurel PHMSA raised 
concerns about whether the floodwaters would erode the material 
covering the very pipeline, leaving it exposed to debris. 
According to PHMSA, the agency contacted ExxonMobil on June 
1st, and ExxonMobil confirmed that there was at least 12 feet 
of cover, is that correct?
    Mr. Pruessing. Actually, sir, we did a depth-of-cover 
survey in the river in December of 2010. We confirmed that 
there were 5 to 8 feet of riverbed cover over the pipeline in 
the riverbed. Then, as you moved on to shore, between the 
shoreline and the first valve we had approximately 12 feet of 
cover on the shoreline.
    Mr. Rush. And was that in the bank or under the bed?
    Mr. Pruessing. The 12 feet was actually on the shoreline 
between the edge of the river and the first valve.
    Mr. Rush. What action did ExxonMobil take in June to 
maintain that cover and keep the pipeline buried far enough 
below the river to protect it from debris collision?
    Mr. Pruessing. There are a number of things we have been 
doing to maintain the integrity of this line. If you go back to 
2009, we had done an inline inspection consistent with the 
regulations to confirm that the pipe was safe and it didn't 
have any integrity problems. I mentioned the December, 2010, 
depth-of-cover survey. Actually, PHMSA came in just a month 
ago, in June of 2011, and did a full review, an audit of the 
integrity management program for this pipeline.
    Further, we were working with the city of Laurel during the 
high water period. We actually took the shutdown of the 
pipeline during 1 day to stand back and do a further risk 
assessment to confirm that we had a safe line. In working with 
PHMSA and the city of Laurel and looking at the integrity data, 
we had--we believe we had a safe line, so we restarted the 
line.
    Mr. Rush. Uh-huh.
    Mr. Kessler, current regulations require an underground 
pipeline crossing a river to be buried at least 4 feet 
beneath--below the bottom of the river. Are you confident that 
4 feet is adequate to contain a pipeline from erosion and 
debris in cases of flooding or high-speed waters?
    Mr. Kessler. It does not appear to be. I am not an 
engineer, but, thus far, it does not appear to be, particularly 
if it is not reexamined and required to be maintained at least 
at that level.
    Mr. Rush. Would it make sense to vary the required depth of 
the pipeline based on the characteristics of the river?
    Mr. Kessler. It certainly might indeed, Mr. Rush.
    Mr. Rush. As I understand it, the requirement to bury the 
pipeline at least 4 feet below the river applies when the 
pipeline is constructed, but there is no specific requirement 
to maintain the burial depth of 4 feet over time, and that 
seems like a huge gap----
    Mr. Kessler. Agreed.
    Mr. Rush [continuing]. The regulations. Do you have any 
additional thoughts on this?
    Mr. Kessler. We agree, and there are different ways to get 
at this, and that is definitely a gap, we think, in the 
regulation, the idea that it doesn't have to be reexamined to 
maintain that depth. So----
    Mr. Rush. Thank you very much. My time has concluded.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Colorado, Mr. Gardner, for 5 minutes.
    Mr. Gardner. Thank you, Mr. Chairman; and thank you for the 
testimony today. Just a couple of quick questions.
    Several years ago, we had a big debate in the Colorado 
State legislature regarding borrow ditch excavation and 
notification and calls; and that got, as you can imagine, 
pretty interesting conversations both sides of the issue.
    When it comes to section 3 of the bill, there is language 
in there that talks about appropriate--the minimum standards 
for State one-call notification programs in order to receive 
funding from the Federal Government to that program. It talks 
about appropriate participation by all underground facility 
operators, appropriate participation by all excavators, 
including all government contract excavators, flexible and 
effective enforcement under State law. And then exemptions 
prohibited, a State one-call notification program may not 
exempt mechanized excavation.
    Are you satisfied with this language or is there a concern 
from States that this language may actually prohibit some 
activities that the States have exempted right now? Is anybody 
aware of activities that the State has exempted from their 
notification system, that this could actually override State 
law or State exemptions?
    Mr. Martin. I don't know that I am aware of any of those 
that override, but I am not all that familiar with all of the 
details in the State requirements on that. I do think the 
language that is in the draft bill is very appropriate.
