[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





   BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE STATE OF 
   RAILROAD, PIPELINE, AND HAZARDOUS MATERIALS SAFETY REGULATION AND 
                        OPPORTUNITIES FOR REFORM

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

                                (115-11)

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 26, 2017

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                         Columbia
FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania            Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                   Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota

                                  (ii)

  


     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                   JEFF DENHAM, California, Chairman

JOHN J. DUNCAN, Jr., Tennessee       MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri                 DONALD M. PAYNE, Jr., New Jersey
LOU BARLETTA, Pennsylvania           JERROLD NADLER, New York
BLAKE FARENTHOLD, Texas              ELIJAH E. CUMMINGS, Maryland
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
MARK MEADOWS, North Carolina         ALBIO SIRES, New Jersey
SCOTT PERRY, Pennsylvania            JOHN GARAMENDI, California
MARK SANFORD, South Carolina         ANDRE CARSON, Indiana
TODD ROKITA, Indiana                 RICHARD M. NOLAN, Minnesota
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut
BRIAN BABIN, Texas                   CHERI BUSTOS, Illinois
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas            MARK DeSAULNIER, California
LLOYD SMUCKER, Pennsylvania          DANIEL LIPINSKI, Illinois
PAUL MITCHELL, Michigan              PETER A. DeFAZIO, Oregon (Ex 
JOHN J. FASO, New York, Vice Chair   Officio)
JASON LEWIS, Minnesota
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)
















                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Linda Bauer Darr, President, American Short Line and Regional 
  Railroad Association...........................................     5
Roger Nober, Executive Vice President, Law and Corporate Affairs, 
  and Chief Legal Officer, BNSF Railway..........................     5
Paul W. Rankin, President, Reusable Industrial Packaging 
  Association, on behalf of the Interested Parties for Hazardous 
  Materials Transportation.......................................     5
Robin Rorick, Group Director of Midstream and Industry 
  Operations, American Petroleum Institute.......................     5
Donald F. Santa, Jr., President and Chief Executive Officer, 
  Interstate Natural Gas Association of America..................     5
John Tolman, Vice President and National Legislative 
  Representative, Brotherhood of Locomotive Engineers and 
  Trainmen.......................................................     5

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Linda Bauer Darr.................................................    47
Roger Nober......................................................    68
Paul W. Rankin...................................................    75
Robin Rorick.....................................................    81
Donald F. Santa, Jr..............................................    90
John Tolman......................................................    95

                       SUBMISSIONS FOR THE RECORD

Paul W. Rankin, President, Reusable Industrial Packaging 
  Association, on behalf of the Interested Parties for Hazardous 
  Materials Transportation, response to question from Hon. Peter 
  A. DeFazio of Oregon, and extension and clarification of 
  remarks........................................................    20

                        ADDITIONS TO THE RECORD

Letter of April 26, 2017, from Chris Jahn, President, The 
  Fertilizer Institute, to Hon. Bill Shuster, Chairman, Committee 
  on Transportation and Infrastructure, et al....................   103
Richard Patterson, Executive Director, Sporting Arms and 
  Ammunition Manufacturers' Institute, Inc., views on certain 
  hearing topics.................................................   105
  
  
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
   BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE STATE OF 
   RAILROAD, PIPELINE, AND HAZARDOUS MATERIALS SAFETY REGULATION AND 
                        OPPORTUNITIES FOR REFORM

