    [Senate Hearing 114-251]
    [From the U.S. Government Publishing Office]

                                                         S. Hrg. 114-251

                       PIPELINE SAFETY: OVERSIGHT OF OUR
                           NATION'S PIPELINE NETWORK

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

                                    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 29, 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 29, 2015...............................     1
    Statement of Senator Fischer.....................................     1
    Statement of Senator Booker......................................     2
    Statement of Senator Moran.......................................    48
    Statement of Senator Peters......................................    50
    Statement of Senator Daines......................................    53
    Statement of Senator Klobuchar...................................    55
    Statement of Senator Ayotte......................................    57
    Statement of Senator Markey......................................    58
    Statement of Senator Blumenthal..................................    60

                                   Witnesses

    Susan A. Fleming, Director, Physical Infrastructure Issues, U.S.
      Government Accountability Office...............................     3
        Prepared statement...........................................     5
    Hon. Christopher A. Hart, Chairman, National Transportation
      Safety Board...................................................    13
        Prepared statement...........................................    14
    Michael Bellamy, General Manager, PII Pipeline Solutions.........    19
        Prepared statement...........................................    22
    Donald F. Santa, President and CEO, Interstate Natural Gas
      Association of America.........................................    23
        Prepared statement...........................................    25
    Terry McCallister, Chairman and Chief Executive Officer, WGL
      Holdings and Washington Gas, on behalf of the American Gas
      Association....................................................    30
        Prepared statement...........................................    31

                                    Appendix

    Response to written questions submitted to Susan A. Fleming by:
        Hon. Deb Fischer.............................................    65
        Hon. Cory Booker.............................................    65
        Hon. Joe Manchin.............................................    66
        Hon. Gary Peters.............................................    67
    Response to written questions submitted to Hon. Christopher A.
      Hart by:
        Hon. Cory Booker.............................................    67
        Hon. Joe Manchin.............................................    68
        Hon. Gary Peters.............................................    69
    Response to written questions submitted to Michael Bellamy by:
        Hon. Cory Booker.............................................    69
        Hon. Joe Manchin.............................................    70
        Hon. Gary Peters.............................................    71
    Response to written questions submitted to Donald F. Santa by:
        Hon. Cory Booker.............................................    71
        Hon. Joe Manchin.............................................    72
        Hon. Gary Peters.............................................    72
    Response to written questions submitted to Terry McCallister by:
        Hon. Cory Booker.............................................    72
        Hon. Joe Manchin.............................................    73
        Hon. Gary Peters.............................................    74

          PIPELINE SAFETY: OVERSIGHT OF OUR NATION'S PIPELINE NETWORK

                                  ----------

                          TUESDAY, SEPTEMBER 29, 2015

                                   U.S. Senate,
             Subcommittee on Surface Transportation and
               Merchant Marine Infrastructure, Safety, and Security,
            Committee on Commerce, Science, and Transportation,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2:30 p.m., in
    room SR-253, Russell Senate Office Building, Hon. Deb Fischer,
    Chairman of the Subcommittee, presiding.
        Present: Senators Fischer [presiding], Ayotte, Moran,
    Daines, Booker, Klobuchar, Blumenthal, Markey, Peters, and
    Manchin.

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

        Senator Fischer. Good afternoon. I am pleased to convene
    the Senate Subcommittee on Surface Transportation and Merchant
    Marine Infrastructure, Safety, and Security for our ninth
    hearing titled ``Pipeline Safety: Oversight of Our Nation's
    Pipeline Network.''
        Pipeline infrastructure transports vital energy resources
    to homes, businesses, schools, and commercial centers across
    the United States. According to the Pipeline and Hazardous
    Materials Safety Administration, or PHMSA, more than 2.5
    million miles of pipeline traverse the United States. Half a
    million miles of pipeline transports natural gas, oil, and
    hazardous materials to critical infrastructure, including
    powerplants, military bases, and airports. In addition,
    pipelines move approximately 75 percent of our Nation's crude
    oil and 60 percent of our refined petroleum products.
        In order to protect the safety and natural resources of
    Nebraskans and of all Americans, Congress must maintain robust
    oversight over PHMSA's 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.
        Two weeks ago, I traveled to Montana with Senators Daines
    and Tester to convene a field hearing on the importance of
    State and local perspectives in pipeline safety. With an
    excellent panel of witnesses, our hearing focused on the safe
    movement of liquid materials on rural pipelines. We heard from
    the newly confirmed PHMSA administrator about the agency's
    organizational assessment aimed at refocusing resources and
    streamlining PHMSA's work. Thanks to an inquiry by Senator
    Daines, we learned that the pipeline operators are seeking
    faster turnaround times on the results of PHMSA inspections,
    which can often take more than a year.
        Today--today's hearing will focus on the transportation of
    natural gas throughout our Nation's vast pipeline network. In
    addition to natural gas pipeline operators, we're fortunate to
    have pipeline inspections technology represented, as well as
    officials from the Government Accountability Office and the
    National Transportation Safety Board.
        As many of you are aware, in 2010 a natural gas pipeline
    exploded in San Bruno, California, killing eight people,
    injuring 60 people, and destroying 37 homes. Most experts cite
    this incident as among the worst pipeline accidents in recent
    history.
        In March 2014, a natural gas pipeline in Fremont, Nebraska,
    exploded, burning nearly 4 hours. Fortunately, this accident
    took place in the middle of a cornfield, and so no one was
    injured.
        Through stronger oversight and collaboration between
    stakeholders, we can be better prepared for pipeline incidents.
    I look forward to hearing how natural gas pipeline operators
    are working with local communities and with PHMSA on risk-based
    approaches to preventing pipeline accidents. Most importantly,
    we must work to help PHMSA reprioritize and complete the
    outstanding requirements from the 2011 PHMSA reauthorization
    bill.
        Although PHMSA has made substantial progress, the agency
    must work to complete the remaining requirements to provide
    regulatory certainty to industry and our local communities.
    With regard to staffing, PHMSA is experiencing challenges
    competing with the private sector for highly skilled labor. I
    would like to explore the ways in which we can work together to
    accelerate the agency's hiring practices. I hope to learn more
    about PHMSA's work with pipeline operators on the agency's
    risk-based integrity management assessment programs and
    pipeline inspection requirements. Accurate and ample data is
    key to the success of PHMSA's Integrity Management Program.
    PHMSA should continue to work with stakeholders on best
    practices for data-sharing to better educate ancillary
    industries and the public on pipeline safety. This is
    especially important when it comes to high consequent areas,
    including drinking aquifers, environmentally delicate regions,
    and population centers.
        Thank you all again for being here today. And together, I'm
    certain we can pass a bipartisan reauthorization bill that
    enhances pipeline safety for all Americans.
        I would now invite my Ranking Member, Senator Booker, for
    his opening remarks.

                    STATEMENT OF HON. CORY BOOKER,
                      U.S. SENATOR FROM NEW JERSEY

        Senator Booker. Thank you very much, Senator Fischer. It's
    an honor to continue to be your Ranking Member on this very
    important committee.
        I know that this transcript will be a hot topic--hot item
    later, and will be read for months to come, so let the record
    show that the room is packed, and there are people waiting in
    the wings. There are tons of press crowded around just to make
    sure--hanging on every word that we have to say.
        In many ways, pipelines remind me of my time serving as a
    lineman on the Stanford field goal team. Nobody really notices
    you at all unless something goes wrong, and then they zero in
    on you. And that is the truth of pipelines. And, unfortunately,
    we know that when things go wrong, they can go horribly wrong
    and have consequences to our environment and to life itself.
        And so, in many ways, that's why we're here, is to make
    sure that we're doing everything we can to prevent something
    going wrong. As we've seen in San Bruno, California, pipeline
    accidents are--have devastating impacts. This is one of the
    reasons why--and, because, in my home state of New Jersey, we
    have a higher per-capita population than any other places in
    the country, it's one of the reasons why I'm very concerned,
    because, in my state especially, pipelines--pipeline problems
    could have catastrophic consequences.
        And so, while pipeline safety in recent years has gotten
    much better--and I've heard and read now about a lot of things
    that are being done--we will continue to stay vigilant. And I'm
    sure there are always things we can do to be better.
        While PHMSA has made substantial progress on pipeline
    safety, there--more has to be done. We continue to see
    devastating accidents like some were mentioned by Senator
    Fischer. These incidents are worrisome. I look forward to
    hearing from the NTSB and GAO on what steps we should be doing.
    I think they have important things to contribute.
        In addition, technology is rapidly advancing in the
    industry, and this is something that both Senator Fischer and I
    are very interested in. These changes can be--can dramatically
    change how we use and analyze data, and, importantly, how we
    can improve safety. I also look forward to hearing from the
    industry on how they are working to implement new technologies
    to address these safety challenges.
        Today is a great opportunity to assess where we are and to
    consider what steps we could be using to go forward.
        With that, I again want to thank the Chairwoman, and I look
    forward to today's testimony.
        Senator Fischer. Thank you, Senator Booker.
        I would like to welcome our panel today. I appreciate you
    taking the time to be here and provide us with information that
    will be very important to us as we work on this
    reauthorization.
        First, we will hear from Ms. Susan Fleming, the Director of
    GAO. She manages GAO's surface safety, rail financing, and
    airline competition work.
        So, welcome.

                STATEMENT OF SUSAN A. FLEMING, DIRECTOR,

                    PHYSICAL INFRASTRUCTURE ISSUES,

                 U.S. GOVERNMENT ACCOUNTABILITY OFFICE

        Ms. Fleming. Thank you. Chairman Fischer, Ranking Member
    Booker, and members of the Subcommittee, thank you for the
    opportunity to participate in this hearing on pipeline safety
    and PHMSA's reauthorization.
        Pipeline safety is critical to our Nation's economy. We
    rely on a pipeline network of over 2.6 million miles to
    transport about two-thirds of our domestic energy supply in the
    form of hazardous liquids and natural gas. Pipelines are a
    relatively safe means of transporting these hazardous
    materials, but these catastrophic incidents can and do occur.
        PHMSA establishes regulation that pipeline operators must
    follow to, first, prevent and, if needed, respond to incidents.
    My statement today is based on our recent reports which cover
    the following three issues: the safety of gathering pipelines,
    particularly in light of the boom in oil and natural gas
    production from shale sources; pipeline operator incident
    response; and the current requirements for reassessing natural
    gas transmission pipelines at least every 7 years. In response
    to recommendations we made in those reports, PHMSA has begun,
    but not completed, efforts to improve regulations, data, and
    guidance in these three areas.
        Let me begin with gathering pipelines. Gathering pipelines
    transport products from production areas to processing
    facilities. About 90 percent of these pipelines are not
    federally regulated because they are in rural areas and
    typically have smaller diameters and lower operating pressures.
    States may regulate gathering pipelines, but most do not. While
    gathering pipelines generally pose lower safety risk than other
    types of pipelines, PHMSA does not collect comprehensive data
    to identify these risks.
        In 2014, we found that construction of larger, higher-
    pressure gathering pipelines had increased due to the increased
    production of oil and gas. This raises safety concerns, because
    an incident from a larger gathering pipeline could affect a
    greater area than an incident from one of the traditionally
    smaller pipelines. At that time, we recommended that DOT move
    forward with a proposed rulemaking to address safety risk,
    including emergency response requirements as well as improved
    data collection to help identify risk. PHMSA has sought comment
    on expanding the regulation of gathering pipelines, including
    collecting additional data and plans to issue proposed rules
    this fall.
        Next, pipeline operator incident response. 2013, we found
    that, while PHMSA had a goal for operators to respond to
    incidents in a prompt and effective manner, this goal was not
    linked to performance measures. We further found that PHMSA's
    data on operators' incident response times was not reliable. We
    recommended that PHMSA improve its data, which would allow it
    to determine appropriate response-time goals for different
    types of pipelines based on location and other factors. PHMSA
    plans to improve its incident response data and to develop a
    performance-based response standard by the end of 2016.
        Our work has also addressed the use of automated valves to
    improve incident response. We've found that such valves can
    help operators to quickly shut down a pipeline if a rupture
    occurs, but it can also disrupt service to customers or even
    cause a rupture in some cases. We concluded that deciding where
    to install these valves should be done on a case-by-case basis,
    and recommended that PHMSA improve guidance to assist operators
    in making that decision. PHMSA plans to improve its guidance
    and to publish a Notice of Proposed Rulemaking on this issue in
    February 2016.
        Finally, pipeline integrity assessment. There is a
    statutory requirement for natural gas transmission pipeline
    operators to reassess the integrity of their pipelines every 7
    years. In June 2013, we found that this requirement provides a
    safeguard that operators are regularly addressing problems, but
    it is not fully consistent with risk-based practices. Such
    practices could lead to more, or less, frequent assessments for
    specific pipelines, depending on the situation. We also found
    that guidance for calculating assessments intervals is lacking,
    and, as a result, operators may perform a less rigorous
    determination of reassessment intervals. PHMSA plans to issue
    such guidance in 2016 and is researching the feasibility of
    risk-based assessments less often than the current 7-year
    requirement.
        Mr. Chairman, this concludes my statement. I'd be pleased
    to answer any questions you or members of the Subcommittee may
    have.
        [The prepared statement of Ms. Fleming follows:]

                                 GAO Highlights
    Why GAO Did This Study
        The nation relies on a pipeline network of more than 2.6 million
    miles to transport hazardous liquids and natural gas. This network
    includes gathering pipelines that transport products to processing
    facilities and transmission pipelines that transport products from
    processing facilities to users (see figure). Pipeline safety oversight
    from PHMSA, along with state partners, covers issues such as incident
    response planning and integrity management. PHMSA uses a risk-based
    approach to regulate pipelines, resulting in regulation of all
    transmission pipelines and about 10 percent of gathering pipelines.
    Specifically, PHMSA does not regulate gathering pipelines that are
    smaller, operate at lower pressure, and are located in rural areas.This
    statement addresses PHMSA's efforts in the areas of (1) gathering
    pipeline safety, (2) pipeline operator incident response, and (3)
    assessment of natural gas pipeline integrity. It is based on GAO's
    March 2012, January 2013, June 2013, and August 2014 reports on
    pipeline safety and July 2015 updates from PHMSA on its actions to
    respond to the reports' recommendations.
    What GAO Recommends
        In its reports, GAO made seven recommendations to DOT to improve
    pipeline safety data and guidance and to move forward with proposed
    rulemaking to address safety risks. GAO recommended, for example, that
    DOT move forward with proposed rulemaking to address risks from newer
    gathering pipelines. DOT is taking actions to respond to the
    recommendations.

        Pipeline Safety--Department of Transportation Needs to Complete
                     Regulatory, Data, and Guidance Efforts

    What GAO Found
        The Department of Transportation's (DOT) Pipeline and Hazardous
    Materials Safety Administration (PHMSA) has begun but not completed
    efforts to improve pipeline safety in response to GAO's prior
    recommendations:

       Gathering pipelines: In 2012, GAO found that while gathering
            pipelines that are not regulated by PHMSA were generally
            considered to present less safety risk than other pipelines,
            PHMSA did not collect comprehensive data to identify such
            risks. GAO concluded that such data could help pipeline safety
            officials and pipeline operators increase the safety of these
            pipelines by better identifying and quantifying safety risks.
            In 2014, GAO found that construction of larger, higher-pressure
            gathering pipelines had increased due to the increased
            production of oil and gas, raising safety concerns because an
            incident could affect a greater area than an incident from a
            smaller, lower-pressure pipeline. PHMSA plans to issue proposed
            rules in fall 2015 that include collecting data on unregulated
            gathering pipelines.

       Pipeline operator incident response: In January 2013, GAO
            found that PHMSA's data on operators' incident response times
            were not reliable, limiting the agency's ability to move to a
            performance-based approach for incident response. Improved data
            would allow PHMSA to determine appropriate response times for
            different types of pipelines, based on location and other
            factors. PHMSA plans to require changes in operator reporting
            to improve its incident response data and develop a
            performance-based standard as part of an upcoming rulemaking.

       Gas pipeline assessment: In June 2013, GAO found that a
            requirement for gas transmission pipeline operators to reassess
            the integrity of their pipelines every 7 years provided a
            safeguard that issues were regularly addressed, but was not
            fully consistent with risk-based practices. A risk-based
            approach based on individual pipeline characteristics could
            call for assessments to occur more or less frequently than 7
            years. However, implementing intervals longer than 7 years
            could require additional inspection resources to verify that
            operators appropriately assessed risk. GAO also found that
            guidance for calculating assessment intervals was lacking.
            PHMSA plans to issue guidance in 2016 and is researching the
            feasibility of risk-based assessments occurring less frequently
            than every 7 years.
                                     ______

          Prepared Statement of Susan A. Fleming, Director, Physical
          Infrastructure Issues, U.S. Government Accountability Office
        Chairman Fischer, Ranking Member Booker, and Members of the
    Subcommittee:

        Thank you for the opportunity to participate in this hearing on
    pipeline safety. The Department of Transportation's (DOT) Pipeline and
    Hazardous Materials Safety Administration (PHMSA), working in
    conjunction with state pipeline safety offices, oversees a vital
    network of over 2.6 million miles of pipelines carrying oil and natural
    gas products to refineries, businesses, and homes. This network
    includes gathering pipelines that convey crude oil and natural gas from
    production wells to processing facilities; transmission pipelines that
    transport the processed products over long distances to communities and
    large-volume users; and distribution pipelines that split off from
    natural gas transmission pipelines to deliver gas to residential,
    commercial, and industrial customers. As you know, pipelines are a
    relatively safe means of transporting these hazardous materials;
    however, catastrophic incidents \1\ can and do occur when pipelines
    leak or rupture, resulting in death, injury, and environmental and
    property damage. PHMSA establishes regulations that pipeline operators
    must follow to construct and maintain pipelines, as well as prepare for
    and respond to incidents. Since 2002, PHMSA has required operators to
    follow a risk-based approach to pipeline safety. For example, the
    Pipeline Safety Improvement Act of 2002 required PHMSA to implement a
    risk-based ``integrity management'' program for natural gas
    transmission pipeline safety that required pipeline operators to
    complete a baseline safety assessment of their pipelines and complete
    reassessments of those pipelines at least every 7 years.\2\
    ---------------------------------------------------------------------------
        \1\ In its regulations, PHMSA refers to the release of natural gas
    from a pipeline as an ``incident'' and a spill from a hazardous liquid
    pipeline as an ``accident.'' (49 C.F.R. Part 195, Subpart B). For
    simplicity, this statement will refer to both as ``incidents.''
        \2\ Pub. L. No. 107-355, Sec. 14(a), 116. Stat. 2985, 3002 (2002)
    (codified as amended at 49 U.S.C. Sec. 60109(c)(3)(A)-(B)).
    ---------------------------------------------------------------------------
        My statement today highlights our past work on:

      (1)  the safety of gathering pipelines, particularly in light of the
            boom in oil and natural gas production from shale sources;

      (2)  the ability of transmission pipeline operators to respond to
            incidents; and

      (3)  requirements for reassessing the integrity of natural gas
            transmission pipelines.

        For this statement, we drew from our reports on these topics issued
    from 2012 through 2014.\3\ For these reports, we analyzed PHMSA
    pipeline incident data; reviewed pipeline regulations; conducted
    literature reviews; and interviewed selected pipeline operators,
    representatives of safety and industry groups, state pipeline safety
    officials, and PHMSA officials. For the 2012 report on gathering
    pipelines, we also surveyed state pipeline safety officials in all 50
    states and the District of Columbia. In addition, in July 2015, we
    obtained updates from PHMSA on its actions to respond to the
    recommendations we made in these reports. Additional information on the
    scope and methodology for each report can be found in these reports.
    Our work on each pipeline safety report was conducted in accordance
    with generally accepted government auditing standards. Those standards
    require that we plan and perform the audit to obtain sufficient,
    appropriate evidence to provide a reasonable basis for our findings and
    conclusions based on our audit objectives. We believe that the evidence
    obtained provides a reasonable basis for our findings and conclusions
    based on our audit objectives.
    ---------------------------------------------------------------------------
        \3\ GAO, Pipeline Safety: Collecting Data and Sharing Information
    on Federally Unregulated Gathering Pipelines Could Help Enhance Safety,
    GAO-12-388 (Washington, D.C.: Mar. 22, 2012); Pipeline Safety: Better
    Data and Guidance Needed to Improve Pipeline Operator Incident
    Response, GAO-13-168 (Washington, D.C.: Jan. 23, 2013); Gas Pipeline
    Safety: Guidance and More Information Needed before Using Risk-Based
    Reassessment Intervals, GAO-13-577 (Washington, D.C.: June 27, 2013);
    and Oil and Gas Transportation Safety: Department of Transportation Is
    Taking Actions to Address Rail Safety, but Additional Actions Are
    Needed to Improve Pipeline Safety, GAO-14-667 (Washington, D.C.: Aug.
    21, 2014).
    ---------------------------------------------------------------------------
    Background
        Pipelines transport roughly two-thirds of domestic energy supplies
    through over 2.6 million miles of pipelines across the United States.
    These pipelines carry hazardous liquids and natural gas from producing
    wells to end users, such as businesses and homes. Within this
    nationwide system, there are three main types of pipelines--gathering,
    transmission, and gas distribution--managed by about 3,000 operators.
    (See fig. 1.)

        Sources: Pipeline and Hazardous Materials Safety Administration;
    and GAO. / GAO-15-843T

