[Senate Hearing 114-255]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-255

                           PIPELINE SAFETY: 
                      STATE AND LOCAL PERSPECTIVES

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

                             FIELD HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON SURFACE TRANSPORTATION
                  AND MERCHANT MARINE INFRASTRUCTURE,
                          SAFETY AND SECURITY

                                OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 18, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

      SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE 
                  INFRASTRUCTURE, SAFETY AND SECURITY

DEB FISCHER, Nebraska, Chairman      CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas                  RICHARD BLUMENTHAL, Connecticut
DAN SULLIVAN, Alaska                 BRIAN SCHATZ, Hawaii
RON JOHNSON, Wisconsin               EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  TOM UDALL, New Mexico
STEVE DAINES, Montana
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 18, 2015...............................     1
Statement of Senator Fischer.....................................     1
    Prepared statement of MAPPS--An Association of 
      Photogrammetry, Mapping and Geospatial Firms...............    43
    Prepared statement of the National Society of Professional 
      Surveyors (NSPS)...........................................    45
    Letter dated September 18, 2015 to Hon. Deb Fischer, Hon. 
      Steve Daines and Hon. Jon Tester from Don Youngbauer, 
      Chairman, Yellowstone River Conservation District Council..    46
    Letter dated September 23, 2015 to Senator Steve Daines and 
      Senator Deb Fischer from Elena Evans, Executive Director, 
      Montana Association of Conservation Districts..............    48
Statement of Senator Daines......................................     3
    Prepared statement of Hon. Ryan Zinke, U.S. Representative 
      from Montana-at-Large......................................     4

                               Witnesses

Hon. Jon Tester, U.S. Senator from Montana.......................     6
Hon. Marie Therese Dominguez, Administrator, Pipeline and 
  Hazardous Materials Safety Administration, U.S. Department of 
  Transportation.................................................     9
    Prepared statement...........................................    11
Todd Denton, President, Phillips 66 Pipeline LLC.................    16
    Prepared statement...........................................    18
John Ostlund, Commissioner, Yellowstone County, Billings, Montana    21
    Prepared statement...........................................    22
Michelle Slyder, Founding Member/Treasurer, Montana Liquid Gas 
  Pipeline Association...........................................    23
    Prepared statement...........................................    25

                                Appendix

Response to written questions submitted by Hon. Steve Daines to 
  Hon. Marie Therese Dominguez...................................    51

 
                           PIPELINE SAFETY: 
                      STATE AND LOCAL PERSPECTIVES

                              ----------                              


                       FRIDAY, SEPTEMBER 18, 2015

                               U.S. Senate,
         Subcommittee on Surface Transportation and
           Merchant Marine Infrastructure, Safety, and Security,   
        Committee on Commerce, Science, and Transportation,
                                                      Billings, MT.
    The Subcommittee met, pursuant to notice, at 10:00 a.m., at 
Montana State University, 1500 University Drive, Billings 
Library, Room 148, Billings, Montana, Hon. Deb Fischer, 
Chairman of the Subcommittee, presiding.
    Present: Senators Fischer [presiding] and Daines.

            OPENING STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Good Morning. The hearing will come to 
order. I am pleased to convene this Senate Subcommittee on 
Transportation and Merchant Marine Infrastructure, Safety and 
Security for our eighth hearing titled ``Pipeline Safety: State 
and Local Perspectives.''
    First, I would like to thank Senator Daines for hosting 
this field hearing in his home state of Montana. We are pleased 
to be here at Montana State University in beautiful Big Sky 
Country. I also want to thank Senator Jon Tester for joining 
the Committee today. He and I have shared a strong working 
relationship, particularly on issues related to transportation 
policy, and I look forward to working closely with both of you 
as we move forward on this pipeline safety reauthorization and 
other important pieces of legislation.
    Finally, I would like to acknowledge the presence of the 
newly confirmed Pipeline Safety and Hazardous Materials 
Administrator, Marie Therese Dominguez. I was pleased to 
strongly support Administrator Dominguez's nomination in the 
Committee and on the floor, and I look forward to hearing more 
from her today.
    Today's hearing will examine the importance of pipeline 
safety, particularly as it relates to rural areas. According to 
PHMSA, more than 2.5 million miles of pipelines cross through 
the United States. Half a million miles of pipeline transports 
natural gas, oil, and hazardous materials to critical 
infrastructure, including power plants, military bases, 
airports, or treatment facilities. Pipelines transport 
approximately 75 percent of our Nation's crude oil and 60 
percent of our refined petroleum products. Accidents related to 
pipeline safety are often tremendous disasters that pose harm 
to the public and our sensitive natural resources.
    As many of you know, in 2011, a corroded pipeline spilled 
63,000 gallons of crude oil into the Yellowstone River in 
Laurel, Montana. I understand that is not far from here. In 
2010, a natural gas pipeline exploded in San Bruno, California, 
killing eight people, injuring 60 people, and destroying 37 
homes. This year in Glendive, Montana, the Poplar Pipeline 
spilled nearly 30,000 gallons of crude oil into the Yellowstone 
River.
    Most officials and experts cite these events as among the 
worst pipeline accidents in recent history. In order to protect 
the safety and natural resources of Nebraskans, Montanans, and 
all Americans, Congress must maintain robust oversight of PHMSA 
activities. State and Federal officials must also ensure that 
pipelines across the country can continue operating 
efficiently. After all, pipelines are renowned as the safest 
way to transport crude oil and natural gas.
    As we look forward to PHMSA reauthorization, I am eager to 
work closely with my colleagues on both sides of the aisle, as 
well as PHMSA and industry stakeholders. Together we can 
establish a bipartisan, pro-safety reauthorization bill that 
strengthens our Nation's pipeline network.
    To begin, I am looking forward to hearing more about 
PHMSA's work to fulfill the Agency's outstanding mandates from 
the previous reauthorization. In the 2011 PHMSA 
reauthorization, PHMSA received over 40 new mandates. To date, 
they have completed well over 50 percent of its mandates, but 
still have a significant amount to accomplish. I also look 
forward to working with Administrator Dominguez to reprioritize 
the Agency's important work in our reauthorization legislation.
    With regard to staffing, I understand the Agency is 
experiencing challenges competing with the private sector for 
highly skilled labor. I would like to explore the ways in which 
PHMSA and Congress can work together to accelerate its hiring 
of field inspectors and analytical experts. In addition, I hope 
to learn more about PHMSA's work with industry stakeholders on 
the Agency's Risk-Based Integrity Management Assessment 
Programs and pipeline inspection requirements, particularly as 
it relates to high consequence areas.
    In January 2015, a National Transportation Safety Board 
report found that PHMSA's Integrity Management Program's 
complex requirements often make compliance challenging for 
pipeline operators. In its quantitative analysis, NTSB found 
that although the Integrity Management Program has kept 
material failures on pipelines low, there is no evidence that 
the overall occurrence of gas transmission pipeline incidents 
have declined.
    In addition, PHMSA's inspections criteria should be 
reviewed. Currently, pipeline operators must inspect pipelines 
every seven years. In some instances, PHMSA's inspection 
requirements may be too little, while in others too frequent. I 
hope to work with PHMSA to reexamine best practices to improve 
pipeline inspection and data collection requirements.
    Finally, I would like to hear from PHMSA and all the 
stakeholders on the importance of providing up-to-date and more 
accurate information for pipeline operators and policymakers. 
PHMSA should better educate stakeholders and the public, 
particularly when it comes to high consequence areas, including 
river crossings, drinking water aquafers, environmentally 
delicate regions, and population centers.
    Again, thank you all for being here today. Together I am 
certain we can achieve a bipartisan, pro-safety reauthorization 
to ensure the stability, efficiency, and safety of our Nation's 
best network of pipeline infrastructure.
    I would now like to invite Senator Daines to offer opening 
remarks.

                STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Chairman Fischer, thank you for traveling 
to Montana to chair this subcommittee hearing. We often hear 
about the urban/rural divide, how what works for folks in New 
York City or San Francisco does not necessarily work here in 
Montana. Chairman Fischer, I know you come from a ranch family. 
You have a cow cap operation in a small town in Nebraska, so I 
know you feel right at home here in our way of life here in 
Montana.
    Senator Fischer. Yes.
    Senator Daines. Similarly, many of the hearings held in 
D.C. are focused primarily on urban issues, and too often the 
rural voice of America goes unheard. And that is why field 
hearings like this are so important, and I truly appreciate my 
colleague, our Chairman from Nebraska, who comes from and 
understands rural America. Thank you for requesting with me 
this hearing in Montana and facilitating our rural voices being 
heard.
    On that same note, I would like to thank Committee Chairman 
John Thune, and Ranking Member Bill Nelson for scheduling our 
request for this hearing. If you take a look at the makeup of 
the Commerce Committee today in the U.S. Senate, there is a 
strong showing of western and rural states. We have a great 
team that does understand rural issues.
    Senator Tester, thanks for joining us today. I appreciate 
that we have been able to work together on these issues, 
including introducing an appropriations amendment addressing 
pipeline river crossings. And for that, I thank you. I also 
note Congressman Ryan Zinke also wanted to be here to put a 
statement for the record. However, the House is in session 
today. They are voting today, and I want to thank him for his 
support for constructing pipelines to promote job creation and 
energy independence and safety. He is also a good partner to 
work with.
    Chairman Fischer, I would like to ask unanimous consent to 
have Congressman Zinke's written statement entered into the 
record.
    Senator Fischer. Without objection.
    [The information referred to follows:]

                Prepared Statement of Hon. Ryan Zinke, 
               U.S. Representative from Montana-at-Large
    Mr. Chairman, Mr. Ranking Member, Senator Fischer, Senator Daines, 
and Members of the Committee:

    I wish to offer my sincere thanks for your willingness to host a 
hearing here in my great state of Montana about pipeline safety efforts 
at the state and local levels. While I am sorry I cannot be there in 
person to participate, this issue is a top concern for many of my 
constituents and I am honored to share my perspective on this issue.
    Pipeline infrastructure, particularly across Eastern Montana, is a 
critical method to transport crude, natural gas, gasoline, propane, and 
other energy and chemical resources across the country. With roughly 
15,000 miles of pipelines that traverses the state, which is a small 
portion of our Nation's 2.5 million miles of pipeline, these pipes 
offer enormous benefits for consumers and businesses. In my mind, 
safety is at the very top of the list.
    Data has shown that compared to trains or trucks, pipelines are a 
far safer method of transport. When looking at the amount of spillage 
and the overall rate of accidents, there is minimal comparison; pipes 
have a lower probability of spill incidents. This is why I support the 
creation of additional pipelines. According to the Association of Oil 
Pipelines, in 2013, 8.3 billion barrels of crude oil were moved via 
pipeline, compared to 291 million barrels of oil by rail. Further 
shifting the energy supply transports to pipes would allow the rail 
industry to provide additional support to other important industries in 
Montana, such as agriculture or manufacturing.
    Our pipeline infrastructure is at a crossroads. Despite its immense 
importance, much of the existing infrastructure is outdated and in 
desperate need of reform. Even though pipelines are exponentially 
safer, accidents still happen. The incident in Glendive, Montana, that 
occurred in January of this year illustrates that work still needs to 
be done. We must look into revamping our safety and monitoring systems 
as our energy and pipeline industries continue to expand. Our nation's 
growth potential must be matched by a world-class infrastructure system 
that keeps Montanans and our Nation safe.
    However, I applaud the local, state, and Federal agencies who 
responded to the Glendive spill. Their collaboration minimized the 
impacts and protected the environment from further damage. Within 
twenty-four hours of the break, all involved agencies were on the scene 
accessing the situation and developing an action plan for the quickest 
cleanup. Because of the rapidness and effectiveness of the conjoined 
response effort, the spill was contained and isolated. Six months 
later, tests are showing a clean bill of health for the river.
    We need to continue to learn from these successful coordination 
efforts that help minimize impacts on natural resources, adequately 
involve entities and communities in an efficient and timely manner, and 
protect health and human safety. You will hear of other examples of 
triumphs and failures during today's hearing, but I treat these as 
valuable learning experiences. My hope is that by investing in 
infrastructure updates and improvements, as well as creating innovative 
methods to effectively evaluate pipelines, our local and state entities 
will have far fewer accidents and increased economic growth.
    I believe it is incredibly important to have these conversations as 
we move toward appropriate legislative action and look forward to 
hearing the testimonies of the participants.

    Senator Daines. Chancellor Mark Nook and his team here at 
MSU-Billings, thank you for hosting this field hearing and 
providing this excellent facility. This is a place that my mom 
attended many, many years ago. Your staff has been a pleasure 
to work with, including providing great AV support. And as we 
all know, you are usually only as good as your AV support, and 
I thank you for that.
    I have a little different background perhaps than many in 
Congress. I spent 28 years in the private sector after 
graduating from Montana State University-Bozeman as a chemical 
engineer. In fact, I think I am the only chemical engineer in 
Congress. Do not hold that against me. I know many other great 
engineers get their start right here in the Montana State 
University system. Many of these engineers have gone on to 
design, construct, operate, and inspect the pipeline 
infrastructures that we are here to discuss today.
    Earlier this week, we had a biannual Montana High Tech jobs 
summit in Bozeman. We have bright students with an unparalleled 
work ethic, matched with access to the great landscapes and 
quality of life we have here in Montana and our abundant 
natural resources which has made Montana an attractive place 
for high-tech jobs. This unique environment has enabled 
Montanans to lead in innovation and play an instrumental role, 
an important role, in increasing the safety and efficiency of 
our infrastructure. Technology has also allowed our pipelines 
to become more advanced, to become safer, and to become more 
efficient. I am looking forward to exploring these gains during 
today's meeting.
    Thanks also to our witnesses. I appreciate you joining us 
in Billings today and testifying on this very important issue. 
I first want to recognize our two Montana witnesses, 
Yellowstone County Commissioner Ostlund of Billings and Ms. 
Slyder from Edgar, Montana. Commissioner, thank you for your 12 
years of public service. Ms. Slyder, I appreciate having 
another Montana engineer at the table. ``Environmental 
engineer'' just sounds better than ``chemical engineer,'' so 
congratulations, although we had to study all the same topics.
    I look forward to hearing from both of you about your 
professional experiences working with and around the pipelines 
of our state. Thanks for the work that you do for the people of 
Montana and for being here speaking up for our state.
    Ms. Dominguez, welcome to Montana. It is a pleasure seeing 
you here again. I understand this is your first testimony since 
your confirmation of PHMSA--as a PHMSA administrator. Thank you 
for accepting the invitation and joining us today to discuss 
safety, discuss jobs, and PHMSA's role right here in Montana. I 
hope you have a little extra time to enjoy some of our great 
beauty.
    Mr. Denton, thank you for traveling to Montana to provide 
the perspective as a pipeline operator here in Montana. I am 
grateful we have Montanans at the table here today with both 
industry leaders and folks from Washington to ensure that the 
Montana voice is heard. We need Washington to look a little 
more like Montana, and that is best accomplished when we have 
decisionmakers come to the states to listen as well as to 
learn.
    The Pipeline and Hazardous Materials Safety Administration, 
also known as PHMSA, plays a very important role here in 
Montana, and is vital to ensuring the safe and environmentally 
sound transportation of our natural resources. PHMSA's 
jurisdiction covers approximately 2.16--2.6 million miles of 
pipeline across our Nation, nearly 19,000 miles here in Montana 
alone.
    This infrastructure, along with highways, railroads, 
airports, is an economic bloodline for our state because 
Montana produces approximately 30 million barrels of crude oil, 
63 billion cubic feet of gas, and 42 million short tons of coal 
annually, and we export 60 percent of this energy. The oil and 
gas industries directly employ 7,500 Montanans, 862 just in 
pipeline construction. In total supports the employment of over 
43,000 Montanans; in fact, 6.7 percent of Montana's total 
employment.
    In Montana, we know firsthand the potential that exists 
from investing in more energy infrastructure. The Keystone 
Pipeline alone would create an additional 4,000 jobs nationwide 
and approximately 800 jobs for us right here in Montana. That 
would double the current number of pipeline construction jobs 
in Montana alone.
    The oil and gas industries contribute $4.5 billion to our 
economy. That is over 10 percent of Montana's economic 
activity. These are good-paying jobs. Because our average 
salary in Montana is just under $40,000, the average oil and 
gas industry salary in Montana is over double that at $81,000. 
Additionally, Montana's oil and gas industries provide nearly 
half a billion dollars in state and local tax revenues. That is 
helping support our schools, our teachers, and our 
infrastructures. And pipelines alone paid $72 million in 
property taxes to the State of Montana just last year.
    During my preparation for this hearing, it was impossible 
not to reflect on this year's and 2011's pipeline releases into 
the Yellowstone River. Speaking as somebody who just fished the 
Yellowstone River two weeks ago, I am grateful for the efforts 
of both industry and of government to quickly respond to clean 
up the spills, investigate what went wrong, and institute 
measures to improve safety and prevent recurrence. By finding 
out what went wrong in these incidents, we can implement some 
common sense reforms to prevent similar occurrences in the 
future.
    One of the challenges we have discussed and we will explore 
more today around PHMSA's hiring practices is the lack of 
pipeline inspectors in Montana. I want to thank you, 
Administrator, for working to hire a second pipeline inspector 
in Montana. I was excited to discuss this new position earlier 
this month with you, and appreciate PHMSA's taking steps to 
ensure resources are available to ensure the continued 
inspection of Montana's pipelines. Thank you.
    Pipelines remain the safest way of transporting liquid and 
gas resources. According to a recent study, pipelines are up to 
40 times safer than on our roads. It is imperative to our state 
that these energy products continue to be moved safely, to be 
moved efficiently.
    Congress plays an important role in the oversight of this 
infrastructure, and PHMSA--with PHMSA's authorization expiring, 
I have been working closely with the Senate Commerce Committee 
on legislation to reauthorize PHMSA. Your experiences, your 
ideas for improvement is critical as we begin drafting this 
legislation. Thank you.
    Senator Fischer. Thank you, Senator Daines. Next, it is my 
great pleasure to welcome my friend, Senator Tester, from the 
great state of Montana, and I invite him to give testimony 
before the Committee.