                              ----------                              


                       WEDNESDAY, APRIL 26, 2017

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m. in 
room 2167 Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. Good morning. The committee will come to order.
    Today we meet to take stock of the landscape for safety 
regulation across all of the industries under the committee's 
jurisdiction, and consider opportunities for reform.
    Much has been accomplished on rail, pipeline, and hazardous 
materials safety, most recently through the Fixing America's 
Surface Transportation, or the FAST Act, and the Protecting our 
Infrastructure of Pipelines and Enhancing Safety Act of 2016, 
or the PIPES Act. I am proud that we have consistently worked 
on a bipartisan basis, and I want to thank Chairman Shuster and 
Ranking Members DeFazio and Capuano for their work on these 
bills.
    Safety is our top priority, and will continue to be so. But 
the breadth of regulation has grown significantly in recent 
years. And so we are here to ask stakeholders about the impact 
and burden of regulation on their businesses, and ways to ease 
the burden without compromising safety.
    Are these the--[lifts volumes from table and reads:] ``2016 
Regulations and Codes.'' We are very focused on safety, but 
this has more than doubled in the last--how many years? Since 
2000. So, quite a bit more compliance here. Again, safety is 
our number-one priority. But we also want to make sure that, as 
we move forward, we are doing so in a way that allows all of 
you to conduct business appropriately.
    In 2004, when the Pipeline and Hazardous Materials Safety 
Administration, PHMSA, was created, the number of pages of this 
CFR governing pipeline and hazardous material had increased 
over 200 pages. Regardless, we are adding more regulations 
without considering the cumulative burden on industry. And all 
of the industries represented here today are facing growing 
regulations, not just from the DOT, but from other agencies, 
such as the Department of Labor, as well.
    Today's hearing is an opportunity for our stakeholders to 
tell us what is working, what is not, and what needs to be 
modified in terms of regulatory process. Are regulations based 
on sound science? Is guidance being used appropriately? Are the 
appropriate rulemaking processes being followed? Can 
performance-based regulations be more effective than command-
and-control regulations in achieving safety goals while 
imposing less of a burden on industry? These are just some of 
the issues I hope that we will explore today.
    I am also interested in hearing from our witnesses about 
how the agencies are implementing the FAST and PIPES Acts, and 
whether they are following congressional intent. PHMSA has 
still not implemented congressional directives from 2011, 
something we have expressed concern about over the past few 
years.
    So I want to hear from each of our witnesses, and thank 
each of them for being here today.
    I now call on Mr. Capuano for any comments that he may 
have.
    Mr. Capuano. Thank you, Mr. Chairman. Great introduction. 
Let's get to the hearing.
    Mr. Denham. I now call on the chairman of the full 
committee, Mr. Shuster.
    Mr. Shuster. That is why I love Capuano.
    [Laughter.]
    Mr. Denham. I now call on--are you going?
    Mr. Shuster. Yes, I am going.
    [Laughter.]
    Mr. Shuster. Capuano doesn't love me that much, because I 
talk more than he does. Would the chairman recognize me?
    Mr. Denham. The chairman of the full committee, Mr. 
Shuster, is recognized.
    Mr. Shuster. I appreciate that. I am really glad we are 
having this hearing today, and everybody has heard the 
President of the United States talk about doing a big 
infrastructure bill. I feel confident we are going to do a big 
infrastructure bill. It will cover more than just the modes 
that we deal with here in the committee.
    It will deal with--I think broadband will be in there, and 
the electric grid, the power grid will be part of it, plus many 
other things.
    As I have told people, you know, he just dropped the MOAB, 
the mother of all bombs, on Afghanistan. Well, I think this is 
going to be the MOAB of bills, the mother of all bills. I think 
it is going to be a big bill, I think it is something that we 
can find common ground across the aisle with our counterparts, 
because when you talk about the infrastructure of this country, 
everybody knows we need to invest.
    And again, I feel very confident we are going to be able to 
do something with our Democratic colleagues and, more 
importantly, I think even with our Senators over there, 
Republicans and Democrats, if we get them going in the right 
direction.
    And when we talk about the infrastructure bill, two of the 
two industries that I talk to--and I have talked to the 
President and some of his folks--it doesn't require Federal 
dollars for the railroad industry and the pipeline industry. 
They are already spending billions of dollars on their own 
infrastructure. I know last year, I believe, the number was $30 
billion the railroad industry spent. And if we allow the 
railroad industry to keep more of their profits, I am confident 
that that $30 billion will grow, and they will rebuild--
continue to rebuild their infrastructure.
    The same with the pipeline industry. In Pennsylvania we 
have two pipeline projects, one a $3 billion pipeline project, 
one a $1 billion project. The $3 billion pipeline project is 
being held up because FERC and the Corps of Engineers can't 
agree on where to permit it to build it, and it is just 
ridiculous, when you see this thing is going to be safe--
pipelines are the safest mode to move hazardous materials. So 
we have to make sure that we move forward.
    And I am confident that the--you know, the mistakes happen 
out there, things happen, but moving by pipes is extremely 
safe, as well as the railroad industry is incredibly safe.
    My dear friend who has departed us, Jim Oberstar, and we 
had this big hearing one day on rail safety, and he was 
questioning whether the railroads are safe enough, and I was 
saying they were, and he talked about when he was a young man 
he jumped off the back of a railcar. He was working for the 
railroad up in Minnesota. He jumped off the back of a railcar, 
slipped, and he said, ``My head missed the rails by inches. I 
could have split my head open and been killed.''
    Well, they happened to call the vote at the time, so I 
walked down the hall and the entire rail industry was there to 