        Gathering pipelines. Gas gathering pipelines collect natural gas
    from production areas, while hazardous liquid gathering pipelines
    collect oil and other petroleum products. These pipelines then
    typically transport the products to processing facilities, which in
    turn refine the products and send them to transmission pipelines.
    Unlike the other types of pipelines, many of these pipelines have not
    been subject to PHMSA regulation because they are generally located in
    rural areas, are smaller in diameter than transmission pipelines
    (traditionally about 2 to 12 inches), and operate at lower pressures,
    ranging from about 5 to 800 pounds per square inch (psi).\4\ PHMSA
    regulates gathering pipelines in nonrural areas, resulting in
    regulation of approximately 10 percent of gathering pipelines.\5\
    ---------------------------------------------------------------------------
        \4\ PHMSA has limited statutory authority to regulate such
    pipelines under 49 U.S.C Sec. 60101(b). The law authorizes PHMSA, if
    deemed appropriate, to define which gathering pipelines are regulated
    on the basis of factors such as location, length, operating pressure,
    throughput, diameter, and composition of the transported gas or
    hazardous liquid. Crude oil gathering pipelines with a diameter of not
    more than 6 inches that operate at low pressure and are located in a
    rural area that is not unusually sensitive to environmental damage are
    specifically exempted from regulation.
        \5\ 49 C.F.R. Part 192.5 and 49 C.F.R. Sec. Sec. 195.1(a)(4) and
    195.11(a)(2).
    ---------------------------------------------------------------------------
        Transmission pipelines. Transmission pipelines carry hazardous
    liquid or natural gas, sometimes over hundreds of miles, to communities
    and large-volume users (e.g., factories).\6\ For natural gas
    transmission pipelines, compression stations located periodically along
    the pipeline maintain product pressure. Similarly, pumping stations
    along hazardous liquid transmission pipelines maintain product flow.
    Transmission pipelines tend to have the largest diameters and pressures
    of the three types of pipelines, generally ranging from 12 to 42 inches
    in diameter and operating at pressures ranging from 400 to 1440 psi.
    PHMSA's regulations cover all hazardous liquid and natural gas
    transmission pipelines.
    ---------------------------------------------------------------------------
        \6\ For the purposes of this statement, we use the term
    transmission pipeline to refer to both hazardous liquid and natural gas
    pipelines carrying product over long distances to users.
    ---------------------------------------------------------------------------
        Gas distribution pipelines. Natural gas distribution pipelines
    transport natural gas from transmission pipelines to residential,
    commercial, and industrial customers. These pipelines tend to be
    smaller, sometimes less than 1 inch in diameter, and operate at lower
    pressures--0.25 to 100 psi.
        PHMSA estimated that in 2014 there were about 200,000 miles of
    hazardous liquid pipelines,\7\ 302,000 miles of gas transmission
    pipelines, 18,000 miles of gas gathering pipelines, and 2.2 million
    miles of gas distribution pipelines based on annual reports from
    pipeline operators.
    ---------------------------------------------------------------------------
        \7\ PHMSA's data do not categorize hazardous liquid pipelines into
    transmission and gathering pipelines.
    ---------------------------------------------------------------------------
        Transporting hazardous liquids and natural gas by pipelines is
    associated with far fewer fatalities and injuries than other modes of
    transportation. From 2010 to 2014, there was an average of about 14
    fatalities per year for all pipeline incidents reported to PHMSA,
    including an average of about 2 fatalities per year resulting from
    incidents on hazardous liquid and natural gas transmission pipelines.
    In comparison, in 2013, 3,964 fatalities resulted from incidents
    involving large trucks and 703 additional fatalities resulted from
    railroad incidents. Yet risks to pipelines exist, such as corrosion and
    third-party excavation, which can damage a pipeline's integrity and
    result in leaks and ruptures. A leak is a slow release of a product
    over a relatively small area. A rupture is a breach in the pipeline
    that may occur suddenly; the product may then ignite, resulting in an
    explosion.\8\ According to pipeline operators we met with in our
    previous work, of the two types of pipeline incidents, leaks are more
    common but generally cause less damage. Ruptures are relatively rare
    but can have much higher consequences because of the damage that can be
    caused by an associated explosion.
    ---------------------------------------------------------------------------
        \8\ The risks and consequences posed by gas and hazardous liquids
    incidents also differ. Natural gas tends to ignite more easily,
    resulting in more explosions. Hazardous liquids ignite less easily, but
    can spill and pollute the environment.
    ---------------------------------------------------------------------------
        PHMSA administers two general sets of pipeline safety requirements
    and works with state pipeline safety offices to inspect pipelines and
    enforce the requirements.\9\ The first set of requirements is minimum
    safety standards that cover specifications for the design,
    construction, testing, inspection, operation, and maintenance of
    pipelines. Under PHMSA's minimum safety standards, operators are
    required to have a plan for responding to an incident that addresses
    leak detection, coordinating with emergency responders, and shutting
    down the affected pipeline segment. The amount of time it takes to shut
    down a pipeline segment depends on the type of valve installed on the
    pipeline. For example, manual valves require a person to arrive on site
    and either turn a wheel crank or activate a push-button actuator. In
    contrast, automated valves generally take less time to close than
    manual valves. They include remote-control valves that can be closed
    via a command from a control room and automatic-shutoff valves that can
    close without human intervention based on sensor readings.\10\ PHMSA's
    minimum safety standards dictate the spacing of all valves, regardless
    of the type of equipment installed to close them.\11\
    ---------------------------------------------------------------------------
        \9\ For pipelines, there are 48 states, the District of Columbia,
    and Puerto Rico in PHMSA's natural gas pipeline program and 17 states
    in its hazardous liquid pipeline program (49 U.S.C. Sec. 60104(c)).
        \10\ Hazardous liquid regulations refer to emergency flow
    restriction devices, which include remote-control valves and ``check''
    valves that automatically prevent product from flowing in a specific
    direction. See 49 C.F.R. Sec. 195.452(i)(4). We refer to all of these
    valves as automated valves.
        \11\ 49 C.F.R. Sec. Sec. 192.179, 195.260.
    ---------------------------------------------------------------------------
        The second set of requirements is part of a supplemental risk-based
    regulatory program termed ``integrity management,'' whereby operators
    are required to systematically identify and mitigate risks to pipeline
    segments that are located in ``high-consequence areas'' where an
    incident would have greater consequences for public safety or the
    environment.\12\ For example, natural gas transmission pipeline
    operators were required to assess the integrity of their pipelines
    within high-consequence areas by December 2012, repair or otherwise
    address anomalies found during the assessment, and reassess these
    segments at least once every 7 years thereafter. Integrity management
    regulations also require that all transmission pipeline operators
    consider the use of automated valves when identifying and mitigating
    pipeline risks. These requirements have been in effect for all
    hazardous liquid pipelines since 2002, for natural gas transmission
    pipelines since 2004, and for natural gas distribution pipelines since
    2010.
    ---------------------------------------------------------------------------
        \12\ High-consequence areas are defined differently for hazardous
    liquid and natural gas pipelines. For hazardous liquid pipelines, such
    areas include highly populated areas (i.e., urban areas), other
    populated areas (i.e., a city, town, or village), navigable waterways,
    and areas unusually sensitive to environmental damage. For natural gas
    pipelines, high-consequence areas typically include highly populated or
    frequented areas, such as parks.
    ---------------------------------------------------------------------------
    Gathering Pipelines Pose Safety Risks That PHMSA Is Working to Address
        In our 2012 and 2014 reports, we identified safety risks associated
    with gas and hazardous liquid gathering pipelines that PHMSA was
    planning to but had not yet addressed through regulatory proposals. In
    2012, we found that PHMSA does not collect comprehensive data on safety
    risks associated with gathering pipelines.\13\ Although gathering
    pipelines generally pose lower safety risks than other types of
    pipelines, our survey of state pipeline safety agencies found problems
    including construction quality, maintenance practices, unknown or
    uncertain locations, and limited or no information on current pipeline
    integrity as safety risks for federally unregulated gathering
    pipelines. Operators of federally unregulated gathering pipelines are
    not required by Federal law to report information on such risk factors.
    Furthermore, the survey, as well as interviews with other pipeline
    industry stakeholders, identified land-use changes--namely urban
    development encroaching on existing pipeline rights-of-way--and the
    increased extraction of oil and gas from shale as changes in the
    operating environments that could increase the safety risks for
    federally unregulated gathering pipelines. Consequently, Federal and
    state pipeline safety officials do not know the extent to which
    individual operators collect such information and use it to monitor the
    safety of their pipelines.
    ---------------------------------------------------------------------------
        \13\ GAO-12-388. Although PHMSA has the legal authority to collect
    data on unregulated gathering pipelines, the agency is not required and
    has not yet exercised its authority to do so.
    ---------------------------------------------------------------------------
        In our 2012 report, we found that the data PHMSA collects for
    regulated pipelines help Federal and state safety officials and
    pipeline operators increase the safety of these pipelines by better
    identifying and quantifying safety risks, as well as by implementing
    mitigation strategies, and addressing potential regulatory needs. We
    concluded that collecting such data about gathering pipelines could
    facilitate quantitatively assessing the safety risks posed by
    unregulated gathering pipelines. We recommended that PHMSA collect data
    from operators of federally unregulated onshore hazardous liquid and
    gas gathering pipelines subsequent to an analysis of the benefits and
    industry burdens associated with such data collection. We recommended
    that data collected should be comparable to what PHMSA collects
    annually from operators of regulated gathering pipelines (e.g.,
    fatalities, injuries, property damage, location, mileage, size,
    operating pressure, maintenance history, and the causes and
    consequences of incidents). In July 2015, PHMSA officials told us that
    regulatory proposals the agency plans to issue for both natural gas and
    hazardous liquid pipelines will call for collecting data on unregulated
    gathering pipelines through both annual reports and accident/incident
    reports. As of September 2015, DOT estimated that Notices of Proposed
    Rulemaking on these issues would be published in October 2015.
        We also found in our 2012 report that a small number of state
    pipeline safety agencies we surveyed reported using at least one of
    five practices that were most frequently cited to help ensure the
    safety of federally unregulated pipelines.\14\ However, we also found
    that the sharing of information among states on the safety practices
    used appeared to be limited, and that some state and PHMSA officials we
    interviewed had limited awareness of safety practices used by other
    states. We recommended that PHMSA establish an online clearinghouse or
    other resource for sharing information on pipeline safety practices. In
    response, PHMSA requested that the National Association of Pipeline
    Safety Representatives develop an online resource document library for
    states to obtain and post information related to gathering pipelines.
    This online library was established in May 2014 and includes, among
    other things, state-specific regulatory information for gathering
    pipelines, such as rules, definitions, and inspection form examples.
    ---------------------------------------------------------------------------
        \14\ These practices include (1) damage prevention programs, (2)
    considering areas of highest risk to target resources, (3) safety
    inspections, (4) public outreach and communication, and (5) increased
    regulatory attention on operators with prior spills or leaks.
    ---------------------------------------------------------------------------
        In our 2014 report, we examined the transportation impacts of
    increased oil and gas extraction and found that construction of larger,
    higher-pressure gathering pipelines had increased to meet the increased
    oil and gas production.\15\ Such pipelines, if located in rural areas,
    are generally not subject to DOT safety regulations that apply to other
    pipelines. This includes requirements for emergency response planning
    that apply to other pipelines but do not apply to rural unregulated
    gathering pipelines. For example, transmission pipeline operators with
    pipelines similar in size to the new gathering pipelines are required
    to develop comprehensive emergency response plans and coordinate with
    local emergency responders. Emergency response officials we spoke with
    stated that without information about the location of some gathering
    pipelines, responders--particularly in rural areas--may not be
    adequately prepared to respond to an incident. Consequently, response
    planning in rural areas with federally unregulated gathering pipelines
    may be inadequate to address a major incident. Historically, gathering
    pipelines were smaller and operated at lower pressure and thus posed
    less risk than long-distance pipelines. However, state pipeline
    regulators, PHMSA officials, and pipeline operators we spoke with said
    that some newly built gathering pipelines have larger diameters and
    higher operating pressures that more closely resemble transmission
    pipelines than traditional gathering pipelines. For example, while
    gathering pipelines have traditionally been 2 to 12 inches in diameter,
    one company operating in a Texas shale region showed us plans to build
    30-and 36-inch natural gas gathering pipelines, which is near the high
    end of diameters for regulated transmission pipelines. The recent
    increase in their size and pressure raises safety concerns because they
    could affect a greater area in the event of an incident. Although
    states may regulate some gathering pipelines in rural areas, a 2013
    report on state pipeline oversight by an association of state pipeline
    regulators showed that most states do not currently regulate gathering
    pipelines in rural areas.\16\
    ---------------------------------------------------------------------------
        \15\ GAO-14-667. We found that the increase in pipeline mileage is
    unknown because data on gathering pipelines are not systematically
    collected by PHMSA or by every state. Technology advancements such as
    horizontal drilling and hydraulic fracturing (pumping water, sand, and
    chemicals into wells to fracture underground rock formations and allow
    oil or gas to flow) have allowed companies to extract oil and gas from
    shale and other tight geological formations. As a result, oil and gas
    production increased more than fivefold from 2007 through 2012.
        \16\ The National Association of Pipeline Safety Representatives,
    an association representing state pipeline safety officials, produced a
    compendium of state pipeline regulations showing that most states with
    delegated authority from PHMSA to conduct intrastate inspections do not
    have regulations that cover oversight of gathering pipelines. Based on
    our analysis, we determined that regulations vary by state, but the
    compendium shows that at least 6 states have some form of gathering-
    pipeline regulation. National Association of Pipeline Safety
    Representatives, Compendium of State Pipeline Safety Requirements &
    Initiatives Providing Increased Public Safety Levels compared to Code
    of Federal Regulations, second edition (Sept. 9, 2013).
    ---------------------------------------------------------------------------
        PHMSA has been working to propose regulatory changes to address
    safety risks of unregulated gathering pipelines, but this effort is not
    yet complete. PHMSA issued Advance Notices of Proposed Rulemaking for
    onshore hazardous liquid and gas pipelines in October 2010 and August
    2011, respectively, seeking comment on whether to require operators to
    report on federally unregulated gathering pipelines, as well as on
    whether to establish a new, risk-based regime of safety requirements
    for large-diameter, high-pressure gas gathering pipelines, including
    those pipelines in rural locations.\17\ PHMSA also noted that
    enforcement of current requirements has been hampered by the
    conflicting and ambiguous language of the current regulation that can
    produce multiple classifications for the same pipeline system, which
    means that parts of a single pipeline system can be classified as rural
    gathering pipelines and therefore be federally unregulated, while other
    parts of the same pipeline with the same characteristics are regulated.
    In our 2014 report, we recommended that PHMSA move forward with a
    Notice of Proposed Rulemaking to address gathering pipeline safety that
    addresses the risks of larger-diameter, higher-pressure federally
    unregulated gathering pipelines, including subjecting such pipelines to
    emergency response planning requirements that currently do not apply.
    DOT generally concurred with the recommendation. In July 2015, PHMSA
    officials told us the proposed regulations the agency expects to
    publish in October 2015 will address this recommendation. Specifically,
    officials said that the gas pipeline proposal will extend certain
    requirements (including emergency response planning) to previously
    unregulated gathering pipelines with a diameter greater than 8 inches.
    PHMSA officials also said that in the hazardous liquid pipeline
    proposal, they are planning on using the proposed annual report and
    accident data collection from federally unregulated hazardous liquid
    gathering pipelines to develop appropriate and relevant regulations for
    certain hazardous liquid gathering pipelines that are currently
    unregulated.
    ---------------------------------------------------------------------------
        \17\ 75 Fed. Reg. 63774 (Oct. 18, 2010) and 76 Fed. Reg. 53086
    (Aug. 25, 2011).
    ---------------------------------------------------------------------------
    Better Guidance on Use of Automated Valves and a Performance-Based
            Approach to Incident Response Could Improve Operators' Response
            Times
        In our January 2013 report on pipeline operator incident response,
    we found that numerous variables influence the ability of transmission
    pipeline operators to respond to incidents.\18\ For example, the
    accuracy of a leak detection system, the location of response
    personnel, the preparedness of emergency responders, and the use of
    manual or automated valves can affect the amount of time it takes for
    operators to respond to incidents, which can range from minutes to
    days.\19\ However, even though the primary advantage of installing
    automated valves is that operators can respond quickly to isolate the
    affected pipeline segment and reduce the amount of product released,
    automated valves can have disadvantages as well. Specifically,
    accidental closures can lead to loss of service to customers or even
    cause a rupture. Because the advantages and disadvantages of installing
    an automated valve are closely related to the specifics of the valve's
    location, it is appropriate that operators decide whether to install
    automated valves on a case-by-case basis. However, not all operators we
    spoke with were aware of existing PHMSA guidance designed to assist
    operators in deciding when to use automated valves. Consequently, we
    recommended that PHMSA use its existing information-sharing mechanisms
    to alert all pipeline operators of inspection and enforcement guidance
    that provides additional information on how to interpret regulations on
    automated valves. PHMSA officials said they plan to address this
    recommendation by highlighting existing guidance during public
    presentations and in other forums pipeline operators attend and through
    an upcoming rulemaking on rupture detection and valve rules. PHMSA
    plans to publish a Notice of Proposed Rulemaking on this issue in
    February 2016.
    ---------------------------------------------------------------------------
        \18\ GAO-13-168.
        \19\ Variables outside of operators' control--such as weather
    conditions--can also influence incident response time.
    ---------------------------------------------------------------------------
        In our January 2013 report, we concluded that PHMSA has an
    opportunity to improve incident response times by developing a
    performance-based approach for pipeline operators to improve incident
    response times. We have also previously concluded that a performance-
    based approach--including goals and associated performance measures and
    targets--can allow those being regulated to determine the most
    appropriate way to achieve desired outcomes. While PHMSA has
    established a national goal for pipeline operators to respond to
    incidents in a ``prompt and effective'' manner, it has not linked
    performance measures or targets to this goal.
        Defining performance measures and targets for incident response can
    be challenging, but we identified a potential strategy for PHMSA to
    move toward a more quantifiable, performance-based approach to improve
    incident response based on nationwide incident response data. For
    example, PHMSA could evaluate nationwide data to determine response
    times for different types of pipeline (based on location, operating
    pressure, and pipeline diameter, among other factors). First, though,
    PHMSA must improve the data it collects on incident response times.
    These data are not reliable both because operators are not required to
    fill out certain time-related fields in the reporting form and because
    operators told us they interpret these data fields in different ways.
    Consequently, we found that some pipeline operators did not
    consistently report the date and time for when the incident was
    identified or for when operator resources arrived on the site of the
    incident. Some operators also did not consistently report whether the
    incident led to a shutdown of a pipeline or facility. Reliable data
    would improve PHMSA's ability to measure incident response and assist
    the agency in exploring the feasibility of developing a performance-
    based approach for improving operator response to pipeline incidents.
        We recommended that PHMSA improve the reliability of incident
    response data and use these data to evaluate whether to implement a
    performance-based framework for incident response times. In July 2015,
    PHMSA officials told us they have taken several steps toward addressing
    this recommendation, including making changes to its incident reports
    and requiring that operators report specific pieces of information
    regarding an incident. Additionally, PHMSA officials said that, later
    this year, they plan to propose further changes to the report forms to
    collect additional data that will allow the agency to better track
    incident response times. PHMSA officials also said they plan to develop
    a more specific performance-based standard for incident response as
    part of the upcoming February 2016 rulemaking.
    Guidance and More Information Needed for Use of Risk-Based
            Reassessment Intervals
        The current statutory requirement for natural gas transmission
    pipeline operators to reassess pipeline integrity at least every 7
    years provides a safeguard by allowing operators and regulators to
    identify and address problems on a continual basis, but in our June
    2013 report, we found that this requirement is not fully consistent
    with risk-management practices, which are the basis for PHMSA's
    integrity management program.\20\ The primary advantage of the 7-year
    reassessment requirement is that it is more frequent than the intervals
    found in industry consensus standards, which specify 10-, 15-, or 20-
    year intervals depending on the characteristics of individual
    pipelines.\21\ This conservative approach provides greater assurance
    that operators are regularly monitoring their pipelines to address
    threats before leaks or ruptures occur. However, this requirement is
    not fully consistent with risk-based management practices. Under a
    risk-based approach, operators could, for example, use information to
    identify, assess, and prioritize risks so that resources may be
    allocated to address higher risks first. While operators are currently
    required to determine an appropriate reassessment interval based on the
    threats to their pipelines in high-consequence areas, they must
    reassess those pipelines at least every 7 years regardless of the risks
    identified. If the operator's risk analysis indicates that
    reassessments should be done at intervals shorter than 7 years, the
    operator is required to do so.
    ---------------------------------------------------------------------------
        \20\ GAO-13-577.
        \21\ The American Society of Mechanical Engineers developed an
    industry consensus standard--subsequently approved by the American
    National Standards Institute--on maximum reassessment intervals for all
    safety risks (including corrosion damage) that PHMSA incorporated into
    its regulations. See 49 C.F.R. Sec. 192.939.
    ---------------------------------------------------------------------------
        Implementing risk-based reassessment intervals that are longer than
    7 years for natural gas transmission pipelines would require a
    statutory change and could exacerbate current workload, staffing, and
    expertise challenges for operators and regulators. For example, PHMSA
    officials told us that allowing longer intervals could require
    inspectors to spend more time and resources than they do currently to
    verify that operators appropriately assessed risk, and state pipeline
    safety offices we met with noted potential concerns with staffing and
    training to effectively evaluate risk-based reassessment intervals.
    Further, some operators told us that extending reassessment intervals
    to be longer than 7 years would likely require additional data analyses
    beyond those currently required. In our June 2013 report, we found that
    operators we met with varied in the extent to which they calculated
    reassessment intervals and used the results of data analyses. Further,
    we found that guidance to calculate reassessment intervals was lacking,
    and as a result, operators may perform a less rigorous determination of
    their reassessment intervals. As a result, some operators could be
    following the 7-year reassessment interval when their pipeline should
    be reassessed more frequently (e.g., within 5 years). To improve how
    operators calculate reassessment intervals, we recommended that PHMSA
    develop guidance for operators to use in determining risks and
    calculating reassessment intervals. PHMSA officials said the agency has
    drafted guidance on calculating reassessment intervals that are shorter
    than 7 years; this guidance is currently under internal review and
    agency officials anticipate that it will be posted on PHMSA's website
    by February 2016.
        At the request of a congressional committee, in 2008, PHMSA
    described how it would establish and enforce risk-based criteria for
    extending the 7-year reassessment interval for natural gas transmission
    pipelines. At that time, PHMSA proposed retaining the current 7-year
    reassessment requirement, but also establishing a process by which
    operators could use risk-based reassessment intervals that are longer
    than 7 years if they met certain potential criteria, such as
    demonstrating sound risk analysis. This process would be similar to
    that used by PHMSA for hazardous liquid pipeline reassessment
    intervals.\22\ While we and PHMSA have supported the concept of risk-
    based reassessment intervals that are longer than 7 years, given the
    breadth of potential challenges with implementation, more information
    might help decision-makers better understand the resource requirements
    and potential safety implications of such a change. For example, PHMSA
    has used pilot programs to collect such information and study the
    effects prior to rule changes. To better identify the resource
    requirements needed to implement risk-based reassessment intervals that
    are longer than 7 years for gas transmission pipelines, we recommended
    that PHMSA collect information on the feasibility of addressing the
    potential challenges of implementing risk-based reassessment intervals
    that are longer than 7 years, for example by preparing a report or
    developing a legislative proposal for a pilot program, in consultation
    with Congress, that studies the impact to regulators and operators of a
    potential rule change. PHMSA is studying the potential to implement
    risk-based reassessment intervals that are longer than 7 years for gas
    transmission pipelines; agency officials plan to complete this research
    by March 2016.
    ---------------------------------------------------------------------------
        \22\ Reassessment interval requirements for hazardous liquid
    pipelines were established by PHMSA rulemaking rather than through
    legislation. The gas transmission pipeline reassessment interval
    requirements were established in the 2002 Pipeline Safety Improvement
    Act.
    ---------------------------------------------------------------------------
        Chairman Fischer, Ranking Member Booker, and Members of the
    Subcommittee, this completes my prepared statement. I would be pleased
    to respond to any questions that you may have at this time.

        Senator Fischer. Thank you, Ms. Fleming.
        Next, we have the Honorable Christopher Hart, who is the
    Chairman of the National Transportation Safety Board, sworn in
    on March 17, 2015. He was originally sworn in as a member of
    the Board in 2009 and designated by the President as Vice
    Chairman a few days after that in 2009.
        So, welcome, Mr. Hart.

       STATEMENT OF HON. CHRISTOPHER A. HART, CHAIRMAN, NATIONAL
                      TRANSPORTATION SAFETY BOARD

        Mr. Hart. Thank you. Good afternoon, Chairman Fischer,
    Ranking Member Booker, and members of the Subcommittee. And
    thank you for inviting the National Transportation Safety
    Board.
        Pipelines remain one of the safest and most efficient means
    of transporting vital commodities that are used to power homes
    and supply businesses. However, as we have observed during our
    investigations, the consequences can be tragic when pipeline
    operators do not follow safe operational practices, have
    inadequate safety standards, or disregard safety standards.
    High-pressure natural gas pipeline failures frequently result
    in explosive releases that, if ignited, become intense jet
    fires that can cause extensive damage, injuries, and deaths.
        Hazardous liquid pipeline incidents, on the other hand, can
    cause large-scale environmental damage even in the absence of
    an explosion or fire. For example, in July 2010, an Enbridge
    30-inch pipeline released about 844,000 gallons of crude oil
    into the Kalamazoo River near Marshall, Michigan. To date,
    cleanup costs have exceeded $1.2 billion, with a ``b.'' This is
    the largest onshore oil spill and most costly cleanup in U.S.
    history.
        As the Nation's demand for oil and gas grows and pipeline
    infrastructure ages, we must pay even more attention to the
    transportation mode that lies buried beneath us. Safe operation
    of natural gas and hazardous liquid transmission pipelines are
    a shared responsibility among the operator, government
    oversight agencies, and local communities.
        The NTSB continues to investigate such accidents. In fact,
    as recently as last week, we launched an investigation team to
    a pipeline accident in Centreville, Virginia, where a pipeline
    released an estimated 4,000 gallons of gasoline. Some of the
    liquid accumulated in a storm water retention pond near the
    pipeline right away, but fortunately the spill did not result
    in deaths or injuries. However, the spill made it necessary to
    ensure that nearby residents were not adversely affected.
        As you're aware, there are three types of pipeline systems
    through which natural gas is transported from its source to the
    end users: gathering, transmission, and distribution systems.
    Gathering lines transport gas from a production facility to a
    transmission line, and transmission lines transport gas from a
    gathering line to a distribution facility. There are almost
    300,000 miles of onshore natural gas transmission pipelines in
    the United States. Compared to gas distribution pipelines,
    transmission pipelines typically have larger diameters and
    significantly higher operating pressures; therefore, the
    potential impact of a transmission pipeline accident on its
    surroundings is very high.
        Since 2004, the operators of these pipelines have been
    required by the Pipeline and Hazardous Materials Safety
    Administration, PHMSA, to develop and implement integrity
    management programs to ensure the integrity of their pipelines
    in high-consequence areas, including populated areas, in order
    to reduce the risk of injuries and property damage from
    pipeline failures.
        In the last 6 years, we have completed three major gas
    transmission pipeline accident investigations where we
    identified deficiencies in the operators' incident management
    programs and PHMSA oversight. These three accidents, which
    occurred at--in Palm City, Florida, San Bruno, California,
    which has already been mentioned, and Sissonville, West
    Virginia, resulted in eight deaths, more than 50 injuries, 41
    homes destroyed, and many more damaged.
        Earlier this year, the NTSB Safety Research Division
    conducted a safety study to build upon the results from the
    completed investigation, and used additional research to gauge
    the effectiveness of integrity management programs for gas
    transmission pipelines in high-consequence areas. As a result
    of the safety study, we issued 28 new recommendations,
    including 22 to PHMSA. The recommendations include developing
    expanded and improved guidance for operators and inspectors
    for: first, the development of criteria for threat
    identification and elimination; second, consideration of
    interactive threats; and finally, increased knowledge of the
    critical components that are associated with risk assessment
    approaches. We also recommended that PHMSA evaluate and improve
    gas transmission pipeline integrity assessment methods,
    including increasing the use of inline inspection and ensuring
    that direct assessment is not the sole integrity assessment
    method.
        Since 2000, we have made 77 safety recommendations to
    PHMSA, with about half in an open status. For only one
    recommendation have we evaluated PHMSA's actions as
    unacceptable. The NTSB recognizes the efforts that PHMSA has
    undertaken, but our study of integrity management in gas
    transmission pipelines in high-consequence areas showed no
    evidence of a decline in incidents since 2004, when PHMSA
    integrity management rule first went into effect. The accidents
    and incidents that NTSB investigates attest to the fact that
    additional safety enhancements are still necessary to prevent
    future pipeline accidents.
        Thank you for the opportunity to testify before you today.
    I'm happy to answer any questions you may have.
        [The prepared statement of Mr. Hart follows:]

           Prepared Statement of Hon. Christopher A. Hart, Chairman,
                      National Transportation Safety Board
        Good afternoon Chairman Fischer, Ranking Member Booker, and Members
    of the Subcommittee. Thank you for inviting the National Transportation
    Safety Board (NTSB) to testify before you today.
        The NTSB is an independent Federal agency charged by Congress with
    investigating every civil aviation accident and significant incidents
    in the United States and significant accidents and incidents in other
    modes of transportation--railroad, highway, marine and pipeline. We
    determine the probable cause of accidents and other transportation
    events and issue safety recommendations aimed at preventing future
    accidents. In addition, we carry out special studies concerning
    transportation safety and coordinate the resources of the Federal
    Government and other organizations to provide assistance to victims and
    their family members impacted by major transportation disasters.
        Since its inception, the NTSB has investigated more than 140,500
    aviation accidents and thousands of surface transportation accidents.
    On call 24 hours a day, 365 days a year, our investigators travel
    throughout the country and internationally to investigate significant
    accidents and develop factual records and safety recommendations with
    one aim--to ensure that similar accidents don't occur in the future. To
    date, we have issued over 14,000 safety recommendations to nearly 2,300
    recipients, including 77 recommendations to the Pipeline and Hazardous
    Materials Safety Administration (PHMSA) since 2000.\1\ Because we have
    no formal authority to regulate the transportation industry, our
    effectiveness depends on our reputation for conducting thorough,
    accurate, and independent investigations and for producing timely,
    well-considered recommendations to enhance transportation safety.
    ---------------------------------------------------------------------------
        \1\ Nine of the recommendations were made to PHMSA's predecessor,
    the Research and Special Programs Administration.
    ---------------------------------------------------------------------------
        Each year, the NTSB releases its Most Wanted List, highlighting
    safety-critical actions that the U.S. Department of Transportation
    (DOT), United States Coast Guard, other Federal entities, states, and
    transportation industry organizations need to take to help prevent
    transportation accidents and save lives. We base our Most Wanted List,
    which focuses on our top 10 areas for transportation safety
    improvements, on safety issues we have identified as a result of our
    accident investigations. Although the 2015 Most Wanted List did not
    include a pipeline-specific issue, the 2014 most Wanted List included
    ``Enhance Pipeline Safety.'' Safe operation of natural gas and
    hazardous liquid transmission pipelines is a shared responsibility
    among the operator, government oversight agencies, and local
    communities. As we pointed out,

            Oversight agencies also play a role, especially when operators
            are reluctant to initiate safety improvements. Regulators can
            mandate specific safety program improvements to ensure pipeline
            operators adopt and improve practices that reduce the risk and
            consequences of pipeline failures. For example, given the gas
            industry's reluctance to expand the use of automatic shutoff
            valves and remote controlled valves, the Pipeline and Hazardous
            Materials Safety Administration should require this technology,
            which can isolate a rupture within minutes and reduce the
            volume of gas released and the duration of a fire. \2\
    ---------------------------------------------------------------------------
        \2\ NTSB, 2014 Most Wanted List: Enhance Pipeline Safety (2014),
    http://www.ntsb.gov/safety/mwl/Pages/mwl5_2014.aspx.