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. Well, thank you, Chairman Fischer, and 
thank you for allowing me to be a part of this hearing. I 
appreciate you making the trip to Billings to Big Sky Country. 
I know it was not an easy trek for you. Steve and I happened to 
make the flight. She did not, but she got in here two hours 
earlier, so God works in mysterious ways.
    I also want to thank Senator Daines for his leadership on 
the pipeline issues. Senator Daines, we have worked together in 
the past, and I look forward to working together in the future 
to bolster pipeline safety across the Nation, and particularly 
in the great state of Montana.
    You know, I also want to thank the folks on the second 
panel for their testimony, or third panel, however you want to 
read this. I think it is critically important when we talk 
about pipeline safety that we get as many players as possible 
to the table to talk about what the challenges are and how can 
work more effectively together. And Administrator Dominguez, 
thank you very much. We look forward to reading your testimony.
    It goes without saying, we rely on pipelines to transport a 
wide array of important products across this country. And while 
pipelines are the most efficient and safest way of 
transportation, they also pose risks to Montana's clean air, 
and clean water, and to our safety. Oil is a critical resource, 
but water is more valuable. It is our responsibility to keep 
our pipelines safe, grows in size and scope every year as our 
infrastructure ages, and our oil and gas production increases.
    We know this all too well in Montana. We have experienced 
two major spills, as has been pointed out previously. The 
Yellowstone River--the first spill, was back in 2011 when an 
Exxon-Mobil pipeline ruptured. Sixty-three thousand gallons 
went in the river about 20 miles upstream from here. At the 
time, the river was flooding out of its banks, and that oil 
extended downstream some 70 miles from the spill site. And in 
January of this year, a pipeline ruptured near Glendive, 
spilling about 30,000 gallons of oil into the Yellowstone 
River, shutting down the Glendive water system for a relatively 
short period of time due to the spill.
    In a recent--in a recent report to Congress, PHMSA found 
that erosion created exposed pipelines, and that was a factor 
in at least 16 significant incidents between 1991 and 2012, 
including the oil spill that I spoke of that happened in July 
2011. We need to do more to address the unique challenges of 
river crossings. Fast-moving water and erosion can change the 
characteristics of rivers rapidly, exposing these pipelines and 
making them susceptible to rupture.
    Given the importance of safeguarding our waterways, I 
really need to know whether we are doing enough to monitor the 
spill response plans of pipeline owners and operators. It is 
important that we hold PHMSA to the highest standards, but 
ultimately the owners and operators of these pipelines need to 
be an important part of the equation when it comes to 
maintenance and upgrades to ensure that spills that, by the 
way, make nobody any money, happen rarely.
    We must also make sure that our first responders and the 
communities have the appropriate information to do their jobs 
and manage the risk responses. And I hope Commissioner Ostlund 
can speak to that.
    I also need more information about real-time monitoring 
during flood events, and if PHMSA utilizes river data from 
other agencies, like the USGS. Today I expect PHMSA will 
communicate about their efforts to bring new pipeline 
inspectors on board, so we applaud those efforts. In 2014, we 
supported an effort to greatly expand the number of inspectors 
in PHMSA's Pipeline Safety Division. More inspectors will allow 
the Agency to prevent future incidents, and that is going to 
save money. That is going to help everybody be more profitable.
    I know hiring and training a new workforce can be extremely 
difficult, and I look forward to the progress update on the 
hiring process and how Congress can continue to help you do 
your job, Administrator. Montana has a tremendous work force, 
and we have got great schools to train folks. I look forward to 
working with you, Administrator Dominguez, to see how the 
Agency can partner with people in our State, including this 
university, to get good people on the ground, keeping an eye on 
our infrastructure.
    As this hearing unfolds, I hope we will address what we 
learned from the previous two spills, what can be used on 
future spills. I hope we will address the oversight of older 
pipelines. Is it greater or less? The chairman talked about 
every 7 years the pipelines need to be inspected. Sometimes 
that is too long; sometimes that is too less. She is absolutely 
correct.
    We need to talk about river crossings. What happens in 
flood events? We need to find out if our partners are working 
with us and we are working with them. Critically important. And 
communication, and the communication not only between oil and 
gas companies and pipeline companies, but also our local 
governments and commissioners. Very, very important. And in the 
case of a spill, who is driving the bus? Who has--who is the 
lead Agency? Who do we go to find out if things are going in 
the right direction?
    Look, Montana is a great place to live. I hope, Madam 
Chair, that Senator Daines has the opportunity to take you out 
on the Yellowstone, maybe fishing. Bow hunting season is on. 
But the fact is you are probably like us. You are probably gone 
this afternoon, and that is unfortunate because we do have a 
great State. We like to think it is better than Nebraska. You 
may have a different opinion.
    But we must do everything we can to make sure that we have 
energy that is dependable, predictable, affordable, safe, and 
does the things for our economy to allow our outdoor industry 
to be able to flourish, some $6 billion and 64,000 jobs in that 
industry also. So I am committed to working with Administrator 
Dominguez, Senator Daines, and you, Madam Chair, to make sure 
that our kids inherit the best world we can give them.
    Thank you very, very much for this opportunity to testify. 
I will be reading the--what do they call it?
    Senator Daines. Transcript.
    Senator Tester. The transcript. That is it, the transcript. 
And finally, and least, but not least, I thank you all for 
being here. I think it shows the importance of this issue to 
people of the State of Montana. Thank you.
    Senator Fischer. Thank you, Senator Tester. We are all so 
fortunate to live in the states that we do live in. They are 
beautiful states. The people are wonderful, and it is a 
pleasure to be here in Montana. Thank you, sir, for being here.
    At this time, I would ask that our panel please come 
forward. Welcome, and thank you all for being here. We are so 
fortunate today to have four really great panel members that 
are going to offer us testimony and then respond to questions.
    We will begin with Marie Therese Dominguez. She is the 
Administrator of the Pipeline and Hazardous Materials Safety 
Administration. PHMSA's mission is to protect people and the 
environment from the risks inherent in transportation of 
hazardous materials by pipeline and other modes of 
transportation.
    Ms. Dominguez most recently served as Principal Deputy 
Assistant Secretary of the Army for Civil Works. As Principal 
Deputy, she provided policy direction and performance oversight 
for the Army Corps of Engineers Civil Works Programs, focused 
on water resources, conservation and development, navigation, 
flood control, hydroelectric power generation, and outdoor 
recreation.
    Welcome, and we would look forward now to your testimony.

           STATEMENT OF HON. MARIE THERESE DOMINGUEZ,

             ADMINISTRATOR, PIPELINE AND HAZARDOUS

                MATERIALS SAFETY ADMINISTRATION,

               U.S. DEPARTMENT OF TRANSPORTATION

    Ms. Dominguez. Chairwoman Fischer, Senator Daines, thank 
you very much for inviting me to testify about the 
reauthorization of the Pipeline and Hazardous Materials Safety 
Administration, otherwise known as PHMSA.
    Our program oversees the safe transportation of hazardous 
materials through the Nation's 2.6 million miles of energy 
pipelines. I would also thank Senator Tester and Senator Daines 
for welcoming me very humbly to the State of Montana. I am 
always happy to visit Big Sky Country, and you served up some 
beautiful weather, so thank you very much.
    I want to express my gratitude to both of you for 
confirming my nomination in August. Two months ago I testified 
before you as the nominee for PHMSA Administrator, and thanks 
to your support, I am honored to testify before you now as the 
Administrator to discuss our strategy for enhancing pipeline 
safety amid rapid industry growth.
    When I last testified before you, I told you my goal was to 
make PHMSA synonymous with safety, trust, and innovation. 
Safety is our mission, and it is at the heart and at the core 
of everything that we do. To achieve this mission, we need a 
strong foundation of trust with our partners in the States, the 
regulated industry, Congress, and, above all, with the American 
people. And to be an effective regulatory and enforcement 
agency amid rapid change, we must be innovative.
    Since my confirmation, we have undertaken a number of 
initiatives to advance our safety mission and culture of trust, 
and ensure that the Agency is structured for the future. To 
that end, I was notified this morning that the Office of 
Management and Budget has completed their review of PHMSA's 
proposed rule on hazardous liquid pipelines which we have had 
pending, and they are preparing for notice of publication in 
the Federal Register some time hopefully in the next week or 
so. The proposed regulations will result in critical safety 
improvements, and we hope that they will spark a robust 
dialogue moving forward about pipeline safety in the United 
States.
    More broadly, I have initiated an organizational assessment 
of PHMSA. Through this assessment, we will work to optimize our 
regulations, enforcement authority, and internal processes to 
ensure that PHMSA is structured to be responsive and drive 
innovation that enhances our safety mission.
    In addition, PHMSA is the first USDOT modal administration 
to develop and begin implementing an Agency Safety Action Plan, 
or ASAP. The ASAP is led by the Secretary of Transportation, 
and it is a really important effort across the Department to 
proactively identify ways we can improve safety. It is really 
asking the question, how can we better leverage our current 
authorities and our capabilities to improve safety. As part of 
the Agency Safety Action Plan, PHMSA is seeking ways to assist 
with and incentivize high performance among our state partners. 
And we look forward to working with the Congress to make our 
State partners as effective as possible.
    Montana is one example of PHMSA's strong coordination with 
State partners, which is ever more important as the industry 
expands. The recent spills in Montana are unacceptable, and 
they underscore the importance of PHMSA's safety mission and 
the need to work with our state and industry partners to push 
for improvements that mitigate risk and prevent future 
incidents.
    PHMSA continues to investigate January's Bridger pipeline 
oil spill. After launching a comprehensive investigation, PHMSA 
issued a corrective action order to that operator. In late 
April, Bridger received approval from PHMSA to replace its 
pipeline with a new horizontal directional drilled pipeline 
crossing, and allowing it to remove service--excuse me--resume 
service. We will pursue additional enforcement actions if it is 
determined that the operator violated any Federal pipeline 
regulations.
    In the wake of the Bridger spill and the 2011 Exxon-Mobil 
spill, PHMSA has been working closely with the Montana 
government and pipeline operators to ensure necessary steps are 
taken to safeguard pipeline water crossings. These efforts are 
yielding measurable results for Montana. Since mid-2011, 17 
pipeline crossings of major rivers have been replaced with HDD 
pipelines. Of the 64 major river crossings in Montana, 41 are 
now directionally drilled.
    There is more work to do. Thanks to resources provided by 
Congress, PHMSA is growing by 25 percent. Hiring and training 
Federal and State inspectors is of the utmost importance as we 
expand our workforce. We are committed to strategically using 
the resources that Congress has granted us to invest in our 
inspection and enforcement capabilities, work to say ahead of 
industry trends, strengthen our partnerships, and ensure the 
highest safety standards.
    I look forward to working with you as PHMSA leads the way 
in driving our State partners in industry toward a pipeline 
network that is known for safety, trust, and innovation.
    [The prepared statement of Ms. Dominguez follows:]

  Prepared Statement of Hon. Marie Therese Dominguez, Administrator, 
Pipeline and Hazardous Materials Safety Administration, U.S. Department 