    As you mentioned, some of the borrow pits--I know there are 
some examples that are used that says it is a borrow pit, no 
harm. But a borrow pit runs out. You have to extend that borrow 
pit. It might go wider, where a pipeline or utility might be. 
So that would be the reason why we would want to include all 
excavation activities into something like that, so that we are 
reasonably safe that a utility isn't impacted by somebody 
excavating it.
    Mr. Gardner. For instance, Colorado right now has some 
exemptions for their notification on landscaping. Would this 
language exempt mechanized excavation? Would that override an 
exemption for landscaping exemptions in the State?
    Mr. Martin. If I understood that to be, it would be putting 
additional requirements on the States to include those groups. 
That would be my understanding.
    Mr. Kessler. Mr. Gardner, we are generally in lockstep with 
the industry on this issue. It is the exemptions themselves 
that are one of the major problems with our one-call system. 
And actually having been a landscaper in my previous life and 
operated backhoes and whatnot, I can tell you I am pretty lucky 
over time that I never hit an underground facility. They should 
definitely be included. I don't think it is a huge ask.
    Mr. Gardner. I certainly think when it comes to using 
backhoes and thing like that, but you know where there may be 
other activities----
    Mr. Kessler. Ditch switches, things like that.
    Mr. Gardner. Ditch switches certainly ought to be included 
in that. But you have other activities, too, that may be lesser 
disturbance that we ought to consider. The States I think have 
done a good job--at least Colorado has done a good job of 
taking those conversations into account. So I want to take a 
little more look at this language to make sure that we are not 
overriding State exemptions that have been well-thought and 
well-planned.
    Mr. Kessler. I think the telecom industry also has similar 
issues and is supportive in the same way. The pipeline industry 
and safety community is, too. So you should consider them as 
well.
    Mr. Gardner. Appreciate that. I thank you.
    I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Gardner.
    At this time, I recognize the gentleman from California, 
Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Over the last 12 months, we have seen a series of oil and 
natural gas pipeline failures all across the country. I think 
it is clear that our pipeline safety laws need to be improved 
and updated. As the committee develops pipeline safety 
legislation, we need to ensure that the legislation 
meaningfully addresses the regulatory weaknesses revealed by 
these accidents.
    Mr. Kessler, your organization is devoted to enhancing the 
safety of pipelines. I would like to ask you about some of the 
tragic accidents we have seen this past year and what needs to 
be done to prevent similar accidents from occurring in the 
future.
    Last year, an Enbridge pipeline spilled over 800,000 
gallons of oil into the Talmadge Creek which flows into the 
Kalamazoo River. The pipeline was hemorrhaging oil all night 
long, but the company was not able to detect this massive leak. 
The discussion draft includes a provision on leak detection. Do 
you think it is adequate? And, if not, how can it be 
strengthened?
    Mr. Kessler. We applaud the committee draft for including 
leak detection, but, no, we don't think it is adequate. We 
think some kind of a best-available-technology standard--or 
really what we need to get at is the amount that triggers it 
and the timeliness of providing these warnings. Clearly, that 
didn't happen in the case of the Kalamazoo River. And the 
contents of that actually have different properties than 
normal. We are finding more heavy metal, and it is more 
difficult to clean up. So it is even more important, I think.
    Mr. Waxman. OK. Last September, the San Bruno gas pipeline 
explosion left eight people dead and many other injured. There 
was also tremendous property damage. Observers said that the 
suburban neighborhood looked like a war zone. The California 
Public Utilities Commission investigated and found that PG&E 
did not have records that could verify the type of pipeline 
they had in the ground and was therefore not properly operating 
and inspecting the pipeline.
    The Senate bill includes a provision on maximum allowable 
operating pressure verification. The discussion draft does not 
include this provision. Mr. Kessler, in your written testimony, 
the Pipeline Safety Trust encouraged the committee to add this 
provision to the bill. Can you explain how this provision would 
address the problem we saw at San Bruno and why we should add 
it?
    Mr. Kessler. Thank you, Mr. Waxman.
    Again, in almost every statute in the committee's 
jurisdiction I am aware of, we regulate two records. We don't 
actually necessarily regulate to the physical--the individual 
physical properties or under question. If you don't have 
accurate records, you can't regulate accurately. You can't set 
standards. You can't tell. So the Senate provision is vital we 
think, and based upon an NTSB recommendation, to making sure 
our regulatory system works as it should. Without it, 
everything is in question.