        Pipeline safety remains a priority for the NTSB. Just last week we
    launched an investigative team to a pipeline accident in Centreville,
    Virginia, in which a pipeline released an estimated 4000 gallons of
    gasoline. Some of the liquid had accumulated in a stormwater retention
    pond near the pipeline right-of-way. Fortunately, the spill did not
    result in fatalities or injuries, and precautions were taken to ensure
    that nearby residents and businesses were not adversely affected by the
    released gasoline.
    Recent Investigations
        Two recent NTSB pipeline investigations involved natural gas
    explosions. On March 12, 2014, in East Harlem in New York City, two
    multi-use, five-story buildings were destroyed by a natural gas
    explosion and subsequent fire. Eight people died, more than 50 people
    were injured, and more than 100 families were displaced from their
    homes.
        On December 17, 2013, natural gas leaking from a cast iron
    distribution pipeline resulted in the explosion of a two-story
    apartment building in Birmingham, Alabama. One person was killed and
    eight people were injured.
        These explosions are a grim reminder that efforts to improve
    pipeline integrity management practices must continue, particularly for
    pipelines located in high consequence areas.
        The NTSB issued its final accident report on the East Harlem
    explosion last June,\3\ and the Birmingham investigation is still
    underway. The East Harlem accident investigation focused on the
    following safety issues:
    ---------------------------------------------------------------------------
        \3\ NTSB, Natural Gas-Fueled Building Explosion and Resulting Fire,
    New York City, New York on March 12, 2014, Rpt. No. NTSB/PAR-15/01
    (June 9, 2015).

       Adequacy of the Consolidated Edison Company of New York,
            Inc. (Con Edison) quality assurance and quality control
    ---------------------------------------------------------------------------
            procedures for joining plastic pipes;

       Effectiveness of Con Edison's public awareness program;

       Adequacy of Con Edison's gas odor report response;

       Effectiveness of the New York City Department of
            Environmental Protection sewer integrity program; and

       Effectiveness of Federal and state natural gas pipeline
            oversight.

        The investigation found that a Con Edison contractor had installed
    a plastic gas main and service ``tee joint'' in 2011 using a Con Edison
    heat fusion procedure for plastic pipe. Post-accident examination
    showed that the surfaces of the service tee and the gas main had not
    adequately been prepared before the tee was fusion welded to the gas
    main, resulting in a defective joint that contained an area of
    incomplete fusion.
        The investigation also found a large hole in a sewer main in the
    vicinity of the gas main, which had been identified by the New York
    City Department of Environmental Protection in 2006 and again in 2011
    but was not repaired. The supporting soil under the gas main was washed
    into the sewer through the sewer wall breach over the course of many
    years when groundwater accumulated in the area. Consequently, the soil
    supporting the gas main had washed away in the vicinity of the service
    tee, which caused the gas main to sag and overstressed the defective
    service tee fusion joint. A crack opened in the defective joint,
    allowing natural gas to escape into the subterranean area and migrate
    into one of the nearby buildings.
        Con Edison had conducted an extensive public awareness program that
    included urging the public and gas customers to call Con Edison in the
    event of a suspected gas leak. This information was included in
    customer billings, in newspaper advertisements, and in flyers posted in
    apartment buildings. However, the investigation found that people
    smelled gas the day before the accident but had not called Con Edison,
    the fire department, or 911.
        About 25 minutes before the accident, Con Edison received a call
    from a resident of an adjacent building who reported a gas odor both
    inside and outside of his residence. The gas was coming from one of the
    buildings that was later destroyed in the explosion. During the call,
    the Con Edison customer service representative's computer stopped
    responding, which delayed the notifications. Although a gas service
    mechanic was dispatched, the fire department was not notified as
    required by Con Edison's response procedure.
        The NTSB determined that the probable cause of the accident was (1)
    the failure of the defective fusion joint at the service tee that
    allowed natural gas to leak from the gas main and migrate into the
    building where it ignited and (2) a breach in the sewer line that went
    unrepaired since at least 2006, allowing groundwater and soil to flow
    into the sewer, leading to a loss of support for the gas main, which
    caused the line to sag and overstressed the defective fusion joint.
        As a result of this investigation, the NTSB made six safety
    recommendations: one to the New York State Public Service Commission,
    one to the City of New York, and four to Con Edison.\4\ The safety
    recommendation to the New York State Public Service Commission called
    upon that agency to ensure that its 5-year audit plan for pipeline
    operators effectively addresses all aspects of the state pipeline
    regulations. The safety recommendation to the City of New York, if
    acted upon, will result in better reporting of sewer line breaches and
    better coordination among city agencies to identify and address soil
    disruption and voids. We recommended that Con Edison better adhere to
    standard practices for heat fusion joining of polyethylene pipe,
    promptly notify the New York City Fire Department in the event of a gas
    emergency, and perform more extensive and appropriate installation of
    gas main isolation valves.
    ---------------------------------------------------------------------------
        \4\ P-15-33 through -38.
    ---------------------------------------------------------------------------
        While the East Harlem accident investigation did not result in our
    issuing a safety recommendation to PHMSA, the NTSB pointed out in its
    accident investigation report that PHMSA had failed to identify
    deficiencies in the New York state pipeline safety regulations. The
    state pipeline safety program certifications in Title 49 United States
    Code section 60105(a) allow states to inspect and enforce intrastate
    pipeline safety, provided the state adopts at least the minimum Federal
    pipeline safety regulations. Our examination of the New York state
    pipeline safety regulations revealed that they did not meet Federal
    regulations in two areas: definition of service line and pipeline
    pressure testing. These deficiencies had not been identified by PHMSA
    during state program recertifications. In response to the NTSB's
    investigation findings, the New York State Public Service Commission
    corrected these deficiencies.
    Pipeline Safety: Natural Gas Pipelines
        Three types of pipeline systems are used to transport natural gas
    from the source to end users; gathering, transmission, and distribution
    systems. Gathering lines transport gas from a production facility to a
    transmission line, and transmission lines transport gas from a
    gathering line to a distribution facility.\5\ The United States has
    approximately 298,000 miles of onshore natural gas transmission
    pipelines. Compared to gas distribution pipelines, transmission
    pipelines typically have larger diameters and significantly higher
    operating pressures. Therefore, the potential impact of a transmission
    pipeline incident on its surroundings is high.
    ---------------------------------------------------------------------------
        \5\ Title 49 Code of Federal Regulations (CFR) 192.3.
    ---------------------------------------------------------------------------
        Since 2004, PHMSA has required the operators of these pipelines to
    develop and implement integrity management (IM) programs to ensure the
    integrity of their pipelines in populated areas (defined as high
    consequence areas [HCAs]) to reduce the risk of injuries and property
    damage from pipeline failures.\6\ An operator's IM program is a
    management system designed and implemented to ensure the operator's
    pipeline system is safe and reliable. It consists of multiple
    components, including procedures and processes for identifying HCAs,
    determining likely threats to the pipeline within the HCA, evaluating
    the physical integrity of the pipe within the HCA, and repairing or
    remediating any pipeline defects found. These procedures and processes
    are complex and interconnected. Effective implementation of an IM
    program relies on continual evaluation and data integration. The IM
    program is an ongoing program that PHMSA and state regulatory agencies
    should periodically inspect to ensure operator compliance with
    regulatory requirements.
    ---------------------------------------------------------------------------
        \6\ PHMSA's gas transmission IM regulations are found at 49 CFR
    Part 192, Subpart O.
    ---------------------------------------------------------------------------
        In the last six years, the NTSB has completed three major gas
    transmission pipeline accident investigations in which deficiencies
    with the operators' IM programs and PHMSA oversight were identified as
    a concern.\7\ These three accidents--located in Palm City, Florida; San
    Bruno, California; and Sissonville, West Virginia--resulted in eight
    fatalities, more than 50 injuries, and 41 homes destroyed, with many
    more damaged. We are also evaluating IM oversight in the ongoing
    Birmingham investigation.
    ---------------------------------------------------------------------------
        \7\ NTSB, Columbia Gas Transmission Corporation Pipeline Rupture
    Sissonville, West Virginia on December 11, 2012, Rpt. No. NTSB/PAR-14/
    01 (February 19, 2014); NTSB, Rupture of Florida Gas Transmission
    Pipeline and Release of Natural Gas Near Palm City, Florida, Accident
    Brief No. NTSB/PAB-13/01 (August 13, 2013); NTSB, Pacific Gas and
    Electric Company Natural Gas Transmission Pipeline Rupture and Fire San
    Bruno, California on September 9, 2010, Rpt. No. NTSB/PAR-11/01 (August
    30, 2011).
    ---------------------------------------------------------------------------
        Earlier this year, the NTSB's Safety Research Division conducted a
    safety study using the results from the completed investigations and
    additional research to identify weaknesses in the implementation of gas
    transmission pipeline integrity management programs in HCAs. The study,
    Integrity Management of Gas Transmission Pipelines in High Consequence
    Areas, found that, although PHMSA's gas IM requirements have kept the
    rate of corrosion failures and material failures of pipe or welds low,
    no evidence exists to show that the overall occurrence of gas
    transmission pipeline incidents in HCA pipelines has declined.\8\
    Rather, the study identified areas where improvements need to be made
    to further enhance the safety of gas transmission pipelines in HCAs.
    ---------------------------------------------------------------------------
        \8\ NTSB, Integrity Management of Gas Transmission Pipelines in
    High Consequence Areas, No. NTSB/SS-15/01 (January 27, 2015).
    ---------------------------------------------------------------------------
        We recognize that IM programs are complex and require expert
    knowledge and integration of multiple technical disciplines including
    engineering, material science, geographic information systems, data
    management, probability and statistics, and risk management. This
    complexity requires pipeline operator personnel and pipeline inspectors
    to have a high level of practical knowledge and skill to adequately
    perform their functions. This complexity can make IM program
    development and implementation, and the evaluation of operators'
    compliance with IM program requirements, difficult. The study
    illustrated the need to expand and improve PHMSA resources in guiding
    both operators and inspectors.
        The effectiveness of an IM program depends on many factors,
    including how well threats are identified and risks are estimated. This
    information guides the selection of integrity assessment methods that
    discover pipeline system defects that may need remediation. The study
    found that aspects of the operators' threat identification and risk
    assessment processes require improvement. Further, the study found that
    of the four different integrity assessment methods (pressure test,
    direct assessment, in-line inspection, and other techniques), in-line
    inspection yields the highest per-mile discovery of pipe anomalies, and
    the use of direct assessment as the sole integrity assessment method
    has numerous limitations. Compared to their interstate counterparts,
    intrastate pipeline operators rely more on direct assessment and less
    on in-line inspection.
        As a result of the safety study, the NTSB issued 28 new
    recommendations.\9\ Of these, 22 were issued to PHMSA and one previous
    recommendation issued to PHMSA was reiterated.\10\ The recommendations
    include developing expanded and improved guidance for operators and
    inspectors for----
    ---------------------------------------------------------------------------
        \9\ P-15-1 through -28.
        \10\ P-15-1 through -22, reiterated P-11-7.

       The development of criteria for threat identification and
    ---------------------------------------------------------------------------
            elimination;

       Consideration of interactive threats; and

       Increased knowledge of the critical components associated
            with risk assessment approaches.

        The NTSB also recommended that PHMSA evaluate and improve gas
    transmission pipeline integrity assessment methods, including
    increasing the use of in-line inspection and ensuring that direct
    assessment is not the sole integrity assessment method. Other
    recommendations include evaluating the effectiveness of the approved
    risk assessment approaches for IM programs; developing minimum
    professional qualification criteria for all personnel involved in IM
    programs; and improving data collection and reporting, including
    geospatial data, to support the development of probabilistic risk
    assessment models and the evaluation of IM programs by state and
    Federal regulators.
        All of the recommendations to PHMSA resulting from the safety study
    are classified as open with an acceptable response, with the exception
    of P-15-14. This recommendation asked PHMSA to revise Title 49 Code of
    Federal Regulations (CFR) 192.915 to require all personnel involved in
    integrity management programs to meet minimum professional
    qualification criteria. PHMSA responded that operator personnel
    involved in integrity management programs receive on-the-job training
    (OJT) under the supervision of a qualified person and that OJT is an
    integral component of integrity management training. PHMSA further
    stated that operators should establish personnel qualification criteria
    that are applicable to their unique operating environment and managers
    should have the discretion to determine what minimum qualifications are
    needed. To address the recommendation, PHMSA proposed to review options
    for setting qualification criteria based on PHMSA and NTSB evaluations,
    and to use this information and current regulations to issue an
    advisory bulletin to clarify and reiterate the importance of the
    requirements and place renewed emphasis on compliance in future IM
    inspections. Although PHMSA's intended course of action may constitute
    an improvement, it falls short of revising the regulations as
    recommended. Accordingly, we requested that PHMSA reconsider the
    current plan in order to adequately address the NTSB recommendation.
        The Pipeline Safety, Regulatory Certainty, and Job Creation Act of
    2011 \11\ (the 2011 Act) requires PHMSA to conduct an evaluation on (1)
    whether IM should be expanded beyond current HCAs and (2) whether doing
    so would mitigate the need for class location requirements for gas
    transmission pipelines. Consequently, PHMSA began a series of
    rulemaking activities to consider whether IM requirements should be
    changed, including adding more prescriptive language in some areas, and
    whether other issues related to system integrity should be addressed by
    strengthening or expanding non-IM requirements. Among the specific
    issues PHMSA is considering concerning IM requirements are whether the
    definition of an HCA should be revised and whether additional
    restrictions should be placed on the use of specific pipeline
    assessment methods.\12\ The NTSB provided comments and will monitor
    these rulemakings to ensure that PHMSA has the full benefit of the
    lessons learned through our investigations and safety study.
    ---------------------------------------------------------------------------
        \11\ Public Law No. 112-90, section 5 (2012).
        \12\ The two relevant notices are: (1) Pipeline Safety: Safety of
    Gas Transmission Pipelines -Advance Notice of Proposed Rulemaking, 76
    Fed. Reg. 5308 (Aug. 25, 2011); and (2) Pipeline Safety: Safety of Gas
    Transmission Pipelines -Advance Notice of Proposed Rulemaking;
    Extension of Comment Period, 76 Federal Register 70953 (Nov. 16, 2011).
    ---------------------------------------------------------------------------
    Pipeline Safety: Hazardous Liquid Pipelines
        As we learned from the July 25, 2010, pipeline rupture in Marshall,
    Michigan, and the subsequent release of more than 840,000 gallons of
    crude oil into nearby wetlands, Talmadge Creek, and the Kalamazoo
    River, ensuring adequate integrity management programs for pipelines
    transporting hazardous liquids remains critically important. No
    fatalities were reported from the crude oil spill; however, local
    residents self-evacuated from their houses and more than 300 people
    reported symptoms consistent with crude oil exposure.\13\ The Marshall,
    Michigan, spill is the costliest onshore oil spill ever to occur in the
    United States, with current cleanup costs exceeding $1 billion.
    ---------------------------------------------------------------------------
        \13\ NTSB, Enbridge Incorporated Hazardous Liquid Pipeline Rupture
    and Release Marshall, Michigan on July 25, 2010, Rpt. No. NTSB/PAR-12/
    01 (July 10, 2012).
    ---------------------------------------------------------------------------
        The NTSB determined that the probable cause of the pipeline rupture
    was corrosion fatigue cracks that grew and coalesced from crack and
    corrosion defects under disbonded polyethylene tape coating, producing
    a substantial crude oil release that went undetected by Enbridge
    Incorporated's control center for more than 17 hours. The rupture and
    prolonged release were made possible by pervasive organizational
    failures at Enbridge, and PHMSA's weak regulation for assessing and
    repairing crack indications. Contributing to the accident was PHMSA's
    ineffective oversight of pipeline integrity management programs,
    control center procedures, and public awareness. The investigation also
    determined that contributing factors to the severity of the
    environmental consequences were (1) Enbridge's failure to identify and
    ensure the availability of well-trained emergency responders with
    sufficient response resources, (2) PHMSA's lack of regulatory guidance
    for pipeline facility response planning, and (3) PHMSA's limited
    oversight of pipeline emergency preparedness that led to the approval
    of an inadequate facility response plan.
        As a result of this investigation, the NTSB made safety
    recommendations to the U.S. Secretary of Transportation, PHMSA,
    Enbridge, the American Petroleum Institute, the Pipeline Research
    Council International, the International Association of Fire Chiefs,
    and the National Emergency Number Association.\14\ The NTSB also
    reiterated a previous recommendation to PHMSA.\15\ All of the
    recommendations to PHMSA are currently classified as not yet completed
    but thus far acceptable.
    ---------------------------------------------------------------------------
        \14\ P-12-1 through P-12-19.
        \15\ P-11-8.
    ---------------------------------------------------------------------------
        The NTSB is pleased that PHMSA has made progress in implementing
    the recommendations from this investigation, including that agency's
    development of a Notice of Proposed Rulemaking (NPRM) titled Pipeline
    Safety: Safety of On-Shore Hazardous Liquid Pipelines. Among other
    things, the NPRM proposes to incorporate, by reference, consensus
    standards governing conduct of assessments of the physical condition of
    in-service pipelines using inline inspection, internal corrosion direct
    assessment, and stress corrosion cracking direct assessment.
        PHMSA is also considering revisions to the Control Room Management
    regulations of the Pipeline Safety Regulations to more explicitly
    require team training, through its NPRM titled Pipeline Safety:
    Operator Qualification, Cost Recovery, and Other Proposed Changes. This
    NPRM was published on July 10, 2015.\16\
    ---------------------------------------------------------------------------
        \16\ 80 Fed. Reg. 39916 (Jul. 10, 2015).
    ---------------------------------------------------------------------------
        In addition, PHMSA issued two advisory bulletins. The first,
    Advisory Bulletin 2014-01, published on January 28, 2014,\17\ notified
    pipeline operators (1) of the circumstances of the Marshall, Michigan,
    pipeline accident, and (2) of the need to identify deficiencies in
    facility response plans and to update these plans as necessary to
    conform with the non-mandatory guidance for determining and evaluating
    required response resources as provided in Appendix A of 49 CFR Part
    194, ``Guidelines for the Preparation of Response Plans.'' The second,
    Advisory Bulletin 2014-02, published on May 6, 2014,\18\ was directed
    to all hazardous liquid and natural gas pipeline operators, describing
    the circumstances of the accident in Marshall, Michigan--including the
    deficiencies observed in Enbridge's integrity management program--and
    asking them to take appropriate action to eliminate similar
    deficiencies.
    ---------------------------------------------------------------------------
        \17\ 79 Fed. Reg. 4532 (Jan. 28, 2014).
        \18\ 79 Fed. Reg. 25990 (May 6, 2014).
    ---------------------------------------------------------------------------
    Conclusion
        Since 2000, the NTSB has made 77 safety recommendations to PHMSA;
    only one of these has been closed in an unacceptable status.\19\ We
    recognize the progress PHMSA has made over the past 15 years; yet,
    there will always be room for improvement, and the accidents and
    incidents that the NTSB investigates attest to the fact that safety
    improvements are still necessary to prevent future accidents.
    ---------------------------------------------------------------------------
        \19\ P-15-14, discussed above at page 7.
    ---------------------------------------------------------------------------
        Thank you for inviting me to testify today. I am happy to answer
    your questions.

        Senator Fischer. Thank you, Chairman Hart.
        Next, we have Michael Bellamy, who is the General Manager
    of PII Pipeline Solutions. Mr. Bellamy has over 23 years
    experience in sales and marketing of technology solutions to
    the oil and gas industry.
        Welcome.

            STATEMENT OF MICHAEL BELLAMY, GENERAL MANAGER,
                         PII PIPELINE SOLUTIONS

        Mr. Bellamy. Thank you very much. That's a good start.
        Good afternoon. My name is Michael Bellamy, and I'm the
    General Manager of PII Pipeline Solutions. PII is part of
    General Electric's measurement and control business. We inspect
    oil and gas pipelines, and, in the 35 years since the business
    was founded, have inspected over a million miles of pipelines
    worldwide. Over 40 percent of that work has been carried out
    here in the United States.
        I appreciate the opportunity to speak to you today about
    pipeline inspection technology, which is also referred to as
    inline inspection, carried out using high-technology robotic
    devices, also called ``smart pigs.'' These devices travel along
    the inside of the pipeline at speeds up to 9 miles an hour,
    propelled by the pressure of the product flowing through the
    line. Equipped with sensors of various types, ``pigs'' collect
    millions of measurements as they travel, covering every inch of
    both the internal and external surface of the pipe steel,
    recording the data onboard for subsequent download when
    recovered at the end of the inspection run.
        To help understand the role of inline inspection tools in
    ensuring pipeline safety, perhaps a medical analogy will help.
    In human medicine, data provided by MRI scanners, CT scanners,
    X-Ray machines, and ultrasound devices is used by medical
    specialists to develop a diagnosis and prescribe a course of
    treatment. In the same way, pipeline operators use the
    diagnostic capability afforded by inline inspection tools to
    design integrity management programs that take into account the
    age of the line, the way it's operated, the environment in
    which it's situated, all of which determine the potential for
    threats to pipeline safety.
        Moreover, just as medical diagnostic technologies are used
    to identify medical issues at the earliest stages in our
    bodies, inline inspection tools can identify potential problems
    in pipelines early enough to prevent them from developing into
    a leak or rupture. By means of inline inspection, cracks the
    size of a matchstick or corrosion half the diameter of a penny
    can be identified and measured with confidence.
        Inline inspection tools were first introduced in the 1970s
    and have evolved tremendously since. As yet, there is no one
    tool that can find all threats. Nevertheless, pipeline
    operators today have access to a range of modern, high-
    technology tools covering all the major threats to pipeline
    safety, including dents, corrosion, cracking, and land movement
    in both gas and liquid pipelines. The inline inspection
    industry is now deploying its fourth generation of metal-loss
    tools, its fourth generation of geometry tools, and third
    generation of crack-detection tools. Our understanding of the
    physics of these tools continues to evolve, and, coupled with
    advances in algorithmic search and data manipulation
    techniques, the inspection tools available today are providing
    ever improving results.
        Once a ``smart pig'' run is completed, the data recorded,
    which is equivalent to looking at 70 football fields in grids
    of one-eighth inch by one-eighth inch, is processed to
    highlight suspected anomalies. The resulting output is then
    reviewed by a trained data analyst, who verifies the assessment
    and compiles a report on the condition of the pipeline to
    submit to the operator. With this information, and in the
    context of the PHMSA-approved integrity management program for
    the pipeline, the pipeline operator can prioritize the issues
    that need immediate attention.
        In this way, inline inspection tools make a material
    contribution to pipeline safety. For example, corrosion tools
    have been in use for more than 45 years. Data gathered in the
    U.S. continue to show a reduction in corrosion-related
    incidents by 36 percent over the last 12 years. Crack
    inspection tools have been around for less time than corrosion
    tools. Nevertheless, a recent Pipeline Research Council study
    compared over 40,00 cracks found by inline inspection tools
    with actual measurements from field excavations. The results
    gave a clear validation of the published tool specifications.
        Additionally, the soon-to-be-published API-1176 industry
    recommended practice document developed with PHMSA involvement
    will provide guidance to operators on how to use the results
    from inline inspection tools as part of a comprehensive crack-
    management program. We look forward to seeing continued
    improvement in pipeline safety, vis-a-vis cracks, as this
    technology continues to mature and becomes more widely adopted
    by pipeline operators.
        We consider ourselves partners with our customers and PHMSA
    in working to enhance pipeline safety. We support rules that
    are clear and interpreted in such a way as to encourage
    competition and innovation. However, the current U.S. rules
    don't recognize the differences between inline inspection tool
    technologies or in tool performance, nor do they encourage
    operators to use the best available technology.
        PHMSA has done a great job in stimulating the pipeline
    industry to use inline inspection tools for dents and general
    corrosion. The next step is to encourage the use of a broader
    range of tool technologies capable of finding and
    characterizing a broader range of pipeline anomalies.
        I'd also like to mention risk management and risk models as
    an accepted approach adopted by pipeline regulators globally.
    Such models take inline inspection data and combine it with
    contextual information about the pipeline, its construction and
    operation, to help operators make better-informed diagnosis
    concerning the ongoing health of their pipeline. We are
    encouraged that PHMSA intends to put risk management at the
    core of its proposed new pipeline integrity rules. We hope that
    they will consider the kind of goal-setting approaches that we
    see working effectively in Europe and Canada.
        So, in summary, we believe that pipeline safety in the U.S.
    can be enhanced by regulations that embody the following
    principles:
        Pipeline operators are best positioned to determine the
    appropriate method to verify the ongoing integrity of their
    pipeline.
        Inline inspection provides the clearest assessment of the
    condition of a pipeline, and can be used to prioritize those
    features that need immediate attention and those that require
    monitoring over time.
        Regulation should encourage the development and adoption of
    new technology that can further enhance pipeline safety.
        Regulations should move operators toward a risk-based goal-
    setting approach.
        At PII Pipeline Solutions, we're committed to pipeline
    safety and will continue to work with PHMSA and our customers
    to advance the state-of-the-art for inline inspection.
        Thank you for your attention.
        [The prepared statement of Mr. Bellamy follows:]