                           of Transportation
I. Introduction
    PHMSA's reach is vast, but the mission is concise: to protect 
people and the environment from the risks of hazardous materials 
transportation in all modes, including the 2.6 million miles of 
pipeline nationwide. This safety mission is what drives our talented 
team of experts and professionals, and it is what drives me in my 
commitment to make PHMSA the premier safety organization in 
transportation.
    The American energy industry is rapidly changing, growing and 
expanding. As such, PHMSA is at a pivotal juncture; as a regulator, it 
is critical for PHMSA to keep pace with and anticipate industry trends 
and make sure that, along with growth, there is a commitment to the 
highest safety standards--a commitment that the American public can 
count on.
    Thanks to resources provided by Congress, PHMSA is growing by 25 
percent. Hiring and training Federal and state inspectors is of the 
utmost importance as PHMSA expands its workforce. As it carries out 
this hiring surge and looks ahead to reauthorization of the pipeline 
safety program, PHMSA is committed to strategically using the resources 
Congress has granted us to stay ahead of industry trends, strengthen 
state partnerships and ensure the highest safety standards.
    The goal is to make PHMSA synonymous with safety, trust and 
innovation. Safety is PHMSA's mission and is at the core of everything 
the agency does. To achieve this mission, PHMSA needs a strong 
foundation of trust with partners in the states, the regulated 
industry, and Congress--and, above all, with the American people. And 
to be an effective regulatory and enforcement agency amid rapid change, 
it is critical to be innovative and nimble. In recent months, PHMSA has 
undertaken a number of initiatives to advance its safety mission and 
culture of trust, and ensure that the agency is structured for the 
future.
    First, PHMSA is undergoing an organizational assessment. Through 
this assessment, the agency will work to optimize its regulations, 
enforcement authority and internal processes to ensure that it is 
structured to be responsive and drive innovation that enhances the 
safety mission.
    In addition, PHMSA is the first USDOT modal administration to 
develop and begin implementing an Agency Safety Action Plan, or ASAP. 
ASAP is led by the Secretary of Transportation and is an effort across 
the Department to proactively identify ways to improve safety. It's 
asking the question: How can PHMSA better leverage current authorities 
and capabilities to improve safety?
    These efforts will help PHMSA to utilize the resources provided by 
Congress to create greater efficiency in its structure and program 
execution, improve data collection and utilization, mitigate risk and 
advance safety.
    The PHMSA team looks forward to working with Congress as the agency 
leads the way in driving state partners and industry toward a 
nationwide pipeline network that is known for safety, trust and 
innovation.
II. Pipeline Safety: Toward Zero Incidents
    PHMSA does not accept death, injury, or environmental harm as an 
inevitable consequence of transporting hazardous materials, and the 
agency drives toward the goal of zero pipeline incidents. When 
incidents do occur, PHMSA investigates the root cause of the incident 
and, if any Federal regulations were violated, levies civil penalties. 
In addition, Corrective Action Orders (CAO) can require the operator to 
identify and address the root cause of the incident before they are 
allowed to return the pipeline to service. The requirements outlined in 
the CAO can take months or years to implement and can require the 
operator to make system-wide investments that improve safety.
    In January 2015, when a pipeline in Glendive, Montana, spilled as 
much as 1,200 barrels of crude oil into the Yellowstone River, PHMSA 
launched a comprehensive investigation into the cause of the spill. A 
team of technically-skilled inspectors deployed to the scene in 
Glendive and the Bridger Pipeline Company's control room in Casper, 
Wyoming, to ensure the operator took all necessary steps to prevent any 
additional damage as a result of the pipeline failure.
    In addition to launching an investigation of the Glendive spill, 
PHMSA immediately issued a CAO to the Bridger Pipeline Company, 
directing it to take a number of immediate and long-term actions to 
verify that the pipeline was safe to resume operation. In late April, 
Bridger tested and, after receiving approval from PHMSA's Western 
regional office, replaced the faulty pipeline with a new horizontal 
directional drilled (HDD) pipeline crossing under the Yellowstone River 
and resumed service. HDD is a method that allows pipes to be installed 
with minimal environmental impacts and at depths that may help reduce 
the likelihood of failure due to river scouring.
    In 2011, when the ExxonMobil Pipeline Company's Silvertip pipeline 
in Laurel, Montana released 1,509 barrels of crude oil into the 
Yellowstone River, PHMSA issued a Corrective Action Order that directed 
the operator to complete numerous safety improvements, including the 
replacement of river crossings across three major Montana rivers with a 
deeper HDD pipeline to reduce exposure from erosion and help ensure 
long-term safety. ExxonMobil reported spending $34 million to comply 
with the CAO--above and beyond the $1 million civil penalty issued by 
PHMSA. On June 12th of this year, PHMSA denied ExxonMobil Pipeline 
Company's petition for reconsideration of PHMSA's Final Order and civil 
penalty.
    PHMSA is employing a similar investigative strategy in response to 
the May 19, 2015, Plains Pipeline, LP oil spill in Santa Barbara, 
California. Following the spill, PHMSA immediately deployed an 
investigative team to the scene and an investigator to Plains' Midland, 
Texas control room to review operational information and data. Plains 
reported that the failure resulted in the release of 3,400 barrels of 
crude oil, some of which reached the Pacific Ocean. Investigation by 
Federal and state agencies continues as to the volume of oil spilled, 
the miles of beaches impacted, and other impacts to the environment. On 
May 21, PHMSA issued a Corrective Action Order to Plains with a set of 
instructions and requirements for mitigating the hazards and restoring 
safety conditions, operations and culture. The order includes an 
ongoing metallurgical analysis as well as third-party review of 
previous internal inspections carried out by the operator. The affected 
pipeline remains shut down pending completion of an extensive integrity 
analysis. PHMSA will not allow the line to return to operation until 
the operator has taken satisfactory actions to mitigate potential 
risks.
    The investigations for both the Glendive and Santa Barbara 
incidents are still in progress, and PHMSA will pursue additional 
enforcement actions if it is determined that either operator violated 
any Federal pipeline safety regulations. These spills highlight the 
need for continuous improvement and commitment to safety by PHMSA, 
state partners and operators.
III. Leveraging State Partnerships to Mitigate Risk
    The recent oil spills in Montana and California are unacceptable 
and unfortunate, and they underscore the importance of PHMSA's safety 
mission and the need to learn from these incidents and work together 
with state partners to push for improvements that mitigate risk and 
prevent future incidents. Montana is one example of PHMSA's strong 
coordination with state partners, which is ever more important as the 
industry expands.
    For example, following the 2011 ExxonMobil spill, PHMSA conducted a 
joint study with the Montana Governor's Oil Pipeline Safety Review 
Council. The joint study revealed that many of Montana's pipeline water 
crossings could be threatened by river flooding and channel migration. 
PHMSA has been working closely with Montana's Departments of 
Environmental Quality, Natural Resources and Transportation, as well as 
Montana pipeline operators, to ensure that necessary steps are taken to 
safeguard existing crossings. These steps include: in-place safety 
procedures during flood conditions or increased river flow rates; 
increased frequency of patrols and depth of cover surveys during and 
after significant river-flow events; swift remediation measures, if 
needed; strengthening emergency response preparedness; and replacing 
trenched crossings with HDD pipelines.
    While HDD pipelines are a critical and successful tool, operators 
must take a comprehensive approach to improving safety. In addition to 
the HDD pipeline installations, PHMSA has worked with Montana to 
establish more robust safety procedures for hazardous liquid pipeline 
operators in the state. The point of our Integrity Managements 
regulations is that all operators of pipelines located in 
environmentally sensitive areas (``High Consequence Areas'') such as 
river crossings must carefully monitor their systems and take extra 
precautions to prevent and mitigate the potential impacts of accidents 
in such areas.
    Furthermore, on April 9, 2015, PHMSA issued an advisory bulletin to 
ensure operators were aware of the inherent risks associated with river 
crossings and remind them of the need to take extra steps to protect 
such environmentally sensitive areas.
    These efforts are yielding measurable results for Montana. Since 
the 2011 ExxonMobil spill, 17 pipeline crossings of major rivers (>100 
feet wide) in Montana have been replaced with HDD pipelines. Of the 64 
major river crossings in Montana, 41 now utilize HDD methods.
    This kind of progress shows the need for strong state relationships 
across the country to stay ahead of industry and pipeline safety 
trends. States' input and experience is critical as PHMSA sets public 
policy, strategically allocates resources, and moves forward with new 
regulations. Likewise, PHMSA plays an important role in supporting 
capacity-building and enforcement of high standards nationwide. Through 
agreements and certifications, states assume authority over more than 
80 percent of intrastate gas and hazardous liquid distribution and 
transmission pipelines by inspecting and enforcing both Federal and 
state regulations. PHMSA's efforts to support pipeline safety also 
include providing grant funding to support state damage prevention 
programs and technical assistance related to pipeline safety issues.
    A key resource available to support states is the State Base Grant 
program, which can increase the capacity for inspection and compliance. 
Last year, PHMSA provided Montana with more than $160,000 in grant 
funding--amounting to 118 inspection days. Over the past 10 years, 
PHMSA grants have provided more than $650,000 to Montana. PHMSA 
recently announced an estimated $214,000 to Montana to help cover the 
costs of its natural gas pipeline safety program for the 2015 calendar 
year. PHMSA also provides Technical Assistance Grants to Montana--
$49,600 in total funding from PHMSA since 2009.
    PHMSA has provided significant support to Nebraska as well. Last 
year, PHMSA provided $255,000 in grant funding to Nebraska--amounting 
to 373 inspection days. Over the past 10 years, PHMSA grant funding to 
Nebraska totaled more than $1.6 million. Last week, PHMSA announced an 
estimated $347,000 to help cover the costs of Nebraska's natural gas 
pipeline safety program for the 2015 calendar year.
    As part of the Agency Safety Action Plan, PHMSA is seeking ways to 
assist with and incentivize high performance among state partners, and 
looks forward to working with Congress to make its state partners as 
effective as possible.
IV. PHMSA Hiring Surge: A Workforce to Address Evolving Safety 
        Challenges
    The FY 2015 Omnibus provided PHMSA's pipeline safety program with 
109 new positions, 80 percent of which will be in the inspection and 
enforcement areas. These additional inspectors will allow PHMSA to 
increase its pipeline inspection regimen and improve oversight of 
interstate hazardous liquid and gas pipeline operations in Montana, 
Nebraska and across the country.
    PHMSA has an aggressive strategy underway to recruit, hire and fill 
these positions as quickly as possible. The majority of these positions 
will consist of inspectors and enforcement personnel to be located 
across our five regional offices to oversee operators' pipeline safety 
programs, conduct critical inspections and accident investigations, and 
participate in spill response activities. Twelve of these new positions 
will be allocated to the Western regional office, which is responsible 
for the State of Montana.
    One challenge is that PHMSA competes directly with industry to fill 
these positions. The engineers and transportation specialists who are 
the target candidate pools for these positions are highly sought after 
by the expanding U.S. oil and gas industries that PHMSA regulates. It 
is difficult to match not only industry salaries, but also the speed 
with which industry is able to hire.
    To address these challenges, PHMSA is pursuing a comprehensive 
strategy to encourage talented people to seek careers in public 
service. PHMSA uses hiring authorities and pay flexibilities such as 
the Veterans Employment Opportunities Act and the Veterans' Recruitment 
Appointment; recruitment, relocation and retention incentives; and the 
student loan repayment program. PHMSA is seeking Direct Hire Authority. 
The agency posts vacancy announcements on social media (Twitter and 
LinkedIn); conducts outreach to professional organizations and veterans 
groups; and attends career fairs and on-campus hiring events. PHMSA 
also plans to explore creating new partnerships with colleges and 
universities with engineering programs.
    As the workforce increases, training is critical to achieve the 
highest possible level of safety. Hiring and training Federal and state 
inspectors is of the utmost importance as PHMSA expands its workforce 
by 25 percent from increased appropriations. Enhanced training 
opportunities for both Federal and state inspectors include tailored 
training for inspectors, finding the right mix between classroom and 
distance learning to alleviate travel challenges.
V. Data-driven Regulation
    PHMSA's priorities and activities are guided by three strategic 
principles: Safety, Trust and Innovation. It is PHMSA's responsibility 
to use its regulatory and enforcement authority effectively to assure 
all Americans that, even as the industrial landscape changes, safety is 
a constant.
    Completing all Congressional mandates is critical to PHMSA's 
pipeline safety program, allowing the agency to meaningfully strengthen 
its oversight program. PHMSA has completed 26 of the 42 mandates 
contained in the Pipeline Safety, Regulatory Certainty, and Job 
Creation Act of 2011.
    For example, in 2013 PHMSA completed section 28 of the Pipeline 
Safety, Regulatory Certainty, and Job Creation Act of 2011, which 
directed the agency to conduct a water crossings study to determine if 
the depth of cover over buried pipelines was a factor in any accidental 
release of hazardous liquids.
    PHMSA has a plan in place to address the remaining open mandates 
and is working diligently to do so. Four mandates were addressed this 
year by reporting to Congress on the potential extension of existing 
regulations to unregulated gathering lines, submitting the first of two 
reports to Congress on the Research & Development program, offering 
maintenance-of-effort waivers to states for FY 14, and implementing 
continued improvements to the Facility Response Program.
    The hard work continues. The damage prevention final rule was 
published on July 23; the rule goes into effect on January 1, 2016. 
With the support of the Office of Management and Budget (OMB), over the 
summer PHMSA issued two proposed rules on expansion of excess-flow 
valve requirements, and updated incident notification requirements for 
pipeline operators and operator qualification. The Operator 
Qualification, Cost Recovery and Accident Notification proposed rule 
addresses two mandates from the 2011 Act--the requirement that 
operators notify the National Response Center of an incident as soon as 
practicable, but not more than one hour after confirmed discovery, and 
the authorization for PHMSA to recover costs for pipeline design 
reviews.
    PHMSA is working to publish its proposed natural gas transmission 
and hazardous liquid rules by the end of this calendar year, and is 
working diligently within the Department and with OMB to meet this 
goal. These rules will improve pipeline safety significantly in 
Montana, Nebraska and nationwide.
    The rulemaking process is methodical to ensure that new rules are 
effective, efficient, and reflect feedback from all stakeholders. In 
addition to working to advance the gas and liquid rules, PHMSA is 
working to balance representation on the gas and liquid pipeline 
technical advisory committees to ensure that their recommendations are 
borne out of balanced and robust conversations. There are obvious 
challenges in getting there; membership in the advisory committees 
changes, due in part to new appointments, retirements and career 
changes. In the last 24 months, PHMSA has lost 8 members representing 
the government and public sectors. It is important to rebalance these 
committees again to benefit and protect the American public from 
pipeline transportation risks.
    To assist with future rulemaking efforts and the broader safety 
mission, PHMSA has initiated an agency-wide data assessment. The 
assessment will evaluate PHMSA's data and analytical needs and review 
the current status of data, technology systems, and skills of the PHMSA 
workforce. It will then develop a gap analysis and comprehensive 
strategy to become a predictive, data-driven, risk based regulatory 
development and enforcement safety agency.
    PHMSA continuously works to develop new ways to mitigate risk with 
one aspirational goal in mind: zero deaths, injuries, environmental and 
property damage, and transportation disruptions related to hazmat 
transportation. Serious pipeline incidents have declined an average of 
10 percent every three years since 1988, despite increased energy 
production, aging infrastructure, and increased pipeline mileage.
    To sustain this safety record, PHMSA is positioning to be more 
predictive, in order to anticipate the risks of the future and drive 
innovation that enhances the safety mission. Research and development 
is vital to that effort.
    PHMSA conducts R&D in partnership with industry, universities, and 
other stakeholders, working together to identify gaps in current 
technology and reach consensus on the sector's most pressing 
challenges. PHMSA's investments have contributed to new pipeline 
technologies entering the market, including above-ground, radar-based 
pipeline mapping and a nondestructive testing method for unpiggable 
pipelines. In addition to these collaborative R&D efforts, PHMSA 
conducts R&D in the public interest to enhance our rulemaking efforts 
and our safety mission.
VI. Data-sharing Need
    Of the 2.6 million miles of pipeline within the United States, 
states monitor 80 percent. Yet the information the states gather 
through inspections and enforcement activities is not shared between 
states or with PHMSA. Linking state and Federal inspection, 
enforcement, and geospatial data, and providing a consolidated national 
view of all pipeline data, is a vital component in identifying current 
and emerging risks that drive improved safety performance and informed 
regulations. To that end, PHMSA has consistently requested a nationwide 
integrated database of pipeline inspection and enforcement data.
    This nationwide integrated database will close important gaps in 
the inspection, enforcement and remediation of unsafe pipelines and 
their operators with two important elements. First, it will share the 
safety inspection records by operator and by element of the inspection 
and communicate those results to all impacted inspectors in states with 
common operators and common practices. Simply put, a dangerous practice 
or pipeline element found in one location will be communicated quickly 
to all inspectors and operators that would have an interest in the 
condition identified in order to avoid environmental damage and 
disasters in and around our communities. Second, this database will 
plot the results of inspections along the available pipeline mapping 
systems, giving a better optic of the coverage of inspections, 
pipelines, and incidents.
    The improved data collection and sharing will also help inform 
PHMSA's future rulemaking activity by allowing PHMSA to capture data 
from the States on the 80 percent of the Nation's pipelines that they 
oversee. Through this project, PHMSA and state inspection and 
enforcement data could be combined with current incident and annual 
reporting data to provide complete safety records for all pipeline 
operators and a more complete view of the pipeline landscape to inform 
future regulation. This would include the identification of pipelines 
that pose a higher risk of failure as well as a more complete view of 
overall fitness level information to be assessed when significant 
determinations such as enforcement actions or the issuance of special 
permits are being considered.
VII. Enhancing Enforcement
    Enforcement authorities are a critical aspect of preventing and 
deterring accidents. PHMSA is undergoing an assessment of its 
enforcement capabilities and how it can use them more effectively. 
Results over the course of the next three to four months will help the 
agency create better alignment and efficiency in program delivery, and 
identify opportunities to enhance enforcement of the authorities 
Congress has granted PHMSA.
    One of PHMSA's most effective enforcement tools is the Corrective 
Action Order (CAO), which directs an operator to take immediate action 
to prevent or mitigate the risks from a pipeline that poses a threat to 
life, property, or the environment. However, a CAO only applies to a 
single operator and cannot address emerging safety issues that affect 
multiple operators. Advisory bulletins are important tools that provide 
industry with clear guidance on issues that impact safety. While most 
pipeline operators will adjust their practices based on information 
communicated in Advisory Bulletins, the bulletins do not carry the 
weight of law. As PHMSA works toward a comprehensive understanding of 
it enforcement capabilities, it is committed to using all enforcement 
authorities wisely to address the greatest risks and maximize safety.
VIII. Promoting a Strong Safety Culture at PHMSA and Industry-Wide
    PHMSA improves safety by using all the tools at our disposal--
safety regulations, research and development, education and outreach, 
inspections, and enforcement tools such as corrective actions, civil 
penalties and other interventions. A critical part of this safety 
system is to continually strive for improvement and to find new ways to 
raise the bar on safety.
    With stronger safety partnerships and enhanced coordination with 
states, PHMSA aims to further enhance a risk-based approach to safety 
management and a strong safety culture throughout the entire pipeline 
sector and regulated industries.
Leading by Example
    PHMSA is leading by example through the Agency Safety Action Plan 
and organizational review. The ASAP should serve as a model for the 
entire pipeline sector to take a close look at where safety 
improvements can be made and to take concrete steps to drive toward 
enhanced safety in a methodical and comprehensive way. The ASAP is a 
PHMSA-wide effort, with the strong support of the Secretary of 
Transportation.
    In the next few weeks, PHMSA will also begin an organizational 
assessment. With additional positions and funding for both the pipeline 
and hazmat safety programs, Congress has invested in PHMSA. The 
organizational assessment, in conjunction with a Human Capital Strategy 
and Staffing Study, will help determine how to allocate these resources 
and how to position the organization for efficiency and long-term 
success. It also will help ensure effective use of resources to support 
PHMSA's mission, reduce risk and improve safety.
Safety Management System Recommended Practice
    In 2010, the National Transportation Safety Board (NTSB) 
recommended that the American Petroleum Institute (API) facilitate the 
development of a safety management system standard specific to the 
pipeline industry, in collaboration with industry, regulators and other 
stakeholders. PHMSA participated in the development of API Recommended 
Practice (RP) 1173, the recently published recommended standard for 
implanting Safety Management Systems in the pipeline industry.
    PHMSA fully supports the implementation of RP 1173 and plans to 
promote vigorous conformance to this voluntary standard. The 
recommended practice is a proactive, system-wide approach to reducing 
risks and provides operators with a comprehensive framework to address 
risk across the entire life cycle of a pipeline. The standard promotes 
pipeline safety, while implementing guidelines for continuous 
improvement.
    Moving forward, PHMSA will continue to work with states and other 
stakeholders to encourage the implementation of RP 1173 across the 
pipeline industry.
IX. Conclusion
    PHMSA employs a talented team of experts and professionals, and is 
dedicated to maintaining the highest levels of safety in today's and 
tomorrow's industry. PHMSA has a variety of capabilities at its 
disposal: enforcement authority, a workforce of world-class technical 
experts, and safety partnerships. The goal is to work within the 
organization, with partners and with Congress to implement changes that 
allow for long-term success and safety in Montana, Nebraska and 
nationwide.

    Senator Fischer. Thank you, Administrator.
    Next, I would like to welcome Todd Denton. He is President 
of Phillips 66 Pipeline LLC, where he is responsible for the 
operation of approximately 11,000 miles of crude oil, refined 
products, and NGL pipelines. He has 24 years experience in the 
industry, beginning his career as a project engineer for 
Diamond Shamrock. He later moved into engineering management 
positions with UDS and Valero LP, and he has been in operations 
management for the past eight years.
    Welcome.

             STATEMENT OF TODD DENTON, PRESIDENT, 
                    PHILLIPS 66 PIPELINE LLC

    Mr. Denton. Thank you, Senator. I appreciate you having me. 
I am Todd Denton, President of Phillips 66 Pipeline LLC. We are 
members of the Association of Oil Pipe Lines and the American 
Petroleum Institute. So today I will share with you examples of 
our pipeline safety efforts, as well as industry-wide pipeline 
safety improvement initiatives.
    Phillips 66 Pipeline LLC, a wholly-owned subsidiary of 
Phillips 66, operates, as you mentioned, more than 11,000 miles 
of pipelines in the United States and 1,500 miles of pipelines 
here in Montana. Our pipelines are remotely monitored and 
controlled through a state-of-the-art 24-hour control center. 
We also have five storage terminals here in Montana where 
refined products are distributed to retail outlets.
    Phillips 66 is one of the largest refiners in the United 
States with 11 refineries, including one right here in 
Billings, and a net crude oil processing capacity of 1.8 
million barrels per day. We employ 14,000 people worldwide, and 
we are investing billions of dollars every year in projects 
that contribute to the health of the U.S. economy.
    Phillips 66 proudly employs over 400 Montanans. These are 
good-paying jobs that can support a family, provide for medical 
care, savings for college, and retirement some day. We also 
support Montana communities, schools, police departments, and 
fire stations by contributing over $15 million annually to 
property taxes. In addition, we recognize the responsibility 
that we have to operate safely. Safety, honor, and commitment 
are our core values. We work extremely hard to ensure our 
pipelines operate with minimal impact to the public or 
environment.
    Pipelines are an exceedingly safe way to deliver the energy 
America needs. For all of industry, the average barrel of crude 
oil or petroleum product reaches its destination safely greater 
than 99.999 percent of the time. Over the past 15 years, 
pipeline incidents impacting the public or environment are down 
50 percent. Corrosion and accidental third-party damage 
incidents are each down more 76 percent.
    So one of our current safety areas of focus involves 
geohazards, primarily river crossings and land movement. 
Flooding in 2011 on the Yellowstone River and the Missouri 
River Basin as well will heighten awareness for Phillips 66 and 
others in the pipeline industry. As a result, we added a large-
scale effort to our already robust integrity management program 
in our Billings division to survey over 400 crossings to verify 
the depth of cover, identify those prone to erosion and water 
channel changes, identify and assess hundreds of potential land 
movement features that could impact our pipelines, and develop 
metrics to prioritize higher-risk areas based on factors, such 
as depth of cover, channel migration and scour potential, 
impact from debris, land movement, and potential consequences.
    We then used the data gathered to select and execute 
permanent mitigation strategies, such as new horizontal 
directional drills, or HDDs, new trenched crossings targeting 
double potential scour depth, bank stabilization, and pipeline 
relocations. We also operate a real-time monitoring program for 
flood events that includes proactive snow level and 
precipitation monitoring, and USGS real-time data for stream 
flows, which include 40 live flow stations.
    These efforts do not come cheaply. The Billings Division 
alone plans to spend nearly $120 million on approximately 100 
projects from 2012 through 2017. This program has been 
successful in part due to the cooperation of many stakeholders 
and government agencies, including PHMSA, the Montana 
Governor's Office, multiple state, county, and local agencies, 
the Tribal Nations, and many landowners. While I speak for 
Phillips 66 Pipeline, we are not alone in these efforts within 
our industry. Other operators in Montana and throughout the 
United States are undertaking their own river crossing 
programs.
    In addition, leaders of the liquids pipeline industry added 
a strategic initiative just this year to update industry-wide 
river crossing guidance. This strategic initiative will 
significantly update and expand American Petroleum Institute 
Recommended Practice 1133 to focus intensely on the surveying, 
evaluation criteria, mitigation strategies, and monitoring of 
existing river crossings. I will personally serve as the 
executive champion for this effort, overseeing its development 
and ensuring it receives the attention it deserves across the 
industry.
    As a Montana conservation group, Montanans for Healthy 
Rivers, has said, ``It is no exaggeration to call rivers the 
lifeblood of Montana. They provide us with drinking water, 
irrigation water, water for industry, and boundless 
recreational opportunities. The history of Montana is the 
history of its rivers, and so will be its future.''
    The future of Phillips 66 Pipeline in Montana is care and 
stewardship of the rivers and lands that we cross. Phillips 66 
Pipeline and the entire liquids pipeline industry are committed 
to a goal of zero incidents, and a safety performance strategic 
plan that includes improvements in technology, risk management, 
safety culture and management practices, and response 
capabilities.
    Thank you for your invitation to testify today, and I look 
forward to answering any questions you have. And, Senator, with 
your permission, I believe we have a two-minute video that 
explains some of our river crossing programs that we can share 
with you.
    Senator Fischer. OK.
    [Video shown.]
    [The prepared statement of Mr. Denton follows:]

 Prepared Statement of Todd Denton, President, Phillips 66 Pipeline LLC
    Thank you. I am Todd Denton, President of Phillips 66 Pipeline LLC. 
We are members of the Association of Oil Pipe Lines and the American 
Petroleum Institute. Today, I will share with you examples of our 
pipeline safety efforts, as well as industry-wide pipeline safety 
improvement initiatives.