    Mr. Waxman. In February, an old cast iron natural gas 
pipeline exploded in Allentown, Pennsylvania, killing five 
people. As I understand it, this pipeline was over 80 years old 
and wasn't scheduled to be replaced for another 100 years. Mr. 
Kessler, the discussion draft includes a provision requiring a 
survey of cast iron pipelines. Do you think this is adequate? 
And, if not, what should we require instead?
    Mr. Kessler. Thank you.
    We are glad it is in there, but we believe it absolutely 
needs to go farther to assess the risk and require action. I 
think Atlanta, Georgia, long ago took steps to replace its cast 
iron pipeline. We have been talking about this. I think there 
has been something on the books for at least 30 years. And it 
is really time to act. Especially when natural gas prices are 
going down and we are building more pipe, we can I think 
capture some of that delta and then use that for this 
replacement program. You know what, one way or the other, you 
are going have to replace them and it would be better to 
replace them before they blow up than afterwards.
    Mr. Waxman. I think that makes sense. I want to thank you 
for your answers.
    I look forward to working with the majority to strengthen 
the discussion drafts so that our pipeline safety laws are up 
to the challenge of preventing future tragedies like those we 
have seen during the past year.
    I thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Whitfield. Thank you, Mr. Waxman.
    At this time, I recognize the gentleman from Oklahoma, Mr. 
Sullivan, for 5 minutes.
    Mr. Sullivan. Thank you, Mr. Chairman.
    This is for the entire panel. I will start with Mr. Black.
    With regards to expanding integrity management beyond high-
consequence areas, should there be some sort of logical process 
for how the expansion occurs? For example, should the focus be 
on covering more people living or working around pipelines and 
therefore adding pipeline segments based on population in a 
phased manner?
    Mr. Black. There is an ongoing rulemaking on liquids, on 
expansion of the pipelines, and on expansion of integrity 
management areas. We think the focus should remain, as Congress 
and PHMSA has put it, on high-consequence areas and make any 
expansion of that risk based. There may need to be a review of 
the repair schedule that is required within high-consequence 
areas right now if that is to be expanded. That repair schedule 
may not be as technically based as it should, and it is 
probably in need of updating.
    Mr. Martin. Yes, if there is an expansion of the high-
consequence areas, I think it is something--a study that should 
be conducted through the PHMSA organization with input from the 
industry as to the effectiveness of doing that. I do think it 
should be focused on population, as I stated in my testimony, 
of people living and working around our pipeline system. So I 
would agree with that.
    Mr. Kessler. I think any expansion we should delegate to 
the agency with the expertise and require input from not just 
industry but local governments, safety and environmental 
groups, a wide array of affected groups.
    We do think that any change in the class rating system 
needs to go hand in hand with expanding integrity management, 
but they should be looked at together. Either we can study 
both, or we can require action on both. But I don't think you 
can do one without the other. And I think we should give some 
direction to the agency, but I think we should allow the agency 
to do its work.
    Mr. Dippo. Yes, AGA would agree with the position offered 
by Mr. Martin of INGAA that we believe PHMSA should study the 
existing regulations and what has been accomplished in the 
baseline assessment period, which is expiring next year, before 
they try to fix the existing regulation. It could, as you say, 
involve expanding HCAs to address areas that are more highly 
populated or perhaps expanding the number of miles that are 
being covered by the high-consequence areas.
    But the idea is to understand for distribution companies 
there are many transmission facilities that are embedded into 
the distribution system. And as part of doing these assessments 
it is imperative that we take into account the singular 
directional fees that exist on the majority of our lines.
    Mr. Pruessing. ExxonMobil Pipeline uses the same integrity 
management program for all of our pipelines, including those 
that are not in HCAs. I do agree with Mr. Black's comment. It 
would be important to look at the repair schedules to make sure 
the risks are included in that.
    Mr. Sullivan. Thank you.
    Mr. Martin, Pipeline Safety Trust testifies that all 
gathering lines should come under the same regulation as 
transmission pipelines. Do you agree?
    Mr. Martin. Well, representing the Interstate Natural Gas 
Association, we don't have the gathering lines as part of the 
association. So that is really not an area that we are focused 
on at this point.