greet me. And they said, ``If he would have jumped off that and 
we knew it, we'd have had to fire him,'' because you have to 
hold both the rails going down the steps the back of a railcar.
    So, you know, the railroad industry is committed to safety. 
Any time you meet with them you got to go through a safety 
briefing. And again, I know the pipeline industry, I know the 
folks in the hazardous material business are really--that is 
the number-one priority. For your industries I know it is, and 
it is for this committee. So we want to make sure that we are 
working together to reduce the regulatory burden.
    It is crazy, when you look at those things and how they 
have grown over the past 15, 16 years. And it has gotten safer. 
And not necessarily because of those regulations. You know, 
again, if we could get these things done faster, smarter, let 
people keep more of their money, it is going to benefit 
everybody, it is going to benefit the economy as we move 
forward.
    And, with that, I will say sorry, Mr. Capuano, for taking 
up so much time, but I am ready to go. Thank you very much, 
Chairman.
    Mr. Denham. I now call on the ranking member of the full 
committee, Mr. DeFazio, for a brief opening statement.
    Mr. DeFazio. Thank you, Mr. Chairman. I will have an 
opening statement, because I think this merits a lot of 
discussion and scrutiny by this committee.
    And, I mean, there are a few examples out there: the 
Enbridge Pipeline, which leaked for quite a period of time, 1 
million gallons of tar sands, mostly unrecoverable, in the 
river, because simple leak detection was not effective; the gas 
explosion in San Bruno, California, killed eight people because 
of problems with the pipe and the pipeline itself.
    And, as someone mentioned, PHMSA, a pretty much 
dysfunctional agency, has yet to implement rules from our 2011 
bill. So, before we start messing around with the things that 
are pending, we ought to actually see what they produce and 
then review what their products are.
    And then, finally, one that is of extraordinary concern to 
me, is lithium batteries on airplanes. We just had another 
lithium battery incident. Luckily, it was not in the hold of an 
airplane. Otherwise, we would have seen dead people. It was 
Sunday night, a Union Pacific train. The car was removed from 
the train when it started smoking. Later there was an explosion 
inside. And it contained cargo of small lithium batteries. If 
that happened in the hull of an airplane, it would come down 
and people would die.
    We have the example of UPS flight 6 near Dubai, which 
created a giant crater. Twenty-seven minutes, forty-five 
seconds. That is how much time between when the fire alarm went 
off on the cargo plane until the plane cratered into the 
ground. I think there is a visual of that. The manifest said 
there were no hazardous materials on board. In fact, there were 
three shipments of lithium batteries that had quite a variety 
of cells inside.
    Two minutes after the flight--fire warning, the flight 
leveled off. It had already started to burn through the flight 
controls. Four minutes, the cockpit was full of smoke. Five 
minutes, the smoke was so thick the crew had a hard time seeing 
their instruments. Nine minutes, the captain was unconscious or 
dead, first officer couldn't see the controls inches in front 
of him. And 28 minutes later, the plane cratered into the 
ground with the pilots deceased. Luckily, they did not crash 
into a large, inhabited area.
    The International Civil Aviation Organization, which is not 
known for taking a tough stance on things, finally, after the 
manufacturers of Airbus and Boeing came out and said there is 
no way to repress these fires on board an airplane, they 
adopted some very minimal standards regarding the charging of 
the batteries and that, and also that they should not be on 
passenger aircraft.
    The industry says that ICAO standard is a really bad idea. 
We should put them on passenger aircraft, and we shouldn't 
restrict them on airplanes. You know, it only takes one half-
charged lithium battery, the size of a water bottle, in a pack 
of eight to take down an airplane. So the fact that the DOT was 
working on adopting the very minimalist ICAO standards, and 
that has been stayed by the Trump administration, which said it 
would not stay regulations which are critical to health and 
safety--I don't know what is critical to health and safety if 
airliners falling out of the sky isn't critical, both to the 
people on board and the people on the ground underneath.
    There are times when regulation becomes absurd and over-
regulated. But other times regulation is absolutely essential 
in the public interest. And now the passenger airlines in the 
United States have said, voluntarily, they won't carry lithium 
batteries.
    But given the insufficient labeling requirements, we are 
not sure whether they are or are not in the carriers. And 
secondly, it is voluntary. So maybe one of the low-budget 
airlines will say, ``Hey, no one else is carrying them. The 
industry will pay us a premium to move these things around. We 
will put them on board. Nothing to worry about.''
    So, you know, let's not be cavalier about this and 
aggrandize the places where we have over-regulated with places 
where we need to regulate for the critical national safety and 
health interests of the people of the United States of America.
    With that, I look forward to the hearing.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you. I would now like to welcome our 
panel of witnesses.
    First, Ms. Linda Darr, president, American Short Line and 
Regional Railroad Association.
    Mr. Roger Nober, executive vice president, law and 
corporate affairs for BNSF Railway.
    Mr. Paul Rankin, president, Reusable Industrial Packaging 
Association, on behalf of the Interested Parties for Hazardous 
Materials Transportation.
    Mr. Robin Rorick, group director of midstream and industry 
operations for American Petroleum Institute.
    Mr. Donald Santa, Jr., president and chief executive 
officer, Interstate Natural Gas Association of America.
    And Mr. John Tolman, vice president and national 
legislative representative for the Brotherhood of Locomotive 
Engineers and Trainmen.
    I ask unanimous consent that our witnesses' full statements 
be included in the record.
    Without objection, so ordered.
    Since your written testimony has been made part of the 
record, the committee requests that you limit your summary to 5 
minutes.
    Ms. Darr, you may proceed.