    Phillips 66 Pipeline LLC, a wholly-owned subsidiary of Phillips 66, 
operates more than 11,000 miles of pipelines in the United States and 
1,500 miles of pipeline in Montana. Additionally, the company owns or 
operates more than 50 finished-product, LPG, and crude oil storage and 
distribution terminals. Our pipelines are remotely monitored and 
controlled through a state-of-the-art 24 hour control center. We also 
have five storage terminals here in Montana.


    Phillips 66 Pipeline LLC transports both raw and finished petroleum 
products, including crude oil, propane and refined products such as 
gasoline, diesel and jet fuel. The company also stores motor fuels at 
terminals, where tanker trucks pick them up for delivery to local 
retail outlets.
    Phillips 66 pipelines deliver products to and from refineries 
across the country, including our own Phillips 66 refinery here in 
Billings. Phillips 66 is one of the largest refiners in the United 
States with 11 refineries and a net crude oil processing capacity of 
1.8 million barrels per day. We employee 14,000 people worldwide and we 
are investing billions of dollars every year in projects that 
contribute to the health of the U.S. economy.
    Phillips 66 and Phillips 66 Pipeline are proud to be part of 
communities in Billings and across Montana. Phillips 66 employs over 
400 Montanans. These are good paying jobs that can support a family, 
provide for medical care, savings for college and retirement some day. 
Phillips 66 facilities also support local communities through property 
taxes. Montana schools, police departments and fire stations all 
benefit from over $15 million in local taxes paid by Phillips 66.
    Phillips 66 Pipeline recognizes not only the benefits it provides 
to Montana communities, but also the responsibility we have to operate 
safely in Montana. We work extremely hard to ensure our pipelines 
operate with minimal impact to the public or environment.
    Pipelines are an exceedingly safe way to deliver the energy America 
needs. The average barrel of crude oil or petroleum products reaches 
its destination safely greater than 99.999 percent of the time. Since 
1999, pipeline incidents impacting the public or environment are down 
50 percent. Corrosion-caused pipeline incidents are down 76 percent, 
thanks to the widespread use of smart-pig in-line inspection to detect 
corrosion in pipes. Pipeline incidents caused accidentally by third-
party damage are down 78 percent.
    Pipeline incidents at river crossings are one focus of the 
Subcommittee here today. A study conducted by the U.S. Pipeline and 
Hazardous Materials Safety Administration (PHMSA) concluded these are 
relatively rare events. Over a 20 year period, PHMSA found 0.3 percent 
of all reported liquids pipeline incidents had exposed pipe in 
riverbeds as a contributing factor in the incidents. That said, 
Phillips 66 Pipeline and the liquids pipeline industry recognize that 
while relatively rare, pipeline incidents at river crossings are very 
real with real impacts on the local surrounding communities.
    One of our current safety areas of focus involves geohazards--
primarily river crossings and land movement. Flooding in 2011 on the 
Yellowstone River and the Missouri River Basin heightened awareness for 
Phillips 66 and others in the pipeline industry. As a result, we added 
a large-scale effort to our already robust integrity management program 
in our Billings division to:

   Survey over 400 crossings to verify the depth of cover and 
        identify those prone to erosion and water channel changes;

   Identify and assess hundreds of potential land movement 
        features that could impact our pipelines; and

   Develop metrics to prioritize higher risk pipelines based 
        on:

     Depth of cover;

     Channel migration and scour potential;

     Possible impact from debris;

     Land movement; and

     Potential consequences (such as downriver water 
            users).

    We then used the data gathered to select and execute permanent 
mitigation strategies such as:

   New Horizontal Directional Drills (HDD);

   New trenched crossings targeting double potential scour 
        depth;

   Bank stabilization; and

   Pipeline relocations

    We also operate a real-time monitoring program for flood events 
that includes:

   Proactive snow level monitoring

   Historic flow rates and trigger maximum flow rates

   USGS real-time data for stream flow which includes 40 flow 
        stations

    These efforts do not come cheaply. The Billings Division alone 
plans to spend nearly $120 million on approximately 100 projects over 6 
years averaging nearly $20 million per year. This program has been 
successful in large part due to the cooperation of many stakeholders 
and government agencies including PHMSA, the Montana Governor's office, 
multiple state, county, and local agencies, the Tribal Nations, and 
many landowners.


    The experiences and efforts of Phillips 66 Pipeline are not alone 
in the liquids pipeline industry. Other operators in Montana are 
undertaking their own river crossing programs. In addition, this year 
leaders of the liquids pipeline industry added a strategic initiative 
to update industry-wide river crossing guidance.
    American Petroleum Institute Recommended Practice (RP) 1133 sets 
out criteria for the design, construction, operation, maintenance and 
abandonment of onshore pipelines. Developed after flooding on the San 
Jacinto River in Texas 20 years ago, the current RP focuses primarily 
on construction techniques in floodplains and commercially navigable 
waterways.
    Our strategic initiative will update and expand this industry-wide 
guidance to focus more intensely on the monitoring and management of 
existing river crossings. We expect the updated guidance to include 
strategies for surveying existing crossings, developing evaluation 
criteria and plans, undertaking mitigation strategies and implementing 
monitoring programs. I will personally serve as the executive champion 
for this effort, overseeing its development and ensuring it receives 
the attention it deserves across the industry.
    As a Montana conservation group (Montanans for Healthy Rivers) has 
said, ``[i]t is no exaggeration to call rivers the lifeblood of 
Montana. They provide us with drinking water, irrigation water, water 
for industry, and boundless recreational opportunities. The history of 
Montana is the history of its rivers, and so will be its future.'' 
(http://healthyriversmt.org)
    The future of Phillips 66 Pipeline in Montana is care and 
stewardship of the rivers and lands we cross. Phillips 66 Pipeline and 
the entire liquids pipeline industry are committed to strong, robust 
river crossing programs protecting our natural and public resources.
    Thank you for your invitation to testify before you today and I 
look forward to answering any questions you may have.

    Senator Fischer. Thank you, Mr. Denton.
    Next, I would like to welcome Commissioner John Ostlund. He 
is serving his third term as Yellowstone County Commissioner 
for District 1, which has jurisdiction over parts of Billings 
and Lockwood, Montana.
    He was first elected to the three-member commission in 
2002, and prior to that position, Mr. Ostlund headed the 
Yellowstone County Road Department. Welcome, sir.

 STATEMENT OF JOHN OSTLUND, COMMISSIONER, YELLOWSTONE COUNTY, 
                       BILLINGS, MONTANA

    Mr. Ostlund. Good morning, Chairman Fischer and Senator 
Daines. Thank you for the opportunity to be here today.
    Pipeline safety and protecting our environment is our 
number one priority in Yellowstone County. However, with that 
said, the three refineries and their associated incoming crude 
lines and outbound gas and diesel distribution lines provide 
enormous employment opportunities with high-paying jobs, a 
stable tax base for our roads, bridges, schools, and public 
safety.
    In 2011, Yellowstone County awoke to a broken pipeline 
spilling crude into an already flooding Yellowstone River. The 
disaster tested our ability to manage a quick response to stop 
the flow, capture as much of the released oil as possible, and 
start the process of an enormous cleanup project. I came away 
from that 2011 Yellowstone River spill with a new appreciation 
of how the Federal EPA, State DEQ, Exxon's team of 
professionals, and local elected officials faced with a serious 
environmental challenge can work together to evaluate the 
cause, launch an immediate cleanup, and work through the summer 
to end up with a finished product that we are all proud of.
    Many lessons were learned from the spill. Old and new 
pipeline crossings, river pipeline crossings, have been bored 
much deeper under our free-flowing rivers and streams, new 
check valves have been added, along with additional monitoring 
equipment to prevent future problems. While no system is 
flawless, pipelines have the best safety record for 
transporting oil and gas, and are the most efficient way to 
deliver both crude oil and the finished products. Our 
refineries provide a stable economic base, great opportunities 
for employment, a stable tax base, and are one of the reasons 
that our county has remained fairly recession proof when other 
parts of the Nation have suffered major periods of economic 
decline.
    While it is very important to set our goals for pipeline 
safety high and expect 100 percent compliance with all of the 
rules and regulations, I would ask that we be careful not to 
overregulate any industry. Our Federal government has a history 
of making the process so complicated and lengthy that projects 
like our Northeast Highway Bypass, already 15 years in the 
planning, just this year received a record of decision allowing 
us to take the next steps to move the process forward. Just 
imagine the cost increases when it takes 20 years to move a 
project from concept to completion.
    Everyone wants a clean and healthful environment. However, 
we must find a way moving forward to ensure that the process 
does not become the problem. Our taxpayers foot the bill for 
study after study that causes delay after delay. Common sense 
should tell us that we can effectively regulate business 
without grinding that business to a halt.
    I would be happy to answer any questions.
    [The prepared statement of Mr. Ostlund follows:]

           Prepared Statement of John Ostlund, Commissioner, 
                 Yellowstone County, Billings, Montana
    Chairwoman Senator Deb Fischer--Honored members of the Senate 
Committee on Commerce, Science, and Transportation, thank you for 
allowing me to testify on an issue as important to Montana as pipeline 
safety.
    For the record, my name is John Ostlund and I am a Yellowstone 
County Commissioner.
    The 2.6 million miles of pipeline networks in our Nation are vital 
parts of our country's infrastructure. In Montana and Yellowstone 
County, they supply the gas, diesel, heating oil, jet fuel and cooking 
fuel that are the life blood of our economy.
    Pipeline safety is very high in our priorities especially after the 
Exxon spill in 2011. We have an expectation that all regulations and 
rules will be 100 percent complied with.
    With that said, I worked on a daily basis with the excellent team 
from Exxon, the Federal EPA, the State DEQ, and our local elected 
officials on the cleanup and can tell you from personal experience that 
Exxon did a first class job on restoring the Yellowstone River to a 
pristine condition. Additionally, Exxon bent over backwards to insure 
each and every property owner was compensated for any loss and made 
whole.
    As a follow-up with the refineries, it is important to note the 
lessons learned from the spill and mitigation efforts from the pipeline 
companies and refineries to reduce future possibilities of another 
catastrophic incident. River crossings have been looked at, new 
pipelines and older ones are being bored much deeper under our 
important waterways, and new valves have been installed with additional 
monitoring equipment with a focus on pipeline safety and more efficient 
operations while working to reduce the possibility of future incidents.
    It is in the pipeline and refineries best interest to comply with 
all safety regulations and I see a strong desire by the private 
companies to go above what is expected to provide a safe environment 
for transportation of our Nation's critical fuel supply and look out 
for the best interest of their stockholders.
    While regulation and compliance are important, please consider that 
OVER regulation drives up costs, slows progress, and impedes new 
development at a time when oil production in our great country is at an 
all-time high. America's national security depends more every year on 
producing and refining our own gas and diesel as we watch the Middle 
East become less stable. Our economy in Yellowstone County has been 
very stable. One big reason for that economic stability is that three 
of the four refineries in the state are located in Yellowstone County, 
along with the associated oil supply pipelines and diesel and gas 
distribution lines. All together, the pipelines in our state pay $72 
million dollars per year in taxes. And, if you add utility gas 
distribution lines into the picture, tax revenue exceeds 100 million 
dollars. Cenex Harvest States alone provides 337 jobs in Montana 
exceeding wages of $65,000 per year (which is twice the Montana average 
salary), with an additional 860 jobs in pipeline construction. Exxon 
has 250 professional and competitive wage jobs and employs over 100 
contractors every day of the year.
    In total, class nine properties which are mostly pipelines, over 
the last few years, have paid 12.5 percent to 13 percent of all 
property taxes paid in Montana.
    I have not mentioned Phillips 66 who will be here today with their 
own numbers; however, I can tell you collectively that our 3 refineries 
and the pipelines that support their operation play a major role in 
Yellowstone County's economic success story.
    Of the total property tax revenue collected, the three refineries 
pay 32 percent of Yellowstone County's Road and Bridge budget. Those 
monies directly provide for all of the maintenance and repair of our 
county's rural road system, both asphalt and gravel.
    These refineries, that are also great community partners, play a 
critical role in our county's recession proof economy and are always 
there when a school or a Little League team needs a helping hand.
    I do have some recommendations looking forward at the regulatory 
process. The MOST important is not to OVER REGULATE. The process I 
worked through with Exxon, the EPA, DEQ and our local elected officials 
worked very effectively. Exxon, the pipeline companies and the Board of 
County Commissioners were very satisfied with the end product of a 
clean environment, new thought processes regarding deeper lines at 
river crossings, additional valves and monitoring equipment and a 
renewed focus on pipeline safety.
    As I continue to dialog with the refineries, I am impressed with a 
total commitment to the goals of a 100 percent safety record.
    If any one thing could be done to reduce the possibility of 
pipeline breaks it would be to provide further education in the 811one 
call systems. Excavation without the one call locations has much more 
risk of damaging the system with catastrophic results than natural 
disasters can produce.
    In summary, the best example of over regulation I can provide is 
our National Highway system and the time required to move a project 
from concept to completion.
    In Yellowstone County, we are working on a federally funded highway 
project called the Northeast Bypass. The five mile project started as a 
concept 15 years ago and, because the environmental process now takes 
more time and costs more than the project itself, we have just 
completed the Record of Decision allowing us to take additional steps 
to work toward actual construction of the bypass. When it takes 15 
years to get to the point you can think about starting construction you 
can see regulations are more of the problem than the solution.
    Chairwoman Fischer and honored members of the senate committee, 
while we all want a clean and healthful environment I have more fear 
for our country's future from over regulation than from industry 
performance. Washington, DC has over regulated business to the point of 
grinding those business ventures to a halt, the process has become the 
problem and, while spending millions of tax payer dollars on studies, 
we are not producing any measurable results.
    I ask that any additional rules be well thought out and that we 
empower as many of those rules as possible to be handled at the local 
government level.
    Chairwoman Fischer and honored members of the senate committee, 
thank you for allowing me to testify today. I would be happy to answer 
any questions.

    Senator Fischer. Thank you, sir. Next we have Michelle 
Slyder, and she is currently the Director or with the 
Department of Transportation, a Compliance Manager--correct--in 
pipelines and terminals at CHS located in Billings, Montana. 
She has experience serving on committees and councils, such as 
the Cirque Oil and Gas Industry, the Montana CGA Committee, the 
Montana Utility Coordinating Council, and the Montana Liquid 
and Gas Pipeline Association.
    Welcome.

   STATEMENT OF MICHELLE SLYDER, FOUNDING MEMBER/TREASURER, 
            MONTANA LIQUID GAS PIPELINE ASSOCIATION

    Ms. Slyder. Good morning Chairman Fischer, Senator Daines, 
and members of the Subcommittee. My name is Michelle Slyder, 
and I am here to testify today on behalf of the Montana Liquid 
and Gas Pipeline Association, commonly known as the MLGPA, 
which is comprised of the 30 major pipeline operators in 
Montana. Through this testimony I will share with you the 
specific approaches the MLGPA has implemented across the state 
of Montana, including many that go above and beyond the Federal 
code of regulatory requirements in regards to public awareness.
    Federal regulations currently require pipeline operators to 
perform public awareness outreach to four main stakeholder 
audiences: emergency responders, public officials, excavators, 
and the affected public. This outreach can be accomplished via 
many forms of engagement such as direct mail, advertising and 
face-to-face meetings. Regulations specify the frequency and 
content requirements, but leaves the methods of outreach up to 
individual pipeline operators. The following testimony 
identifies the methods utilized by the MLGPA to address public 
awareness program requirements.
    Per Federal regulation, emergency responders and public 
officials must be engaged on an annual basis for emergency 
responders and on a three-year interval for public officials. 
The MLGPA meets or exceeds these requirements by providing 
direct mail to both audiences on an annual basis via membership 
with the Pipeline Association for Public Awareness. In addition 
to baseline training and messaging, the MLGPA provides 
emergency responders with interactive pipeline emergency 
response training scenarios, emergency contact directories for 
pipeline operator information, capabilities assessments and 
reports, an identified site and emergency planning application, 
and interoperable response procedures that can be modified to 
meet local requirements.
    In 2007, the MLGPA also began hosting more than 20 face-to-
face meetings annually with emergency responders and public 
officials across the state. Through these meetings, the MLGPA 
members meet with an average of 600 stakeholders annually. This 
outreach is performed by the members and not contractors, and 
is crucial to establishing the relationships necessary to 
ensure effective response and teamwork in the event of a 
pipeline release. These relationships have been built and 
maintained over many years by the MLGPA's commitment to meeting 
the expectations of the predominantly volunteer emergency 
responder audience.
    This has been achieved by securing continuing education 
credits for the peace officers and emergency medical services, 
and modifying the presentation approach on an ongoing basis. 
For example, the original presentations contained the baseline 
messaging as required by PHMSA, but resulted in minimal 
engagement of the audience due to the volume of material being 
presented.
    We have modified those presentations now to the current 
meeting format, which includes site-specific scenarios in a 
local tabletop exercise format and local case studies that 
allow emergency responders to learn from real-world events. The 
MLGPA also accommodates volunteer participation by rotating the 
location and timing of the events to coincide with regular fire 
department meetings in rural locations.
    In 2008, the MLGPA also teamed with the National 
Association of State Fire Marshals to co-sponsor the NASFM 
Pipeline Emergencies Train the Trainer Program in Montana. This 
was the first time industry had ever engaged NASFM to bring the 
training to the State level. There were more than 50 
stakeholders in attendance, which was the highest ever achieved 
by any state at that time. The MLGPA members also gave 
presentations and staff informational booths at the Volunteer 
Fire Chiefs annual meetings, Montana Career Fire Chiefs 
Association annual meetings, the Montana Disaster and Emergency 
Service meetings, as well as offering pipeline training 
opportunities for responders to participate in pipeline-
specific incident command structure training, tabletop 
exercises, boom deployments, town hall meetings and facility 
tours.
    Moving on to the excavator and affected public outreach 
that is performed by the MLGPA, we accomplish it through a 
substantial amount of supplemental outreach through 
collaboration with Montana811 and the Montana Utility 
Coordinating Council. This outreach includes implementation of 
funding of a statewide advertising campaign and effectiveness 
surveys that utilize over $100,000 a year to promote the ``Call 
Before You Dig'' message, improving prevention of pipeline 
accidents.
    Members of the MLGPA also help staff Montana811 excavator 
meetings, allowing an average of 1,200 excavators to meet face 
to face with pipeline operators every year. MLGPA members also 
assist Montana8ll in staffing ag safety days and expos, home 
improvement shows, minor league baseball games, and the 
University of Montana and Montana State Cat/Griz games. And 
MLGPA members have also installed tank signs that promote the 
``Call Before You Dig'' message in high visibility areas such 
as Billings, Glendive, Logan, Missoula, Helena, and Cut Bank, 
as well as billboard signs across the state.
    In conclusion, I would like to share that the success of 
the MLGPA has been built on the foundation established through 
collaborative efforts and extensive face-to-face outreach with 
all of the stakeholders across Montana. The members of the 
MLGPA consider collaborative organizations to be at the 
cornerstone of our success. The extensive level of stakeholder 
engagement in Montana proves that it is effective to allow 
operators the flexibility to implement common sense local 
strategies to address Federal requirements, and that there is 
no one-size-fits-all approach to public awareness.
    Thank you for inviting me to testify today and provide 
information on the commitment the MLGPA. I would be happy to 
answer any questions.
    [The prepared statement of Ms. Slyder follows:]