    Mr. Sullivan. OK. And then, Mr. Black--I have a little bit 
of time here--with regards to the leak detection standards, 
what is AOPL's view of the current provision? How would the 
best available standard affect operators who are forced to 
implement leak detection technology?
    Mr. Black. Well, we don't know, but it could set up a 
standard that is very unattainable and quite costly with 
potentially little benefit. Right now, operators are required 
to conduct a leak detection capability evaluation in high-
consequence areas. That is available to PHMSA for inspection 
and audit.
    We have proposed in the PHMSA rulemaking that they require 
that of us throughout the transmission system. We think that is 
where the focus should be, is between PHMSA and the operator, 
evaluating what the leak detection capabilities are.
    We also support research on this, and we think it is 
important to improve the technology. I think some type of a 
best available technology doesn't fit with leak detection as a 
series of practices and not one technology.
    Mr. Sullivan. Thank you, sir.
    I yield back.
    Mr. Whitfield. Thank you, Mr. Sullivan.
    At this time, I recognize the gentleman from Louisiana, Mr. 
Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing on the legislation.
    Of course, both the House and the Senate need to take 
action before the end of the fiscal year for reauthorization if 
we are going to continue to have a guideline for pipeline 
safety. I think what is important about this draft document is 
that it does seem to incorporate a lot of lessons learned, and 
all of us want to continue to learn as there are incidents.
    Nobody wants to see any kind of pipeline incidents, but we 
also--just as, if a plane crashes, you surely don't stop all 
other planes from flying. You find out what happened to cause 
that crash to do whatever you can to make sure it doesn't 
again. In some cases, there may be things that went wrong, 
human error, and you can't necessarily do a lot about that, 
might do some things. But, in some cases, you might have a 
mechanical error or might have problems where you might need a 
recall. But, at the same time, the FAA doesn't ground all the 
planes.
    But you need to learn your lessons, and that seems like 
that the gist of this is. It seems like some of those safety 
improvements are incorporated into the draft, and that is good 
news.
    I do want to ask--I was looking on section 20 of the 
legislation. It talks about leak detection, and it requires the 
Secretary of Transportation to come back to us, the relevant 
committees, with guidelines on leak detection systems utilized 
by operators of hazardous liquid pipelines, transportation-
related flow lines. And then it further goes on in subsection B 
to require the Secretary to prescribe regulations and, of 
course, have notice hearings, the requisite things to come up 
with the best regulations for leak detection.
    It was suggested by one of the panelists that we actually 
set standards in this bill, as opposed to having the Secretary 
bring us some of those recommendations. I wanted to ask you, 
Mr. Black, to get your take on that, kind of the difference 
between what was presented by one of the panelists versus what 
is in the draft document in section 10 dealing with leak 
detection.
    Mr. Black. Part A in section 10 is the study. We don't 
oppose the study. A study was completed about 3 years ago and 
concluded what I think we all know here, that this is very 
complex, there is no one size fits all. And they did not 
conclude a rulemaking was necessary.
    Item B assumes what the study will find. It assumes that 
there is a rulemaking requirement. And we do not believe that 
the Congress should presume that the rulemaking is necessary. 
We encourage the support of the Federal Government on leak 
detection technologies. I know PHMSA is considering some of 
this, as are we. We fund consortium research on leak detection 
availabilities. I think that is the focus, rather than a 
rulemaking.
    Mr. Scalise. OK, I appreciate that input.
    As we look at continuing to make improvements, ultimately 
bringing this formal bill to a markup and hopefully moving it 
through the chambers, I hope you also keep in mind that it is 
critical that we continue to maintain our ability to transport 
oil products, natural gas products through our pipelines. 
Because if you don't have that pipeline system--I think most 
would agree that it is probably the safest method and most 
efficient method of transporting these types of products that 
people use every single day throughout our country. Because if 
you don't have that, you will be putting them on rail or on 
trucks and moving them in other ways. And so you have got a 
system that is built in right now.
    We need to learn from any mistakes that have been made in 
the past and continue to improve safety, but, at the same time, 
keep in mind--unless you are somebody that just doesn't believe 
anybody should be able to use fossil fuels, which there are 
clearly people like this on this committee. But, in the real 
world, I don't think many people are ready to plug in their 
cars to a plug and get to where they need to go. They are going 
to be using fossil fuels for a long time. And if we are going 
to do that, we better have good methods of transporting.