 TESTIMONY OF LINDA BAUER DARR, PRESIDENT, AMERICAN SHORT LINE 
AND REGIONAL RAILROAD ASSOCIATION; ROGER NOBER, EXECUTIVE VICE 
PRESIDENT, LAW AND CORPORATE AFFAIRS, AND CHIEF LEGAL OFFICER, 
 BNSF RAILWAY; PAUL W. RANKIN, PRESIDENT, REUSABLE INDUSTRIAL 
PACKAGING ASSOCIATION, ON BEHALF OF THE INTERESTED PARTIES FOR 
    HAZARDOUS MATERIALS TRANSPORTATION; ROBIN RORICK, GROUP 
    DIRECTOR OF MIDSTREAM AND INDUSTRY OPERATIONS, AMERICAN 
PETROLEUM INSTITUTE; DONALD F. SANTA, JR., PRESIDENT AND CHIEF 
   EXECUTIVE OFFICER, INTERSTATE NATURAL GAS ASSOCIATION OF 
     AMERICA; AND JOHN TOLMAN, VICE PRESIDENT AND NATIONAL 
LEGISLATIVE REPRESENTATIVE, BROTHERHOOD OF LOCOMOTIVE ENGINEERS 
                          AND TRAINMEN

    Ms. Darr. Thank you, Chairman Denham and Ranking Member 
Capuano and members of the committee. I am Linda Darr, 
president of the American Short Line and Regional Railroad 
Association, representing the Nation's 600 class II and class 
III railroads. Together, short line railroads operate 
approximately 50,000 miles of track, or nearly one-third of the 
national railroad network. Thirty members of this 
subcommittee's thirty-two members have at least one short line 
operating in your district.
    There are three important differences between short lines 
and the large, class I railroads. First, short lines are small 
businesses. Our combined annual revenues are less than the 
annual revenues of any one of the four large class I railroads. 
The average short line employs 30 people or less.
    Second, most short lines operate track headed for 
abandonment under previous class I owners. These marginal lines 
receive little or no capital investment, resulting in 
significant deferred maintenance. Consequently, short lines 
must invest over 25 percent of their annual revenues in 
rehabilitation, making us one of the Nation's most capital-
intensive industries.
    Third, short line operating characteristics are far 
different than those of the class I's. Short lines are 
generally operating in a much smaller geographic area. These 
shorter distances, combined with slower speeds and shorter 
trains, produce more predictable work schedules and more 
routine patterns of interchange and delivery.
    These three characteristics--our size, our capital needs, 
and our operating requirements--shape our view of the safety 
regulations that impact our businesses. We need regulations 
that are more efficient, more goal-oriented, less reliant on a 
one-size-fits-all mindset, and much more focused on costs and 
benefits.
    We understand the need to make railroading as safe as 
possible, and we understand that Government has an obligation 
to step in when necessary. But Government also has an 
obligation to step in responsibly. Too often Government 
regulation forces companies to spend huge sums of money and 
solutions that don't solve much.
    Most damaging are the one-size-fits-all regulations that 
provide no basis for the presumed benefits and that ignore our 
unique operating characteristics. I cite four examples in my 
written testimony, but let me briefly describe one of those.
    The part 243 minimum training standard rules. The proposed 
rule imposes an enormous paperwork burden on short line 
railroads, with no corresponding safety benefit. The rule was 
drafted pursuant to the Rail Safety Improvement Act, but we 
believe that, ultimately, the FRA's interpretation goes far 
beyond anything contemplated by the statute.
    If I might be permitted the use of a prop here, they told 
me to drop it on the table for extra emphasis, so I will do 
that.
    Following the proposed rule, we hired a safety professional 
to produce a template manual that met all the requirements of 
the rule for just 1 of the 26 crafts, or job assignments, on 
the railroad. So this is the manual that was produced. This 
notebook would have to be duplicated 26 times to cover all of 
the crafts in our industry for our small businesses.
    We gave this book to the FRA, and we asked them to comment 
on and approve it as a template that could be used by all the 
short lines. It took FRA 3 years to reply: a good indication of 
the complexity and the time-consuming nature of this directive. 
We believe this regulation should be repealed, and the 
underlying statutory requirement revised.
    Let me conclude with an anecdote that symbolizes the 
importance of safety for our industry. Before joining the short 
line association, I represented the trucking industry for just 
about 17 years. When we had big meetings, they were usually 
kicked off with a pledge to the flag, or sometimes even a 
prayer. In the short line industry, we start each and every 
meeting, big or small, with a safety briefing. It is a central 
focus of what we do. It reflects our commitment to safety, and 
it is an effort to make us safer today than we were the day 
before.
    With the help of Congress, we stood up the Short Line 
Safety Institute to help us drive a sustainable, strong safety 
culture throughout our industry, and to carry forward that 
commitment to safety. You are undertaking an important task. If 
you make regulations more efficient, more goal oriented, and 
more focused on benefits and costs, you will have done our 
industry and the public a great service, and we are deeply 
appreciative of that effort. Thank you.
    Mr. Denham. Thank you, Ms. Darr.
    Mr. Nober, you may proceed.
    Mr. Nober. Good morning, Chairman Denham, Chairman Shuster, 
subcommittee Ranking Member Capuano, and Ranking Member 
DeFazio. Thanks for the opportunity to testify before you this 
morning on behalf of BNSF Railway. And I have to say it is 
always a privilege to be able to be back before this 
subcommittee and this committee to be able to talk about this 
topic in particular: safety, regulatory matters, and ways to 
improve the regulatory process, a subject which I spent much of 
my 25 years in transportation policy focusing on.
    At the outset, I would like to commend this committee for 
its work during the last Congress to enact a significant amount 
of legislation that is beneficial to railroads. And in this 
Congress we look forward to again working closely with this 
committee on a proactive agenda, including updating and 
improving regulation, and ensuring that transportation 
infrastructure policy, as Chairman Shuster mentioned earlier, 
treats railroads equitably.
    Transportation issues and this committee have always been 
bipartisan and solution-oriented, and we think the subject of 
today's hearing lends itself to those two important 
characteristics.
    Today's topic of safety regulation improvement is 
difficult, but it is important. BNSF has been discussing it 
with policymakers for years.
    And with BNSF, growth is at the core of our business model. 
And, like many businesses around the country, we look to 
Congress and the administration to promote policies that help 
grow the economy, so that we can grow with our customers. Now, 
our ability to grow and earn adequate revenues and reinvest in 
the company is directly related to the topic of today's 
hearing: safety. Reinvestment is the foundation of the railroad 
safety record that you and we have come to expect, and 