    Prepared Statement of Michelle Slyder, Founding Member/Current 
         Treasurer, Montana Liquid and Gas Pipeline Association
I. Introduction
    Good morning Chairman Fischer, Senator Daines, Senator Tester, and 
members of the Subcommittee. My name is Michelle Slyder, I am here to 
testify on behalf of the Montana Liquid and Gas Pipeline Association, 
commonly known as the MLGPA, which is comprised of 30 major pipeline 
operators in Montana.
    Through this testimony I will share with you the specific 
approaches the MLGPA has implemented across the state of Montana, 
including many that go above and beyond the Federal code requirements 
in regards to public awareness.
    Federal code currently requires pipeline operators to perform 
public awareness outreach to four main stakeholder audiences: emergency 
responders, public officials, excavators, and the affected public. This 
outreach can be accomplished via many forms of engagement such as 
direct mail, advertising and face to face meetings. The code specifies 
the frequencies and content requirements and leaves the methods of 
outreach up to individual pipeline operators. The following testimony 
identifies the methods utilized by the MLGPA to address public 
awareness program requirements.
II. Emergency Responder and Public Official Outreach
    Per Federal code, pipeline operators are required to deliver 
baseline messaging to emergency responders annually and public 
officials every three years. The MLGPA meets or exceeds these 
requirements by providing direct mail to both audiences on an annual 
basis via membership with the Pipeline Association for Public 
Awareness, referred to as PAPA. In addition to baseline messaging, the 
MLGPA provides emergency responders with interactive pipeline emergency 
response training scenarios, emergency contact directories, 
capabilities assessments and reports, an identified site and emergency 
planning application, and interoperable response procedures that can be 
modified to meet local requirements.
    In 2007, the MLGPA began hosting more than 20 face to face meetings 
annually with emergency responders and public officials. Through these 
meetings, the MLGPA members meet with an average of over 600 
stakeholders annually. This outreach is performed by the members and 
not contractors and is crucial to establishing the relationships 
necessary to ensure effective response and teamwork in the event of a 
pipeline release. These relationships have been built and maintained 
over many years by the MLGPA's commitment to meeting the expectations 
of the predominantly volunteer emergency responder audience. This has 
been achieved by securing Peace Officer Standards and Training and 
Emergency Medical Services (EMS) continuing education credits to help 
responders meet their annual training requirements and modifying the 
presentation approach on an ongoing basis. For example, the original 
presentations contained the baseline messaging, as required by Pipeline 
Hazardous Materials Safety Administration (PHMSA), but resulted in 
minimal engagement of the audience due to the volume of data being 
presented. In order to engage the audience and maintain attendance 
levels, it became apparent that the approach needed modification. The 
current meeting format includes site specific scenarios in a local 
tabletop exercise format and local case studies that allow emergency 
responders to learn from real world events. The MLGPA also accommodates 
volunteer participation by rotating the location and timing of the 
events to coincide with regular fire department meetings in rural 
locations.
    In 2008, the MLGPA teamed with the National Association of State 
Fire Marshals (NSAFM) to co-sponsor the NASFM Pipeline Emergencies 
Train the Trainer Program in Montana. This was the first time the 
industry had ever engaged NASFM to cosponsor the training and there 
were more than 50 stakeholders in attendance, which was the highest 
ever achieved by any state at that time.
    MLGPA members also give presentations and staff informational 
booths at the Volunteer Fire Chiefs annual meeting, Montana Career Fire 
Chiefs Association annual meeting, and Montana Disaster & Emergency 
Services meetings, as well as offer pipeline training opportunities for 
responders to participate in pipeline specific incident command 
structure training, tabletop exercises, boom deployments, town hall 
meetings and facility tours.
III. Excavator and Affected Public Outreach
    The MLGPA accomplishes a substantial amount of supplemental 
outreach to excavators and the affected public through the partnership 
it has developed with the Montana Utility Coordinating Council and 
Montana811. This outreach includes:

   Implementation of a statewide advertising campaign and 
        effectiveness surveys utilizing over $100,000 a year to promote 
        the ``Call Before You Dig'' message to all Montana residents.

   Members of the MLGPA help staff Montana811 excavator 
        meetings, allowing an average of 1200 excavators to meet face 
        to face with pipeline operators every year.

   MLGPA members also assist Montana811 in staffing ag safety 
        days and expos, home improvement shows, minor league baseball 
        games, and University of Montana-Montana State ``Cat/Griz'' 
        games.

   MLGPA members have also installed tank signs promoting 
        ``Call Before You Dig'' in high visibility areas in Billings, 
        Glendive, Logan, Missoula, Helena and Cut Bank as well as 
        billboard style signs along many highways across the state.
IV. Conclusion
    The success of the MLGPA has been built on the foundation 
established through collaborative efforts and extensive face to face 
outreach with all stakeholders. The members of the MLGPA consider 
collaborative organizations to be a cornerstone of our success. The 
extensive level of stakeholder engagement in Montana proves that it is 
effective to allow operators the flexibility to implement common sense 
local strategies to address code requirements and that there is no one 
size fits all approach to public awareness.
    Thank you for inviting me to testify today on the commitment of the 
members of the MLGPA to the communities in which we operate. This 
concludes my testimony and I would be happy to answer any questions you 
may have.