    And, clearly, if you look at all the different methods 
available, I think most would agree the most safe and efficient 
method is the pipeline system. And so as we continue to improve 
upon it, I think it is also important to remember that we 
cannot let this authorization expire, which it would if we 
didn't have this legislation.
    So, again, thank you, Mr. Chairman, for bringing it; and I 
look forward to the debate as it continues on with actual 
legislation.
    Mr. Whitfield. Thank you.
    At this time, I would like to recognize the gentleman from 
California, Mr. Bilbray, for 5 minutes.
    Mr. Bilbray. Thank you, Mr. Chairman.
    Mr. Chairman, I know it doesn't specifically address this 
piece of legislation, but, Mr. Kessler, there is one thing that 
I think we don't talk about enough and that is, you know, long-
term planning and trying to get cooperative efforts before a 
crisis. We always kind of respond to crisis.
    My question is, you were talking about how many people die 
every year or whatever with these accidents. We lose--what--100 
people a day on our interstate freeways. But the Federal 
Government has taken a lead and required local governments to 
take a lead at citing freeway alignments, doing the 
environmental, looking at the big picture. We don't ask the 
companies that build freeways for us to do the environmental 
assessment and do the alignments and do it the right-of-way 
acquisition. We have government involved but in a proactive 
way, not a reactive way.
    Just like we require the council of governments and the 
States to participate in the citing of the freeways and just as 
cities and counties in the urban areas cite power lines, gas 
lines, and water lines, don't you think it is about time we 
start talking about having council of governments be proactive 
of where is the best place to put the utility easements and try 
to do this comprehensively as a responsibility of good 
planning, rather than continuing to ask the private sector to 
always sort of go do it yourself and it is not our job?
    Mr. Kessler. Mr. Bilbray, more planning, more 
collaboration, more discussion between companies and local, 
State, Federal Government is always a good thing. And, as you 
know, oil pipelines are cited by States and interstate gas by 
the FERC under the Gas Act. And there are gaps. And, in fact, 
this committee in 2002 included a provision that required 
development of planning and information. You know, there is a 
lot of encroachment on existing pipelines. It is not the 
pipeline's fault that cities have grown up around pipelines. 
And what you need to do, as you said, better plan and better 
communicate. And we have advocated for--there is a report that 
has come out of the 2002 Act, but we need to fund that kind of 
outreach, and we need to do more of what you are talking about.
    Mr. Bilbray. I only bring this up because those of us that 
were in the game--I started off at 25 as a council member and I 
was a mayor at 27, so a county of 3 million I supervised. I 
think those of us in government are quick to point fingers at 
the private sector that they need to do more, but we are slow 
at talking to ourselves or our colleagues in government of 
saying we need to be willing to take the heat. We have got to 
be willing to stand up and say this is the best way for an 
alignment or this is the safest way, whatever.
    Mr. Chairman, I just wanted to bring that up because I 
think we are treating symptoms a lot of times with regulatory 
oversight mandates because we haven't set the great foundation 
and required those at the State and especially at the regions 
to take the responsibility at being proactive and telling the 
private sector, hey, just like we do with our streets in our 
urban areas, here is the alignment. This is the alignment we 
set aside for you. You have access to this. And here we go.
    And we may even want to charge for it, which they do in 
urban areas, but we at least take the heat of running those 
lines down, rather than somebody later showing up, my God, I 
didn't even know this was running through my city. Not only 
should they know that, but they should be required to 
participate in the decision making of where it runs through 
their city, just like we do with freeways.
    We don't allow cities and counties to say, it is not my 
business. We don't have a Federal FERC or a Federal 
transportation agency deciding those easements. We don't have 
State do that. We have local and regional do that. And you 
agree we ought to be moving towards that kind of participation 
in our utilities.
    Mr. Kessler. Again, the committee was wise to put the 
provision in in 2002 under Mr. Tauzin and Mr. Barton. We got a 
good report. We need to actually put those things into effect. 
You are absolutely right. More collaboration, more planning is 
always better. It is good for the companies, and it is good for 
the general public and the environment.
    Mr. Bilbray. And more government trying to find answers, 
rather than trying to find fault.
    OK, I yield back.
    Mr. Whitfield. Thank you, Mr. Bilbray.