            Prepared Statement of Michael Bellamy, General Manager,
                             PII Pipeline Solutions
        Good afternoon. My name is Michael Bellamy and I am the General
    Manager of PII Pipeline Solutions. PII is part of General Electric's,
    Measurement and Control business, headquartered in Billerica, MA. We
    inspect oil & gas pipelines, and in the 35 years since the business was
    founded have inspected over 1,000,000 miles of pipelines worldwide.
    Over 40 percent of that work has been carried out in the United States.
        I appreciate the opportunity to speak to you today about pipeline
    inspection technology, which is also referred to as in-line inspection,
    carried out using high technology robotic devices, often called ``smart
    pigs''. These devices travel along the inside of the pipeline at speeds
    up to 9 miles per hour, propelled by the pressure of the product
    flowing through the line. Equipped with sensors of various types, pigs
    collect millions of measurements of the pipe wall as they travel,
    covering every inch of both the internal and external surface of the
    pipe steel, recording the data on board for subsequent download when
    recovered at the end of the inspection run.
        To help understand the role of in-line inspection tools in ensuring
    pipeline safety, perhaps a medical analogy will help. In human
    medicine, data provided by MRI scanners, CT scanners, x-ray machines
    and ultrasound devices is used by medical specialists to develop a
    diagnosis and prescribe a course of treatment.
        In the same way, pipeline operators use the diagnostic capability
    afforded by in-line inspection tools to design integrity management
    programs that take into account the age of the line, the way in which
    it is operated, and the environment in which it is situated, all of
    which determine the potential for threats to pipeline safety.
        Moreover, just as medical diagnostic technologies are used to
    identify medical issues at their earliest stages in our bodies, in-line
    inspection tools can identify potential problems in pipelines early
    enough to prevent them from developing into a leak or rupture.
        By means of in-line inspection, cracks the size of a match stick
    and corrosion \1/2\ the diameter of a penny can be identified and
    measured with confidence.
        In-line inspection tools were first introduced in the 1970s and
    have evolved tremendously since. As yet there is no one tool that can
    find all threats. Nevertheless pipeline operators today have access to
    a range of modern high technology tools covering all the major threats
    to pipeline safety including dents, corrosion, cracking and land
    movement, in both gas and liquid pipelines.
        The in-line inspection industry is now deploying its 4th generation
    of metal loss tools, 4th generation of geometry tools and 3rd
    generation of crack detection tools. Our understanding of the physics
    of these tools continues to evolve, and coupled with advances in
    algorithmic search and data manipulation techniques, the inspection
    tools available today are providing ever improving results.
        Once a smart pig run is complete, the data recorded, which is
    equivalent to looking at 70 football fields in grids of 1/8" x 1/8", is
    processed to highlight suspected anomalies. The resulting output is
    then reviewed by a trained data analyst, who verifies the assessment
    and compiles a report on the condition of the pipeline to submit to the
    operator.
        With this information and in the context of the PHMSA approved
    integrity management program for the pipeline, the pipeline operator
    can prioritize the issues that need immediate attention.
        In this way, in-line inspection tools make a material contribution
    to pipeline safety.
        For example, corrosion tools have been in use for more than 45
    years. Data gathered in the U.S. continue show a reduction in
    corrosion-related incidents by 36 percent over the past 12 years.
        Crack inspection tools have been around for less time than
    corrosion tools. Nevertheless, a recent Pipeline Research Council study
    compared over 40,000 cracks found by in-line inspection tools with
    actual measurements from field excavations. The results gave a clear
    validation of the published tool specifications.
        Additionally, the soon to be published API 1176 industry
    recommended practiced document, developed with PHMSA involvement, will
    provide guidance to operators on how to use the results from in-line
    inspection tools as part of a comprehensive crack management program.
    We look forward to seeing continued improvement in pipeline safety vis
    a vis cracks as this technology continues to mature and becomes more
    widely adopted by pipeline operators.
        We consider ourselves partners with our customers and PHMSA in
    working to enhance pipeline safety. We support rules that are clear and
    interpreted in such a way as to encourage competition and innovation.
        However the current U.S. rules don't recognize the differences
    between in-line inspection tool technologies or in tool performance,
    nor do they encourage operators to use the best available technology.
        PHMSA has done a great job in stimulating the pipeline industry to
    use in-line inspection tools for dents and general corrosion; the next
    step is to encourage the use of a broader range of tool technologies
    capable of finding and characterizing a broader range of pipeline
    anomalies.
        I'd like to also mention risk management and risk models as an
    accepted approach adopted by pipeline regulators globally. Such models
    take in-line inspection data and combine it with contextual information
    about the pipeline, its construction and operation to help operators
    make a better informed diagnosis concerning the ongoing health of their
    pipeline. We are encouraged that PHMSA intends to put risk management
    at the core of its proposed new pipeline integrity rules. We hope that
    they will consider the kind of goal setting approaches that we see
    working effectively in Europe and Canada.
        Before I conclude, I would like to emphasize that in-line
    inspection tools are very good at identifying features that they have
    seen before, but they can't know what they don't know. We can only
    learn what a specific signal represents by comparing that signal with
    the real defect.
        The creation of a ``no-fault'' environment, in which operators can
    share dig verification data with their in-line inspection vendors,
    without fear of regulatory penalty, would allow the entire industry to
    grow more effective in identifying threats.
        So, in summary, we believe that pipeline safety in the U.S. can be
    enhanced by regulations that embody the following principles:

       Pipeline operators are best positioned to determine the
            appropriate method to verify the ongoing integrity of their
            pipeline

       In-line inspection provides the clearest assessment of the
            condition of a pipeline and can be used to prioritize those
            features that need immediate attention and those that require
            monitoring over time

       Regulations should encourage the development and adoption of
            new technology that can further enhance pipeline safety

       Finding an effective way to share dig verification data, in
            a no-fault environment, will enhance tool learning and make in-
            line inspection even more effective.

       Regulations should move operators toward a risk based, goal
            setting approach.

        At PII Pipeline Solutions we are committed to pipeline safety and
    will continue to work with PHMSA and our customers to advance the state
    of the art for in-line inspection.
        Thank you for your attention.

        Senator Fischer. Thank you, Mr. Bellamy.
        Next, we have Mr. Donald Santa, who is the President and
    CEO of the Interstate National Gas Association of America, the
    North American association representing the interstate and
    interprovincial natural gas pipeline industry.
        Welcome.

      STATEMENT OF DONALD F. SANTA, PRESIDENT AND CEO, INTERSTATE
                   NATURAL GAS ASSOCIATION OF AMERICA

        Mr. Santa. Thank you. And good afternoon, Chairwoman
    Fischer, Ranking Member Booker, and members of the
    Subcommittee. My name is Donald Santa, and I am President and
    CEO of the Interstate Natural Gas Association of America, or
    INGAA.
        INGAA represents interstate natural gas transmission
    pipeline operators in the U.S. and Canada. The pipeline systems
    operated by INGAA's 25 member companies are analogous to the
    interstate highway system, transporting natural gas across
    state and regional boundaries.
        In the wake of the natural gas pipeline accident in
    California in 2010, INGAA's board of directors committed the
    Association and its member pipeline companies to the goal of
    zero pipeline safety incidents. While this is a tough and, some
    would say, impossible goal to meet, the emphasis is in the
    right place: a pursuit of excellence.
        While progress toward INGAA's goal of zero incidents must
    continue, whether new regulations are issued, it is important
    and desirable that there be consistency between the voluntary
    commitments in the INGAA action plan and the regulations that
    will implement the 2011 Pipeline Safety Act.
        INGAA has engaged in an active dialogue with PHMSA and with
    other stakeholders over the past 4 years to achieve this goal.
    This has been constructive, and we have every reason to believe
    that the comprehensive rule proposed soon will reflect INGAA's
    input.
        Still, these proposed regulations are behind the schedule
    that Congress prescribed in the 2011 Act. INGAA acknowledges
    that regulations should be thoughtfully considered and include
    an analysis of costs and benefits. The practical consequence of
    delay, however, is to erode the confidence of some pipeline
    companies that proceeding with the dedication of resources
    needed to implement the pipeline safety commitments will be
    consistent with the final rules adopted by PHMSA. This
    hesitancy is rooted in the perceived risk that the rules
    ultimately might compel repeating certain steps in the pipeline
    safety action plan. This is not insignificant. For example,
    testing pipelines for material strength is both costly and
    disruptive, because pipelines must be removed from operation to
    complete the testing. This do-over risk for pipeline operators
    and their customers creates the risk of more extensive
    operational disruption that would be needed. This do-over risk
    should not be permitted to hold us back when we as an industry
    and our regulators should be moving forward.
        Our purpose here is to work collaboratively with PHMSA.
    Because the regulatory process, indeed, goes beyond what PHMSA
    can control, INGAA wishes to make the point that it is critical
    that these natural gas pipeline safety regulations be completed
    in a workable and timely manner.
        It is worth recalling that the title of the most recent law
    reauthorizing the Pipeline Safety Act makes the point. It is
    the Pipeline Safety Regulatory Certainty and Job Creation Act
    of 2011. Regulatory certainty is necessary to move forward.
        INGAA does support reauthorization of the Pipeline Safety
    Program during this Congress. My written statement includes
    some suggestions for legislation, including providing some more
    definition for several key natural gas regulations. With
    further definition from Congress, we believe the proposed rules
    could be completed in a more timely fashion, and the pipeline
    industry would have greater certainty about what the future
    regulations would require. This would allow operators to start
    working toward those requirements now, as opposed to just
    waiting until regulations are final at an indeterminate future
    date.
        In addition, INGAA suggests that Congress direct PHMSA to
    adopt regulations for underground natural gas storage
    facilities by a date certain. We continue to believe that a
    reauthorization bill, and the accountability and oversight that
    comes from that, will help to get PHMSA back on track for
    meeting the safety mandates required in 2011.
        I would be happy to discuss this and other questions
    subsequently. Thank you for the opportunity to testify today.
        [The prepared statement of Mr. Santa follows:]

           Prepared Statement of Donald F. Santa, President and CEO,
                 Interstate Natural Gas Association of America
        Good afternoon Chairwoman Fischer, Ranking Member Booker and
    members of the Subcommittee. My name is Donald F. Santa, and I am
    President and CEO of the Interstate Natural Gas Association of America,
    or INGAA. INGAA represents interstate natural gas transmission pipeline
    operators in the U.S. and Canada. The pipeline systems operated by
    INGAA's 25 member companies are analogous to the interstate highway
    system, transporting natural gas across state and regional boundaries.
    As you can see from the map below, this is an extensive energy
    infrastructure system.
               U.S. Interstate Natural Gas Transmission Pipelines
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        INGAA and its members' core mission is the safe and reliable
    transportation of natural gas. Through a variety of initiatives--
    including best practices and standards development, regulatory
    compliance and damage-prevention efforts--this association has been
    committed to the continuous improvement of pipeline safety since its
    founding in 1944. As part of this commitment, INGAA supported the most
    recent reauthorization of the Pipeline Safety Act, enacted in 2011. We
    also support implementation of the new law through regulations.
        To date, however, the Pipeline and Hazardous Materials Safety
    Administration (PHMSA) has not yet implemented several of the key
    regulatory mandates from the 2011 Act. INGAA hopes PHMSA will release
    these proposed regulations for public comment soon, so stakeholders can
    participate in a process that culminates in final rules within the next
    year. Another important step for pipeline safety is reauthorization of
    the Pipeline Safety Act during this Congress. Decisive action by
    Congress and PHMSA will keep pipeline safety moving in the right
    direction.
    INGAA Safety Commitments
        As mentioned, INGAA has a long history of engagement to improve
    pipeline safety. This began with the development of construction and
    operating standards during the early years of the natural gas
    transmission pipeline industry. In 1968, Congress enacted the Natural
    Gas Pipeline Safety Act, formalizing these standards and making them
    enforceable. In the decades since, Congress has added new requirements
    as technology has advanced and the ability to monitor safety
    performance has improved.
        We have long maintained--and regulators agree--that the natural gas
    pipeline industry operates with a high degree of safety. Accidents are
    rare, and the number of fatalities and injuries from pipeline accidents
    is very low. The Department of Transportation states that pipelines are
    the safest mode of energy transportation.
        Still, the pipeline failure in San Bruno, California in 2010 was a
    wake-up call for our industry. It reinforced for pipeline operators
    that pipeline safety is not just a matter of regulatory compliance; it
    is central to the industry's social license to operate. We recognize
    that safety must be our highest priority.
        In the wake of that pipeline failure, INGAA's board of directors
    committed the association and its member pipeline companies to the goal
    of zero pipeline safety incidents. INGAA identified the commercial
    aviation sector as a model of an industry with a similar ``zero
    incident'' goal. While this is a tough, and some would say, impossible,
    goal to meet, the emphasis is in the right place--a pursuit of
    excellence.
        INGAA's overarching goal of zero incidents is anchored by four core
    principles. These are: (1) commitment to a strong safety culture as a
    critical dimension of continuous improvement; (2) relentless pursuit of
    improving by learning; (3) commitment to apply integrity management
    principles on a system-wide basis; and (4) commitment to engage with
    stakeholders at all levels.
        These core principles provided the basis for a nine-point pipeline
    safety action plan that the INGAA board endorsed in early 2011. This
    action plan--known as the INGAA Integrity Management Continuous
    Improvement (or IMCI) initiative--addresses all of the major issues
    raised in relevant reports by the National Transportation Safety Board
    as well as the key natural gas pipeline issues addressed within the
    Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (the
    2011 Act). In connection with this, two items deserve specific mention:
    (1) expanding integrity management beyond High Consequence Areas, and
    (2) demonstrating that pre-regulation pipelines remain fit for service.
        Consistent with our guiding principle of a relentless pursuit of
    improvement, INGAA's members worked with our peers in the hazardous
    liquid and gas distribution industries, as well as Federal and state
    regulators, to develop a standard for pipeline safety management
    systems, called API 1173. This standard consolidates best practices
    within the industry and addresses a recommendation made by the National
    Transportation Safety Board. Our members are now incorporating the
    safety management system elements established in API 1173.
    Recent Pipeline Safety Legislation
        The Pipeline Safety Improvement Act of 2002 incorporated a new,
    risk-based approach to safety for natural gas transmission pipelines in
    Federal pipeline safety law. The 2002 reauthorization law directed the
    Secretary of Transportation to develop a regulation on ``integrity
    management'' for natural gas transmission pipeline segments located in
    populated areas. Regulations subsequently required the operators of
    such pipelines to: (1) identify pipeline segments located in defined,
    populated areas, known as High Consequence Areas or HCAs; (2) conduct
    baseline inspection on such segments within 10 years; and (3) re-assess
    those segments every seven years thereafter.
        This integrity management directive emphasized achieving the
    greatest enhancement to public safety by reducing risks in populated
    areas. For interstate natural gas transmission pipelines, only about
    six percent of total pipeline mileage is located in a defined HCA.
    Still, because the majority of these segments were inspected using in-
    line inspection tools (``smart pigs''), over 70 percent of INGAA's
    membership mileage is now being inspected periodically with this
    enhanced process in order to capture the six percent within HCAs. This
    has resulted in a 72 percent reduction in leaks attributable to
    corrosion, material or construction defects.
        As part of its pipeline safety action plan, INGAA members committed
    to the phased expansion of integrity management beyond HCAs. INGAA's
    plan would cover 90 percent of pipeline segments located near people by
    2020, and 100 percent of segments located near people by 2030. We
    advocate a phased approach in part to minimize delivery service
    disruptions. Testing some pipeline segments will be challenging because
    the pipeline must be removed from service for inspection and possible
    repair and replacement. INGAA's members are on schedule, and to date
    have inspected segments located in proximity to over 70 percent of the
    public along pipelines.
        The 2011 Act directs PHMSA to examine the expansion of the
    integrity management program beyond the 2002 requirements, report its
    findings to Congress and issue any new rules that might be warranted.
        The other major issue addressed in the 2011 Act involved whether
    pipelines constructed before Federal pipeline safety regulations took
    effect in 1970 remain ``fit for service.'' Many of the Nation's natural
    gas transmission pipelines were constructed before 1970. Industry
    standards then called for operators to test new pipe to confirm its
    ability to operate safely at the system's maximum allowable operating
    pressure prior to placing such pipe in service. Beginning in 1970,
    operators were required by Federal regulations to conduct this testing
    and retain related records for all new pipelines.
        The accident in San Bruno highlighted the need for pipeline
    operators to ensure that they have adequate testing records. INGAA's
    members support the validation of testing records, as well as re-
    testing segments located in populated areas if traceable, verifiable
    and complete testing records cannot be produced.
        The 2011 Act requires regulations on records/testing for pre-1970
    pipe in highly populated areas. INGAA members have validated the
    material strength records for approximately 85 percent of the pipeline
    in HCAs and are far along in addressing the remaining segments. While
    these regulations have not yet been proposed, PHMSA engaged in a robust
    pre-rulemaking dialogue with pipeline safety stakeholders, including
    INGAA and its members, to develop a process to implement this
    requirement. We anticipate that PHMSA will address this topic, as well
    as the proposed expansion of integrity management, in its comprehensive
    natural gas rule currently under review by the Office of Management and
    Budget (OMB).
    Natural Gas Safety Regulations--Importance of Certainty
        INGAA's members remain committed to the goal of zero incidents, and
    progress toward that target must continue whether new regulations are
    issued, or not. Nonetheless, consistency between INGAA's voluntary
    commitments and the regulations that will implement the 2011 Act is
    both important and desirable. INGAA has engaged in an active dialogue
    with PHMSA (and other stakeholders) over the past four years to achieve
    this goal. This has been constructive, and we have every reason to
    believe that PHMSA's proposed rule will reflect INGAA's input.
        Still, these proposed regulations are behind the schedule
    prescribed by Congress in 2011. INGAA acknowledges that regulations
    should be considered thoughtfully and include an analysis of costs and
    benefits. The practical consequence of this delay, however, is to erode
    the confidence of some pipeline companies that their voluntary safety
    commitments will be consistent with the final rules adopted by PHMSA.
    Therefore, operators may be reluctant to dedicate the enormous
    resources needed to implement the voluntary pipeline safety
    commitments. This hesitancy is rooted in the perceived risk that the
    rules ultimately might compel a repeat of certain steps in the pipeline
    safety action plan. This is not insignificant. For example, testing
    pipelines for material strength is both costly and disruptive to
    service because pipelines are removed from operation to complete the
    testing. Therefore, progressive pipeline operators are at risk if they
    act while new regulations are pending.
        Our purpose here is not to be critical of, but instead to work
    collaboratively with, PHMSA. The regulatory process goes far beyond
    what PHMSA can control, and policymakers should avoid assigning PHMSA
    too much blame for the delays in implementing the 2011 Act. Indeed,
    recent press articles have taken the simplistic view that PHMSA can
    simply draft new regulations and unilaterally bring such regulations
    into force. This narrative ignores the role of the Department of
    Transportation and OMB in vetting proposed rules before they can be
    published for public comment. This process is arduous at best. We need
    to recognize that reality and work with the agencies to make this
    difficult regulatory process as efficient as possible.
        In the end, we need the regulatory certainty that will come with
    completion of the regulations implementing the 2011 Act. The title of
    that legislation makes the point. It is ``The Pipeline Safety,
    Regulatory Certainty and Job Creation Act of 2011'' (emphasis added).
    Without certainty, in the form of new safety regulations that clearly
    define expectations, the path forward on natural gas transmission
    pipeline safety will be far more disjointed.
    Legislative Recommendations
        INGAA encourages Congress to reauthorize the Pipeline Safety Act
    during this Congress. Some have suggested that the upcoming
    reauthorization should be for a limited term of two years rather than
    the typical four or five years. INGAA questions the utility of such a
    limited effort. Congress should gather the information needed and make
    the legislative changes necessary to have confidence in enacting a
    four-year reauthorization. PHMSA needs certainty too, and a shortened
    reauthorization term would deprive the agency of the assurance needed
    to devote its undivided attention to fulfilling its mission.
    Finalize PHMSA Rulemakings Required by 2011 Reauthorization
        As mentioned, several major natural gas rulemakings from the 2011
    Act are incomplete. INGAA's highest priority for this next
    reauthorization is providing greater certainty on what those
    rulemakings will entail, such that industry can continue with
    confidence its initiatives to fulfill the purposes of the 2011 Act and
    other guidance even before regulations are finalized. Given how long it
    has taken to send these proposed rules to OMB for review, and the
    record of delay in other rulemakings across the executive branch, we
    have good reason to be apprehensive that it may take several more years
    to finalize these pipeline safety rules.
        INGAA recommends that Congress add further details on expected
    deadlines, testing levels and performance metrics, for the rulemakings
    on integrity management expansion and pre-1970 pipeline fitness-for-
    service. More clearly delineated expectations will provide pipeline
    operators with the certainty to proceed confidently with and take
    credit for initiatives to improve pipeline safety before the rules are
    finalized.
    Create Safety Regulations for Underground Natural Gas Storage
            Facilities
        There are approximately 425 underground natural gas storage
    facilities in the U.S. The facilities use underground geologic
    formations, such as depleted oil and gas wells, to store natural gas.
    While PHMSA has the statutory authority to do so, to date it has not
    promulgated Federal safety regulations for these facilities. In an
    Advanced Notice of Proposed Rulemaking on gas transmission safety
    issues in 2011, PHMSA asked whether it should create safety standards
    and regulation for natural gas storage. INGAA responded in the
    affirmative, and over the past four years, we have worked with American
    Gas Association, PHMSA and state officials to develop industry
    consensus standards that could form the basis for future regulations.
    These consensus standards, or ``recommended practices,'' were completed
    this month.
        INGAA believes PHMSA should undertake a rulemaking to adopt new
    regulations for underground natural gas storage, and our hope is that
    the new recommended practices will help to facilitate the more rapid
    adoption of such rules. We recommend that Congress require the creation
    of Federal regulations by a date certain. We also support the
    appropriate delegation of oversight authority to state entities for
    intrastate storage facilities, similar to the existing delegation of
    authority for intrastate pipeline regulation. Finally, INGAA recommends
    that Congress give PHMSA the authority to collect user fees from
    storage operators to fund Federal and state oversight of storage
    facilities. Closing this gap in safety oversight would be an important
    step forward.
    Eliminate Duplicative Requirements
        Beginning with the Federal rules promulgated in 1970, natural gas
    pipeline safety regulations always have prioritized achieving the
    greatest margin of safety where pipelines are in close proximity to
    population. At that time, regulators created four classes of pipe,
    based on the number of buildings in close proximity to the pipeline
    right-of-way. At one end of the scale are pipeline segments in rural
    areas; at the other end are segments in urban areas. A pipeline's class
    location changes if the number of structures along the pipeline
    increases. This can trigger a requirement that the operator either
    operate at a lower pressure--which is usually impractical from an
    operations standpoint--or completely replace pipelines with thicker-
    walled pipe.
        Pipeline inspection technology now has advanced to a point where
    operators can inspect pipes internally and assess integrity without
    removing pipelines from service. This was not possible when the class
    location rules were adopted in the 1970s. As mentioned, regulations now
    require natural gas transmission pipeline operators to employ integrity
    management programs designed to increase the margin of safety for pipe
    segments located in populated areas. These programs include a thorough
    risk assessment and detailed pipeline inspections on a regular
    interval. Smart pig internal inspection technology is the principal
    method that INGAA members use to comply with integrity management
    regulations.
        Consequently, pipeline operators now must comply with redundant
    regulatory requirements (integrity management and pipe replacement
    based on class location) that are intended to address the same problem.
    Today's use of integrity management principles, and associated
    inspection technology, is a more sophisticated approach to pipeline
    safety in populated areas. If pipes can be inspected so that their
    condition is known, there is no reason for replacing pipeline that
    remains safe to operate. Eliminating unneeded pipeline replacement also
    would reduce burdens on landowners and significantly reduce methane
    emissions and service disruptions.
        In the 2011 pipeline safety reauthorization, Congress required
    PHMSA to assess ``whether applying the integrity management program
    requirements, or elements thereof, to additional areas would mitigate
    the need for class location requirements.'' Congress required a report
    from PHMSA by January 2014. To our knowledge, PHMSA has not submitted
    this report. We hope PHMSA and Congress will agree to eliminate the
    overlap between these two regulations.
    Update Outmoded PHMSA User Fee Funding
        While not INGAA's top priority, the PHMSA user fee and funding
    regime needs to be updated. The law authorizing the user fee, enacted
    in 1986, has not kept up with the times. PHMSA's user fees need
    scrutiny and a legislative update.
        As part of the appropriations process, the Department of
    Transportation recently advocated amending the statutory authority for
    one of these user fees. To their credit, the House and Senate
    Appropriations Committees refused to legislate on an appropriations
    bill. The Senate Appropriations Committee also weighed in on another
    PHMSA user fee matter, related to the allocation of the Pipeline Safety
    Fund user fee. The committee's report on the Transportation/HUD
    appropriations bill \1\ included the following statement:
    ---------------------------------------------------------------------------
        \1\ H.R. 2577, as amended; S.Rrpt. 114-75.

            Pipeline Safety User Fee Allocation.--The pipeline safety
            program is largely funded through user fees on natural gas
            transmission pipelines, jurisdictional hazardous liquid
            pipelines, and liquefied natural gas terminal operators. Recent
            authorizations have increased the responsibilities for PHMSA
            and the States with respect to the safety of our Nation's
            pipelines. Given this change in scope of the pipeline safety
            program, the Committee directs PHMSA to review the user fee
            collection process to determine if it should be modified to
            more equitably allocate the cost of the pipeline program across
            the industry segments covered by Federal and State oversight.
            PHMSA shall submit a report to both the House and Senate
            Committees on Appropriations within 60 days of enactment of
            this act, that summarizes the agency's statutory authority to
            revise the fee structure, its assessment of the current fee
            structure, and any recommendations for changes to the fee
            structure that should be considered by Congress as it considers
    ---------------------------------------------------------------------------
            reauthorization of PHMSA.

        INGAA agrees, and urges that this be done in a comprehensive
    fashion. The existing Pipeline Safety Fund fee is not assessed on all
    regulated sectors of the natural gas industry, but rather only on gas
    transmission operators. This gives rise to an important question: If a
    large block of ``users'' are not paying the user fee, is it still a
    ``user fee'' under budget rules and precedent? The answer to this
    question has implications for both Congressional committee jurisdiction
    and whether the dollars raised must be sent to the Treasury rather than
    reserved to offset PHMSA's costs.
        We respectfully suggest that the authorizing committees review the
    current state of this user fee, and amend the statute to make this a
    true user fee assessed on all regulated sectors of the natural gas
    industry. At the very least, Congress should clarify that PHMSA is
    authorized to collect user fees from any new industry sectors added to
    PHMSA oversight either by statute or regulation.
    Collaborative Pipeline Safety Research and Development
        For many years, the pipeline industry worked in a collaborative
    fashion with DOT and PHMSA to identify and fund pipeline safety
    research and development projects. This collaboration worked well in
    identifying key priorities and avoiding duplication of effort. Many of
    the pipeline inspection technology successes of the past were the
    product of this process. In 2011, however, the Secretary of
    Transportation suspended collaborative R&D efforts due to conflict-of-
    interest concerns.
        We do not believe that such a conflict of interest, in fact, exists
    here. To the contrary, we contend that the government, public and
    industry share an identical interest in a robust and successful
    pipeline safety R&D effort. INGAA, therefore, suggests that PHMSA
    return to a collaborative R&D effort. For example, the existing
    pipeline safety advisory committees could serve as a forum for R&D
    discussion and approval. These advisory committees include equal
    representation from three different stakeholder groups--government,
    industry and the public. The pipeline safety advisory committees are a
    logical choice for establishing pipeline safety R&D priorities in a
    transparent and inclusive manner.
    Conclusion
        INGAA urges Congress to pass a pipeline safety reauthorization bill
    soon. Industry continues to make significant system-wide investments in
    advancing its goal of zero pipeline incidents. Congress should provide
    additional clarity to guide PHMSA on its comprehensive natural gas
    pipeline rule, require action on storage safety, and address
    duplicative and outdated provisions that do not contribute to enhancing
    public safety. Madam Chairwoman, thank you for the opportunity to share
    our views. I would be happy to answer questions at the appropriate
    time.