operating safely and reliably is at the core of our ability to 
attract new business.
    Now, the laws of physics that make railroads the most 
efficient mode of surface transportation also make railroads 
the most unforgiving. This risk has been significantly 
contained through the years through large capital investment in 
our track, structures, equipment, and road bed, and 
implementing innovative technologies and processes. Today we 
have an incredibly safe railroading environment. These 
technologies, as well as the effectiveness of our annual 
maintenance and ongoing employee training and rules compliance 
programs, have driven train incidents and employee safety 
records to historic lows.
    Now, we have not yet achieved our safety vision. Incidents 
and accidents still do occur. However, we believe that they are 
outliers. Operating safely every day on every move is now our 
normative outcome and our expectation.
    Now, turning to today's hearing, at BNSF we believe that 
technology is a key to our next level of safety improvement. 
BNSF believes it is important for regulators and regulation to 
catch up with and encourage technological innovation. This will 
promote a virtual cycle of continued investment in the 
development of technologies, allowing railroads to advance 
safety, while also potentially achieving more productivity. 
This is a commonsense approach that is supported by recent 
Executive orders, and also those issued in previous 
administrations, and it has been consistent across time.
    Altering existing rules to keep up with changes in 
technology or operations has not been easy. And I am fond of 
saying in railroading you are never far from history. And well-
meaning safety regulators can be extremely risk-averse in their 
approach to reviewing or changing regulations, especially those 
that have been long in place, even in an increasingly 
technologically transformed work environment.
    An improved approach to regulatory oversight would empower 
the regulators to embrace innovation and technology-enabled 
advancements in safety, rather than make them more difficult.
    As I have discussed in my written testimony, there are many 
areas where technology and innovation run into historical 
regulation. Rail systems are generally regulated with time and 
mileage-based manual inspection regimes, testing, and overhaul 
activities. But today, signal systems, grade crossing 
equipment, railcars, brakes, and locomotives have 
microprocessor technologies that monitor and report actual 
asset health on a real-time basis.
    There is still a role for visual inspections, but 
regulators need to recognize the enhanced safety value of 
automated inspections and diagnostics. Similarly, our 
investment in wayside technology has improved our track 
inspection technology.
    Electronic recordkeeping and communications rules are ripe 
for updating, with railroad technology and digital 
communication able to drive safer and more efficient outcomes. 
There are also a variety of track and ballast regulations which 
should be revisited to allow compliance through inspection 
technologies and appropriate standards to bring this area of 
regulation up to date, as well.
    Now, improving administrative processes is critically 
important. The FRA has a regulatory waiver process that can be 
improved. And to the extent that railroads request waivers to 
demonstrate technology, regulators should view them as 
opportunities to create common understanding about rail 
operations, similar to pilot programs.
    Waivers should be speedy, cooperative, and transparent, and 
can be a precursor to moving rail safety regulation to a 
performance-based regulation, where safety outcomes, rather 
than activities, are incentivized.
    Finally, we believe regulators should curtail the practice 
of regulating through non-APA regulations like guidances, 
emergency orders, and safety advisories.
    In conclusion, regulatory innovation does not happen 
overnight, and it is especially difficult in a long-lived 
industry like railroads, where there have been more than 100 
years of how it has always been done. But there are many 
railroad-related regulations that call for review which could 
be done cooperatively, if we could just get started. And this 
committee can play an important role in their implementation.
    I look forward to your questions.
    Mr. Denham. Thank you, Mr. Nober.
    Mr. Rankin, you may proceed.
    Mr. Rankin. Chairman Denham, Chairman Shuster, Ranking 
Member Capuano, and Ranking Member DeFazio, thank you very much 
for giving us the opportunity to talk here today. I am Paul 
Rankin. I serve as chair of the Interested Parties group, which 
is a volunteer coalition of 46 organizations that share a deep 
and abiding interest in legislative and regulatory issues 
related to the safety and security of hazardous materials 
transportation, both domestically and internationally.
    At the outset, I want to make clear to the subcommittee 
that members of the Interested Parties are deeply committed to 
ensuring the safe and secure transportation of hazmat in both 
domestic and international transportation. Safety is of 
paramount concern to the industry, and our exemplary record in 
this area and support for reasonable and effective regulation 
underscore this goal.
    We support a robust, efficient, and centralized hazmat 
transportation regulatory program that is located within the 
Department of Transportation, specifically PHMSA, and which has 
clear, cross-modal, and international authorities.
    The Interested Parties do support reasonable Federal 
regulation in the field of hazardous materials transportation. 
As I am sure the members of the committee know, the 
transportation of hazardous materials in domestic and 
international commerce is essentially prohibited, unless 
authorized by a regulation, special permit, or approval. As 
such, reasonable regulation is needed to ensure the safe and 
uninterrupted--I will get that, soon--flow of these materials 
and commerce.
    In line with our desire for reasonable Federal regulation 
is the support for preemption authority, the purpose of which 
is to promote safety by ensuring, to the extent practicable, 
that a patchwork of State and/or local regulations do not 
impede interstate commerce, or encourage communities to export 
transportation risks to their neighbors.
    Because hazardous materials may only be transported if 
appropriately authorized, regulatory flexibility is needed for 
such activities as authorizing one-time movements of hazardous 
materials and facilitating the emergence of new and innovative 
technologies. Special permits and approvals are the regulatory 
mechanisms that PHMSA uses for these purposes. We are grateful 
for the attention that Congress and this committee, in 
particular, has given to addressing delays in the special 
permits and review process.
    And, although PHMSA has made appropriate and significant 
progress in recent years to streamline the special permits 
program, including a recent rulemaking incorporating some 
special permits older than 10 years into the hazardous 
materials regulations, we believe more can and should be done 
to improve this program.