    Senator Fischer. Thank you, Ms. Slyder, and thank you to 
all our panel for your testimony.
    Since we are from Nebraska and Montana, Senator Daines and 
I agreed that we are going to be a little more informal in our 
questioning than we usually are with a--with a Senate hearing. 
So we are going to see how that works.
    [Laughter.]
    Senator Fischer. But we think it will be great. So I am 
going to begin with a few questions. Senator Daines then will 
do some. We will have a little back and forth, and I hope the 
panel is willing to go with us on this as well.
    First, I would like to begin with you, Administrator. I 
know that you have just been in the position a few months. How 
is it going?
    Ms. Dominguez. Well, thank you very much. It is going well.
    Senator Fischer. Good. Are we seeing any major changes to 
the Agency? Are you looking at some different changes with the 
organization because I know that is a very strong suit that you 
have?
    Ms. Dominguez. Thank you. We are. I have been in the 
position now for just over a month officially. I was confirmed 
on August 5. Again, thank you. And we have had an aggressive 
kickoff here. Coming in I was able to bring some new leadership 
members to the team, and we have started an aggressive 
assessment of the organization. One of the things we are going 
to be launching here in the next couple of weeks is an 
organizational assessment of the entire Agency to look for 
potential efficiencies, how are we structured. Congress has 
been incredibly generous in its funding to help us increase our 
inspector workload moving forward, and we are doing all we can 
to hire into those positions. The appropriations that came 
through last year were very helpful in that regard.
    But moving forward, what we want to make sure is that we 
are taking those resources and we are actually not only 
distributing them well across the Nation where they need to be, 
but also making sure that all of our programs and our 
operations are working as efficiency as possible, and that we 
are structured to not only handle the growth that has been 
given to us, but then move forward to make sure that we are 
addressing future energy needs of this country because clearly 
our energy markets are changing, and we need to make sure that 
we can address them.
    Senator Fischer. Can you talk a little bit about how you 
are moving forward in meeting the congressional mandates from 
2011, and what specific challenges you may be facing there?
    Ms. Dominguez. We have had--we had a good number of 
mandates that were outlined in the 2011 Act. And we have worked 
through about 26 of the 42 existing mandates that include 
rulemakings, reports to Congress, et cetera. I will tell you 
that with the notice that we received this morning from the 
Office of Management and Budget, a number of those existing 
requirements that were outlined--a couple of those existing 
requirements that were outlined in the 2011 Act, we hope to 
address through this rulemaking on hazardous liquids. It is one 
of the two major rulemakings that we have been working on, and 
it has been something that has been a key priority of mine 
since coming on board, was to try and move these through our 
regulatory process.
    So I look forward to actual publication of the rule so that 
we can share it with our stakeholders and engage in a very good 
dialogue. We want to bring transparency. We want to communicate 
what those rulemakings are, and then get some good dialogue so 
that we can move to final issuance of some rules here and 
complete the mandates.
    Senator Fischer. And as you look at that Agency Action 
Plan, what specific initiatives have you been considering?
    Ms. Dominguez. Well, as I mentioned, the ASAP, the Agency 
Safety Action Plan, is something that I have started with the 
Secretary of Transportation. He is very much focused on looking 
at all of the modes of transportation to make sure that we are 
taking a good critical eye on leveraging our existing 
capabilities and the authorities that we presently have. So we 
have started that. The first part of our assessment is our 
enforcement regime, and we hope in the next month or two here 
we are going to start to see some preliminary results, and----
    Senator Fischer. What direction do you think you are headed 
in on the specifics?
    Ms. Dominguez. What we are trying to do is make sure that 
as we look at all of the enforcement capabilities, for 
instance, this is one area, all of the enforcement capabilities 
that we have, we go from a corrective action order, which is 
directed at a single operator when they meet a certain imminent 
hazardous threshold, and we are needing to address critical 
deficiencies. That is a very, very high threshold, and it goes 
all the way down to, you know, literally fines.
    So the question is, given that range, is there anything 
more that we can do? Are we doing it well, and where can we 
make some improvements? Are there additional things that we 
should potentially talk to the Congress about? Those are the 
areas that we are looking at.
    Senator Fischer. Thank you very much. Senator Daines?
    Senator Daines. Thanks, Chairman Fischer. We have an 
opportunity to give some feedback to PHMSA and also to get 45 
days of assessment, Administrator Dominguez, of what you think 
as well, building on what Chairman Fischer asked. So whether 
you want to do it as a start/continue kind of feedback and what 
should PHMSA should stop doing, start doing, continue doing, or 
perhaps one to two things that PHMSA is doing right now, one or 
two areas where PHMSA could be improved. Very much just to have 
that dialogue here today.
    It is kind of nice to have this open conversation versus 
having to write letters to an office and go through the 
bureaucratic channels of D.C. Here we have a chance to have an 
open conversation. And so, let us start with--we will let the 
Administrator go last on that because I know you have your own 
assessments as well.
    So a couple of things are going well. A couple of things at 
PHMSA that should change. Who would like to start?
    Mr. Denton. I will take a shot.
    Senator Daines. All right, Mr. Denton.
    Mr. Denton. So I think on the positive side, PHMSA has very 
qualified, competent inspectors, and they go after their tasks. 
They know the regulations. They know the assets, and they do 
well when they come into our facilities. I think a couple of 
improvements may be around getting inspection results out 
sooner. Potentially, you know, it takes months sometimes before 
we see those. And in the meantime, we may be having another 
inspection where if we had those results, we could be 
implementing those improvements. And perhaps the--some of the 
hirings that they will be doing over this next year can help 
speed that up as well.
    Senator Daines. Could you elaborate? In terms of kind of on 
average, what kind of time delays from the time of inspection 
until you see the report will you start taking corrective 
action? About how long is that?
    Mr. Denton. From our side?
    Senator Daines. Yes.
    Mr. Denton. Many times it is about a year.
    Senator Daines. A year.
    Mr. Denton. Right.
    Senator Daines. From the time the inspection occurs----
    Mr. Denton. Right.
    Senator Daines.--until you are told the result of the 
inspection.
    Mr. Denton. Or it can be sooner. It can be--it can be 
later, and it has varied quite a bit over the years. I will say 
it has gotten better in recent years.
    Senator Daines. In the last 45 days perhaps.
    Mr. Denton. We have seen----
    Senator Daines. That is right.
    Mr. Denton.--we have seen improvements already.
    Mr. Denton. That is right.
    [Laughter.]
    Senator Daines. That is great, OK.
    Mr. Denton. So then, second, I would probably say, you 
know, a little bit of a frustration for us is we would like to 
see a little more consistency among the inspectors. There are 
five different regions. We also have five different operating 
regions. We operate in all five of PHMSA's regions, so we often 
see different--you know, they each have different focuses, and 
so sometimes there is a little bit of inconsistency there.
    And then, I guess, third, we would like to see a move 
towards performance-based regulations. And I think we will have 
an opportunity, not necessary regulations, but performance-
based inspections. And with the new safety management system--
--
    Senator Daines. Mr. Denton, what does that mean? I am not 
clear what ``performance-based inspection'' means.
    Mr. Denton. So, and I will tell you, we even do this to 
ourselves, you know. Internally we audit ourselves to death, 
right? So we look at things we call operations excellence, 
compliance issues, you know, health, safety, environmental, 
things like that. And a lot of times it becomes a little bit of 
a check the box, you know. Here is the--here is the rule. Here 
is what you need to do, so check the box. That is fine. We need 
to be addressing those things. But let us look at what really 
makes a difference, right? Are there things that maybe we do 
not necessarily have a rule for that we can make some 
improvements on?
    And at the end of the day, industry and PHMSA have the same 
end goal, right? I mean, we both want to drive toward zero 
incidents. So I think there is a collaborative effort that we 
can make there. And as I started to say a minute ago, the 
biggest piece I think that will--recently that will contribute 
to that is our recent safety management system recommended 
practice. You know, that is something that has been in the--
say, the refining industry for many years. You are probably 
familiar with it as a chemical engineer.
    That has not been in the pipeline industry, and so that 
just rolled out. It was published in July, and we will be 
moving into our implementation phase. And that is much of a 
performance-based type standard, so we would like to get that 
implemented. I think we will see improvements there, and PHMSA 
can use as part of, you know, those improvements as well.
    Senator Daines. You are going to get the last word, 
Administrator. So we are going to--you are going to get the----
    Ms. Dominguez. I am taking notes.
    [Laughter.]
    Senator Daines. No, you are going to get to close here. So 
we will kind of go down the line between either Commissioner 
Ostlund or Ms. Slyder.
    Mr. Ostlund. Madam Chairman and Senator Daines, thank you 
for the question. You know, quite honestly I think consistent 
application of the rules to everyone is very, very important. 
We need to know that wherever--we are in the same level playing 
field. And we spend a lot of time and a lot of focus with our 
operators on the pipeline safety around the 811 call system, 
and it appears that you are much more likely to see a spill. 
Even though it will not likely be the magnitude of a river 
spill, you are much more likely to find a problem with the 
result of construction equipment than anything else.
    And so, a focus on more training for the 811 system. More 
education, I think, would be extremely important and very 
helpful, and reduce the amount of accidents that we do have, 
down time, and spills, and contamination.
    Senator Daines. Thanks, Commissioner. Ms. Slyder?
    Ms. Slyder. I would like to offer up that PHMSA does an 
outstanding job of assisting pipeline operators in engaging the 
stakeholders from a public awareness perspective. They have 
CATS coordinators--community assistance and technical 
specialists--basically that help engage when we need them to 
help drive process improvements.
    For example, in the State of Montana, we are currently 
trying to revise the one-call damage prevention line in the 
State, and the CATS coordinator from PHMSA has been heavily 
engaged throughout that process. And I think that, again, it 
speaks to that collaborative approach even between the 
regulators and the pipeline operators trying to do what is 
right. So I would like to definitely, you know, commend them on 
that effort because it is a commitment to provide those 
resources to us.
    One area that I would like to see them continue to focus 
some emphasis on is, you know, sometimes we get wrapped up in 
the statistics of what we are doing, and it kind of comes back 
to Mr. Denton's comment about the actual performance of it. 
When we look at what the MLGPA does in the State, our biggest 
measure of effectiveness is not a statistic. It is not how many 
did we outreach to. It is not numbers. It is how engaged are 
they in the process, and are they coming back and reaching out 
to us for additional information.
    So that is how we gauge our success is are the DES 
coordinators coming to us and developing pipeline response 
annexes? Are fire departments wanting more information, wanting 
to come into our facilities, and learn more about what they 
need to do to be effective when it comes to pipeline emergency 
response? And so, to me that is the piece that I would like to 
see, you know, is that we focus more on, like you said, the 
bigger performance of the program, not just statistics.
    Senator Daines. Great, thank you. Administrator?
    Ms. Dominguez. Thank you. I greatly appreciate all the 
witnesses' statements, and comments, and insights. I first and 
foremost want to talk about--you mentioned inspection results. 
I am hoping that the resources that have been provided to us 
are going to greatly assist us in our--in our capability of 
turning around our inspection results to our operators in a 
more efficient manner, and hopefully more in a timely way. We 
have been in need of those resources to actually help assist 
doing that--in doing that.
    Senator Daines. Let me ask a question. Is there--is there a 
goal or a standard set in terms of we should--we should try to 
get it with in 90 days or 30 days? Is there some kind of 
standard in PHMSA of the time from inspection until we get the 
report back to the operator?
    Ms. Dominguez. I am sure there is. I do not know directly 
if there--I am sure there is a performance associated with it. 
If not, I will be asking those questions immediately after this 
hearing. But I think that there should be, and I think that one 
of the opportunities that we have moving forward is actually to 
make sure that we are leveraging these new inspectors as they 
come on board and helping as part of their training understand 
the importance of conveying our inspection results back to the 
operators, because it does further foster that culture of 
safety.
    I think that the other that--I had a chance yesterday here 
in Montana to meet with a number of--in fact, everyone here on 
the panel, some members of Commissioner Ostlund's conservation 
districts from the Yellowstone River as well, but had a chance 
to sit down with Phillips and had a chance to sit down with Ms. 
Slyder and some of her colleagues, and really understand the 
context in which they are operating.
    One of the things that I was able to talk to in particular 
with all three is about this larger safety management system, 
and how do we actually go to a more performance-based set of 
criteria that we can all work from? And PHMSA has been headed 
in that direction in a number of ways. We as the regulator, as 
you know, set the minimum standard for what operators need to 
meet, and we expect that they go above that in their integrity 
management systems, and all of the information that they put 
into those systems. So the ability to actually be more 
performance-oriented is inherent in the regulatory framework 
that we operate off of.
    That said, moving forward, the industry is taking a 
leadership role, and I greatly appreciate it, and I am 
challenging them in an even greater direction on safety 
management systems and a safety management culture, and then 
building off of the standard that they have introduced under 
API-1173. It is a great framework for truly integrating a 
number of aspects of performance-based operation. It is really 
a continuous improvement cycle, and it is something that we at 
PHMSA are also looking at doing for our own internal regulatory 
processes as well.
    But it is a great--it is a big challenge. It is a number of 
industries, as you may know, already engaged in it, a number of 
departments within the Department of Transportation, such as 
the aviation industry, are already in an SMS culture. I think 
there is opportunity moving forward to do that in the pipeline 
culture as well.
    Senator Daines. Thanks, Administrator. Chairman Fischer?
    Senator Fischer. Thank you, Senator Daines. Mr. 
Commissioner, could you talk a little bit about the experience 
you have in addressing that 2011 spill in the Yellowstone, and 
what you learned from that, and how you had to then deal with 
the spill in 2015?
    Mr. Ostlund. Chairwoman Fischer and Senator Daines, I would 
be glad to. That was quite an experience in 2011, and, of 
course, one of the first things that you hear about at the 
local level is how bad the Federal Government is and how poorly 
they operate. And I can tell you from experience that that was 
not the case at all. In fact, the Federal regulators that come 
in, along with the State DEQ, worked extremely effectively with 
the local community, and they provided all fact-based analysis 
to the public during the public meetings and hearings. And they 
talked about whether or not there were carcinogens in the oil, 
and the vapor, and all the questions that were asked by the 
public that were exposed to the spill.
    I actually thought the process was kind of refreshing. It 
is never good to have a disaster, but after the disaster 
occurred, it was incredible to see the team work so effectively 
together. Exxon just did, I thought, a bang-up job. They 
brought all of the people that they needed and all the 
resources in, and we talked to very few people along the way 
that were not completely happy and satisfied with the way the 
spill was being dealt with. And if you fly, or drive, or boat 
down the river right now, you will find no remnants of that 
spill. They bent over backward to clean up.
    I quite honestly think that that was one of the most 
effective responses that I have seen to a natural disaster, and 
was quite impressed with everyone.
    Senator Fischer. Good to hear. How have PHMSA grants helped 
Montana? Have they assisted in public safety in any way? Are 
you aware of the grant situation?
    Mr. Ostlund. You know, I am not aware of any grant 
applications that we have had directly, so.
    Senator Fischer. Anybody else on the panel aware of that? 
Ms. Slyder?
    Ms. Slyder. They do have a damage prevention grant that the 
Montana Utility Coordinating Council has teamed with Joel 
Tierney with the Public Service Commission to get that 
application in for those grants. In the past, they have been 
used for damage prevention outreach. We have hosted utility 
locator training schools in the state as a result of those 
grants, and we continue to look for opportunities like that.
    Right now, the grant opportunities for damage prevention in 
the state are not available to us because of the need to update 
our one-call law in the state of Montana. We did apply, and we 
did not receive funding this year as a result of that, so we 
are working toward that currently.
    Senator Fischer. When you apply for the grants, I would ask 
you, do you--do you see good cooperation with PHMSA on that? 
Are they--are they aware of concerns that you have at the state 
and local level?
    Ms. Slyder. Yes, they are engaged in the process, and have 
a lot of communication, I believe, with Joel Tierney at the PSE 
to really evaluate that need, and what the basics are, and why 
we are looking to do what it is we are asking them to do, yes.
    Senator Fischer. And as you have mentioned, is it the 811--
--
    Ms. Slyder. Yes.
    Senator Fischer.--system that you have in place there? What 
are the efforts of the State and local officials with that, 
regarding that call system? How is that coming along, because 
most incidents occur because somebody puts a pipeline in.
    Ms. Slyder. Yes, there are a significant amount of 
incidents that are actually caused by third party damage. We 
have a very engaged stakeholder audience here in the State of 
Montana. Through the one-call law rewrite efforts, we have 
found that most of the stakeholders want to see us get to where 
we have an improved one-call law that meets the requirements 
that PHMSA has set forth, and are very engaged in the process.
    And I think that, again, the MLGPA's overlap and work 
through Montana811 speaks to that as well. All of the utilities 
in the State of Montana host these face-to-face meetings 
annually with excavators. We also perform the public awareness 
outreach that I talked about, as well as outreach to farmers 
and ranchers specific to damage prevention. So we are doing a 
lot in the state to try to promote safe excavation practices 
and the use of one-call, and our numbers and statistics are 
showing a positive trend.
    Senator Fischer. And I know, Mr. Denton, your company has a 
very good safety record, but accidents happen. How are you 
reaching out to local stakeholders?
    Mr. Denton. I will add on to the 811 piece. You know, going 
back, I mentioned improvement over the last 15 years, and 
really I attribute that to two big things. One is technology 
with the introduction of smart pigging, which took care of a 
lot of the corrosion type issues. And then the second was a 
cultural change, which was really the 811 ``Call Before You 
Dig.''
    But we are still having some of those incidents, and the 
number of incidents of those types are small. I believe it is 
less than 10 percent. But they have a much more likelihood to 
be a serious incident because you have someone there that may 
be digging into your pipeline with the potential for a fatality 
or injury even. So I think, in fact, they are over a third of 
the serious incidents.
    So the new damage prevention rule that came out from PHMSA 
I think is very important. We would like to see additional 
enforcement in the states. I think, in fact, Montana is one of 
four states that does not necessarily enforce 811 laws, so that 
is one improvement we would like to see.
    In the meantime, as an industry we spend a lot of time and 
effort on public awareness, and that has been a big 
improvement. You know, 10 years ago you would send a postcard 
to a local landowner, hey, you have a pipeline near you, just 
be aware of it. We are getting a lot more creative now. We are 
going to schools. We are contributing money to PTOs if they 
will have a session on pipelines in their area. We are going 
face-to-face to landowners.
    And then the emergency response piece of it that was 
mentioned earlier has been a big piece of it. The last--we 
started an emergency response advisory board about two years 
ago involving all of the fire--I did not know there were so 
many fire associations, but there are. We got them in there, 
getting the word out. We started this online training free 
portal, and I believe over 3,500 first responders have signed 
up for that already. So that is helping get that word out.
    Senator Fischer. And how do you address public concerns 
about the safety of pipelines, especially when they are 
crossing rivers, when they are near aquafers? How do you, I 
guess, explain to the public your command and control center? I 
think it is in Oklahoma City? Is that correct?
    Mr. Denton. Correct.
    Senator Fischer. How can you monitor a pipeline in Montana, 
and how quickly can you know if an issue arises so that we can 
make sure that our water is protected?
    Mr. Denton. Right. So two--I guess two pieces to that. 
First, with the landowner issues, that is one of our bigger 
challenges, and a lot of it is education. You know, if we are 
going in with a new pipeline, it is having town halls, public 
meetings, talking about our safety record, the monitoring and 
mitigation measures that we have. Sometimes it may even be, and 
Montana is a good example, where we have done these 100 
projects.
    In many cases, the landowners at first have been in 
opposition to that, but once we get in front of the county 
commissioners, have the town hall meetings, explain to them 
here is what we are doing, we are going deeper into the river, 
we are making the pipeline safer, then everyone really gets on 
board with that. So that is one piece of it.
    As far as the monitoring, you know, that was really another 
cultural improvement that came out starting in about 2010, 
2011. That was an NTSB recommendation. PHMSA put out a control 
room management rule in 2010 that was a big part of that 
improvement. A lot of the incidents back in that timeframe, you 
would see a lot of the volume released, was not necessarily 
from the original release, but the control center trying to 
restart the pipeline.
    So that is a cultural change in the control center. We call 
it ``think leak.'' And in our control center we tell them if 
there is any doubt whatsoever, shut the pipeline down. We have 
instances, for example, where a landowner may be out taking a 
walk. They smell something, and they see our pipeline marker. 
They call us. We shut it down. And sometimes it may just be a 
dead animal on the right-of-way, right, or something like that, 
but we do not take any chances with that.
    And I will give you two examples. We have had--we had two--
one of the things that we wanted to go after following the 
Marshall release was pipeline ruptures, and so we put out a 
white paper on that. And then at Phillips, we actually had two 
pipeline ruptures in 2013. One was an excavator that hit the 
pipeline, and the other was a landslide. In both cases, our 
control center saw those--the pressure changes and everything 
on the pipeline, within a couple of minutes had the pipeline 
shut down in five minutes and blocked in. And in one case we 
had personnel on the pipeline. By the time they called the 
control center, they already had the line shut down and blocked 
in.
    So we see data very quickly. They are trained to respond 
very quickly, and we have had some success at making those 
changes.
    Senator Fischer. And your response, when it--which I am 
happy to hear it is a quick response, you shut it down. You 
mentioned the restart and the issues there. Do you have 
personnel on the ground to look at the pipeline to make sure it 
is all right, if it is visible----
    Mr. Denton. Exactly.
    Senator Fischer.--to be able to monitor it, or do you 
depend completely on the--on the computer's technology for it?
    Mr. Denton. No, we have a full--we have a pretty robust 
process now where--and it goes back to an incident that we had 
several years ago, 10 years ago, where we did the same thing. 
We started a pipeline. So now if we shut a pipeline down for 
any reason, we will send local personnel out to confirm. We 
will do what we call a standup test to confirm the integrity of 
the pipeline, and then we get approval from the division 
manager and the control center manager before we will restart 
that pipeline.
    Senator Fischer. How often do you have pipelines that are 
shut down?
    Mr. Denton. We on average probably average one a day. I 
would say 5 to 10 a week.
    Senator Fischer. And I guess when you look at the risks 
involved, how serious a risk is it when the pipeline is shut 
down compared to a dead animal that somebody smells that you 
said--I mean, what----
    Mr. Denton. For the most, if it is----
    Senator Fischer. What I am looking for is the risk involved 
to those pipelines.
    Mr. Denton. Right. So a controlled shutdown is very safe. 
We turn off the pumps, because pipelines go up and down.
    Senator Fischer. The reason. The reason they are shut down 
is what I am looking for.
    Mr. Denton. Right, OK. So there can be several triggers, 
right? So we have a lot of data. In fact, we have 40,000 data 
points coming into our control center from the field, so we 
have a lot of data, a lot of analysis that goes into that. We 
have what we call line balancing.
    So maybe they see a little bit of imbalance in the line, so 
that will trigger a response. So we will get people involved, 
and we will make an analysis. This does not look right, shut it 
down, and then we will go investigate it. It may be an odor 
complaint from the landowner. It may be an instantaneous where 
we see, you know, the data is just obvious that it is. So those 
are the type of things that prompt those shutdowns.
    Senator Fischer. But how often is it a serious matter that 
shuts it down?
    Mr. Denton. Oh, I would say 99 percent of the time it is 
not an issue, right? Whatever we shut the pipeline down for, 
there was not a problem. So it, and----
    Senator Fischer. So it is a pretty thorough monitoring 
system.
    Mr. Denton. It is. And, in fact, I remember we had a 
meeting with NTSB Chairwoman, Deborah Hersman, a couple of 
years ago, and she asked that very question about, you know, 
OK, your controllers are paid to move the product through the 
pipeline. And we said, no, they are paid to move the product 
through the pipeline safely. That is the first priority. And 
so, we never want to have--you know, if there is a spill, we 
want to take care of it very quickly. But it is rare. It is 
very rare.
    Senator Fischer. Administrator, you have been ready to jump 
in.
    Ms. Dominguez. Sorry. I just wanted to--the reason I think 
it is important to understand what Mr. Denton is referring to 
is because the difference in operation that he is describing by 
if they identify a potential leak, whether it is, you know, a 
dead animal or any other anomaly that they are noticing in 
their operation center. Their immediate response is to assess 
it and shut the line down as opposed to taking the time to 
identify somebody to go out, look. You know, there is time 
involved in a physical inspection versus shutting it down, then 
going to inspect.
    And so, in the rare instance that there is in that one 
percent out of your 99 percent, what I took away from our 
discussion is that there is more prevention built in. There is 
more risk reduced--risk is reduced as a result of actually 
shutting it off. And shutting the pipeline off and 
understanding what the harm might be, and then going back to a 
safe restart versus, you know, potentially literally 
containing----
    Mr. Denton. Containing.
    Ms. Dominguez. Yes, thank you.
    Senator Fischer. And my last question on this area, people 
are concerned about pipelines. How do they compare with moving 
hazardous material by rail or by truck?
    Mr. Denton. Our perspective, it is the safest way to move 
hazardous liquids and just the sheer quantity that we move in 
the United States. I mean, our pipeline company alone, we 
deliver over two million barrels per day to multiple 
destinations all throughout the United States. So it--for the--
for the quantity that we move, pipelines is generally the 
safest way.
    Senator Fischer. Administrator, do you have numbers on 
that?
    Ms. Dominguez. I do not have numbers on it. I know that 
there--our responsibility at PHMSA is to make sure--our mission 
literally is to make sure that there is the safe transportation 
of all hazardous materials, regardless of mode. So as you know, 
we work both with rail, freight, highway, and pipeline to make 
sure that every mode that we are working with is as safe as 
possible.
    Senator Fischer. And how do pipelines compare?
    Ms. Dominguez. Pipelines are very safe. We are doing 
everything that we can for every mode of transportation to make 
sure that they are as safe as possible, regardless of the mode.
    Senator Fischer. OK, thank you very much.
    Mr. Denton. And we believe rail is a safe way as well. In 
fact, we do move some crude oil by rail. We need--we need both.
    Senator Fischer. Thank you. Senator Daines?
    Senator Daines. Thank you, Chairman Fischer. I just want to 
zero in on a Montana question. And I was looking at your 
testimony, Administrator, about the major river crossings where 
we have pipelines. And if I am reading the information 
correctly, since 2011, we have gone from 24 HDD crossings, the 
horizontal directional drilling crossings, to now 41, so there 
have been 17 since 2011. Of the 64 major river crossings--I 
guess we define ``major'' as 100 feet or more. So there are 23 
across our state that still would not be HDD.
    My question is, how should we think about that? What is the 
plan? Is that--what kind of risk does that present right now 
for our bigger rivers?
    Ms. Dominguez. So after the 2011 incident, there was a 
report that we participated in with the Governor of Montana. 
There was a task force that was put together, and really looked 
at assessing all of the river crossings throughout the state. 
The majority of those that we identified as the most 
significant risk have been HDD drilled.
    Moving forward, there is still additional work that we are 
doing in terms of assessing and monitoring, but we believe that 
the majority of them, with the exception--all of them have been 
HDD drilled, except the one here in Billings, which was 
determined by all parties involved that the--because of the 
stable environment of the Yellowstone in this particular area, 
the rip-rap and other measures that have been taken, that HDD 
probably was not the best way moving forward to move product. 
But nonetheless, the risk has been reduced in that particular 
area.
    Senator Daines. We just saw that in the video, an example 
of that. Just for everybody who is watching, how deep--if we go 
do an HDD crossing, how deep are we below the river bed?
    Ms. Dominguez. I am going to turn that over to my 
colleague.
    Mr. Denton. Typically we would go 40 feet below the river 
bed, but it also depends on the potential scour.
    Senator Fischer. Potential?
    Mr. Denton. Scour. Also it depends on the--you know, we 
have some land movement issues in Montana. There are instances 
where we have gone 200 feet deep to get under potential slip 
plains that exist out in the hills. So it really depends on 
every situation, and it also depends on the conditions--the 
soil, the rock--what kind of things you are running into.
    Senator Daines. Is there something built into the 
inspection methodology that relates to when you have a major 
runoff event? I think every Montanan knew from the winter of 
2010--when you saw the Yellowstone in the spring of 2011, I 
distinctly remember crossing the Yellowstone there at 
Springdale. My wife and I got out of our pickup, and we saw 
these huge cottonwoods come rushing down the Yellowstone, the 
forces of water. They were doing tremendous changes in what is 
going on there at the river bed.
    Is that built--that seemed like a pretty common sense 
thing. When that kind of event happens, that ought to raise a 
lot of alarms if we do not have a HDD crossing.
    Ms. Dominguez. We actually have built in our inspection 
criteria literally, rather, GIS data that we are working to--
that we collect with--along with the U.S. Army Corps of 
Engineers, the U.S. Geological Survey. It is part of our 
inspection routine as we go out through the course of our 
inspections, and look to see how we can--and what we are doing 
is looking to see how we can further enhance the data that we 
do collect to make sure that we are knowing everything we can 
about river crossings.
    Senator Daines. And are there any other--of these major 
river crossings that are not HDD, how many are planned to be 
converted to HDD in the next couple of years? Do we have any 
sense for that in Montana? There are--there are 23 remaining if 
I am doing my math properly.
    Mr. Denton. So I do not know the exact number. Like I said, 
we have got 100 projects that we identified that we need to do. 
We are probably about 80 percent through with that. Some of the 
remaining ones are HDD. Some will be traditional cut-ins and 
lowerings.
    But I will say, back to your comment about assessing the 
risk, that is really in the PHMSA regulations already. We are 
required to assess those risks and those threats and respond to 
those, including river crossings. So the burden is on us to do 
those assessments. The 2011 flooding obviously pointed that out 
that we need to do more.
    Senator Daines. Right.
    Mr. Denton. And so, today we have--we are kicking off that 
strategic initiative where we think we can put a lot more 
specific guidance out there, because today it is really more 
focused on new construction, but there is a lot of existing 
pipelines that we need to make sure we are assessing and 
mitigating those risks.
    Senator Daines. OK. And, I guess, the engineer in me, I 
could not resist when you mentioned ``smart pigging.'' Maybe 
give us the quick 30 seconds. What is that doing to help us 
reduce the risk of a spill?
    Mr. Denton. So, again, that really----
    Senator Daines. It does not involve pork production, I do 
not think.
    [Laughter.]
    Mr. Denton. No. It is also called ``in-line inspection,'' 
but it is basically a small computer that you put through a 
pipeline, and there are several different types. So we look for 
deformation. So we call those dent tools where someone may have 
dented your pipeline and it could be a risk for failure. There 
is what is called magnetic flux tools that basically magnetizes 
the pipe, looks for metal loss on the pipe. There are crack 
tools looking for tiny, small cracks that might not show up on 
a different type of tool. We have positional tools that we can 
run to see if the pipeline is moving from land movement, things 
like that. So there are a lot of different tools.
    And back to some of the comments earlier about the seven-
year requirement. In liquids pipelines, it is five years, so we 
are required to reassess every 5 years. And depending on the 
situation, we may do it every 3 years depending on the risks 
for that pipeline. So with the smart pigging, the in-line 
inspection tools have been a huge benefit, and they are getting 
better and better every year. And we are--that is another piece 
of our strategic improvement is more research and development 
on improving those tools.
    Senator Daines. OK. Thank you.
    Senator Fischer. Thank you, Senator Daines. This will 
probably be my last questions unless you stir me on here. The 
talk about inspections, that it is 7 years, or five years, or 3 
years, and we have the pigs going in, and all sorts of things I 
think with technology that can be available.
    So I would like to ask all of you, what do you see 
advancements in technology doing for this business and for the 
inspections, but also how do you evaluate risk? Is it--is it 
location of pipelines, depth, materials used when they were 
built, the age of them? How do you make those risk assessments? 
And then I would ask the administrator if the inspection 
timeline is going to be adjusted for high-risk pipelines as you 
move forward in the future. So however you want to start on 
that.
    Mr. Denton. I will start with the risk piece of it. So 
every operator has a risk management program, and it is 
essentially divided into two parts. So the threats: what are 
the--what are the threats to pipeline, and then, what are the 
consequences? And you combine those two together, and that is 
your risk.
    So we have in our risk management program multiple--we have 
like nine different threat categories, so it may be third-party 
damage. It may be corrosion. It may be manufacturing defects, 
construction quality, things like that. And then there are 
multiple subcategories under each of those. So we assess 
thousands of segments based on those threats, and then we look 
at the consequences.
    And so, just taking river crossings as an example, so like 
our--the consequences we will look at population impact, 
drinking water impact, ecological impact, as well as waterway 
impacts.
    Senator Fischer. And if could interrupt you.
    Mr. Denton. Sure.
    Senator Fischer. As you are--as you are looking at all the 
impacts here, do you bring in stakeholders? Do you bring in the 
commissioner? Do you bring in local elected officials? How do 
you manage that?
    Mr. Denton. Sometimes. We often bring in third party 
technical consultants, for example, so----
    Senator Fischer. Well, I am talking about local people. Do 
you bring in local people? Commissioner, are you involved in 
any of it?
    Mr. Ostlund. Chairwoman Fischer and Senator Daines, thanks 
for the question. Yes. The answer is, yes, and, of course, Mr. 
Denton not being local. We have regular meetings. In fact, 
Yellowstone County has a disaster and emergency services 
director and along with the refineries and the pipeline 
companies checking their crossings on a regular basis every 
year during the flood stages of the river. And when we have 
potentials for disaster, our DES director, along with our road 
and bridge department, spends extra time looking at the river, 
evaluating all of the spots.
    Typically, you will find pipelines near bridges, and that--
it is spots where you can find significant erosion, so we 
monitor those very closely not only to protect the roads, but 
to protect the pipelines. I do have regular meetings with all 
the local refinery executives. I sit on the Exxon Refineries 
Advisory Board--Community Advisory Board and meet regularly 
with the other refineries to talk about mitigation and ways 
that we can work together to make the system work. So I think 
the input and the exchange there is very good and very healthy.
    And with regard to inspections, something that has not been 
mentioned in the process today is that local refineries do hire 
us, private companies around here that do aviation inspections 
of all the lines across the State. And so, there is a regular 
routine patrol done by aircraft or helicopter that goes 
around----
    Senator Fischer. Drones? Do you use drones yet?
    Mr. Ostlund. Well, I cannot answer that question yet.
    Mr. Denton. They are looking at it.
    Mr. Ostlund. Yes, but they go out and look, and they look 
for spots where you might see oil to the surface of the ground, 
or you might excavation near a pipeline or whatever, and they 
report back. So I think the communication is very good at the 
local level. Thank you for the question.
    Mr. Denton. And the answer is we do include local 
officials, especially on new projects, things like that, but we 
do need that input. What are the consequences in your 
community, right, if we have a spill? And so, that is one of 
the inputs into our model as well.
    Senator Fischer. And I would assume you have plans then in 
the manner that you contact the community. We just saw a river 
damaged in Colorado because--well, I guess that was under the 
watch of the EPA and I know local communities, and a lot of the 
different political subdivisions we are hearing did not get 
that information right away. Do you have plans that we can let 
people know something is occurring that does have an effect on 
them, that they can be contacted?
    Mr. Denton. Absolutely, and we obviously want them to know 
about that ahead of time even if something does happen. But, 
yes, we--in fact, we do very large-scale drills every year. We 
had one in Spokane, Washington a few months ago, and we bring 
in all of the local responders. We will bring in EPA. PHMSA 
will participate. We will even bring in our peer companies to 
critique that drill, and then county commissioners. And we will 
do a full-scale--we will even have a media mockup, you know, 
press conferences, things like that. And we will deploy 
equipment out on the rivers and rights-of-ways, you know. It is 
a good opportunity because every time we do that, we learn 
something.
    Senator Fischer. Right.
    Mr. Denton. You can add this and do this better.
    Senator Fischer. Right. So, Administrator, how are you 
going to bring all this to look at your regulations and deal 
with high risk?
    Ms. Dominguez. Thank you for the question, Senator. Before 
I forget, I want to mention one thing. Speaking of drills 
really quickly, there is actually a drill that is being 
conducted here in terms of emergency response. It was done over 
the last 2 days up in Northwest Montana, Flathead region. So I 
am hoping--looking to see the results of that exercise, but I 
hope--I hope it went well. But it is a coordination amongst all 
the emergency responders as well as the operators to make sure 
that we are doing things well.
    Moving forward, I think that one of the opportunities that 
we have is to further enhance and further inform our risk 
modeling system. And as we said, this is an opportunity to make 
sure that the integrity--one of the things that Congress has 
been very focused on and we greatly appreciate it is making 
sure that our integrity management system, which really gets at 
this risk-based modeling, is as informed as it possibly can be 
because what we do, as I said before, is we set the minimum 
criteria that we hope operators then take and inform their 
larger risk models that they operate for their systems. Some of 
our rules that we are engaging in now will further enhance that 
data collection and further inform it.
    I also think that we were talking briefly about the 
facility response plans. One of the things we are doing is we 
have reviewed literally every facility response plan that has 
been filed with the Agency over the course of the last two 
years. We are looking to make sure that operators are--have a 
current operation plan filed, and are executing accordingly in 
the event that there is an incident. So we want to make sure 
that those are as up to date as possible.
    It is a constant exercise. It takes a lot of energy and 
resources. We are trying to do all we can to make sure that we 
are as up to date on those response plans as possible.
    Senator Fischer. Great. Thank you. Senator Daines?
    Senator Daines. All right. I think we are getting close to 
wrapping up, but I want to direct a question to Commissioner 
Ostlund regarding another pipeline that became quite famous, 
perhaps infamous, called the Keystone pipeline. You are a 
publicly elected official. You are involved in managing 
Yellowstone County. You see this is creating jobs. You see them 
pay taxes. You have got to make all those decisions here as you 
look at revenues coming in from your tax base and economic 
growth or an economic downturn perhaps, and the investments 
that you ultimately make in our community.
    How would this impact--how would the Keystone pipeline 
impact Yellowstone County, Montana as you see it? Should we be 
allowed to construct it and get that project completed?
    Mr. Ostlund. Senator Daines, thank you for the question. I 
think the answer to that is pretty easily achievable. We are 
looking right now at a downturn in oil prices in the Bakken, 
and, of course, you can see the economic impact in Billings, in 
the region, in Williston, North Dakota. And across the State, 
the pipelines and distribution lines pay 13 percent of the 
total property tax revenue collected by the State of Montana. 
If you add in the refineries and if we were to get the 
Keystone, you can probably see that percentage, over 20 
percent. So one-fifth of the revenue collected by the State of 
Montana.
    It would add jobs in a state where they are always 
important. It would offer us an opportunity to hook onto that 
line to deliver Montana-made products, which are oil and gas 
down to the refineries. I see nothing but benefit from the 
Keystone pipeline.
    But, most importantly, it allows us a chance to address our 
national security. We should have all of our oil and gas 
available from continents that we support, trust, and believe 
in, and not be reliant upon OPEC to deliver oil and gas over 
here. We have the available technology. We have the reserves. 
We have the ability to build the pipeline. It would benefit our 
country, and our State, and our county significantly.
    And quite honestly, the Montana Association of Counties has 
sent a number of letters to all the senators, including 
yourselves, supporting the Keystone pipeline, and 100 percent 
of the oil and gas counties in Eastern Montana have signed onto 
that. And we think it would be a valuable resource, and we 
certainly think it needs to be built.
    Senator Daines. And from a technology viewpoint--this might 
be for Mr. Denton--where is the Keystone pipeline in terms of 
the technology advances? How would that pipeline be in 
comparison to other pipelines?
    Mr. Denton. So I cannot speak completely for TransCanada, 
but from what I understand it will be, as are many pipelines 
constructed today, the best technology. It is better steel. It 
is better coding. We are doing directional drills, underwater 
crossings, you know. That is much more common in new 
construction, probably the top leak detection type things. And 
we are--in fact, we have another initiative that is a 
construction quality management system that we are working on.
    TransCanada will be a big part of that and contributing to 
that effort with lessons learned that they are doing on that 
pipeline. Many others are building big pipelines as well, and 
so we hope to have more collaborative efforts like that and 
take the best practices of all.
    Senator Daines. OK. My follow-up--my last question to the 
Administrator, as the Administrator of PHMSA, what will you do 
to facilitate the construction of safe operation of new 
pipelines? Looking at all the projections, we are going to be 
building pipelines in this country for many, many years to 
come. How will you lead to encourage and facilitate the 
construction of new pipelines to make sure it is done in a 
timely manner?
    Ms. Dominguez. Senator Daines, I really appreciate the 
question because I think that new construction is terribly 
important. I think that as we look to--we, as you know, set our 
regulations to make sure that there is safe construction, and 
those criteria are actually being met as the pipe is going into 
the ground.
    It is a very vulnerable time for a pipeline. The 
construction, the first few years of operation, it requires a 
lot of monitoring. It requires a lot of inspection. It is, you 
know--if you look at pipeline risks and failures, new--when it 
is new and it goes into the ground, it is one of the first 
opportunities that we have to actually make sure that things 
are going well. Also on the back end as it looks to age there 
are things that also indicate some harm moving forward. So, 
again, it is a little bit of, you know, on both ends of that 
bathtub curve opportunity.
    So with new construction, we are working very hard with 
advancing our inspection force to make sure that we are able to 
put enough inspectors out to review the new pipe that is going 
into the ground and make sure that it is being done well, and 
it is following our standards. And then also working with our 
operators to make sure that they are going above and beyond to 
make sure that they are understanding any trends that they 
might be seeing, and informing us as well as others about how 
things are going as they operate.
    Senator Daines. Thank you. Thanks, Chairman Fischer.
    Senator Fischer. Thank you, Senator Daines.
    The hearing record will remain open for two weeks, and 
during this time, Senators are asked to submit any questions 
for the record. Upon receipt, the witnesses are requested to 
submit their written answers to the Committee as soon as 
possible.
    I have also received a number of requests to submit public 
comments for the record, and these can be submitted 
electronically through the Commerce Committee website within 
the next 2 weeks. I ask unanimous consent that any comments be 
entered into the official record.
    Without objection.
    [The information referred to follows:]