        Senator Fischer. Thank you, Mr. Santa.
        Next, we have Terry McCallister. He is the Chairman of the
    Board and Chief Executive Officer of WGL Holdings,
    Incorporated, the parent company of Washington Gas. He also
    serves as Chairman and CEO of the Washington Gas and Natural
    Gas Utility, serving over 1 million customers in the Washington
    area and the surrounding region.
        Welcome.

     STATEMENT OF TERRY McCALLISTER, CHAIRMAN AND CHIEF EXECUTIVE
      OFFICER, WGL HOLDINGS AND WASHINGTON GAS, ON BEHALF OF THE
                        AMERICAN GAS ASSOCIATION

        Mr. McCallister. Thank you very much. Good afternoon,
    Chairman Fischer and members of the Committee.
        My name is Terry McCallister. I'm Chairman and CEO of WGL
    Holdings and Washington Gas. WGL provides natural gas,
    electricity, green power, carbon reduction, and energy
    services. Washington Gas has served the Nation's capital and
    the surrounding region for more than 165 years. We are
    committed to our customers, the communities we serve, and the
    environment. Safety is paramount among our core values. I'm
    proud of our safety track record. And we continuously strive to
    enhance safety performance.
        I am testifying today on behalf of the American Gas
    Association, which represents more than 200 local distribution
    companies, also known as LDCs, serving more than 72 million
    customers. AGA members operate 2.4 million miles of underground
    pipeline, safely delivering clean, affordable natural gas to
    residential, commercial, and industrial customers. LDCs provide
    that last critical link in the delivery chain, connecting
    interstate pipelines directly to customers. Our focus every day
    is to keep the gas flowing safely and reliably.
        Most states assume primary responsibility for the safety
    regulations of LDCs as well as intrastate transmission
    pipelines. State governments are encouraged to adopt minimum
    standards promulgated by the U.S. Department of Transportation.
    Many states also choose to adopt standards that are more
    stringent than Federal requirements. Our companies are also in
    close contact with State pipeline safety inspectors, working in
    a collaborative manner, which results in far more inspections
    than required by Federal law.
        LDCs aren't just compliance-focused. We have cultures of
    proactive collaborative engagement. We employ trained safety
    professionals, provide ongoing employee evaluation and safety
    training, conduct rigorous system inspections, testing,
    maintenance, repair, and replacement programs, and educate the
    public on safety. AGA's commitment to enhancing safety, adopted
    in 2011, provides a summary statement of commitments beyond
    regulation. The Association has developed numerous pipeline
    safety initiatives focused on raising the bar on safety and
    sharing best practices.
        Each year, LDCs spend approximately $19 billion on safety,
    approximately half on efforts beyond Federal regulation,
    including pipe replacement. This number continues to escalate
    as work continues on newly approved accelerated pipeline
    replacement programs.
        The Pipeline Inspection Protection, Enforcement, and Safety
    Act of 2006 and the Pipeline Safety Regulatory Certainty and
    Jobs Creation Act of 2011 created numerous programs to further
    improve industry safety. AGA member companies have implemented
    these programs through DOT regulations or voluntarily. Many of
    these programs are in the early stages, and we encourage
    Congress to allow them to mature.
        In the case of the unanimously packed--passed 2011 Act,
    several required regulations have yet to be finalized. Progress
    is being made, and we believe it would be premature to make
    changes to the law at this time. For instance, the industry has
    experienced significant uncertainty regarding PHMSA's pending
    changes to transmission integrity management, maximum allowable
    operating pressure, and implementation of the integrity
    verification programs. We are prepared to act, but regulatory
    certainty would serve our customers and the industry alike.
    Layering on new laws and regulations before pending regulations
    have been finalized and given time to work creates uncertainty
    that undermines our shared safety goals.
        PHMSA has issued a number of guidance documents, released
    the results of congressionally mandated study on leak
    detection, and created a database to track progress in
    replacing cast iron and bare steel pipelines. Likewise, the
    industry, NARUC, and State regulators, as well as State
    legislators, have produced significant pipeline safety
    improvements in recent years. We should continue to build on
    this record.
        The quantity of cast iron mains continues to steadily
    decline and now makes up less than 3 percent of total mileage.
    There are 29,358 miles of cast iron mains still in use, and the
    industry estimates it'll cost nearly $83 billion to complete
    this replacement. Utilities are working with legislators and
    regulators to accelerate this process. Today, 39 States and the
    District of Columbia have adopted specific innovative rate
    mechanisms to accelerate pipeline replacement.
        My written testimony expands on the industry's progress and
    incident notification, data collection, and information-sharing
    and research and development. I'm pleased to answer any
    questions you have on this or other topics.
        Thank you.
        [The prepared statement of Mr. McCallister follows:]

     Prepared Statement of Terry McCallister, Chairman and Chief Executive
    Officer, WGL Holdings and Washington Gas on behalf of the American Gas
                                  Association
        Good morning, Mr. Chairman and members of the Committee. I am
    pleased to appear before you today. Pipeline safety is a critically
    important issue, and I thank you for not only holding this hearing, but
    for all the work that you and your colleagues have done over the years
    to help ensure that America has the safest, most reliable pipeline
    system in the world. My name is Terry McCallister and I am Chairman and
    Chief Executive Officer of WGL Holdings and of Washington Gas. WGL is a
    diversified energy business that provides natural gas, electricity,
    green power, carbon reduction and energy services.
        Washington Gas has served the Nation's capital and the surrounding
    region for more than 165 years. We are committed to our customers, the
    communities we serve and the environment. Because of this commitment,
    safety is paramount among our company's core values. I am proud of our
    safety track record; we continuously strive to improve safety
    performance in every aspect of our work at Washington Gas.
        I am testifying today on behalf of the American Gas Association
    (AGA). AGA, founded in 1918, represents more than 200 local energy
    companies that deliver clean natural gas throughout the United States.
    There are more than 72 million residential, commercial and industrial
    natural gas customers in the U.S., of which 94 percent--over 68 million
    customers--receive their gas from AGA members. Natural gas pipelines,
    which transport approximately one-fourth of the energy consumed in the
    United States, are an essential part of the Nation's infrastructure.
    Indeed, natural gas is delivered to customers through a safe, 2.4-
    million mile underground pipeline system. This includes 2.1 million
    miles of local utility distribution pipelines and 300,000 miles of
    transmission pipelines that stretch across the country, providing
    service to more than 177 million Americans. The recent development of
    natural gas shale resources has resulted in abundant supplies of
    domestic natural gas, which has meant affordable and stable natural gas
    prices for our customers. America needs clean and abundant energy and
    America's natural gas provides just that. This has made the safe,
    reliable and cost-effective operation of the natural gas pipeline
    infrastructure even more critically important, as it is our job to
    deliver the natural gas to the customer. Through an effective
    partnership between America's natural gas utilities, state regulators,
    Congressional and state legislators, governors and other key
    stakeholders working together to advance important safety policies, we
    have been able to both enhance system integrity and support increased
    access to natural gas service for homes and businesses.\1\
    ---------------------------------------------------------------------------
        \1\ See Attachment 1: ``Natural Gas Pipelines across the U.S.''
    ---------------------------------------------------------------------------
    Distribution Pipelines
        Distribution pipelines are operated by natural gas utilities,
    sometimes called ``local distribution companies'' or LDCs. The gas
    utility's distribution pipes are the last, critical link in the natural
    gas delivery chain. Gas distribution utilities bring natural gas
    service to their customers. To most customers, their local utilities
    are the ``face of the industry.'' Our customers see our name on their
    bills, our trucks in the streets and our company sponsorship of many
    civic initiatives. We live in the communities we serve and interact
    daily with our customers and with the state regulators who oversee
    pipeline safety. We take very seriously the responsibility of
    delivering natural gas to our communities safely, reliably, responsibly
    and affordably.
        AGA and its members support the development of reasonable
    regulations to implement new Federal legislation as well as the
    recommendations of the National Transportation Safety Board, the U.S.
    Department of Transportation (DOT) Inspector General, Government
    Accountability Office, National Association of Pipeline Safety
    Representatives (NAPSR) and the National Association of Regulatory
    Utility Commissioners (NARUC). Within this testimony are actions that
    are being, or will be, implemented by AGA or individual operators to
    help ensure the safe and reliable operation of the Nation's 2.4 million
    miles of natural gas pipelines. AGA and its individual operators
    recognize the significant role that their state regulators or governing
    body play in supporting and funding these actions to fulfill their
    commitment to our customers.\2\
    ---------------------------------------------------------------------------
        \2\ See Attachment 2: ``Natural Gas Delivery System''
    ---------------------------------------------------------------------------
    Regulatory Authority
        As part of an agreement with the Federal Government, in most
    states, state pipeline safety authorities have primary responsibility
    to regulate natural gas utilities as well as intrastate transmission
    pipeline companies. Under these agreements, state governments adopt as
    a minimum the Federal safety standards promulgated by the U.S.
    Department of Transportation.
        The states may also choose to adopt standards that are more
    stringent than the Federal regulations, and many have done so. LDCs are
    in close contact with state pipeline safety inspectors on a regular
    basis. As a result of these interactions, distribution operator
    facilities are subject to more frequent and closer inspections than
    required by the Federal pipeline safety regulations.\3\
    ---------------------------------------------------------------------------
        \3\ See Attachment 3: ``Regulators and Stakeholders''
    ---------------------------------------------------------------------------
    Commitment to Safety
        Our commitment to safety extends beyond government oversight.
    Indeed, safety is our core value and top priority--a source of pride
    and a matter of corporate policy for every company in our industry.
    These policies are carried out in specific and unique ways. Each
    company employs safety professionals; provides on-going employee safety
    training; conducts rigorous system inspections, testing, and
    maintenance, repair and replacement programs; distributes public safety
    information; and complies with a wide range of Federal and state safety
    regulations and requirements. Individual company efforts are
    supplemented by collaborative activities in the safety and technical
    committees of regional and national trade organizations. Examples of
    these groups include AGA, the American Public Gas Association and the
    Interstate Natural Gas Association of America (INGAA).
        On October 26, 2011, AGA released its Commitment to Enhancing
    Safety, which highlights examples of the industry's commitment to
    safety programs above and beyond regulations. It reflects industry
    leadership and commitment to continuous improvement of pipeline safety
    as our number one priority.\4\
    ---------------------------------------------------------------------------
        \4\ See Attachment 4: ``AGA's Commitment to Enhancing Safety''
    ---------------------------------------------------------------------------
        Outside of regulation and legislation, AGA members are striving to
    improve pipeline safety:

       Through AGA's Safety Culture Statement, each AGA member has
            committed to promoting positive safety cultures among their
            employees throughout the natural gas distribution industry. All
            employees as well as contractors and suppliers providing
            services to AGA members, are expected to place the highest
            priority on employee, customer, public and pipeline safety.

       In AGA's Commitment to Enhancing Safety, AGA and its member
            companies state their dedication to the continued enhancement
            of pipeline safety through their commitment to proactively
            collaborate with public officials, emergency responders,
            excavators, consumers, safety advocates and members of the
            public to continue to improve the industry's longstanding
            record of providing natural gas safely and effectively to 177
            million Americans.

       AGA has also developed numerous pipeline safety initiatives
            focused on raising the bar throughout the natural gas
            distribution industry. Two such programs are AGA's Peer Review
            Program and AGA's Gas Utility Operations Best Practices
            Program. Both allow subject matter experts from AGA member
            companies to help improve industry practices through reviewing
            and sharing individual company policies, procedures and
            practices.

        Natural gas utilities spend an estimated $19 billion a year in
    safety-related activities. Approximately half of this money is spent in
    complying with Federal and state regulations. The other half is spent
    as part of our industry's voluntary commitment to pipeline system and
    community safety. Moreover, we are continually refining our safety
    practices to help improve overall safety and reliability.
    Review of Legislation and Regulation
        From a regulatory perspective, the past fifteen years have, by far,
    included more pipeline safety mandates and rulemakings than any other
    decade since the creation of the Federal pipeline safety code in 1971.
    I want to assure the Committee that the natural gas distribution
    industry has worked vigorously to implement those provisions that are
    related to our sector. It takes considerable time for complicated rules
    to be proposed, vetted, finalized and then implemented. We are
    constantly working on ways to better manage the system and improve
    safety.
        The Pipeline Inspection, Protection, Enforcement and Safety Act of
    2006 and the Pipeline Safety, Regulatory Certainty and Job Creation Act
    of 2011 each outlined significant industry-changing pipeline safety
    programs. While AGA members have implemented aspects of these programs
    either through DOT regulation or voluntarily, it is important to
    remember that many of the programs are still in their infancy. AGA
    encourages Congress to allow these programs to develop and mature in
    order to realize their full impact. Only after fully implementing new
    safety programs and regulations, and allowing time for evaluation and
    conclusive data to be gathered, can we determine what, if any, changes
    need to made. In the case of the unanimously passed Pipeline Safety,
    Regulatory Certainty and Job Creation Act of 2011, many of the required
    regulations have yet to be completed. Therefore, we believe it would be
    premature to make changes to the law at this time. The specifics of The
    Act included substantive changes to the Federal pipeline safety laws,
    including changes to incident notification timelines; testing of
    certain gas transmission lines; and requirements for valves, gathering
    lines, leak detection, integrity management, and class location. The
    U.S. Department of Transportation Pipeline and Hazardous Materials
    Safety Administration (PHMSA) is still working on a number of
    significant final rules that will substantially change the Federal gas
    pipeline safety regulations. These include expansion of transmission
    integrity management, additional pressure testing requirements,
    excavation damage prevention, rupture detection and valves, excess flow
    valves beyond single family homes, and plastic pipe regulations. We
    know that PHMSA is diligently working on these regulations and look
    forward to the certainty that the final rules will bring. PHMSA has
    issued a number of significant guidance documents, released the results
    of a congressionally-mandated study on leak detection, and created an
    online database to track progress in replacing cast iron and bare steel
    pipelines.
        We believe progress is being made to fully address all
    Congressional mandates. We would respectively urge that we stay the
    course in working on existing mandates before layering additional
    responsibilities that will create regulatory uncertainty and undermine
    work already underway. Natural gas distribution companies work every
    day to improve the safety of their systems. It is critical that
    progress on regulations keep that pace to help ensure that these safety
    improvements are not negated. The work that PHMSA has completed to
    date, and the important initiatives taken by industry on its own,
    combined with the significant actions taken by NAPSR, NARUC, individual
    public utility commissions and state legislatures around the country,
    have produced significant improvement in pipeline safety over the last
    several years. Natural gas distribution companies are eager to move
    forward with other aspects of the 2011 Act, but the industry is
    concerned about the uncertainty of future DOT regulations that could
    negate or disrupt current pipeline investments and progress based on
    the legislation as written. A change of course prompted by DOT
    regulations that are inconsistent with the legislation would be paid
    for by natural gas customers and could create significant public
    disruption and inconvenience. AGA members desire a clear path forward
    without duplicative actions or additional cost burdens on their
    customers.
    Review of Key Provisions of the Pipeline Safety, Regulatory Certainty
            and Job Creation Act of 2011 Impacting the Natural Gas
            Distribution Sector
    Pipeline Damage Prevention
        Excavation damage represents the single greatest threat to
    distribution system safety, reliability and integrity. A number of
    initiatives have helped to prevent excavation damage and resulting
    incidents. These include a three digit number, ``811,'' for excavators
    to call before they dig, a nationwide education program promoting 811,
    ``best practices'' to reduce excavation damage and regional ``Common
    Ground Alliances'' that are focused on preventing excavation damage.
    Additionally, AGA and other partners established April as National Safe
    Digging Month, encouraging individuals to dial 811 before embarking on
    any digging or excavation project. Since the Call 811 campaign was
    launched, excavation-related incidents have been reduced by
    approximately a 40 percent. A significant cause for this reduction is
    the work done by the pipeline industry in promoting the use of 811.
    Regulators, natural gas operators, and other stakeholders are
    continually working to improve excavation damage prevention programs.
    This concerted effort, combined with the effort that states are
    undertaking to create robust and effective state damage prevention
    programs, based on the elements contained in the 2006 PIPES Act, is
    having a positive impact. As always, more can be done. We will remain
    vigilant and strengthen collaboration with other stakeholders and the
    public to help ensure the safety of our pipeline systems.
    Distribution Integrity Management
        The 2006 PIPES Act required DOT to establish a regulation
    prescribing standards for integrity management programs for
    distribution pipeline operators. The DOT published the final rule
    establishing natural gas distribution integrity management program
    (DIMP) requirements on December 4, 2009. The effective date of the rule
    was February 12, 2010. Operators were given until August 2, 2011 to
    write and implement their program.
        The DIMP final rule is a comprehensive regulation that provides an
    added layer of protection to the already-strong pipeline safety
    programs implemented by local distribution companies. It represents the
    most significant rulemaking affecting natural gas distribution
    operators since the inception of the Federal pipeline safety code in
    1971. It impacted more than 1,300 operators, 2.1 million miles of pipe,
    and 70 million customers. The final rule effectively took into
    consideration the wide differences that exist between natural gas
    distribution operators. It also allows operators to develop a DIMP plan
    that is appropriate for the operating characteristics of their
    distribution delivery system and the customers that they serve.
    Public Education/Awareness
        AGA appreciates DOT's work with the public, emergency responders,
    and industry to improve the public's awareness of pipelines and natural
    gas safety. The public awareness initiative has been successful and has
    effectively improved the public and emergency responders' awareness of
    pipeline infrastructure and appropriate actions to be taken in the
    event of a pipeline emergency. We are eager to work with DOT to
    identify performance metrics that are critical in assessing program
    effectiveness. The industry is working to help ensure that 911
    operators are identified as an important stakeholder audience and
    receive all needed pipeline awareness information. AGA and the industry
    look forward to continuing to work with all regulatory agencies to help
    improve the methods utilized to educate the public regarding pipeline
    awareness.
    Cast Iron
        Natural gas utilities remain ever vigilant and committed to
    systematically upgrading infrastructure based on enhanced risk-based
    integrity management programs. Indeed, there is a growing effort
    underway to accelerate the replacement of pipelines that may no longer
    be fit for service. This work is facilitated by regulatory and
    legislative policies that establish innovative rate mechanisms which
    allow for accelerated replacement and modernization of natural gas
    pipelines.
        The quantity of cast iron main continues to steadily decline.
    Overall cast iron makes up less than three percent of the distribution
    mileage and that number is decreasing annually. Today, PHMSA reports
    that there are 29,358 miles of cast iron pipelines in use. The
    approximate cost of removing these pipelines is nearly $83 billion.\5\
    ---------------------------------------------------------------------------
        \5\ See Attachment 5: ``Total Cast Iron Main''
    ---------------------------------------------------------------------------
        The specific costs associated with replacement vary depending on an
    individual utility's regulatory structure and state. All utilities have
    an infrastructure replacement program and seek to remove pipelines no
    longer fit for service as rapidly as they are able through their
    regulatory construct. Since former Secretary of Transportation Ray
    LaHood's Call to Action, specific rate mechanisms that facilitate
    accelerated replacement of pipelines no longer fit for service have
    improved from 18, to 9 states and the District of Columbia. \6\
    Clearly, the overall trend is positive. In 2013, nine states moved to
    adopt programs and, NJ, MA, PA and DC adopted pipeline safety measures
    in 2014. In 2015, West Virginia passed legislation while IL, MA, MI,
    MS, NJ, NY and PA also moved to strengthen their replacement efforts.
    Likewise, New Mexico's regulatory construct allows for more rapid
    pipeline replacement. The cumulative result of these important actions
    is that the industry is replacing cast iron pipe, as well as bare
    steel, as quickly as possible in a safe, cost-effective manner.
    ---------------------------------------------------------------------------
        \6\ See Attachment 6: ``States with Accelerated Infrastructure
    Replacement Programs''
    ---------------------------------------------------------------------------
        NARUC has always considered pipeline safety a leading priority and
    has raised the bar by prioritizing the issue of accelerating
    replacement of pipelines no longer fit for service. We commend NARUC
    for having passed a resolution at its 2013 summer meeting calling on
    commissions to explore, examine, and consider adopting alternative rate
    recovery mechanisms as necessary to accelerate the modernization,
    replacement and expansion of the Nation's natural gas pipeline
    systems.\7\ Their leadership on this matter has been an important
    catalyst for states approving accelerated replacement programs.
    ---------------------------------------------------------------------------
        \7\ See Attachment 7: ``NARUC Resolution''
    ---------------------------------------------------------------------------
    MAOP
        There is significant uncertainty in the pipeline industry
    surrounding the method by which PHMSA will implement provisions in the
    2011 Act pertaining to Maximum Allowable Operating Pressure (MAOP) and
    the Integrity Verification Process (IVP). AGA members have conducted a
    verification of records, as proposed in the legislation, for class 3
    and class 4 locations and class 1 and class 2 high consequence areas.
    However because the MAOP and IVP regulations have not yet been
    implemented, operators are uncertain if their actions to address
    missing or incomplete records would be nullified by future DOT rules.
    Incident Notification
        AGA members are committed to finding new and innovative ways to
    inform and engage stakeholders, including emergency responders, public
    officials, excavators, consumers and safety advocates and members of
    the public living in the vicinity of pipelines. AGA and INGAA sponsored
    a workshop that was presented by the National Association of State Fire
    Marshals. The workshop had approximately 60 emergency responders, PHMSA
    staff and 40 operator personnel in attendance. There are also a number
    of efforts at the state and local level to engage emergency responders,
    government officials and the public in pipeline safety efforts.
    Data Collection and Information Sharing
        Collecting accurate data and data analysis are integral to
    determining areas for potential pipeline safety improvement. AGA and
    PHMSA co-chair a data quality and analysis team made up of
    representatives from government, industry and the public. These are
    similar to the PHMSA technical advisory committees. The team analyzes
    the data that PHMSA collects and identifies opportunities to improve
    pipeline safety. The team also works to improve gaps in the data
    collected by PHMSA and others, data collection methods, and message
    consistency based on pipeline incident data.
        AGA has 16 technical committees and an Operations Managing
    Committee focusing on a wide range of operations and safety issues. The
    technical committees develop and share information, including those
    issues raised by PHMSA, the National Transportation Safety Board, and
    other pipeline safety stakeholders. In addition, AGA has a Gas
    Utilities Operations Best Practices Program focused on identifying
    superior performing companies and innovative work practices that can be
    shared with others to improve operations and safety. AGA is also the
    Secretariat for the National Fuel Gas codes, the Gas Piping Technology
    Committee, and manages the Plastic Pipeline Database which includes
    more than 45,000 records of plastic material and component failures
    that have been voluntarily submitted by the industry.
    Research and Development
        More industry research is necessary to improve in-line inspection
    tool quality and capabilities, operator use of tool data, direct
    assessment tools, non-destructive testing and leak detection. Many
    pipeline companies have direct memberships in research consortiums and
    contribute towards this type of research. These research consortiums
    include the Pipeline Research Council International (PRCI), NYSEARCH,
    Operations Technology Development (OTD), Utilization Technology
    Development (UTD) and Sustaining Membership Program (SMP). In the last
    five years, hazardous liquid and gas pipeline operators have
    contributed more than $115 million to research and development.
    However, R&D cannot be successful without cooperative planning between
    industry and government. As noted above, AGA is committed to improving
    the transparent collaborative relationship with PHMSA that has
    historically enhanced pipeline safety R&D.
    Summary
        The natural gas utility industry has a strong safety record.
    Recognizing the critical role that natural gas can and should play in
    meeting our Nation's energy needs, we are committed to working with all
    stakeholders to consistently make improvements to the safety and
    reliability of our systems. To that end, we applaud this committee's
    focus on the common goal: to enhance the safe delivery of this vital
    energy resource.
        Recent pipeline safety reauthorizations contained significant
    changes to pipeline safety programs. Many of these changes are not yet
    in Federal regulation and others are in their infancy. PHMSA is working
    on a number of significant rules that will substantially change the
    Federal gas pipeline safety regulations and the industry looks forward
    to the certainty that the final rules will bring.
        Natural gas distribution companies are eager to implement aspects
    of the 2011 Act that DOT has not finalized. However, concern exists
    that their actions may be nullified if DOT's final regulations are
    inconsistent with the legislation. These inconsistencies could result
    in unnecessary cost to customers, repeat work and disruption to the
    public. AGA members desire a clear path forward so that safety measures
    can be implemented without risk of duplicative actions and additional
    cost burdens on their customers.
        We would urge that we stay the course in developing comprehensive,
    risk-based rules to comply with the legislation and provide the
    regulatory certainty that is essential to ensuring a safe and reliable
    natural gas distribution system. Many of these rules have only recently
    been implemented and need time to be evaluated before additional new
    regulations are created.
        Natural gas is a key to our energy future and America's natural gas
    utilities are upgrading our delivery systems to meet this growing
    demand. There is a tremendous opportunity for consumers and our Nation
    as a whole through greater use of natural gas, and we see a future
    where natural gas is the foundation fuel that heats our homes, runs our
    vehicles, and supports renewable energy. We are building and
    continually improving our infrastructure to deliver on this promise.
    Attachment 1: Natural Gas Pipelines across the U.S.
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 2: Natural Gas Delivery System
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 3: Regulators and Stakeholders
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 4: AGA's Commitment to Enhancing Safety
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 5: Overall Cast Iron Main
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 6: States with Accelerated Infrastructure Replacement
            Programs
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Attachment 7: NARUC Resolution
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Fischer. Thank you very much.
        And thank you to all our panel members.
        We'll begin our first round of questioning, and I will
    begin.
        Mr. Santa, as I referenced, in my opening statement, we
    heard that there are often delays between the time of a PHMSA
    inspection and receiving the report. I would assume that your
    members face that similar challenge. And, if so, how do they
    cope with it? What's the impact of that?
        Mr. Santa. I would--Madam Chairman, I'd have to get further
    data on the extent to which they have delays. However, I think
    it just contributes to uncertainty. And I think, you know,
    that's one of the themes here today, is greater regulatory
    certainty. To the extent that the pipeline operators can have
    the results of those audits, they'd be in a better position to
    take whatever steps are necessary to improve pipeline safety
    based on the results.
        Senator Fischer. And we hear a lot about the uncertainty
    and the challenges that pipeline operators are facing because
    of that uncertainty from PHMSA. I guess I would like you to be
    more specific on the challenges that the operators are facing.
        And, Mr. McCallister, if you would like to answer that
    question, as well.
        Mr. Santa. With regard to the uncertainty, I think one of
    the concerns that pipeline operators have got is that, while
    INGAA's members have committed to a voluntary program to
    improve pipeline safety, when it comes to making major
    commitments, for example, to test pipelines, they are concerned
    that they might do that. It's very expensive. It's disruptive.
    And they're willing to do it, but, by the same token, they are
    somewhat concerned about the risk that they may do that,
    attempt to do the best thing, and then find out that the PHMSA
    regulation, when it's ultimately adopted, requires them to do
    something more, which then might cause them to have to repeat
    that, which, of course, is costly, it would, in most instances,
    require taking a pipeline out of service, so it disrupts the
    flow of natural gas. And I think--you know, that's one of the
    practical consequences of the uncertainty caused by the delay.
        Senator Fischer. Mr. McCallister.
        Mr. McCallister. Yes, I would echo that statement a bit.
    Our utility companies go, I would say, far beyond just the
    regulations that we get by PHMSA, but we work closely with
    PHMSA on--all the stakeholders work together on what these
    regulations that have yet to be developed, for example, what
    they could look like, what's practical, what's the reasonable
    and efficient way in which to go about implementation of these
    regulations. And many of our companies, including ours, move on
    forward with what we expect regulations to look like and what
    the best things are.
        Our concern is similar, in that new legislation that may
    change the direction of the regulation that we expect will
    cause our companies to have probably undertaken considerable
    activities that may no longer be valid or may be nullified by
    the new regulation, and then we'll have, in costs that would
    have been incurred for not only our companies, but the
    customers and your constituents.
        Senator Fischer. Thank you.
        Mr. Bellamy, you provided some great examples on new
    technology and how that helps with inline inspections. So, I
    thank you for that. I think it helps us to understand how
    pipeline operators are able to manage those risks that they are
    facing. I would ask you about something that you discussed in
    your written testimony. You talked about the creation of a no-
    fault environment to expand the data-sharing. And something
    that I've worked on and advocated in transportation policy is
    the implementation of a performance-based regulation so we can
    focus on, really, the ultimate goal that we all have of safety.
    So, how would your no-fault information-sharing environment
    between PHMSA and pipeline stakeholders help to contribute to
    a--advancing that goal-oriented regulatory regimes that I think
    we need to get to?
        Mr. Bellamy. I'm glad you asked the question.
        Senator Fischer. Microphone.
        Mr. Bellamy. I'll learn--I'll get the hang of this
    eventually.
        I'm glad you asked the question, because I skipped over
    that in--under the tyranny of the countdown clock.
        Senator Fischer. Oh, we're not tyrants.
        [Laughter.]
        Mr. Bellamy. The issue there really is that ``smart pigs''
    learn as they go, meaning once we've seen a defect for the
    first time, we can usually then see it again and again and
    again, and we understand what the interpretation of that signal
    picked up by the ``smart pig'' means. The challenge is to see
    enough defects. And particularly when you're out on the long
    tail, because there's a distribution of defects in any
    pipeline, and some of them are extremely rare, the types of
    morphologies you don't see very often. And occasionally, the
    very first time you see it is when it fails.
        Now, for us to be able to get access to those defects and
    to be able to study those defects with our tools and learn what
    those signals--what signals--the signal response to that defect
    would allow us then to be able, as I say, to find that defect
    forevermore. And I think the same would go for my competitors.
    This is just how the industry learns.
        Now, we do know that some of our customers are reluctant to
    declare that they've found something new and bring it forward,
    for fear of regulatory penalty. So, if there was some way in
    which there could be a safe environment for these types of
    issues to be brought forward so that the industry could learn,
    that's really the kind of scenario that we're referring to.
        Senator Fischer. Thank you very much.
        Senator Booker.
        Senator Booker. Thank you, Chairwoman.
        So, if there's a leak or some problem, every second
    absolutely counts in getting it shut off. We had an incident in
    New Jersey in 1994, when it took hours to get the--to shut off
    the flow of gas that fed a pretty serious pipeline break. It
    was--it destroyed a lot of property, apartment buildings and
    the like. And, due to this accident, the NTSB has recommended
    the use of automatic remote-control shutoff valves in high-
    consequence areas. And the last pipeline build required them on
    certain types of--certain types of pipes.
        And so, to Ms. Fleming and Honorable Hart, what are--what
    is it important that--why is it important that the
    administration quickly move forward with this requirement? And
    what factors should the administration consider to ensure the
    rules--the rule improves safety?
        Ms. Fleming. Sure. As you said, automated valves, you know,
    have the ability to respond quickly and to isolate an incident.
    However, you know, we believe that operators should also
    consider disadvantages. There are some cases where, you know,
    installing automated valves has led to accidental closures. For
    instance, if--hazardous liquid operators have told us they're
    reluctant to use those, because it can over-pressurize the
    pipeline leading to a accidental closure.
        So, we believe that operators should look at their
    particular pipeline characteristics, the location of the valve,
    and decide what's the best way to improve incident response.
    They should look at the accuracy of their leak detection
    systems, the location of response personnel, what's the
    relationship like with the local emergency responders, how
    about their control-room protocol. So, we believe that they
    should look holistically. In some cases, an operator may decide
    to install automated valves everyplace; in other cases, they
    may decide that they need to do a number of things, including
    looking at their process, procedures, their relationship with
    some of the responders.
        Senator Booker. Are there other things that we should be
    thinking about with this reauthorization, in terms of closing
    the gap on that response time?
        Ms. Fleming. You know, we really wanted to try to come up
    with an optimal response time. But, unfortunately, the data is
    not reliable at PHMSA right now. So, part of the problem is
    that operators are not required to provide information on when
    the incident occurred, when response individuals showed up,
    when they were able to make the area safe.
        So, the first thing is to improve the data, which PHMSA
    says they're working on. And then, the second thing is to then
    use that data to tease out and to see, based on pipeline
    characteristics and different pipelines, what is an appropriate
    metric or target, and to move toward a performance-based
    approach. So, first line is fix the data, and then move toward
    a performance-based response time.
        Senator Booker. So, more reporting----
        Ms. Fleming. Yes.
        Senator Booker.--by--more reporting.
        Ms. Fleming. And, like, our colleagues here, you know,
    INGAA kind of took this step and came up with a response time
    for their industry to kind of get folks to move toward that.
    So, I think what we're suggesting is that the data would help
    drive what an appropriate response time would be.
        Senator Booker. And then, just shifting to general safety
    and consequences, you know, I'm just really concerned with the
    most densely populated state in the Nation, lots of
    populations, any problems, you know, virtually will cause
    serious consequences. And so, there--are there other safety
    things that we should be considering that are particular to
    highly dense areas?
        Ms. Fleming. I think that, you know, with integrity
    management, it's been over 10 years, and I think it's probably
    time--we believe that it's time to take a look at, Is this
    framework working? Does it need to be tweaked in any regards? I
    think unregulated gathering pipeline is another area that we're
    concerned--only 90--I mean, only 10 percent of those gathering
    pipelines are regulated in high-consequence areas.
        But, as my statement said, you know, it's--there are some
    game-changers there. You know, the increased extraction of
    shale oil and gas has led to much larger, higher-pressure
    gathering pipelines, almost more like transmission pipelines.
    And then the other game-changer is that businesses and homes
    are really moving out to areas that were formerly remote. So, I
    think unregulated gathering pipelines could pose increased
    safety risk, because more people could be impacted.
        So, we recommended that the first line is to really
    gather--believe it or not, states don't even know what they
    have in their own state. So, trying to get some visibility on
    what's out there, and then to look whether or not there are
    some potential safety risks, and then to try to figure out how
    to address those.
        Senator Booker. Thank you very much.
        Senator Fischer. Thank you, Senator Booker.
        Senator Moran.