    Specifically, we recommend PHMSA regularly review all 
special permits of general applicability, and publish annually 
a special permit rulemaking that incorporates those deemed to 
be safe into the hazardous materials regulations.
    Turning to international affairs for a moment, 
international trade in hazardous materials is a global and 
significant business. To ensure these commodity movements are 
safe, the Secretary of DOT has delegated authority to PHMSA to 
represent the United States in various international regulatory 
forums, including the U.N. Subcommittee of Experts on the 
Transport of Dangerous Goods, which the U.S. presently chairs.
    The Interested Parties encourage Congress and this 
committee to continue its strong support for DOT's 
international work. More specifically, we want you to know that 
we believe it is important that a PHMSA representative serve as 
an ICAO panel member, and lead the Dangerous Goods Panel 
delegation to ICAO.
    In terms of enforcement issues, although MAP-21 contained a 
provision directing PHMSA to develop uniform performance 
standards for inspectors and investigators, the Interested 
Parties believe PHMSA can and should do a great deal more to 
improve this program. The Interested Parties suggest the 
creation of an online consultation program patterned on similar 
programs offered or overseen by, among other agencies, the 
Occupational Safety and Health Administration.
    We envision such a program being offered to small and mid-
sized businesses throughout the United States, and we think 
this kind of a program will do much to ensure safety across the 
board.
    Turning to a general regulatory reform matter, the IPs 
support adoption of administrative reforms for PHMSA like those 
enacted by Congress in the FAST Act, applicable to the Federal 
Motor Carrier Safety Administration. Such reforms would include 
inclusion of a regulatory impact analysis for each proposed and 
final rule that considers the effect of the rule on different 
segments of industry, and utilizes the best available science, 
and requiring that all significant rules be initiated with an 
advanced notice of proposed rulemaking or, alternately, a 
negotiated rulemaking.
    Thank you very much, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Rankin.
    Mr. Rorick, you may proceed.
    Mr. Rorick. Good morning, Chairman Denham, Chairman 
Shuster, Ranking Member Capuano, and members of the 
subcommittee. Thank you for inviting me to speak today. With 
over 625 members, the American Petroleum Institute is a 
national trade association representing all facets of the oil 
and natural gas industry. As group director of API midstream 
and industry operations, I am responsible for all energy 
infrastructure issues, including storage, rail, pipelines, 
marine, and all of the modes of oil and natural gas 
transportation.
    The United States is leading the world in the production, 
refining, and processing of oil and natural gas, and at the 
same time in the reduction of carbon emissions, which are at 
the lowest levels in almost 25 years. In less than a decade, we 
have transitioned from an era of energy scarcity and dependence 
to one of energy abundance and security. This energy 
renaissance has helped the U.S.--has helped U.S. families save 
on their energy bills, created greater job opportunities for 
American workers, bolstered U.S. manufacturing, strengthened 
our economy, and helped to enhance our national security 
interests domestically and abroad.
    An energy infrastructure system that keeps pace with 
growing production demand is essential. Yet, despite having a 
robust system, a recent ICF study found that the U.S. will need 
up to $1.3 trillion in energy investment--energy infrastructure 
investment through 2035 to keep pace with supply and demand. 
This investment, on average, will support up to 1 million jobs, 
and add up to $100 billion to GDP, annually.
    Safety is our industry's core value. Since 1924, API has 
been the leader in developing voluntary consensus, 
internationally recognized industry standards that promote 
safety and reliability. This program is accredited by the 
American National Standards Institute, or ANSI, the same 
organization that accredits similar programs at several 
national laboratories.
    Today, API has more than 600 recommended practices that are 
used by the industry throughout the world. These were developed 
with technical experts from Government, academia, industry, and 
the public, and are referenced more than 430 times in Federal 
and State regulations, covering multiple Government agencies, 
including the Pipeline and Hazardous Materials Safety 
Administration.
    In our experience, performance-based standards which 
provide adaptable frameworks for conformance enable the 
industry to significantly advance safety by addressing issues 
such as technology, management systems, best practices, and 
training in an efficient manner.
    As an example, our recently completed recommended practice 
1173 helps pipeline operating companies establish a culture of 
safety through the development of the pipeline safety 
management system.
    Beyond our work on standards, API remains committed to 
regulatory structures that promote safety, environmental 
protection, and responsible operations. We continually look for 
ways to collaborate with regulators to cooperatively address 
challenges in the industry. We strongly support the adoption of 
a performance-based regulatory model which gives operators 
flexibility in implementing comprehensive programs to 
effectively address risks associated with a facility or 
company's unique operations.
    However, we are concerned that recent regulatory action by 
PHMSA, including the natural gas transmission and gathering 
lines rule, the hazardous liquid pipelines rule, and the 
underground natural gas storage facilities rule are too 
prescriptive in their approach. We strongly encourage PHMSA to 
modify these pending rulemakings to ensure that any actions 
taken to advance safe operations are based on the most current 
information and utilize the latest technologies and techniques.
    Certainty and consistency in a regulatory process is of 
critical importance to oil and natural gas operators, 
especially when it comes to the development of energy 
infrastructure projects. Oil and natural gas operators 
typically look at 10- to 20-year planning horizons, based upon 
individual analyses and contractual agreements with customers. 
The impacts of large regulatory and policy swings, particularly 
those that are poorly designed, can create a chilling effect 
throughout the industry that stifles growth and ultimately 
negatively affects consumers throughout the Nation.
    We appreciate Congress' recent efforts on the passage of 
the FAST Act, and the President's recent Executive orders on 
infrastructure streamlining and regulatory reform. Efforts like 
these recognize the need for infrastructure, but also advance 
safety, and are good for the industry, its workers, and the 
people who depend on the products we produce.
    I would like to suggest several actions that can be taken 
in the near term to ensure investment in critical energy 