    Before I conclude this hearing, I would like to ask one 
other question. And then, Mr. Green, did you want to ask a few 
more questions? I had the impression that you would like to ask 
a few more.
    My question would be this. On section 10 of the bill 
entitled leak detection, we talk about a study by the 
Department of Transportation on technical limitations and so 
forth, and all of you are sort of experts in this field. I 
would just ask a general question on your view of the 
technology and leak detection. Are we making real progress in 
that area or what are your impressions on that?
    Mr. Black. Yes, I think the ability to detect a leak is 
improving. I think the expectations for a pipeline operator on 
detecting a leak are also improving.
    The reason this is a tricky issue is leak detection is a 
bunch of things. It is your SCADA system, it is your gauges, 
the accuracy of your gauges, your control room processes, your 
displays, formulas that are used in determining whether this is 
a false positive or indeed a leak. All of that is improving but 
certainly needs to improve further.
    Mr. Whitfield. Mr. Martin.
    Mr. Martin. Yes, obviously, in the bill that was addressing 
liquids lines, gas or different material that is going through 
the pipeline, but we do have leak detection programs. And I 
would just agree with Mr. Black on the advancements. We have 
done a lot of work and made a lot of progress, but we still 
have a lot of work to do.
    Mr. Kessler. We have done a lot of study of this issue. And 
I would note that the State of Alaska on liquid pipelines--not 
exactly the most liberal or certainly not an anti-production 
State--has a 1 percent standard--leak detection standard. We 
would love to see that taken nationwide, but we recognize there 
is different characteristics, different pipelines, both the 
pipelines themselves and the surrounding area.
    This is not about getting companies to pay unreasonable 
amounts. This is about risk, and it is about putting these 
things with the best technology where they are most useful, not 
everywhere. This is being made out to be something much more 
than it is. If Alaska can do it, why can't other States? Why 
can't the country do this?
    Mr. Whitfield. Mr. Dippo?
    Mr. Dippo. Yes, I know the bill discusses leak detection on 
the liquid side, but on the gas side, as Mr. Martin said, we do 
do leak detection every day, continuously. That is part of 
running a system and making sure that it is fit for service.
    Mr. Whitfield. OK. Mr. Pruessing.
    Mr. Pruessing. I agree with Mr. Black that leak detection 
takes a number of different areas. It covers a lot of things.
    I would say that there is really not a standard out there 
right now that anybody's technology meets what everybody wants, 
so it continues to evolve. And a lot of companies, ourselves 
included, are doing internal proprietary work to try to develop 
that next level of standard. There is not something out there 
right now that is off the shelf that people could go use that 
would meet all the requirements that people are asking for.
    Mr. Kessler. I would just like to point out that the bill 
draft does contemplate economic circumstances, technical 
circumstances. You have wisely included that. So I don't think 
it is fair to say that these aren't going to be considerations, 
because you have wisely seen that they will be. So I just want 
to make sure that was----
    Mr. Whitfield. Thank you.
    You do? Mr. Rush has questions; and then we will go to you, 
Mr. Green.
    He defers to you, Mr. Green.
    Mr. Green. I just want to follow up some of the questions 
from members and on the hour versus the immediate. How often do 
operators--and this would be both liquid and gas--just have 
some anomalies in the pipeline that you may not think it is a 
rupture, but it is--and you find out it really is something. Is 
that pretty common? Is it in liquids, Mr. Pruessing?
    Mr. Pruessing. You can have indications on a pipeline that 
do not actually reflect a leak but that just--you don't 
understand. So there could be cases where you would make that 
call without really having a full understanding if you had a 
leak or not.
    Mr. Green. And you would assume you would make that call 
based on the safest possible----
    Mr. Pruessing. Yes, we are always going to take the 
conservative approach.
    Mr. Green. Mr. Dippo?
    Mr. Dippo. Yes, the concern for the natural gas 
distribution industry is to focus on the response. So with the 
proposed legislation, we are concerned the 1-hour limit will 
take the focus away from making that initial emergency response 
to the scene. And, as I said, with the one-call provisions and 
some existing exemptions, it is not unusual for us to see 
struck means and services on a daily bases.
    Mr. Green. Would it make sense to have different standards 
for liquids versus natural gas? Have there been any discussions 
of that over the years, depending on the product that goes 
through the pipeline?