                    STATEMENT OF HON. JERRY MORAN,
                        U.S. SENATOR FROM KANSAS

        Senator Moran. Madam Chairman, thank you very much.
        Let me ask a question and then give a little background.
    I'd like to talk a moment about the issue of underground
    natural gas storage. And the question I would ask is, Is there
    a reason for the inspection of under---interstate underground
    storage facilities, something that the Federal Government
    should be interested in?
        And I would set the stage by a bit of history. Back in
    January 2001, natural gas migrated into caverns in and around
    the community of Hutchinson, Kansas. Explosions ultimately
    occurred. Deaths were a result. And the regulatory environment
    in which we found ourselves in was that the Kansas Corporation
    Commission attempted to step in and inspect and, ultimately,
    regulate that underground storage of natural gas. A Federal
    court determined there was no jurisdiction on the part of the
    State. I assume that could be said plural, there is no
    jurisdiction on the part of States to inspect the storage of
    natural gas. And so--interstate natural gas--and so, my
    colleague from Kansas and I have, on several occasions,
    attempted to amend the law to allow for Federal jurisdiction to
    prevail, in hopes--let me say that differently--and allow a
    State jurisdiction to prevail and allow State inspections to
    occur. And I would say that became important because there
    hasn't been a Federal inspection.
        We also, generally, in my view, is--we're better off with
    State inspection than Federal, anyway. And so, we're trying to
    fashion a solution to this that would have the ability for the
    Federal jurisdiction to apply, but inspections occur by our
    State or by other States. Not just a Kansas issue, I don't
    think.
        So, my question--as we look at reauthorization of this
    legislation, it becomes an opportunity for us to pursue a
    solution. And I would, again, just ask if anyone disagrees with
    the premise that this is something that's important for the
    Federal Government to focus on and for us to take a look at as
    we reauthorize the Act.
        Mr. Santa.
        Mr. Santa. Yes. Senator Moran, INGAA, in our testimony, has
    supported directing PHMSA to adopt Federal regulations for
    regulating the safety of underground natural gas storage and,
    in the case of intrastate storage, to delegate that inspection
    and authority to the states.
        PHMSA, back in 2010, put out an Advance Notice of Proposed
    Rulemaking and asked the question of whether they should
    regulate underground storage. At that time, we filed comments
    supporting it. While PHMSA has not acted, the industry has. The
    industry storage operators, working with States, working with
    regulators, have come up with standards that were adopted just
    this last month, put out just this last month by the American
    Petroleum Institute. We suggested that that would be a good
    starting place for those regulations.
        Senator Moran. Mr. Santa, when you say that's a ``starting
    point,'' is it an ending point? Or that then becomes the basis
    for governmental regulation?
        Mr. Santa. As would happen with any Federal regulation,
    those would be put out for public--for notice and public
    comment. And it would be within PHMSA's discretion to--whether
    or not to adopt those standards, to amend them, to adopt
    something different. But, we think that there is a very good
    starting place that hopefully could lead to some expedited
    action on regulations.
        Senator Moran. Before I ask another question, does anyone
    else want to join in this conversation?
        Mr. McCallister. Yes, I'll just echo that a little bit, in
    that the American Gas Association also worked with INGAA on
    that matter, and we adopted some recommended practices for the
    integrity of storage fields. So, I think it's fine that PHMSA
    would put together a rather broadbased program and that, like
    most things, they would delegate the actual administration of
    that to the State. And whether they use those as a pure
    guideline or whether those are referenced directly, they're
    more easily updated and upgraded, so to speak, over time if
    they're a reference document than a direct rule from them. So--
    --
        But, I think it's going to work well if you can have PHMSA
    oversee it.
        Senator Moran. Anyone else?
        [No response.]
        Senator Moran. Madam Chairman, thank you very much.
        Senator Fischer. Thank you, Senator Moran.
        Senator Peters.

                    STATEMENT OF HON. GARY PETERS,
                       U.S. SENATOR FROM MICHIGAN

        Senator Peters. Thank you, Madam Chair, for that.
        And thank you to our panelists.
        I take this issue very seriously, given the fact that we
    had a major disaster in the state of Michigan--and, Mr. Hart, I
    appreciate your reference to that--given the fact that we've
    had the most expensive pipeline break in the history of this
    country, already spending over a billion dollars in cleanup in
    Kalamazoo. And there is now increased concern in my State about
    another pipeline that exists that's run by the same company
    that had the other pipeline break, that runs underneath the
    Straits of Mackinac, which connects the upper peninsula to the
    lower peninsula, over 5 miles of water, freshwater in the Great
    Lakes, freshwater that provides drinking water to over 40
    million people, and also an incredible resource for the whole
    region. And if there is a pipeline break in that stretch, it
    would be catastrophic. I think it would--the Kalamazoo incident
    would be dwarfed by what would happen in the Straits of
    Mackinac. In fact, a recent study by the University of Michigan
    says that the Straits of Mackinac is the absolute worst place
    to have an oil disaster anywhere in the Great Lakes basin,
    because of the volume of water that goes across the Straits,
    back and forth. It can change directions almost daily. And my
    understanding is, the volume of water is equal to ten times
    Niagara Falls going through there, to put that in perspective
    of what we're dealing with. So, we're very concerned about
    that.
        So, Ms. Fleming, I want to mention a couple of issues. One
    is response plans. Obviously, we want to prevent an accident
    from occurring to begin with, and we'll talk about that. But,
    you made a big issue in your GAO report about response times.
    We had a recent exercise--in fact, just completed last week--in
    Mackinac. One of the principal responders was a Coast Guard
    cutter that was 400 miles away from the Straits of Mackinac, so
    it wouldn't be pre-positioned like it is in an exercise; it
    would have to be called up. If it was wintertime, Lake Superior
    may be completely frozen. It takes a long time for a cutter, if
    has icebreaking capacity, to get there. And then we can talk
    about the ice, as well. But, you talked about an optimal
    response time. Given the fact that you're operating in straits
    that have volumes of water ten times that of Niagara moving
    very rapidly, is--how do you feel about that, in terms of a
    response plan that obviously is probably inadequate, given the
    distances that people have to traverse to even get there?
        Ms. Fleming. It has to be--they obviously have to take that
    in consideration. And, you know, each location, each operator,
    each situation is different. And that's why, you know, we think
    it's very important that the operator, you know, take a look at
    the accuracy of its leak detection system, you know, really
    look at where the valves are. Does it make sense to have
    automated? Where are the personnel located?
        We heard from one operator, the reason they went all
    automatic valves is because they realized that, for their
    response people, it would take them a minimum of two and a half
    hours to get there, and 30 minutes to shut down the crank
    wheel. So, they said, you know, that's just unacceptable.
    Another operator told us that, you know, their control room had
    a misunderstanding that they should never shut down a system.
    They thought that that's just--you know, time is money, you
    don't do that.
        And so, just kind of going through these drills, really
    having a relationship with the local responders. And, like we
    said, once PHMSA has some robust data, then they can say,
    ``Well, what makes sense? What is--is an hour sufficient? Is
    it?''--you know, we have a chart in our report that said, in
    some cases it's minutes, in other cases it was days. Now,
    obviously, if it's a slow leak, that's more acceptable than it
    is if it's, obviously, in a catastrophic particularly deadly
    issue.
        So, we think it's very important that all of these things
    are taken into account and that PHMSA really take a hard look
    at the data and to really think about the pipeline, the
    pressure, the location, the waterways, the environment that's
    there, to really make sure that the response time is as
    efficient and effective as possible.
        Senator Peters. Well, thank you.
        And, Mr. Hart, if I could ask you a question related to
    this, too. In the fact that if we did have a disaster in the
    Straits of Mackinac or anywhere in the Great Lakes, it would be
    the Coast Guard that would have the primary responsibility for
    cleaning that up. And one concern--major concern I have is in
    the wintertime, because the Straits of Mackinac get completely
    frozen over. It's difficult for a Coast Guard icebreaker to get
    through there in the winter, and they would have to respond to
    that. Does it make sense--and you talked about, in your
    testimony, that we work with other agencies to have some
    harmonization, some oversight--would it make sense to have the
    Coast Guard have to sign off on a response plan saying that,
    ``We're the principal agency responsible for cleaning this
    thing up. Our assets are hundreds of miles away. And, in the
    wintertime, when we have thick ice that our icebreakers may
    have a hard time getting through, the ability to even clean up
    a site--it may be impossible.'' And, of course, that might lead
    to a question, if it's impossible to clean up a site, does it
    even make sense to be operating a pipeline that cannot be
    cleaned up if something goes wrong?
        But, to my question, Mr. Hart, does it make sense to have
    the Coast Guard having that ability to oversee that and to sign
    off on it in some way?
        Mr. Hart. Thank you for the question. We work actively with
    the Coast Guard on issues that involve maritime aspects. And
    that--and we've seen that frequently, including in Marshall,
    Michigan, and in Paulsboro, New Jersey. So, we see--we work
    well with the Coast Guard and with the EPA, because they're all
    involved in the response to that.
        I would note, though, in response to your question about
    response time, one of the things that has not yet been
    mentioned--and also in response to Senator Booker's question--
    is the importance not only of automatic valves, but sometimes,
    in a situation where a shutoff can be catastrophic and maybe
    you're not sure if your automatic software is working right,
    you also want to have the possibility of having remotely
    controlled valves. And we have recommended that some way to
    shorten response time, not necessarily automatic, but look at
    automatic or remote to help shorten that time before people
    even know that there's a need to respond. So, we have been
    looking at a number of those issues.
        I would also mention that, in respect to that specific
    event, our work with Enbridge has been very promising, in the
    sense that they worked very well with us when we were
    investigating Marshall, Michigan, they also have been one of
    the ones that--to voluntarily undertake following the
    recommended practice that API instituted, 1173 safety
    management system. So, we've had a very positive experience
    with them. And also, they're the ones--in Marshall, Michigan,
    it took them 17 hours to realize that there even was a release.
    So, that will feed into that learning curve and--to try to
    figure out how to know that sooner.
        So, these aren't direct answers to your question, but I
    could just say, from our experience, we're--we go where the
    accidents take us. From our experience, we are confident that
    we would be able to handle that one as well as anybody could.
        Senator Peters. Even in complete ice cover?
        Mr. Hart. Well, I mean, under whatever circumstances--when
    we were investigating Casselton, North Dakota, and it was 30
    below, I mean, we go--we do what we have to do.
        Senator Peters. Well, it's beyond--I'm sorry, Madam Chair--
    but, it's--beyond the cold, it's underwater, as----
        Mr. Hart. I understand----
        Senator Peters.--well. And, as you mentioned, the spill we
    had in Michigan was 17 hours. It wasn't the company that
    discovered it. I think it was a guy driving his pickup truck
    for a utility company that saw a bunch of oil spilling and
    said, ``You know, I think there's a problem here.'' If it's
    happening under water, under this ice, no one's going to see it
    for a long time. And if the water volumes are equal to ten
    times Niagara Falls, it's going to spread very rapidly, and
    you're talking about a resource that provides drinking water
    for 40 million people. So, we need to have more specific
    answers to these--given the risk.
        Mr. Hart. You raise a very good question that requires
    consideration, as Ms. Fleming said, into the determination of
    how best to do this.
        Senator Peters. Thank you.
        Mr. Hart. Thank you.
        Senator Fischer. Thank you, Senator Peters.
        Before you begin your questions, Senator Daines, I wanted
    to thank you again for hosting this subcommittee at a hearing
    in Billings a couple of weeks ago. I thought we had a very
    informative panel. We gathered a lot of information. And I
    thank you personally for the warm welcome that we received from
    the people of Montana. Thank you very much.
        You may begin your questions.

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

        Senator Daines. Well, thanks, Chairman Fischer. And thanks
    for making the trip to Montana. I----
        Senator Fischer. It was wonderful.
        Senator Daines. It was truly--if you--if you don't believe
    in field hearings, you ought to go to one. I think it really
    promoted a better open and back-and-forth dialogue than we
    often have here in Washington, D.C. So, thanks for making the
    trip out. Your leadership was very appreciated.
        And thank you for holding this hearing, as well as,
    Chairman Thune, Ranking Member Nelson, for scheduling this
    important series of hearings on PHMSA and also holding that
    field hearing that we had a couple of weeks ago in Montana.
        You know, at that field hearing, we focused on protecting
    our pristine natural environment, especially our rivers and our
    streams. Montana's proactive safety efforts and the local
    economic impact of pipelines was discussed. PHMSA's
    administrator testified and was able to hear firsthand from
    Montana liquid pipeline operators, local safety experts, and
    local elected officials on how Montana is leading this
    industry.
        PHMSA's jurisdiction covers approximately 2.6 million miles
    of pipeline across our Nation. Nearly 20,000 miles crisscrosses
    Montana, delivering natural gas to over 262,000 homes, gasoline
    and diesel to the pumps, gas and oil to businesses, as well as
    facilitating exports. In Montana, we produce about 30 million
    barrels of crude oil, 63 billion cubic feet of natural gas, and
    42 million short tons of coal annually. Our 19,000 miles of
    pipelines play a vital enabling us to export 60 percent of our
    energy production, and it supports the employment of over
    43,000 Montanans in the oil and gas industry. That's about 7
    percent of our total employment. Needless to say, it's
    imperative to Montana that we continue to move these
    commodities in a safe and environmentally responsible and an
    efficient manner.
        One of the issues that came up during our field hearing in
    Billings was the inspection turnaround time from PHMSA. What we
    heard was that the time--from the time that PHMSA's inspectors
    will inspect a pipeline until a Montana operator receives that
    inspection is sometimes up to a year. And I don't think that's
    acceptable. And so, I'm curious--perhaps for Mr. McCallister
    and Mr. Santa--have your members experienced similar kinds of
    wait times, delays from the time the inspection occurs until
    you receive the report and can start working on any kind of
    corrective actions?
        Mr. Santa. Senator Daines, I would need to check with our
    members to see what that has been. I'm not aware of any that
    have been up to a year. But, again, I would be happy to inquire
    of our members and provide that to the Committee.
        Senator Daines. OK.
        Mr. McCallister?
        Mr. McCallister. Yes, I would give the same answer. I--I'm
    not aware that it's been that long. PHMSA sits here in our
    backyard, so maybe we get to them a little quicker from our
    company. But, I--I'm not aware. We'd have to check----
        Senator Daines. All right.
        Mr. McCallister.--and get back to you.
        Senator Daines. We'll follow up with you on that, because
    we want to actually get a sense, across the country. I'm sure
    it probably--mileage varies, depending on, perhaps, inspection
    workload and inspectors available, so forth. But, we heard
    quite a range, quite a variation--several months, at a minimum,
    and up to a year. And that is--that was why it raised a flag
    for us. We'd love to work with you and see what you're finding
    out in the field.
        For Mr. Bellamy, in your testimony you state regulations
    should encourage development and adoption of new technology.
    Increasingly, this committee hears from witnesses that
    performance and goal-based regulations--other words,
    regulations that are a means to an end--you know, a safe
    outcome--are worthwhile, given the proactive safety practices
    of industry and the rapid evolution of technology. What hurdles
    does industry face in implementing the best available safety
    technology? And the second part of that question is, How would
    performance-based regulations remove some of these obstacles?
        Mr. Bellamy. Thank you. So, today, with respect to pipeline
    inspection, ``smart pigging,'' the U.S. regulations for both
    liquids and gas are somewhat prescriptive. When I think about
    the difference between prescriptive regulations and goal-
    setting, the story I tend to tell is that of someone trying to
    protect people from falling off the edge of a cliff. A goal-
    setting approach would be to put somebody--charge somebody with
    the goal of protecting or preventing anybody falling off the
    edge of a cliff. A prescriptive regulation would say, ``Build a
    fence 3 feet high using 2-by-4 wood to stop someone falling off
    the edge of a cliff.'' The difference between those two is, one
    might not be sufficient--the latter may not be sufficient. The
    prescriptive approach may not be sufficient for preventing
    people fall off the edge of a cliff. The former puts a lot more
    emphasis on finding out what's the very best way--what are all
    of the risks associated with falling off the edge of a cliff,
    and how do you put in place the measures, whatever they might
    be, and how do you justify that you've done enough to do that?
        Now, around the world, we see different models of pipeline
    regulation. And so, for example, if I take the example of,
    perhaps, Canada--Canada has a goal-setting regime. It was an
    early adopter of crack-detection technology. There is more
    crack detection done in Canada than anywhere else in the world.
    Now, you could argue that's partly because Canada has a
    propensity to--you know, the soil types and so on may be more
    prone to cracking. But, then, what's the difference between the
    soil types in southern Alberta and in northern Dakota? Not a
    lot of difference. And it's also interesting to note that many
    of the--many of the operators--sorry, the--much of the crack
    detection done south of the border is done by Canadian
    operators. So, there might be a coincidence there, or maybe
    not. It might be a cause-and-effect. But, I think it's worth
    PHMSA looking at whether or not a goal-setting approach might
    make it easier for operators to adopt the best available
    technology rather than just following a--you know, a
    prescriptive approach.
        Senator Daines. Thank you.
        Thanks, Chairman Fischer.
        Senator Fischer. Thank you, Senator Daines.
        Senator Klobuchar.

                   STATEMENT OF HON. AMY KLOBUCHAR,
                      U.S. SENATOR FROM MINNESOTA

        Senator Klobuchar. Thank you very much, Madam Chair.
        I want to start with you, Chairman Hart. You noted the U.S.
    has approximately 298,000 miles of onshore natural gas
    transmission pipelines. And PHMSA has required the operators to
    develop and implement these integrity management programs. Do
    you believe they're effective in reducing incidences? I know
    you've completed--NTSB has completed three major investigations
    in some deficiencies of the program. And do you think that
    they're working?
        Mr. Hart. Thank you for the question. The reason we did our
    safety study recently on the integrity management of gas
    transmission pipelines in high-consequence areas is because we
    had three major events of that type that showed that things
    weren't working the way they were supposed to. So, there's
    clearly significant room for improvement.
        Senator Klobuchar. And could you talk a little bit about
    that improvement? And what do you think the practices should be
    to reduce these incidences?
        Mr. Hart. One of the areas that we recommended is
    eliminating the grandfathering. Until the early 1970s, there
    was no requirement to test installed--newly installed pipeline.
    So, when the requirement to test newly installed pipeline came
    into place, pipeline installed before 1970--for example, San
    Bruno--was exempt. So, we're--we are--we have recommended to
    PHMSA that they eliminate the grandfathering--that--the
    grandfather clause so that pipeline installed before 1970 would
    not be exempt from pressure testing. That's one of the biggest
    ones.
        Senator Klobuchar. OK. Thank you.
        Ms. Fleming, you indicated that in 2012 the GAO found that
    PHMSA does not collect comprehensive data on safety risks
    associated with gathering pipelines. Collecting the data could
    facilitate assessing the safety risks. Why do you believe it's
    important for PHMSA to collect data from the operators of the
    unregulated onshore hazardous liquid and gas gathering
    pipelines?
        Ms. Fleming. I think it's very important that PHMSA have a
    understanding on the location, makeup, operation to determine
    the extent of these safety risks. As I said earlier, there has
    been some changes to gathering pipelines really related to the
    increased extraction of shale. And the unregulated gathering
    pipelines are much larger in diameter. In Texas, they told us
    it could be as large as 36 inches and higher pressure, so more
    like operating like a transmission line. So, I think it's very
    important that not only does PHMSA, but the states have some
    visibility as to what's out there and what are the potential
    safety risks.
        I think the other important point is that these unregulated
    gathering pipelines, there is no requirement to have emergency
    response plans. So, I think that's a very important point, too,
    is that, for these 90 percent that are unregulated, we need a
    little bit more visibility. We need them to come in line, in
    terms of having emergency response plans, because there are
    some important emerging trends out there that I think are
    affecting larger populations than in the past.
        Senator Klobuchar. Thank you.
        Mr. McCallister, I think you know that maintaining a strong
    relationship with emergency responders--industry and emergency
    responders is critical for the safety of our communities. What
    are the protocols in place now for energy companies to alert
    first responders? And do you think there's something better we
    could be doing?
        Mr. McCallister. There are a number of regulations. They
    vary state by state sometimes. There are certain requirements
    that are required by PHMSA. Many of us exceed those
    requirements. So, some of the States have more stringent
    requirements. For example, here in the Nation's capital region,
    our emergency response requirements are set by what is our
    strictest jurisdiction, which is Virginia. So, within an hour,
    we're going to be at any call, and we'll make that 98 percent
    of the time. So--given traffic in the region--so they're--we
    work closely with all of our first responders. We do training.
    For example, we have one of the few facilities in the country,
    which we call Pipetown, but it's one of the few facilities
    where we can do live gas demonstrates, live leak detection, how
    to get into vaults and stuff. And we bring emergency responders
    in to train them on that.
        Senator Klobuchar. Thank you.
        I just want to ask one more question to Ms. Fleming. It's
    kind of related. I know that Senator Booker asked about the
    automated valve and using that as a tool to get a quick
    response for the affected segment of the pipeline. Do you think
    that it's moving fast enough on that recommendation from the
    GAO? And what other things could be done when there is an
    incident--to move up the response time?
        Ms. Fleming. PHMSA has told us that they are now--well,
    they're moving toward requiring some of that important data,
    which is, you know, when did the incident occur? When did
    people show up? So, I think having those critical time
    elements. And then, we really believe that it's important to
    move toward a performance-based approach, because, you know
    right now what the requirement is that incident response be
    in--done ``in a prompt and effective manner.'' So, that's a
    little bit squishy for us. So, we think it's more important to
    really kind of take a look and see what the data shows. Maybe
    there's a different time, whether it's transmission, depending
    on if it's high-consequence area. It really needs to look at
    the data first, and then to decide.
        But, they've told us they're moving forward, so we're going
    to take them on their word.
        Senator Klobuchar. Thank you very much.
        Senator Fischer. Thank you, Senator Klobuchar.
        Senator Ayotte.