infrastructure continues to keep pace with our country's energy 
needs and demands.
    First, we strongly urge the President and the Senate to 
reestablish a quorum at FERC. Until a quorum is established, 
the review and permitting of natural gas infrastructure 
projects cannot occur, preventing critical infrastructure 
projects from advancing.
    Second, we urge the President to move forward with 
appointing leadership at agencies like PHMSA that have a key 
regulatory role over energy infrastructure.
    And finally, we urge Congress to hold Federal agencies and 
States accountable to fulfill their obligations and timelines 
under the established permitting processes.
    Let me close by reiterating that API and the oil and 
natural gas industry are committed to delivering 100 percent of 
its products to their destinations without incident. We look 
forward to continuing our work with Congress and the 
administration to ensure that we build and maintain an energy 
infrastructure system that continues to advance safety, and 
allows American families and businesses to take full advantage 
of our Nation's energy renaissance.
    Thank you for having me today, and I look forward to 
answering any questions you may have.
    Mr. Denham. Thank you, Mr. Rorick.
    Mr. Santa?
    Mr. Santa. Good morning, Chairman Denham, Ranking Member 
Capuano, 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. Our members, interstate 
natural gas pipelines, transport the vast majority of the 
natural gas consumed in the United States through an 
approximately 200,000-mile network of transmission pipelines.
    These transmission pipelines are analogous to the 
Interstate Highway System. In other words, they are large-
capacity transportation systems spanning multiple States or 
regions.
    My remarks are focused on the rulemaking process at the 
Pipeline and Hazardous Materials Safety Administration. We all 
want PHMSA to be an effective regulator, and that includes the 
ability to promulgate important regulations on a timely basis. 
It also includes the ability to rescind legacy regulations that 
more recent rules have rendered redundant.
    Stakeholder dialogue is especially important when the 
subject of the rulemaking is a complex technical topic such as 
pipeline safety regulation. New rules should leverage 
stakeholder knowledge and expertise to facilitate the 
deployment of new technologies that may be more effective, more 
efficient, and less disruptive than older technologies that may 
be endorsed by existing regulations.
    The PHMSA rulemaking process has become unusually 
protracted. The case in point is the proposed natural gas 
transmission and gathering rule to implement the mandates in 
the 2011 pipeline safety law.
    This delay is the cumulative result of three flaws in the 
rulemaking process. The first is the failure to embrace 
consensus-building as an early step in developing the proposed 
rule. The second is the agency's choice to address too much in 
a single rulemaking. The third is the prefiling process used by 
the White House Office of Management and Budget, which 
compounded the consequences of PHMSA's choices.
    The natural gas transmission and gathering rule is a 
gigantic proposal that assembles what could be 16 separate 
rules into 1 rulemaking, some of which were in response to 
congressional mandates and NTSB recommendations. Many of these 
initiatives could have been and still could be implemented 
individually or in small groups in a comparatively short time, 
and thus complete many of the unfulfilled congressional 
mandates. We suggest that PHMSA avoid these catch-all rules in 
the future.
    INGAA suspects that PHMSA bundled these initiatives into a 
single mega-rule out of concern that it would not succeed in 
getting OMB approval for the full array of separate rules 
needed to implement applicable mandates and recommendations.
    The OMB prefiling negotiation is an unnecessary added layer 
of review since the APA notice and comment process provides 
ample opportunity to vet the merits of a proposed rule and its 
associated cost-benefit analysis. Without its creation, the use 
of the OMB prefiling process expanded during the prior 
administration. We urge the new administration to scale back 
the OMB prefiling obligation.
    Another opportunity for improvement concerns PHMSA's recent 
use of interim final rule authority. While an IFR may be 
appropriate in some cases, it produced a flawed underground gas 
storage rule. The underground gas storage IFR includes clear 
mistakes that could have been identified and easily fixed, had 
the normal notice and comment procedure been used. Instead, 
those mistakes now are part of a rule that took effect 30 days 
after publication.
    PHMSA's regulations also provide for something called a 
direct final rule, which can be an alternative to an IFR when 
PHMSA adopts a standard developed under a consensus process. 
With a direct final rule there is front-end buy-in and 
communication with the stakeholders. A rule is issued with a 
proviso that will become final, unless there is a significant 
objection.
    The Pipeline Safety Act requires that a safety standard be 
practicable and designed to meet gas pipeline safety needs and 
protect the environment. Achieving this balance requires PHMSA 
to consider outside input. Yet PHMSA recently seems to avoid 
seeking this input in the formative stages of its rulemaking 
initiatives. This is unfortunate, especially because PHMSA has 
the means to do so, via the Gas Pipeline Advisory Committee.
    In conclusion, let me emphasize that INGAA continues to 
support PHMSA's completion of the rulemakings to implement the 
various statutory mandates for new regulations. We suggest that 
the end results of PHMSA's rulemakings can be improved with 
better stakeholder outreach and involvement, and with internal 
improvements to the regulatory process.
    The pitfalls that have undermined the pending natural gas 
transmission and gathering rule and the underground gas storage 
IFR hopefully can be avoided in future rulemakings. We also 
suggest that it is not too late to apply the lessons learned to 
the development of final rules in these two proceedings. It is 
important for natural gas pipeline operators to have the 
certainty that will come with finalizing these regulations.
    Thank you once again for the opportunity to testify today.
    Mr. Denham. Mr. Tolman?
    Mr. Tolman. Good morning, Chairman Denham, Ranking Member 
Capuano, Chairman Shuster, and Ranking Member DeFazio. As you 
said, my name is John Tolman. I am a vice president and 
national legislative rep for the Brotherhood of Locomotive 
Engineers and Trainmen, a division of the Rail Conference. I am 
also a locomotive engineer, and I have been in the industry for 
45 years.
    In the last 20 years I have been working on safety issues. 
I have seen firsthand problems that we encounter when our 
Nation's railroads and other infrastructure are not properly 
maintained. Safety is the number-one issue of the railroad 
industry. It is also the number-one issue for the unions, 
across the board.
    According to FRA study data covering the periods of January 
2016 to January 2017, accidents in the rail industry cost 