    Mr. Dippo. I am not aware that there has been any of those 
discussions. Again, our focus would want to be to respond to 
the emergency situation and then follow up with the reporting 
call to the NRC.
    Mr. Green. Mr. Chairman, I have a series of questions. I 
would like to see what is happening for ExxonMobil, mainly 
their relationship between EPA and the response. I know we 
don't have time now, but if I could submit those and see how 
the relationship has evolved on those disasters. We all watched 
what happened with BP, the Department of Energy, and different 
Federal agencies, because it was all on the national news. 
Montana is not the Gulf of Mexico maybe, but if I could submit 
those questions, I would appreciate it.
    Mr. Whitfield. Absolutely.
    Mr. Rush, you are recognized.
    Mr. Rush. In recent years, there has been a large expansion 
known as gathering pipelines. These are the pipelines that 
bring natural gas and oil from production facilities to 
Federally regulated transmission pipelines. With thousands of 
new gas wells being drilled, even highly populated urban areas 
now have gathering pipelines beneath them, and some of these 
gathering pipelines are of similar size and operating pressure 
as transmission pipelines. The problem is that the Federal 
Pipeline Safety Agency is explicitly prohibited from regulating 
gathering pipelines under current law.
    Mr. Kessler, does it make sense for the pipeline safety 
statute to include a blanket regulatory exemption for gathering 
pipelines?
    Mr. Kessler. No, sir. The development of the Marcellus 
shale and other nontraditional areas is a tremendous benefit to 
the country. It is great that it is being developed, and it is 
resulting in more and more pipelines. And, as you point out, 
some of these gathering lines really have all the 
characteristics--whether it is pressure, size--of a 
transmission line. And like the old saying goes, if it looks 
like a duck and quacks like a duck--to paraphrase--it probably 
should at least be considered to be regulated as a duck, and 
the law doesn't allow that right now.
    Mr. Rush. Well, why is it important for PHMSA to consider 
regulating some of these gathering pipelines?
    Mr. Kessler. I think you already made that case. Because of 
lot of them are popping up in nontraditional areas that are 
densely populated, that have no experience, and again have all 
the characteristics of the things that we do regulate. It 
shouldn't be what we call them. It should be the 
characteristics of the line themselves that require the 
regulation.
    Mr. Rush. As I understand it, the administration proposal 
includes a provision to first eliminate the statutory barrier. 
Then the proposal would require PHMSA to review all of the 
existing regulatory exemptions for gathering pipelines and 
eliminate the ones that are not justified. Under that approach, 
all gathering pipelines wouldn't necessarily be regulated like 
transmission lines; is that correct?
    Mr. Kessler. That is correct.
    Mr. Rush. PHMSA would have the flexibility to decide which 
gathering lines should be treated like transmission lines; is 
that correct?
    Mr. Kessler. That is correct, sir.
    Mr. Rush. I think the approach proposed by the 
administration makes a lot of sense. The Federal pipeline 
safety agency shouldn't be barred from regulating all gathering 
pipelines, as there are certain gathering pipelines that pose 
the same risks as the new transmission pipelines that are 
currently regulated. I would like to work with them in order to 
strengthen this section of the discussion draft.
    I want to bring to your attention the fact that just this 
month there was a gathering line oil spill in Montana that 
apparently went unreported for at least a month.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    Mr. Whitfield. Well, thank you, Mr. Rush.
    It is my understanding that our staffs are working together 
and that you all have submitted a list of priorities from your 
perspective. So, hopefully, we can come out with a product.
    Your testimony helped us a lot today, and we appreciate 
that. We appreciate all of you being here. I know Mr. Kessler 
and Mr. Black roamed the halls of the Energy and Commerce 
Committee for a few years, so we hope that you felt good being 
back with us today.
    Mr. Rush. Mr. Chairman, I might remind the witnesses that I 
am looking forward to getting the report on the minority 
membership and their various associations.
    Mr. Whitfield. Yes, there were some unanswered questions 
and then some questions will be submitted. In fact, we will 
keep the record open for 10 days so that members may have an 
opportunity to submit additional materials.
    And, with that, we conclude the hearing and look forward to 
working with all of you as we proceed on this legislation.
    Thank you.
    [Whereupon, at 11:05 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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