Prepared Statement of MAPPS--An Association of Photogrammetry, Mapping 
                          and Geospatial Firms
    MAPPS (www.mapps.org) is a national association of private sector 
geospatial firms. Our member firms span the entire spectrum of the 
geospatial community, including satellite and airborne remote sensing, 
surveying, photogrammetry, aerial photography, LiDAR, hydrography, 
bathymetry, charting, aerial and satellite image processing, GPS, and 
GIS data collection and conversion services and companies that provide 
hardware, software, products and services to the geospatial profession 
in the United States and other firms from around the world. A 
significant number of our member firms are prime contractors or 
subcontractors to USDOT, PHMSA and other Federal agencies, and to the 
state and local governments that receive Federal grant monies, as well 
as to private sector pipeline operators, utilities, and other 
commercial clients.
    We enthusiastically support the oversight of pipeline safety by 
Senators Fischer of Nebraska and Daines of Montana. We commend this 
leadership on the ongoing focus on reauthorization of the Pipeline and 
Hazardous Materials Safety Administration (PHMSA) and related 
activities and programs.
    MAPPS is deeply concerned about the lack of location data on 
pipelines, as well as other underground infrastructure and utilities. 
This is an important missing ingredient in assuring pipeline safety, as 
well as providing for accident prevention and post-incident mitigation.
    In July 2015, at a hearing held by the House Committee on Energy 
and Commerce on the Pipeline Safety, Regulatory Certainty, and Job 
Creation Act of 2011, Stacy Cummings, then-Interim Executive Director 
of PHMSA testified that:

        ``PHMSA has consistently requested additional funding to 
        support enhancing our risk management, analytical frameworks 
        and mapping capabilities. Through PHMSA grants, state pipeline 
        safety programs are funded up to 80 percent, but PHMSA has 
        limited insight into state data on where interstate pipelines 
        actually exist, their conditions, and the inspection reports 
        performed by our state partners.''

    In January 2013, at a hearing on pipeline safety, then-Commerce 
Committee Chairman Senator Jay Rockefeller (D-WV) said:

        ``They crisscross underneath our cities and country sides, yet 
        most of the time we are not even aware they are there. They 
        deliver critical fuel that powers our homes, factories, and 
        offices, and also transport the oil and gas that keep our cars, 
        trucks, and planes operating . . . Compared to other forms of 
        transportation, pipelines are a relatively safe, clean and 
        efficient way of transporting the goods they carry. 
        Unfortunately, this is not always the case . . . Lack of 
        records about older pipelines is a real problem and contributed 
        to a catastrophic pipeline explosion in California that killed 
        several people.''

    As recently as January 2013, the Government Accountability Office 
(GAO) released a study (GAO-13-168) on pipeline safety urging ``better 
data'' with an emphasis on ``location'', ``proximity'' and 
``topography.''
    The National Transportation Safety Board (NTSB) has also issued 
numerous accident reports, findings, and recommendations regarding the 
location of pipelines, utilities and infrastructure. In January, 2015, 
NTSB adopted a safety study on integrity management of gas transmission 
pipelines in high consequence areas that calls for

        ``expanded and improved resources and guidance at the Federal 
        level, including improvements to the National Pipeline Mapping 
        System and better integration of geographic information system 
        (GIS) technology.''

    Existing records have many problems. A large number of these 
records are either positionally inaccurate, reference physical features 
that may no longer exist, are incapable of being found, were altered 
during conversion to other formats, or have other problems.
    It is estimated that the pipelines in the United States could 
encircle the Earth 25 times. The American Public Works Association 
estimates that an underground utility line is hit somewhere in the 
United States every 60 seconds. There is a critical need for current, 
accurate location data regarding pipelines.
    Geospatial information directly influences all aspects of Accurate 
Safe Utility Location (ASUL) risk assessment and emergency management. 
Advanced location surveying technologies, including light detection and 
ranging (LiDAR), sonar, radar and imagery, provide input into 
Geographic Information System (GIS) data and other geospatial assets 
are of most critical value in emergency response during the initial 
hours and days immediately following any incident. When utilized in the 
field at specific incident response locations, ASUL maps can be 
effective and life-saving tools. In California, a utility's disastrous 
gas pipeline incident brought forth an emergency plan from an 
independent review panel, NTSB, industry associations and regulators 
such as PHMSA, California Public Utilities Commission (CPUC), former 
NTSB leadership, American Gas Association (AGA), Interstate Natural Gas 
Association of America (INGAA) and others.
    Over the past decade, many deaths, injuries, and billions of 
dollars in repairs to the utilities and damaged property have been 
associated with poorly mapped or maintained distribution systems. 
Millions of dollars in environmental cleanup, countless road and 
facility closures, and dozens of evacuations are the additional results 
of these breakdowns. It is important to note that these systems most 
often physically parallel and work in tandem with existing 
transportation corridors, such as railroad and highway structures. 
These systems connect nearly every household to a common grid, often 
exposing citizens to unsafe and potentially explosive conditions. 
Because Federal, state and local governments control the corridor 
rights-of-way, report, and react to incidents (through state One Call, 
Miss Utility, or 811 systems), and issue permits for projects 
surrounding these systems, accurate geo-location surveying and mapping 
must be in place so that these facilities are not damaged or allowed to 
further deteriorate.
    Federal officials, transportation designers, telecom, and utilities 
and pipeline operators, as well as government, need accurate location 
information to manage existing underground infrastructure and plan for 
future growth and development. Surveys and maps of underground 
utilities are often inaccurate. In many cases, they don't even exist. 
The lack of location data is often cited by the NTSB, GAO, and other 
authorities as a factor in pipeline and other utility accidents. The 
inaccuracy of location data, unmarked utilities, and crowding within 
rights of way are major factors contributing to disruption to 
underground infrastructure. Digging, drilling or excavating in the 
vicinity of unknown, unmarked, unmapped, or incorrectly located 
utilities can be costly in terms of wasted excavation time, service 
disruption and utility downtime, environmental damage, and--worst of 
all--personal injury or loss of life. One Call, Miss Utility, or 811 
systems are often nonresponsive to surveyors.
    An Accurate Safe Utility Location + Infrastructure Mapping Reform 
(ASUL+IMR) is needed for accurate location of America's underground 
utilities. This data partnership program will save lives, time, and 
money. Such a partnership should begin with current private sector 
protocols and practices and be open to evolving standards and 
technologies. This initiative should include both management of 
physical infrastructure, the information technology systems used to 
manage our most basic daily consumption of power, water, 
communications, transportation and natural gas, and be compatible with 
One Call, Miss Utility, or 811 systems. Accurate geospatial location 
can enable safe corridor utility distribution through surveying and 
mapping data sets provided by and for terrestrial and mobile LiDAR; 
acoustical sounding; data from ground penetrating radar as well as 
other applicable geophysical technologies; GPS; structures and 
topography; critical infrastructure; cadastral; airborne imagery and 
elevation; and transportation and pipeline. Small businesses providing 
surveying, mapping and geospatial data, products and technologies can 
work closely with utilities, end users, and government to provide 
innovation and flexibility in the planning, mitigation, response, and 
remediation phase.
    Federal officials, transportation designers, telecom, and utilities 
and pipeline operators, as well as government, need accurate location 
information to manage existing underground infrastructure and plan for 
future growth and development. Surveys and maps of underground 
utilities are often inaccurate. In many cases, they don't even exist. 
The inaccuracy of location data, unmarked utilities, and crowding 
within rights of way are major factors contributing to disruption to 
underground infrastructure. Digging, drilling or excavating in the 
vicinity of unknown, unmarked, unmapped, or incorrectly located 
utilities can be costly in terms of wasted excavation time, service 
disruption and utility downtime, environmental damage, and--worst of 
all--personal injury or loss of life. Many location records do not 
reflect the ``as-built'' location of the infrastructure.
    MAPPS respectfully urges the Committee to enable safe corridor 
utility distribution through legislative reforms that will apply cost-
effective, current, state-of-the-art professional geospatial services 
and technology to location requirements in Federal law governing 
pipeline and underground utility safety. Conformance with American 
Society of Civil Engineers (ASCE) standard guideline 38-02 for the 
collection and depiction of existing subsurface utility data will help 
contribute to public health, safety and welfare.
    Once again, thank you for your leadership and MAPPS stands ready to 
work with the Senate and the Committee to enact legislation allowing 
for safer operation of pipelines.
                                 ______
                                 
 Prepared Statement of the National Society of Professional Surveyors 
                                 (NSPS)
    The National Society of Professional Surveyors (NSPS) is the 
national voice of land surveying professionals throughout the United 
States.
    As Congress acts to reauthorize the Pipeline and Hazardous 
Materials Safety Administration (PHMSA) as well as activities and 
programs related to pipeline safety and operation, NSPS is deeply 
concerned about the lack of location data on pipelines, as well as 
other underground infrastructure and utilities.
    We bring to the attention of the Committee the challenges in 
accounting for and coordinating location data for all such pipelines as 
aggregated by Federal agencies as such data is gathered from state and 
local government entities, or other non-Federal sources.
    In April 2015, the Obama Administration cited ``approximately 2.6 
million miles of pipeline'' given that there is not a comprehensive 
inventory or database for all such pipelines and related surveying and 
mapping data. Citing past disasters caused by factors such as 
extraordinary natural events, and ever-aging infrastructure, the White 
House urged in the Quadrennial Energy Report (QER) a $2.5 to $3.5 
billion investment to replace the most at-risk natural gas pipelines--a 
number that is only a fraction of the $270 billion the report says is 
needed to address leak-prone distribution mains across the country. The 
report painted a stark picture of the state of that infrastructure, 
citing aging and increasingly unreliable steel and cast-iron pipelines 
particularly prone to rupture, often with devastating consequences. In 
a tragic example, a 30-inch underground natural gas pipeline exploded 
in September 2010 in San Bruno, California, causing a fire that killed 
eight people, injured 58 and destroyed 38 homes.
    Discrepancies exist with regard to mileage and classification data, 
related to location data, as compiled in two governmental reports in 
2013. The Congressionally authorized National Academies of Science 
(NAS) report found that:

        ``Most of the estimated 55,000 miles of crude oil transmission 
        pipeline in the United States are interconnected to form a 
        national network that links oil production regions, storage 
        hubs, and refineries. This extensive network accounts for more 
        than 90 percent of the ton-mileage of crude oil transported 
        within the United States.''

