[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\
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    \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\
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    \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.
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    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.
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    \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.
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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.
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    \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.
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    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\
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    \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).
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    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).
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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.
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    \18\ GAO-13-168.
    \19\ Variables outside of operators' control--such as weather 
conditions--can also influence incident response time.
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    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.
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    \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.
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    \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.
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    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.
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    \1\ Nine of the recommendations were made to PHMSA's predecessor, 
the Research and Special Programs Administration.
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    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\
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    \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:
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    \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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