                    STATEMENT OF HON. KELLY AYOTTE,
                    U.S. SENATOR FROM NEW HAMPSHIRE

        Senator Ayotte. Thank you, Madam Chair.
        I wanted to ask Director Fleming--we have a--there is a
    project that Kinder Morgan has proposed in New Hampshire called
    the Northeast Energy Direct Natural Gas Transmission Pipeline
    Project. And many of my constituents have raised safety
    concerns with the project itself. And one of the questions that
    our entire delegation has written to FERC about is the question
    about PHMSA's role. Because if you look at the FERC website,
    FERC says, right on its website, ``The Commission has no
    jurisdiction over pipeline safety or security, but actively
    works with other agencies on safety and security
    responsibility.'' So, one of the questions that we've asked
    that we haven't gotten an answer from FERC on, but I wanted to
    ask if you had done any analysis on, is this issue of the
    involvement of PHMSA in actually siting pipelines, as opposed
    to after they're already built and the role that PHMSA could
    play with FERC, in terms of a safety analysis up front during
    the pre-siting process. Have you looked at that issue at all?
        Ms. Fleming. I'm not aware that we have looked at it, but a
    colleague of mine handles the FERC area, and I would like to
    get back to you with a written response, if that would be OK,
    or maybe to set up a meeting to----
        Senator Ayotte. I would really appreciate----
        Ms. Fleming. Yes.
        Senator Ayotte.--that. And--because this is a significant
    issue for my constituents, and understandably so. And one of
    the concerns they have is, they want safety assessed up front
    with the siting of it, as opposed to after.
        And so, I would ask you, Chairman Hart, with--as the lead
    Federal agency with pipeline safety oversight, what is PHMSA's
    role as we look at the actual permitting or siting of a new
    natural gas pipeline, as opposed to after it's already in
    existence?
        Mr. Hart. We go where the accidents are, so I'm not sure
    we're in a position to prospectively state what the situation
    might be. But, your question does raise the issue of safety
    regulators versus economic regulators. This is the only
    industry we look at where we issue a safety recommendation, and
    the safety recommendation will--may depend on what some
    economic regulator does. So, we're struggling--again, that's
    out of our lane--the economic side is out of our lane, but
    we're struggling with how to get things done better on the
    safety side, when the safety response depends on an economic
    regulator. We don't have a good answer to that, but it's going
    to take better collaboration, and maybe better collaboration
    between PHMSA and FERC early on might be a step in that
    direction. But, that's out of our lane.
        Senator Ayotte. Well, have any of your safety
    recommendations looked at the issue of requiring PHMSA to work
    with FERC during the permitting process? Because I think
    certainly where you site something like this could have a
    direct impact on safety.
        Mr. Hart. We have not, except to the extent that our--that
    we look at high-consequence areas. And that--and siting
    something in a high-consequence area brings a host of different
    requirements than siting it in an area that is not high
    consequence. But, other than that, no, we have not looped at
    that.
        Senator Ayotte. Well, I think this is something that should
    be examined. And I would ask you to do that.
        I also believe that, as we look at PHMSA's role in the
    permitting process for pipelines, I think it does make sense to
    have PHMSA play a role not only after the fact, but in FERC's
    pre-filing process to ensure the safest--safety when you're
    thinking about siting and proposing the project.
        So, I appreciate--Director Fleming, I look forward to
    following up with you on this.
        And, Chairman Hart, I hope that's something that you will
    look at, at NTSB, thinking about the whole process, as well,
    including the siting, when it comes to safety.
        Mr. Hart. Certainly, if we see that issue arising in an
    accident investigation that we were doing, we will certainly
    look at that.
        Senator Ayotte. OK. Thank you.
        Mr. Hart. Thank you.
        Senator Fischer. Thank you, Senator Ayotte.
        Senator Markey.

                   STATEMENT OF HON. EDWARD MARKEY,
                    U.S. SENATOR FROM MASSACHUSETTS

        Senator Markey. Thank you, Madam Chair, very much.
        Beneath our streets across our country, we're facing a
    crumbling natural gas pipeline infrastructure. A report
    released by my staff found that aging and leaking natural gas
    distribution pipelines are costing consumers money nationally.
    Consumers have paid at least $20 billion for natural gas that
    they likely never received over the last decade. These leaking
    natural gas pipelines are also harming the environment and
    contributing to climate change by releasing methane, a powerful
    greenhouse gas, much more powerful than carbon dioxide.
        But, these aging pipelines are also a significant threat to
    public safety. Over the last decade, there have been almost 800
    significant incidents on gas distribution pipelines, including
    several hundred explosions which killed and injured hundreds of
    people and caused more than $800 million in property damage.
        The Obama administration's recently released Quadrennial
    Energy Review also highlighted the safety threat posed by these
    natural gas pipelines. The Quadrennial report found that,
    quote, ``Aging, leak-prone natural gas distribution pipelines
    and associated infrastructure prompt safety and environmental
    concerns.'' Most safety incidents involving natural gas
    pipelines occur on natural gas distribution systems. These
    incidents tend to occur in densely populated areas.
        Mr. Fleming, Mr. Bellamy, Mr. Hart, would you agree that
    the findings of the administration's Quadrennial Energy Review
    that aging and leaking natural gas distribution pipelines pose
    a significant threat to public safety and that this is an issue
    that the Committee should examine?
        Ms. Fleming?
        Ms. Fleming. I guess everybody's looking for me.
        Senator Markey. Ms. Fleming, yes. Ladies first, they're
    saying. They're very polite.
        Ms. Fleming. We have not looked at this issue, but would be
    happy to work with the Committee if that's an important issue
    for us to undertake.
        Senator Markey. Mr. Hart?
        Mr. Hart. We've been looking at issues regarding iron
    pipelines for quite--for several decades. And we know that
    the--they need to be replaced, and they are being replaced. We
    go there when there's an accident that results from it. So,
    that's the best I can say at this point, is, when we see----
        Senator Markey. Well, it says a lot that you've been
    looking at it----
        Mr. Hart. Oh, yes.
        Senator Markey.--for decades.
        Mr. Hart. We----
        Senator Markey. So, you know it's a big issue.
        Mr. Hart. Yes.
        Senator Markey. Mr. Bellamy.
        Mr. Bellamy. So, the challenge of inspecting low-pressure
    distribution systems is quite--has been looked at for many,
    many years. There are technologies that can allow such systems
    to be inspected. Those technologies are--there are companies
    actively investing in such technologies today, and deploying
    them. And they're being used. It's not as straightforward as
    inspecting carbon steel. Inspecting cast iron pipelines is a
    more difficult challenge. But, that's not to say it cannot be
    done. And there are companies working----
        Senator Markey. All right, let me just follow up, then. So,
    the--to the three of you again, if you would, would you agree
    with the Quadrennial report that more needs to be done to
    repair and replace our Nation's natural gas infrastructure and
    to examine these issues that the Pipeline Safety
    Reauthorization Act would give us an opportunity to do and
    would be an appropriate place to do so, given the significant
    safety threat posed by these pipelines?
        Ms. Fleming.
        Ms. Fleming. I know you're trying to back me in a corner,
    here, but we have not looked at this issue. I mean, from what
    you're saying, obviously it sounds like it's an important issue
    for folks to get behind. GAO has not looked at this issue. And
    so, it's hard for me to----
        Senator Markey. I can't----
        Ms. Fleming.--to validate it. But, obviously, we're willing
    to work with the Committee if this is something that we can
    help with.
        Senator Markey. Mr. Hart.
        Mr. Hart. Our experience has shown us that cast iron was
    not such a bad idea, back in the days when natural gas had more
    moisture content in it. But as we have intentionally removed
    the moisture content, that's resulted in seals in those
    pipelines failing, which now has created a huge problem. So, no
    question there is a serious need for improvement.
        Senator Markey. Is it--Mr. Bellamy, is it good for us to
    look at something that saves people money and makes them more
    safe? Is that something that we should perhaps take a look at
    as we're reauthorizing this bill?
        Mr. Bellamy. When you put it that way, how can I refuse?
        [Laughter.]
        Mr. Bellamy. How could I--but, the--my role here, we're a
    provider of technology. What I can talk about with some
    confidence is what's happening amongst my colleagues and
    competitors in the industry to provide solutions for (a)
    replacing pipe--and the replacement by polyethylene pipe is
    known technology, it's used extensively around the world, not
    just here in the United States. I think the other issue is for
    those pipelines--cast iron pipelines that need to be inspected,
    there are active programs underway, and there are people
    offering services into the industry today, and they are being
    used.
        Senator Markey. Yes, we have these old cities up in Boston
    that they were installing the stuff 100 years ago----
        Mr. Bellamy. Yes.
        Senator Markey. --120 years ago. It was a good idea then,
    but you've got to update the idea once in a while. OK?
    Especially if you know that the old idea might have a few holes
    in it and might need some additional, you know, help--
    replacement. And so, that's kind of where we are. We know it's
    a problem. We know that the old was great, served well. But,
    sometimes you just need, you know, to take a look at it. And
    $20 billion is a lot of money to be losing in natural gas going
    up into the--going up out of those holes, and methane, you
    know, warming the planet, and explosions that are all related
    to the very same issue. And we know that we can create jobs in
    America by finding a mechanism by which we encourage the
    industry to do this work. And we can put, you know, utility
    workers and steel workers and plumbers and pipefitters and all
    these people out there doing the work, which we know has to be
    done. This thing is just growing as a problem as each and every
    week and year goes by.
        And I just hope, Madam Chair, that we can work together on
    this issue, and especially the older, aging cities in New
    Jersey, in Connecticut, in Massachusetts. It's just a growing
    problem. And maybe in the, you know, the newer industrialized
    cities it hasn't quite reached that same level yet. But, for
    us, it's a big problem. And I'd just ask that it be put on the
    table and we'd be able to work together on it.
        So, I thank you.
        I thank you all for your participation.
        Senator Fischer. Thank you, Senator Markey.
        Senator Blumenthal.

                 STATEMENT OF HON. RICHARD BLUMENTHAL,
                     U.S. SENATOR FROM CONNECTICUT

        Senator Blumenthal. Thank you, Madam Chair.
        Welcome. Thank you for being here.
        Connecticut is expanding its pipeline gas transmission
    capacity. And so, this hearing is very timely for us. For all
    the reasons that have been well demonstrated at this hearing,
    there is a very severe and serious problem with the current
    system of oversight.
        Chairman Hart, you've indicated in your testimony that,
    since the year 2000, NTSB has made 64 recommendations for
    safety. Only one has been closed in an unacceptable status. How
    many have been closed in an acceptable status? How many have
    been acted upon?
        Mr. Hart. Approximately half.
        Senator Blumenthal. So, that's about--close to 40.
        Mr. Hart. Correct.
        Senator Blumenthal. And are some of those serious?
        Mr. Hart. Well, I mean, they range the--they fall on the
    entire spectrum from very serious to not so serious, but the--
    we have gotten good cooperation, in general, from PHMSA. We've
    had some situations where pushing them is a little harder in
    some areas than in others. But, in general, the--we're getting
    good cooperation from them.
        Senator Blumenthal. When you say ``good cooperation,'' they
    haven't completed them.
        Mr. Hart. Well, some----
        Senator Blumenthal. So, they've been cooperative in giving
    you excuses, but not in doing the work.
        Mr. Hart. The reason that we have to recommend them is
    because we know they're difficult, so, you know, we're working
    with them to try to get the things done that we need to be
    done.
        Senator Blumenthal. They're difficult, but serious and
    important.
        Mr. Hart. Yes.
        Senator Blumenthal. They matter to public safety.
        Mr. Hart. Yes.
        Senator Blumenthal. They matter to environmental
    preservation.
        Mr. Hart. Yes, but--that's not really our focus. But, I'm
    sure they do, yes.
        Senator Blumenthal. In October 2014, Senator Blunt and I
    sent a letter to PHMSA inquiring about the agency's oversight
    of gathering pipelines--I have a copy of it here; I don't know
    whether you've seen it--inquiring about the agency's oversight
    of these particular pipelines or pipes that transport oil and
    gas to refining facilities. And that letter was in response to
    the GAO's report--you've mentioned it today--where gathering
    pipelines have traditionally been constructed at about 2 to 12
    inches in diameter to handle 800 pounds per square inch of
    pressure. In recent years, because of the recent gas boom in
    the United States, those pipelines are now--those kinds of
    pipelines now being constructed at, I believe, 24 to 36 inches,
    and operating at approximately 1,400 psi. In other words, to be
    real blunt, these gathering pipelines are being used well
    beyond their capacity. That's a serious public safety threat,
    is it not?
        Mr. Hart. I'd have to get back to you with respect to
    whether we've investigated any gathering pipeline accidents.
    I'm not aware that we have, but I'd have to get back to you if
    we have. That's--we go where the accidents are, basically.
        Senator Blumenthal. If you have, I'd like to know about it.
        Mr. Hart. Yes.
        Senator Blumenthal. If you haven't, I'd like to know
    whether you consider it something that you should be----
        Mr. Hart. We'll be glad to get back to you with our--with
    respect to our accident investigation history on that one.
        Senator Blumenthal. These bigger gathering pipelines pose a
    greater threat because, if they rupture, obviously they can
    contaminate a larger area. And PHMSA has the authority to
    regulate those lines, but its oversight has been limited. In
    fact, in November 2014, I received a response that said,
    ``PHMSA plans a 2015 rulemaking to begin gathering data on
    operators of gathering pipelines.'' Has that rule been issued?
        Mr. Hart. I don't know.
        Senator Blumenthal. Well----
        Mr. Hart. Were you asking me? I'm not aware of whether it
    has, or not.
        Senator Blumenthal. It has not been issued.
        Mr. Hart. OK.
        Senator Blumenthal. To my----
        Ms. Fleming. It has not.
        Senator Blumenthal. To my knowledge, the process of
    rulemaking has not begun. I would be glad to be contradicted on
    that point.
        Long and short, as my time is expiring, it seems to me that
    this agency, basically, is in need of serious reform. Whether
    it is regulatory capture or lack of resources, lack of
    determination and will, PHMSA needs an overhaul. Would you
    agree, or not?
        Mr. Hart. We haven't done an assessment of how well PHMSA
    is working. All I can comment on is how well they have worked
    with us on the accident that we have investigated.
        Senator Blumenthal. And this point is not necessarily
    personal in criticism of anybody there. If it's lack of
    resources and authority, they should be given both. If there is
    too much coziness with the industry, there should be an
    investigation of it, would you agree?
        Mr. Hart. Again, these are all questions that are not in
    our lane, because we go where the accidents are. I hate to keep
    harking back to that answer, but we go where the accidents are.
    If we see----
        Senator Blumenthal. Well, if----
        Mr. Hart.--more accidents----
        Senator Blumenthal.--if anyone else has thoughts about this
    issue, I would welcome them.
        Unfortunately, my time is expired. I'm willing to bet that
    you could probably fit on the floor of the United States Senate
    everybody in the United States of America who knows what PHMSA
    is. And yet, its role in American energy production and
    transmission is vitally important. We all should be on the same
    side of safety in gas transmission--natural gas and, in fact,
    all transmission facilities.
        So, I welcome--and I express my thanks to each of you for
    your participation today in this very important topic.
        Thank you.
        Senator Fischer. Thank you, Senator Blumenthal.
        The hearing record will remain open for 2 weeks. And,
    during that time, Senators are asked to submit any questions
    for the record. I know I'll be submitting some. Mr.
    McCallister, you'll get some with regards to what your company
    and other companies are doing to replace those pipelines that
    are currently there and need replacing, and maybe to clarify
    that gathering pipelines are there when we have refineries, as
    well. So, upon receipt of those questions, I would ask that--
    the witnesses are requested to submit their written answers to
    the Committee as soon as possible.
        With that, I will conclude the hearing. And I thank all of
    you on the panel for being here today.
        Thank you.
        [Whereupon, at 2:30 p.m., the hearing was adjourned.]

                                A P P E N D I X

         Response to Written Question Submitted by Hon. Deb Fischer to
                                Susan A. Fleming
        Question. Ms. Fleming, in GAO's 2013 report, you found that PHMSA
    should re-assess its requirements that pipeline operators inspect
    pipeline every seven years. Your report found that a risk-based
    approach would require, depending on the characteristics of the
    pipeline, for PHMSA to require inspections on more or less frequent
    intervals. Can you please elaborate on what a more risk-based system
    would look like? Would this help PHMSA to provide better allocation of
    its resources?
        Answer. At the request of a congressional committee, in 2008 PHMSA
    described how it would establish and enforce risk-based criteria for
    extending the 7-year reassessment interval for natural gas transmission
    pipelines. PHMSA proposed retaining the current 7-year reassessment
    requirement, but establishing a process by which operators could use
    risk-based reassessment intervals longer than 7 years if they met
    certain potential criteria, such as demonstrating sound risk analysis.
    This process would be similar to that used by PHMSA for hazardous
    liquid pipeline reassessment intervals.
        It is unclear whether moving toward a more risk-based system for
    reassessing the integrity of natural gas transmission pipelines would
    allow PHMSA to better allocate resources. In fact, implementing risk-
    based reassessment intervals longer than 7 years could exacerbate
    current workload, staffing, and expertise challenges for regulators and
    operators. For example, PHMSA officials told us that allowing longer
    intervals could require inspectors to spend more time and resources
    than they do currently to verify that operators appropriately assessed
    risk, and state pipeline safety offices we met with noted potential
    concerns with staffing and training to effectively evaluate risk-based
    reassessment intervals. In light of these uncertainties regarding the
    impact of extending reassessment intervals to be longer than 7 years,
    we recommended that PHMSA collect information on the resources needed
    to implement such a change. PHMSA is studying the potential to
    implement risk-based reassessment intervals that are longer than 7
    years for natural gas transmission pipelines; agency officials plan to
    complete this research by March 2016.
                                     ______

        Response to Written Questions Submitted by Hon. Cory Booker to
                                Susan A. Fleming
        Question 1. Technology advancements are changing how business is
    conducted in virtually every industry across this country and around
    the globe. That said, I'm troubled by the fact that extremely dangerous
    materials are travelling through communities every day, yet, in the
    pipeline industry, we're still spray painting lines on the ground to
    identify the location of pipelines. And we're also still seeing far too
    many accidents where pipelines are inadvertently being hit. According
    to PHMSA, pipeline incidents result in dozens of injuries and more than
    $500 million in property damage each year. What are some of the
    developing ideas and technologies companies should be considering to
    make pipelines safer? How can we make pipelines more intelligent?
        Answer. While our work has not specifically addressed developing
    ideas and technologies to improve pipeline safety, our January 2013
    report recommended that PHMSA improve its guidance to operators on
    whether to install automated valves (see GAO-13-168). PHMSA plans to
    publish a Notice of Proposed Rulemaking on this issue in March 2016.

        Question 1a. How can the Federal Government help advance the
    adoption of developing technologies?
        Answer. We have not conducted the work necessary to answer this
    question.
                                     ______

        Response to Written Questions Submitted by Hon. Joe Manchin to
                                Susan A. Fleming
        Question 1. Pipeline safety regulations are designed to protect the
    public and the environment. Gathering pipelines associated with
    horizontal wells being drilled in the active shale plays are much
    larger in diameter and are operating at ``transmission pipeline''
    pressures (in excess of 1000 psig). While many of these large diameter,
    high pressure gathering lines are built to the safety standards of
    pipeline regulations, they are not required to be built to these
    standards. For example, there is a new gathering pipeline being built
    in central West Virginia that is 30 inches in diameter and operating at
    1250 psig. However, because of the current language in the gas pipeline
    regulations, the majority of the pipeline is unregulated by either the
    State or Federal Government.
        In addition, several pipeline failures resulting in reportable
    spills in these unregulated gathering pipelines have occurred in West
    Virginia in 2015. But because these pipelines are unregulated by the
    Pipeline and Hazardous Materials Safety Administration (PHMSA) or the
    State, there is no requirement to investigate and determine failure
    causes or take any corrective actions.
        Should PHMSA update their rules and regulations to address the
    growth of domestic shale production and the increased size and
    pressures of the gathering lines in use today?
        Answer. Yes, we believe that PHMSA should update its rules and
    regulations to address the growth of domestic shale production and the
    increased size and pressures of the gathering lines in use today. We
    have previously recommended actions to improve PHMSA's ability to
    identify and address risks posed by gathering pipelines, including
    moving forward with proposed rulemaking. In 2012, we found that changes
    in operating environments--including the increased extraction of oil
    and gas from shale--could increase the safety risks for federally
    unregulated gathering pipelines (see GAO-12-388). We recommended that
    PHMSA collect data from operators of federally unregulated onshore
    hazardous liquid and gas gathering pipelines to better identify the
    safety risks posed by such pipelines. The data should be comparable to
    what PHMSA collects annually from operators of regulated gathering
    pipelines (e.g., fatalities, injuries, property damage, location,
    mileage, size, operating pressure, maintenance history, and the causes
    and consequences of incidents). In 2014, we found that construction of
    larger, higher-pressure gathering pipelines had increased due to the
    increased production of oil and gas, raising safety concerns because an
    incident could affect a greater area than an incident from a smaller,
    lower-pressure pipeline (see GAO-14-667). We recommended that PHMSA
    move forward with a Notice of Proposed Rulemaking to address gathering
    pipeline safety that considers the risks of larger-diameter, higher-
    pressure federally unregulated gathering pipelines, including
    subjecting such pipelines to emergency response planning requirements
    that currently do not apply. In July 2015, PHMSA officials told us the
    proposed regulations the agency expected to publish later in the year
    would address these recommendations. PHMSA issued a proposed regulation
    for hazardous liquid pipelines in October 2015 and plans to issue a
    proposed regulation for gas pipelines in November 2015.

        Question 1a. Should the regulations be updated with additional
    requirements for siting or placement of new pipelines to help protect
    the public?
        Answer. Our 2012 and 2014 recommendations were designed to improve
    PHMSA's ability to identify and address risks posed by gathering
    pipelines, but did not specifically address the siting of new
    pipelines. Nonetheless, we found in our 2012 report on gathering
    pipeline safety that, according to responses to our survey of state
    pipeline safety agencies and interviews with industry officials,
    increased urbanization has caused rural areas to become more densely
    populated and, in some cases, developments have encroached on existing
    pipeline rights-of-way (see GAO-12-388). Additionally, in our 2014
    report on oil and gas transportation, we found that a citizens'
    awareness group in Pennsylvania had documented construction of several
    unregulated gathering pipelines with diameters larger than that of
    traditional gathering pipelines (see GAO-14-667). The group argued that
    while these gathering pipelines were in rural areas, they were being
    built unnecessarily close to homes.
                                     ______

        Response to Written Questions Submitted by Hon. Gary Peters to
                                Susan A. Fleming
        Question 1. To your knowledge, does DOT/PHMSA have the authority to
    shut down a pipeline to prevent accidents from an imminent threat, or
    has that ever happened in the past?
        Answer. 49 C.F.R. Sec. 190.233 specifies that, if PHMSA determines
    that operation of a particular pipeline facility would result in the
    likelihood of serious harm to life, property, or the environment, PHMSA
    may require the owner or operator of the facility to suspend or
    restrict use of the facility until PHMSA determines that the facility
    is no longer hazardous. We have not conducted the work necessary to
    determine the extent to which PHMSA has taken this action in the past.

        Question 2. Would more transparency of response plans, including
    the protocols for how PHMSA reviews and approves response plans, or
    other information help federal, state, and local responders act more
    effectively in the event of an incident?
        Answer. Our prior work on pipeline operator incident response did
    not address the transparency of response plans. However, in January
    2013, we concluded that PHMSA has an opportunity to improve incident
    response times and recommended that PHMSA improve the reliability of
    data that could be used to evaluate whether to implement a performance-
    based incident response framework (see GAO-13-168). In July 2015, PHMSA
    officials told us they have taken several steps towards addressing this
    recommendation, including requiring that operators report specific
    pieces of information regarding an incident. Additionally, PHMSA
    officials said that, later this year, they plan to propose further
    changes that will result in the collection of additional data the
    agency can use to better track incident response times. PHMSA officials
    also said they plan to develop a more specific performance-based
    standard for incident response as part of an upcoming rulemaking on
    rupture detection and valve rules.