    Additionally, the report stated:

        ``Pipeline systems traverse different terrains and can vary in 
        specific design features, components, and configurations.''

    A January 2013 Congressional Research Service (CRS) report said 
that:

        ``Nearly half a million miles of pipeline transporting natural 
        gas, oil, and other hazardous liquids crisscross the United 
        States . . . Recent pipeline accidents in Marshall, MI, San 
        Bruno, CA, Allentown, PA, and Laurel, MT, have heightened 
        congressional concern about pipeline risks and drawn criticism 
        from the National Transportation Safety Board (NTSB).''

    The CRS report went on to articulate the role of geospatial data in 
recent law:

        ``In 2006, questions were raised about the accuracy of pipeline 
        location data provided by operators and maintained by PHMSA in 
        the National Pipeline Mapping System (NPMS). At the time, 
        agency officials reportedly acknowledged limitations in NPMS 
        accuracy, but did not publicly discuss plans to address them. 
        P.L. 112-90 authorizes PHMSA to collect additional geospatial 
        and technical data from pipeline operators to achieve the 
        purposes of the NPMS. Congress may review whether these or 
        other statutory measures are sufficient to verify that pipeline 
        operator information is complete and correct, particularly for 
        older parts of the pipeline network.''

    NSPS urges Congress to enact safe corridor utility distribution 
legislation whereby the expertise found in the professional surveying 
and mapping community is robustly engaged to enhance pipeline and 
underground utility safety.
    Once again, thank you for your leadership and NSPS stands ready to 
work with the Senate and the Committee to enact legislation allowing 
for safer operation of pipelines.
                                 ______
                                 
            Yellowstone River Conservation District Council
                                   Billings, MT, September 18, 2015
Hon. Deb Fischer,
Hon. Steve Daines,
Hon. Jon Tester,
United States Senate.

Dear Senators Fischer, Daines and Tester,

    On behalf of the Yellowstone River Conservation District Council 
(YRCDC), I appreciate your efforts to hold this Senate Commerce, 
Science, and Transportation Committee field hearing regarding 
``Pipeline Safety: State and Local Perspectives'' in Billings, Montana.
    For more than a decade the YRCDC has led the way in facilitating 
dozens of meetings within the Yellowstone River corridor, with the 
objective of providing a comprehensive scientific study of the 
Yellowstone River.
    This report presents the results of the Cumulative Effects Analysis 
(CEA) conducted for the Yellowstone River Corridor Study. The corridor 
study was led jointly by the U .S. Army Corps of Engineers and the 
Yellowstone River Conservation District Council, with participation 
from multiple federal, state and local agencies, as well as several 
non-profit organizations and private businesses.
    This study has been undertaken as a result of public attention and 
concerns about the combined effects of damaging flood events (1996 and 
1997) and increased development pressures along the Yellowstone River 
Corridor.
    The study focuses on the 12 counties along the main stem river 
corridor from Yellowstone National Park to the confluence with the 
Missouri River in North Dakota.
    One result of this study was the development of several scientific-
based recommended practices regarding current and future impacts in the 
river corridor. These recommendations include valuable information 
provided by the hazardous material pipeline risk assessment document 
commissioned by the YRCDC.
    Montana Conservation Districts are on the front line of resource 
conservation development and protection. Our knowledge of local lands 
and people are of great value to the many agencies involved with 
protecting our lands and waterways.
    The Yellowstone River Council has a great interest in providing 
safe pipelines for the transport of oil, gas and other hazardous 
materials, especially considering the inherent risks involved with over 
the road and rail methods of transportation.
    We encourage you to support the reauthorization of the Pipeline and 
Hazardous Materials Safety Administrations valuable services in 
overseeing and enforcing Federal regulations.
    Montana depends on a vibrant business community that is enhanced by 
the oil and gas industry, but we also count on those agencies that work 
to protect our pristine landscape and environment. PHMSA provides those 
protections and deserves your support.
    Montana Conservation Districts and the Yellowstone River 
Conservation District Council are on the front lines providing local 
oversight and protections for Montana's waterways and we are eager to 
support continued efforts to protect our neighborhoods in this ``Last 
Best Place''.
            Sincerely,
                                            Don Youngbauer,
                                                          Chairman.
    Cc: The Honorable Marie Therese Dominguez, PHMSA Administrator
                                 ______
                                 

     7.1 Position Statement--Oil/Gas/Brine Water Pipeline Crossings

Background
    Following the 2011 rupture and resulting oil spill from the 
ExxonMobil Silvertip Pipeline near Laurel, the YRCDC commissioned a 
hazardous material pipeline risk assessment that was completed in 2012. 
A second pipeline oil spill near Glendive in January 2015 again 
heightened public awareness of the vulnerability of these pipelines and 
the environmental damage that can result from these spills. The 
pipeline risk assessment shows the presence of 39 pipelines 
intersecting the Yellowstone River 100-yr Channel Migration Zone (CMZ) 
at 21 crossings. Thirty of the pipelines cross the channel while nine 
pipelines are located within the CMZ.
    Factors that affect pipeline failure risk are either internal or 
external. Internal factors are intrinsic to the pipeline itself, such 
as corrosion, weld failure or age. External factors are those that are 
a function of the environment through which the pipeline must pass. 
These external factors include lateral channel migration and channel 
bed scour that can expose shallowly buried pipelines. Depth of cover, 
bank armoring, and ``pinch points'', such as bridges, can exacerbate 
the potential for pipeline exposure by concentrating the erosive forces 
from floods and ice.


    Exposed pipeline in the river at risk of being ruptured.
Recommended Installation and Management Guidelines
    The following are guidelines for new and existing pipeline 
crossings that the YRCDC wants the Pipeline and Hazardous Materials 
Administration (PHMSA) and all pipeline companies responsible for 
pipeline crossings on the Yellowstone River and tributaries to adopt.

   Horizontal Directional Drilling: All new pipeline crossings 
        will use Horizontal Directional Drilling (HDD) technology that 
        places the pipeline at a minimum of 30 feet beneath the river 
        channel bottom. Crossings will be located on a stable straight 
        channel reach where possible. River bends and braided sections 
        should be avoided. The HDD entry and exit points will lie 
        outside the 100-yr CMZ boundary. All drilling pads, staging 
        areas and disturbed areas will be reclaimed following the HDD 
        pipeline installation.

     Existing Pipelines: All existing at-risk pipelines 
            that were installed using open-trench technology will be 
            replaced using HDD technology following with the same 
            criteria as outlined for new pipelines.

     Oversight: State and Federal oversight agencies must 
            require HDD technology be used on all new pipeline 
            crossings on the Yellowstone River mainstem and the 
            perennial/intermittent tributaries that feed into the 
            Yellowstone River.

   Spill Detection: Spill detect ion and remote shutoff valve 
        technology will be incorporated into all pipelines to minimize 
        the volume of spilled material and expedite response time.

   Pipeline Inspections: Pipeline companies need to conduct 
        annual inspections of pipeline crossings with special attention 
        given to real-time monitoring during major flood and ice jams.
Implementation Strategy
  1.  Pipeline Crossings Review: The YRCDC will work with member 
        Conservation Districts on a consistent policy that clarifies 
        their role in reviewing and commenting on new proposed pipeline 
        crossings or the replacement of existing ones in their 
        respective counties. The policy will further clarify the 
        applicability of 310 permits for pipeline crossings.

  2.  State and Federal Agency Coordination: The YRCDC will 
        periodically hold a meeting with state and Federal oversight 
        agencies to discuss the status of pipeline crossings throughout 
        the Yellowstone River Basin and to offer suggestions on design 
        criteria and agency oversight.
Specific Restoration Project Recommendations
    None identified
Additional Information & Data Needs

  (1)  Pipeline Risk Assessment: Expand and update YRCDC's 2012 
        Pipeline Risk Assessment. Depth of cover data within the CMZ 
        for all 39 pipelines will be requested from the National 
        Pipeline Mapping System (NPMS) under the jurisdiction of PHMSA. 
        There will be a detailed risk of exposure assessment conducted 
        on each pipeline based on depth of cover and site specific 
        scour analysis.
                                 ______
                                 
              Montana Association of Conservation Districts
                                     Helena, MT, September 23, 2015

Senator Steve Daines (RMT), and Senator Deb Fischer (RNE), Chairman of 
the Surface Transportation and Merchant Marine Infrastructure, Safety, 
and Security Subcommittee, Washington, DC

Dear Senators Daines and Fischer:

    We are writing concerning the Senate Commerce, Science, and 
Transportation Committee field hearing entitled ``Pipeline Safety: 
State and Local Perspectives'' held on Friday, September 18th at 
Montana State University, Billings.
    Please consider this letter our formal comments to be entered into 
the record regarding the pipeline safety hearing.

  1.  We would like to express our interest in safe pipelines across 
        the USA.

  2.  We would like to bring to light that Conservation Districts have 
        an 80 year + knowledge of local people, lands and waterways.

  3.  We would request that you include Conservation Districts early on 
        in the case of a spill. We believe that our knowledge of local 
        lands and people would be of value.

  4.  We would like to mention that there are 3,000 Districts 
        nationwide with 15,000 locally elected officials.

  5.  We would like to mention that in some states such as Montana, 
        Districts have specific responsibilities ref waterways 
        regarding stream crossing permits.

  6.  In Montana at least, we would like to participate in trainings to 
        learn technical aspects of pipeline stream crossings. This 
        might best be accomplished at one of our annual conventions.

    Thank you for your consideration.
                                               Elena Evans,
                                                Executive Director,
                         Montana Association of Conservation Districts.

    Senator Fischer. With that, I would like to thank all of 
you for being here today. I think we have had a very 
informative and good discussion. Thank you to our panelists. 
Thank you, Senator Daines. Great job. Love Montana.
    We are adjourned.
    [Whereupon, at 11:40 a.m., the hearing was adjourned.]

                            A P P E N D I X

    Response to Written Questions Submitted by Hon. Steve Daines to 
                      Hon. Marie Therese Dominguez
    Question 1. Ms. Dominguez, thank you for traveling to Montana, 
taking the time to hear first-hand from Montana officials, pipeline 
operators, and community stakeholders. A major concern raised during 
the hearing was PHMSA's slow inspection report turnaround time. As a 
Montana operator highlighted, they sometimes have to wait one year 
following and inspection to receive a report from PHMSA. What is 
PHMSA's target inspection report turnaround time? What is PHMSA doing 
to expedite reports and notices following an inspection so operators 
can address any deficiencies?
    Answer. The PHMSA pipeline inspection process is a risk-driven, 
data-informed process that evaluates the safety and compliance of 
pipeline systems. Many of these systems are large and involve thousands 
of miles of pipelines and multiple pump/compressor facilities. A 
typical inspection requires 2-5 engineers/inspectors and lasts 3-8 
months. The PHMSA inspection process is composed of multiple stages, 
including:

   Pre-Inspection Review of Data and Inspection Planning

     PHMSA analyzes all known information about a pipeline 
            company and its pipeline system(s), including material risk 
            factors, proximity to people and sensitive environmental 
            areas, and incident and compliance histories.

     The analysis helps PHMSA decide where to focus its 
            inspections of operator processes, records, and facilities, 
            and often requires the full team one-two weeks to complete.

   The Inspection is composed of five distinct parts, which 
        typically occur over 3-8 months:

     Entrance Interview: PHMSA meets with company officials 
            to outline the scope of the inspection and establish the 
            detailed inspection schedule so that appropriate company 
            personnel are available during the subsequent inspection.

     Procedure Review: PHMSA reviews the company's 
            processes and procedural manuals to determine compliance 
            with Federal safety standards.

     Records Review: PHMSA reviews the company's operations 
            and maintenance records to identify any safety issues and 
            to determine if the records reflect compliance with Federal 
            safety standards and the company's own procedures.

     Field/Facility Review: PHMSA conducts an on-site 
            inspection and evaluation of multiple field locations 
            throughout the system being inspected. This may include 
            multiple pump/compressor facilities and mainline pipeline/
            valve installations.

     Exit Interview: PHMSA conducts an exit interview at 
            the end of every inspection and often at significant 
            ``pause points'' in between. During these discussions, 
            PHMSA identifies to company representatives any safety 
            concerns or probable violations. It is important to note 
            that company representatives do not need to wait until they 
            receive a formal enforcement letter to act upon safety 
            concerns and probable violations.

   Inspection Report Time Frames: PHMSA staff's own performance 
        plans provide target completion timeframes for inspection 
        paperwork:

     Preliminary Inspection Report--30 days after 
            completion of the inspection.

     Final Inspection Report--60 days after completion of 
            the inspection.

    When all available information has been assembled, PHMSA decides 
which issues, if any, identified during an inspection or accident 
investigation warrant enforcement actions, and which type of 
enforcement tool to apply for each issue. These decisions dictate what 
type of evidentiary documentation is needed to validate an enforcement 
case. Probable violations of Federal safety standards may need a 
proposed civil penalty, a proposed compliance order, and a legal 
review. An enforcement notice letter is then prepared that clearly 
alleges the violations and includes a Violation Report, which presents 
the full extent of PHMSA's evidence proving the violations and supports 
the proposed penalty, if applicable. PHMSA has established target times 
from the end of its on-site inspection to the issuance of an 
enforcement notice letter. These target times depend on the enforcement 
tool used, as follows:

   For Notice of Probable Violation cases--225 days

   For Warning Letter cases--120 days

   For Notice of Amendment cases--200 days

    In 2014, the actual median times were:

   For Notice of Probable Violation cases--230 days

   For Warning Letter cases--90 days

   For Notice of Amendment cases--264 days

    PHMSA has undertaken a number of initiatives to speed up the 
inspection and enforcement process, recognizing that expediting our 
enforcement process is important to ensure that operators promptly 
correct non-compliances, and to provide greater fairness by apprising 
operators of the agency's position in a timely manner. These have 
included recently modifying our procedures to allow for the issuance of 
critical enforcement actions in mid-inspection, rather than waiting for 
the completion of the full 3-8 month inspection process. PHMSA also 
issues monthly internal case-management reports that compile 
performance metrics on the processing of cases for each enforcement 
step, compared against established target times for key enforcement 
steps, and holds accountable those responsible for timely completion.
    As a result of its initiatives, PHMSA has reversed a years-long 
trend of increasing times between initiating and fully closing cases 
that include proposed civil penalties or proposed compliance orders 
(i.e., Notice of Probable Violation cases). From 2009 to 2014, the 
average processing time decreased by 54 percent, from 1,370 days to 624 
days. PHMSA continues the effort toward quicker case processing, 
keeping in mind that our enforcement process allows for ``due 
process,'' where the operator is given an opportunity to respond to the 
allegations in our enforcement notice letters. As permitted by our 
regulations, operators sometimes request informal hearings to defend 
their actions and present their case. Subsequent to hearings, operators 
are often provided additional time to submit further written material 
supporting their case. These procedures can add to the total time from 
initiation to closure.

    Question 2. We hear in this Committee increasingly from witnesses 
that performance and outcome based regulations are worth pursuing given 
the proactive safety practices of industry and the rapid evolution of 
technology. Based on my experiences in the private sector, I know 
industry sets a high standard for safety and is most often the source 
of safety technology innovation. What role will performance based 
regulations play in future rulemaking as PHMSA works to complete 
outstanding 2011 Congressional mandates? Will this help facilitate 
innovation?
    Answer. PHMSA's safety framework relies on a mix of performance-
based and prescriptive regulations Prescriptive regulations provide 
operators with minimum safety requirements where appropriate and 
performance-based regulations accommodate technical changes to improve 
safety. This approach gives operators the flexibility to develop 
innovative solutions that improve safety while addressing the unique 
and changing risks of their specific systems.
    Performance-based regulations have proven effective in addressing 
the complexities of regulating vastly different systems and conditions 
and encouraging innovation. They will continue to serve these purposes 
as we continue to address the remaining 2011 mandates. PHMSA will 
continue to seek opportunities to address these mandates, leverage new 
technologies, share lessons learned from inspections and accident 
investigations, and adopt best practices.

                                  [all]

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