        Question 3. What studies have been conducted and reports issued
    (since the U.S. Department of Transportation's ``Common Ground Study'')
    regarding the success or shortcomings of ``811'', ``call before you
    dig'', ``miss-utility'', or ``one-call'' systems? What recommendations
    for improvement have been made, particularly with regard to the
    collection and maintenance of accurate location data?
        Answer. Our 2012 report on gathering pipelines found that 16 state
    agencies we surveyed reported that the unknown or uncertain location of
    federally unregulated gathering pipelines presents a moderate or high
    safety risk, and that knowing such information can be useful for ``Call
    Before You Dig'' programs (see GAO-12-388). However, our work did not
    specifically address the success or shortcomings of such programs.
                                     ______

        Response to Written Questions Submitted by Hon. Cory Booker to
                            Hon. Christopher A. Hart
        Question 1. Technology advancements are changing how business is
    conducted in virtually every industry across this country and around
    the globe. That said, I'm troubled by the fact that extremely dangerous
    materials are travelling through communities every day, yet, in the
    pipeline industry, we're still spray painting lines on the ground to
    identify the location of pipelines. And we're also still seeing far too
    many accidents where pipelines are inadvertently being hit. According
    to PHMSA, pipeline incidents result in dozens of injuries and more than
    $500 million in property damage each year. What are some of the
    developing ideas and technologies companies should be considering to
    make pipelines safer? How can we make pipelines more intelligent?
        Answer. Excavation damage is a leading cause of harm to people.
    PHMSA regulations include requirements for installing permanent markers
    along the right-of-way wherever necessary to identify the location of
    the line or main to reduce the possibility of damage or interference
    (49 CFR 192.707 and 195.410). Markers warn that a transmission pipeline
    is located in the area, identify the product transported in the line,
    and provide the name of the pipeline operator and a telephone number to
    call in the event of an emergency.
        49 CFR 192.616 and 195.440 require operators to have a written
    program addressing public awareness, including use of a one-call
    notification system prior to excavation and other damage prevention
    activities. The regulation incorporates by reference the American
    Petroleum Institute (API) Recommended Practice API RP 1162 Public
    Awareness Programs for Pipeline Operators.
        Operators use high-technology devices, similar to metal detectors,
    to accurately locate the buried pipeline. They use spray paint or other
    suitable indicators only to identify the buried pipeline. Pipeline hits
    result when the operator is not notified of the intended work to locate
    and mark the buried pipelines, and when powered excavating equipment is
    incorrectly used in the vicinity of marked or unmarked pipelines.
        The industry frequently evaluates and adopts improved methods for
    informing the public of the legal requirements to notify the operator
    using the national 811 ``call before you dig'' system to ensure the
    buried pipeline and other utilities are properly marked.

        Question 1a. How can the Federal Government help advance the
    adoption of developing technologies?
        Answer. A full array of technologies continues to be developed that
    involve acoustical monitoring and other sensing methods, better leak
    detection, and better pipeline assessment technologies using in-line
    inspection.
        Federal agencies can provide funding to research and development
    (R&D) programs and incentivize the private industry, which owns the
    bulk of the 2.6 million miles of pipelines in the United States, to
    ramp up investment in R&D.
        PHMSA must continue to work closely with independent organizations,
    such as the API and other industry stakeholders, to advance technology
    related to safe pipeline operations.
                                     ______

        Response to Written Questions Submitted by Hon. Joe Manchin to
                            Hon. Christopher A. Hart
        Question 1. Pipeline safety regulations are designed to protect the
    public and the environment. Gathering pipelines associated with
    horizontal wells being drilled in the active shale plays are much
    larger in diameter and are operating at ``transmission pipeline''
    pressures (in excess of 1000 psig). While many of these large diameter,
    high pressure gathering lines are built to the safety standards of
    pipeline regulations, they are not required to be built to these
    standards. For example, there is a new gathering pipeline being built
    in central West Virginia that is 30 inches in diameter and operating at
    1250 psig. However, because of the current language in the gas pipeline
    regulations, the majority of the pipeline is unregulated by either the
    State or Federal Government.
        In addition, several pipeline failures resulting in reportable
    spills in these unregulated gathering pipelines have occurred in West
    Virginia in 2015. But because these pipelines are unregulated by the
    Pipeline and Hazardous Materials Safety Administration (PHMSA) or the
    State, there is no requirement to investigate and determine failure
    causes or take any corrective actions.
        Should PHMSA update their rules and regulations to address the
    growth of domestic shale production and the increased size and
    pressures of the gathering lines in use today?
        Answer. The NTSB has not investigated accidents involving gathering
    lines and, therefore, has not issued any recommendations regarding
    PHMSA's regulations regarding gathering lines. These accidents
    typically occur in more rural areas and have not involved the injuries
    or fatalities that would meet NTSB accident launch criteria.
        The criteria for determining those onshore natural gas gathering
    pipelines regulated by PHMSA are contained in 49 CFR 192.8 and vary
    based on pipeline material, operating stress, and class location. PHMSA
    is also collecting data to help it assess whether to expand the
    regulations to gathering lines not currently regulated.
        As with any rulemaking undertaken by agencies such as PHMSA, the
    ultimate success or expansion of the regulations will largely be
    determined by the ability to justify safety improvements against the
    cost burden on the operator.

        Question 1a. Should the regulations be updated with additional
    requirements for siting or placement of new pipelines to help protect
    the public?
        Answer. The Federal Energy Regulatory Commission (FERC) oversees
    new pipeline routing for interstate natural gas pipelines. State and
    local agencies oversee intrastate pipeline and hazardous liquid inter/
    intrastate pipeline routing. NTSB has not issued any recommendations to
    the FERC or the states regarding pipeline routing because we have not
    investigated accidents in which routing was a factor.
        In January 2015, PHMSA and FEMA released a new hazard mitigation
    guidance document prepared by the Pipelines and Informed Planning
    Alliance (PIPA) Communication Team. Hazard Mitigation Planning:
    Practices for Land Use Planning and Development near Pipelines outlines
    best practices for communities to reduce risks from pipeline incidents,
    including those caused by natural hazards.
                                     ______

        Response to Written Questions Submitted by Hon. Gary Peters to
                            Hon. Christopher A. Hart
        Question 1. Has NTSB looked at improvements in PHMSA spill response
    criteria, and if so, do you see a need for elevated criteria in
    demonstrating an effective response plan?
        Answer. Yes, the NTSB closely examines operator spill response
    plans and actions, as well as the local, state, and Federal actions
    involved in a hazardous liquid accident. For example, the NTSB
    identified numerous shortcomings in the Enbridge Marshal, Michigan,
    crude oil accident spill response. Our investigation also identified
    shortcomings in the PHMSA facility response plan regulations and the
    PHMSA response plan review process. The Board issued recommendations to
    the U.S. Department of Transportation, PHMSA, and Enbridge addressing
    spill response (NTSB PAR-12/01).

        Question 2. What has been NTSB's recent actions regarding location
    issues, with regard to how surveying and mapping, or ``as-built''
    drawings and records, and infrastructure location can enhance public
    safety, environmental protection and the economy by strengthening the
    accurate location (surveying and mapping) of such pipelines and other
    forms of underground utility infrastructure?
        Answer. In January 2015, the NTSB released a Safety Study, entitled
    Integrity Management of Gas Transmission Pipelines in High Consequence
    Areas (SS-15-01). The study findings discussed improving data
    collection and reporting, including geospatial data. The Board issued
    recommendations to PHMSA addressing the National Pipeline Mapping
    System, improving standards addressing the use of geospatial data, and
    the process for identifying high consequence areas.
                                     ______

        Response to Written Questions Submitted by Hon. Cory Booker to
                                Michael Bellamy
        Question 1. Technology advancements are changing how business is
    conducted in virtually every industry across this country and around
    the globe. That said, I'm troubled by the fact that extremely dangerous
    materials are travelling through communities every day, yet, in the
    pipeline industry, we're still spray painting lines on the ground to
    identify the location of pipelines. And we're also still seeing far too
    many accidents where pipelines are inadvertently being hit. According
    to PHMSA, pipeline incidents result in dozens of injuries and more than
    $500 million in property damage each year.
        The pipeline industry shares the Senator's concern regarding what
    is referred to as ``third-party'' damage and the industry has gone to
    great lengths to work with state and local officials to prevent this
    damage. Rights-of-way for the interstate lines are clearly marked.
        This problem extends to water and electric lines as well as gas and
    oil transmission lines and the ``One-Call'' system has been adopted to
    notify officials with ``one call'' when excavation is to take place so
    that the location of the lines on that particular piece of property can
    be marked.
        The problem isn't that the operators don't know where the lines
    are, rather it lies with those persons who start to dig without first
    determining the pipeline's location.
        The pipeline operators between them spend millions of dollars on
    education programs, but if someone installing a septic system or a
    farmer digging a pond doesn't use the ``One-Call'' system to have
    underground utilities marked, tragedy can occur.
        New technology in the form of surveillance data use from multiple
    sensing systems both static and dynamic are being developed, utilizing
    new imagery techniques to prevent encroachment of unauthorized
    excavations. These need FAA approval as well as landowners permitting
    to install the static sensors, which legislation could assist with.
        What are some of the developing ideas and technologies companies
    should be considering to make pipelines safer? How can we make
    pipelines more intelligent?
        Answer. The first step in making pipelines more intelligent is to
    understand, assess and use the data collected over years of operation
    and integrate it with current technology-driven data to understand how
    the past can help make the future safer; moving towards a
    ``predictive'' approach to safety. GE's Intelligent Pipeline Solutions
    program is a model of what can be done.
        Our technology feeds critical data into an integrated solution so
    operators have the data they need to safely manage their assets, manage
    potential issues before they become an incident, and enhance
    stakeholder communications. The technology integrates operational data
    with external sources of data such as weather, seismic and repair
    information, and combines them into one solution that delivers a
    digital reference of all the assets in the pipeline network, plus
    insight into the threat factors impacting performance. This current
    information allows an organization to run dynamic modeling on threat
    factors and mitigation strategies, with the outcome of optimizing
    production while minimizing maintenance spend and risk exposure. It
    provides a critical foundation for addressing enterprise data
    organization and management, streamlining regulatory preparedness and
    supports a proactive approach to pipeline safety management.
        For example, advances in technology, such as ground motion sensors,
    listening sensors, and unmanned aerial vehicles with high resolution
    cameras and odor detection enable new surveillance methods that improve
    security along and within the Right of Way (ROW). This provides a
    ``view'' of potential unauthorized or illegal digging activities on the
    ROW.

        Question 1a. How can the Federal Government help advance the
    adoption of developing technologies?
        Answer. API's recently published Recommended Practice 1173 provides
    guidance for the industry to move to an Intelligent Pipeline System
    platform. Incorporation of API1173 into regulations by reference will
    encourage migration to more contemporary data management approaches.
        Comparing the adoption of technologies between countries with goal-
    based approaches to pipeline regulation that allow alternative ways of
    achieving compliance, and those countries that have a more prescriptive
    approach in that they specify the means of achieving compliance, GE
    notes that those with a goal-based approach tend to have faster rates
    of new technology adoption.
        The encouragement of pipeline owners and operators to allow
    developing technology to be tested on live systems (tariff or other
    types of incentives of some kind) will help further advance progress.
    Government grants for R&D to assist in the funding of such programs
    will also add to the opportunity for partnerships with industry. For
    many years, PHMSA was a funding participant in public-private
    partnerships to develop advanced safety technology, but this practice
    does not continue today. It should be reinstated. Deploying
    computerized safety measures or operating intelligent pipeline
    principals wherever practical should be used to drive the industry
    forward. Perhaps commitments to use new technology could be used as
    mitigants to operational risks or to optimize inspection intervals.
    Operators should be encouraged to participate in pilot programs to
    experiment with new technology approaches in a controlled and safe
    manner.
                                     ______

        Response to Written Questions Submitted by Hon. Joe Manchin to
                                Michael Bellamy
        Question 1. Pipeline safety regulations are designed to protect the
    public and the environment. Gathering pipelines associated with
    horizontal wells being drilled in the active shale plays are much
    larger in diameter and are operating at ``transmission pipeline''
    pressures (in excess of 1000 psig). While many of these large diameter,
    high pressure gathering lines are built to the safety standards of
    pipeline regulations, they are not required to be built to these
    standards. For example, there is a new gathering pipeline being built
    in central West Virginia that is 30 inches in diameter and operating at
    1250 psig. However, because of the current language in the gas pipeline
    regulations, the majority of the pipeline is unregulated by either the
    State or Federal Government.
        In addition, several pipeline failures resulting in reportable
    spills in these unregulated gathering pipelines have occurred in West
    Virginia in 2015. But because these pipelines are unregulated by the
    Pipeline and Hazardous Materials Safety Administration (PHMSA) or the
    State, there is no requirement to investigate and determine failure
    causes or take any corrective actions.
        Should PHMSA update their rules and regulations to address the
    growth of domestic shale production and the increased size and
    pressures of the gathering lines in use today?
        Answer. The advent of the shale gas revolution in the U.S. has
    precipitated the need for expanding gathering line systems. These
    systems can be large and are generally under regulation by a state
    agency.
        While state regulatory frameworks vary, it is safe to say that
    there is no significant move to make these gathering systems ILI
    capable. Because the shale reserves are sometimes near communities and
    other high consequence areas, a case can be made that some gathering
    lines should require inspections using the best available technology.
    PII is willing to work with any state jurisdiction interested in
    understanding ILI technology and the nature of pipeline specifications
    that will allow its use.

        Question 1a. Should the regulations be updated with additional
    requirements for siting or placement of new pipelines to help protect
    the public?
        Answer. The siting or placement of new pipelines is outside of the
    scope of interest of GE Pipelines Solutions, we would therefore defer
    to ``no comment'' on this question.
                                     ______

         Response to Written Question Submitted by Hon. Gary Peters to
                                Michael Bellamy
        Question. Are there many pipelines that can't be inspected using
    the best technology available, and for those pipelines that can't be
    inspected using best available technology, do you think those pipelines
    (and the surrounding area) should have a higher burden of proof when it
    comes to safety?
        Answer. Interstate gas and oil transmission lines are regulated by
    PHMSA. Industry consensus estimates suggest that approximately 40
    percent are unsuitable for inspection using currently available smart
    pig technology for a variety of reasons. The vast majority of new
    pipelines are constructed to be compatible with ILI tools, and many
    pipeline operators continue to upgrade their pipelines so as to make
    them ILI compatible, and thus benefit from application of the most
    advanced technology as it continues to develop.
        PII supports using the best available technology in high
    consequence areas; that is we support inspecting those lines with In
    Line Inspection (smart pig) equipment. Obviously, our first choice for
    difficult to ILI pipelines in high consequence areas would be to make
    those lines ILI compatible. Where that is not possible, on occasion we
    might be able to modify the ILI tools to allow them to be used in
    pipelines which were previously incompatible for ILI.
        But, to the extent that pipelines cannot be made physically
    compatible for ILI, a number of other less comprehensive inspection
    methodologies are available. For example, operators can choose Direct
    Assessment inspection and/or hydrostatic testing, and there may be
    other operational opportunities to reduce risk. Further, some of the
    data technology being developed by GE in regard to ``intelligent
    pipeline solutions'' may be useful to monitor pipelines in high
    consequence areas.
                                     ______

        Response to Written Questions Submitted by Hon. Cory Booker to
                                Donald F. Santa
        Question 1. Technology advancements are changing how business is
    conducted in virtually every industry across this country and around
    the globe. That said, I'm troubled by the fact that extremely dangerous
    materials are travelling through communities every day, yet, in the
    pipeline industry, we're still spray painting lines on the ground to
    identify the location of pipelines. And we're also still seeing far too
    many accidents where pipelines are inadvertently being hit. According
    to PHMSA, pipeline incidents result in dozens of injuries and more than
    $500 million in property damage each year. What are some of the
    developing ideas and technologies companies should be considering to
    make pipelines safer? How can we make pipelines more intelligent?
        Answer. Natural gas pipelines are safer today as a result of a
    number of technological advances over the last 40 years. While there
    have been advances in materials and equipment, perhaps the most
    important advance has been the development of in-line inspection
    technologies. These tools, commonly called ``smart pigs,'' have
    developed from rudimentary devices 30 years ago, to much more
    sophisticated tools today. This is partly a byproduct of the computer
    and sensor technology advances that have occurred across the entire
    economy, but also the result of pipeline industry focus on inspection
    technology.
        These technologies will continue to advance and will remain an
    essential element of further improvements in pipeline safety. For
    example, the current method for testing the material strength of a
    pipeline is hydrostatic test--essentially, filling the pipeline with
    water at high pressures to see if the pipe breaks. This type of testing
    is expensive, disruptive to service, and actually may damage the
    pipeline. Developing a non-destructive alternative that can test for
    material strength is a current focus of pipeline safety research and
    development.

        Question 1a. How can the Federal Government help advance the
    adoption of developing technologies?
        Answer. As mentioned in our written testimony, INGAA supports re-
    establishing collaborative pipeline safety research and development
    involving PHMSA and pipeline industry groups. This was the practice
    until a previous Secretary of Transportation changed the policy about
    four years ago. Given the limited resources available within both
    government and industry, a collaborative effort will help to avoid
    duplication and will contribute to the more effective development and
    deployment of new technologies to improve pipeline safety.
                                     ______

        Response to Written Questions Submitted by Hon. Joe Manchin to
                                Donald F. Santa
        Question 1. Pipeline safety regulations are designed to protect the
    public and the environment. Gathering pipelines associated with
    horizontal wells being drilled in the active shale plays are much
    larger in diameter and are operating at ``transmission pipeline''
    pressures (in excess of 1000 psig). While many of these large diameter,
    high pressure gathering lines are built to the safety standards of
    pipeline regulations, they are not required to be built to these
    standards. For example, there is a new gathering pipeline being built
    in central West Virginia that is 30 inches in diameter and operating at
    1250 psig. However, because of the current language in the gas pipeline
    regulations, the majority of the pipeline is unregulated by either the
    State or Federal Government.
        In addition, several pipeline failures resulting in reportable
    spills in these unregulated gathering pipelines have occurred in West
    Virginia in 2015. But because these pipelines are unregulated by the
    Pipeline and Hazardous Materials Safety Administration (PHMSA) or the
    State, there is no requirement to investigate and determine failure
    causes or take any corrective actions.
        Should PHMSA update their rules and regulations to address the
    growth of domestic shale production and the increased size and
    pressures of the gathering lines in use today?
        Answer. INGAA represents interstate natural gas transmission
    pipeline operators. These pipelines have been subject to safety
    regulation by the U.S. Department of Transportation since 1970. INGAA
    does not represent gathering line owner/operators, and therefore has no
    positon on gathering line regulation. It is our understanding, however,
    that the upcoming comprehensive natural gas pipeline rule that PHMSA is
    preparing will include some policy changes affecting gathering lines.

        Question 1a. Should the regulations be updated with additional
    requirements for siting or placement of new pipelines to help protect
    the public?
        See above.
                                     ______

         Response to Written Question Submitted by Hon. Gary Peters to
                                Donald F. Santa
        Question. Despite a recent boost in appropriations for PHMSA
    inspectors, it has been noted that it is extremely difficult to recruit
    and retain quality engineers and professionals to carry out inspections
    and other PHMSA program work. How can the oil and gas industry assist
    in making sure we quality individuals that can work together with
    companies to improve safety for everyone?
        Answer. It is our understanding that PHMSA on several occasions has
    sought ``direct hiring authority'' from Congress. This authority would
    enable PHMSA to hire qualified personnel directly, without going
    through the lengthy Office of Personnel Management process. Removing
    this impediment would make it easier for PHMSA to hire qualified
    individuals on a timely basis.
        Another possible solution might be contract personnel. Given the
    highly competitive market for engineers and other skilled
    professionals, the salary and job location limitations for PHMSA remain
    significant obstacles to hiring qualified individuals. The appropriate
    use of private contractors might help to compensate for those
    limitations.
                                     ______

        Response to Written Questions Submitted by Hon. Cory Booker to
                               Terry McCallister
        Question 1. Technology advancements are changing how business is
    conducted in virtually every industry across this country and around
    the globe. That said, I'm troubled by the fact that extremely dangerous
    materials are travelling through communities every day, yet, in the
    pipeline industry, we're still spray painting lines on the ground to
    identify the location of pipelines. And we're also still seeing far too
    many accidents where pipelines are inadvertently being hit. According
    to PHMSA, pipeline incidents result in dozens of injuries and more than
    $500 million in property damage each year. What are some of the
    developing ideas and technologies companies should be considering to
    make pipelines safer? How can we make pipelines more intelligent?
        Answer. Although significant improvements have been made,
    excavation damage continues to be a leading threat to the safe
    operation of pipelines. And most of this damage is due to excavators
    not calling before they dig, not due to a lack of technology. The
    industry takes the threat of excavation damage very seriously. PHMSA
    has collaborated with pipeline operators, other underground utilities,
    excavators and other stakeholders to form the Common Ground Alliance
    (CGA), which helped to launch the national 811 Call Before You Dig. The
    creation of a national and regional CGAs, a national Call Before You
    Dig number, and public awareness efforts have had a dramatic impact on
    improving awareness around the importance of calling to get utility
    lines marked prior to any excavation. In addition, CGA publishes a list
    of best practices that can help reduce to risk of excavation damage.
        As far as new technologies, the industry has several forums that
    are intended to develop new tools and instruments which can improve the
    accuracy of pipe locating, enhance the communication of pipe location
    to the excavator, and provide notification of excavation activity that
    is occurring in the vicinity of a major pipeline. Included in these
    forums is PHMSA's annual R&D forum for pipeline safety: http://
    phmsa.dot.gov/pipeline/research-development, the CGA Technology
    Committee, forums held by the industry research consortiums, and AGA's
    technical committees and Operations Conference & Exhibition.
        In summary, the industry and other stakeholders have worked, and
    continue to work, diligently to reduce the threat of excavation
    damages. New technologies can help, but I do not believe technology is
    always the solution. Enforcement of state laws which will force
    excavators to call 811 before they dig, and firming up state excavation
    damage laws, will reduce excavation damages more than technology
    improvements. Consistent and effective enforcement will result in
    improved digging practices, particularly for the professional
    excavators who utilize mechanized equipment.

        Question 1a. How can the Federal Government help advance the
    adoption of developing technologies?
        Answer. There are several ways that Federal Government can help to
    advance the adoption of developing technologies. The first is the
    continued funding of PHMSA's R&D program and its partnership with
    industry research consortiums, academia and independent research
    groups. The second is quicker adoption of new or unconventional
    technologies. Currently, operators must apply for a special permit to
    use an alternative technology. PHMSA should be encouraged to review the
    special permit requests in a timely manner, and encourage more special
    permits to be filed in order to confirm new technologies meet
    expectations. As a particular technology becomes more mature, PHMSA
    should be encouraged to allow its usage so that special permits and
    applications are no longer required from pipeline operators.
                                     ______

        Response to Written Questions Submitted by Hon. Joe Manchin to
                               Terry McCallister
        Question 1. Pipeline safety regulations are designed to protect the
    public and the environment. Gathering pipelines associated with
    horizontal wells being drilled in the active shale plays are much
    larger in diameter and are operating at ``transmission pipeline''
    pressures (in excess of 1000 psig). While many of these large diameter,
    high pressure gathering lines are built to the safety standards of
    pipeline regulations, they are not required to be built to these
    standards. For example, there is a new gathering pipeline being built
    in central West Virginia that is 30 inches in diameter and operating at
    1250 psig. However, because of the current language in the gas pipeline
    regulations, the majority of the pipeline is unregulated by either the
    State or Federal Government.
        In addition, several pipeline failures resulting in reportable
    spills in these unregulated gathering pipelines have occurred in West
    Virginia in 2015. But because these pipelines are unregulated by the
    Pipeline and Hazardous Materials Safety Administration (PHMSA) or the
    State, there is no requirement to investigate and determine failure
    causes or take any corrective actions.
        Should PHMSA update their rules and regulations to address the
    growth of domestic shale production and the increased size and
    pressures of the gathering lines in use today?
        Answer. The members of the American Gas Association deliver natural
    gas to homes and businesses. Gathering lines are far upstream of these
    local delivery lines. Therefore, we defer this question to other panel
    members.

        Question 1a. Should the regulations be updated with additional
    requirements for siting or placement of new pipelines to help protect
    the public?
        Answer. PHMSA's current jurisdiction does not include siting or
    placement of new pipelines. They have provided assistance to
    communities building around existing pipelines.
                                     ______

         Response to Written Question Submitted by Hon. Gary Peters to
                               Terry McCallister
        Question. Despite a recent boost in appropriations for PHMSA
    inspectors, it has been noted that it is extremely difficult to recruit
    and retain quality engineers and professionals to carry out inspections
    and other PHMSA program work. How can the oil and gas industry assist
    in making sure we quality individuals that can work together with
    companies to improve safety for everyone?
        Answer. The American Gas Association believe PHMSA inspectors and
    state inspectors play a critical role in pipeline safety. AGA was
    pleased to see Congress provide additional resources for PHMSA in the
    prior Pipeline Safety reauthorization.
        There are a number of initiatives on both the government side and
    the industry side that are helping to create qualified inspectors,
    engineers, and energy industry professionals that can work together to
    improve safety:

       Federal and state pipeline safety inspectors currently
            receive training on pipeline safety regulations, compliance
            requirements, inspection techniques, and enforcement
            procedures. This includes classroom training at the PHMSA
            Pipeline Safety Training Center in Oklahoma City, OK, and
            General Pipeline Safety Awareness Course at Leak City in
            Athens, AL. Federal and state inspectors also have
            opportunities to participate in state and regional seminars and
            industry workshops.

        What could improve this training is additional hands on experience
            of pipe materials, components, welding and joining procedures,
            operations and maintenance activities, and emergency response
            in both the classroom and the field.

        In addition, many operators are willing to assist in educating
    newer inspectors through field visits, participation in manufacturer
    demonstrations and even participation in company training programs.
    These educational opportunities should be outside of an inspector's
    audit.
        Industry has a number of initiatives underway pertaining to
    workforce development. This includes the creation of a number of
    company training facilities, new employee training programs, natural
    gas boot camps, partnerships with technical schools and universities,
    the Center for Energy Workforce Development, participation in the
    Utilities Workforce Advisory Council, industry technical committees,
    AGA's Operations Conference & Exhibition, industry workshops, and even
    programs on diversity and inclusion. Several of these initiatives
    actively encourage government's involvement and participation. This
    includes partnerships with technical schools and universities,
    participation in the Center for Energy Workforce Development,
    participation in the Utilities Workforce Advisory Council,
    participation in AGA's Operations Conference & Exhibition, and
    participation in many industry workshops.
        It should be noted that a number of individuals trained by pipeline
    operators leave the natural gas company to work for state or Federal
    Government and the knowledge they gain while working for a utility is
    transferred to their government position.
        There are additional opportunity for industry and government to
    work together to create qualified individuals that can work together to
    improve pipeline safety. Several of these opportunities are based on a
    trust that information will not be used to fine or penalize an
    operator. For example, as an operator identifies an issue, there is an
    opportunity for the operator to openly share this information with
    their Federal or state inspector. These are learning opportunities on
    both the issue and how an issue is addressed. Operators are unwilling
    to share these opportunities if they result in a fine or penalty.

                                      [all]

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