nearly $300 million. Included in this number are 1,500 
derailments, 10 collisions, 70 other types of incidents, and 48 
injuries. The railroads could do much better in the area of 
human factors by ensuring that advances in technology are 
implemented with deliberate speed, and not used as a 
justification for downsizing the workforce.
    If the issue of fatigue on the Nation's railroad is not 
addressed in the near future in a serious and fundamental way, 
catastrophic accidents will not cease. Technologies such as PTC 
[Positive Train Control] alone will not solve the problems. PTC 
will do much to make rail operations safer, but it is not and 
will not--is not designed to prevent all collisions. Crews on 
freight trains work at random times and are on call 24/7. A 
two-person crew provides a level of safety that doesn't need a 
study to prove it is safer than a single-person staff. It is 
just common sense.
    One can't reduce the fatigue discussion and problem to one 
single sleep disorder, sleep apnea. Sleep apnea does not begin 
to explain the causes of fatigue in the rail industry. And that 
means that a sleep apnea program cannot deliver the silver 
bullet for solving challenges posed by fatigue.
    Another issue that we are dealing with presently is at 
least one of the four largest class I railroads is now posing a 
concept they refer to as ``super pool,'' where train and engine 
crews could be expected to know territorial physical 
characteristics of up to 1,500 miles of railroad. This is 
drastically increasing safety risks.
    There is also the issue of rail carriers' repeated 
resistance to regulations that would govern the installation of 
electronic-controlled pneumatic brakes. Conventional brakes 
have been in use today for over 150 years. They work. But 
clearly, there's newer and better technology available that can 
slow and stop trains up to 70 percent faster, and make it 
easier and more efficient to stop trains quicker and safer in 
the event of an emergency.
    The history of the railroad industry demonstrates clearly 
that you can't deregulate your way to improve infrastructure. 
When I entered the railroad 45 years ago, one of the first 
things I was told is that every safety law, regulation, and 
operating rule was written after some major accident. In my 
experience, that has proven true. The only reason we have 
automatic couplers, power brake systems, signals, and train 
control is because Congress enacted laws, and this very 
Congress right here enacted laws to require that the railroads 
implement those safety appliances.
    Every such effort was fought tooth and nail by the 
industry, which employed the very same arguments they make 
today: ``We strongly reject the notion that regulatory review 
should be predicated upon a simple mathematic cost-benefit 
analysis.'' Such a narrow view reduces lives and limbs of rail 
workers and members of the public to merely the cost of doing 
business.
    I have worked with the chairman of this committee for many 
years, and many congressional members on this committee. I know 
that you all have great intentions, and want to get things 
done. So let's work together, let's get the transportation 
system into the 21st century. Let's put thousands of people 
back to work. Let's increase the gas tax for infrastructure 
investment. And let's build the transportation infrastructure 
that is better and safer than our forefathers created. Thank 
you very much.
    Mr. Denham. Thank you, Mr. Tolman, and thank you to each of 
our witnesses for your opening statements.
    The first question I have--obviously, we have had concerns 
about the implementation of a variety of different pieces of 
legislation. But specifically, the FAST Act and the PIPES Act, 
I would like to hear from each of you on how you think that 
implementation process is going, whether or not it is--we are 
behind schedule, ahead of schedule, whether they are following 
the true intent of law.
    Ms. Darr, I would start with you. Just open, frank opinions 
on----
    Ms. Darr. Yes. We are OK. We are OK with it. We think that 
things are going apace. We don't want to make any suggestions 
or comments at this time.
    Mr. Denham. Thank you. Mr. Nober?
    Mr. Nober. We would say that there are a number of 
different parts of it that would affect us. The STB has 
completed their implementation of the FAST Act. I think we 
would like to see some of the permitting reforms move faster 
and be more widely implemented with respect to more modes. And 
that cuts across different industries.
    And obviously, the FRA is taking on a number of the 
different FAST Act provisions, and we think it is trending in 
the right direction there.
    Mr. Denham. Thank you. Mr. Rankin?
    Mr. Rankin. Thank you, Mr. Chairman. Generally speaking, 
the Interested Parties are pleased with the way the FAST Act is 
being implemented. I did mention both in my written and oral 
testimony that we believe some improvements can be made, 
specifically with the special permits and approval process. 
This is crucial for us in the long run and, frankly, crucial 
for many, many members of industry.
    We do believe improvements can be made. But, generally 
speaking, things are moving forward well.
    Mr. Denham. Thank you. Mr. Rorick?
    Mr. Rorick. With regard to the PIPES Act, we were a little 
disappointed--quite disappointed that it has been moving as 
slowly as it has. There is still a number of the 2011 mandates 
with PHMSA that are still outstanding that we feel should move 
forward.
    The FAST Act is doing better. I think there are still a 
number of pieces in the FAST Act, like title 41, that need to 
be worked out, specifically. But we have a more positive 
opinion of the way the FAST Act is being implemented.
    Mr. Denham. Thank you. Mr. Santa?
    Mr. Santa. We are much more familiar with the PIPES Act. As 
I mentioned in my testimony and oral statement, we think that 
the process that PHMSA has used has been somewhat flawed, and I 
think is one of the reasons why we have seen so little 
progress, in terms of the promulgation of the rules to 
implement those mandates.
    As Mr. Rorick noted in his testimony, we think that it 
takes an overly prescriptive approach that is not consistent 
with a lot of the performance-based initiatives that PHMSA has 
used, for example, on integrity management. Nonetheless, we do 
support promulgation of those rules to implement the mandates 
that came out of the Congress.
    Mr. Denham. Thank you. Mr. Tolman?
    Mr. Tolman. One of the issues that we are concerned about 
is inward-facing cameras. We don't believe that that adds 
anything to safety in the industry. We have been--the 
Brotherhood of Locomotive Engineers has been around for over 
150 years, and we don't see that adding anything, any safety. 
In fact, fatigue being the number-one issue, this only 
increases fatigue through stress of having a camera on you 24/
7.
    Mr. Denham. Thank you. And I would also ask each of you 
what you think the most effective approach to regulation is, 
performance-based regulations or prescriptive-based 
regulations. And when are each of those more appropriate than 
others?
    Ms. Darr?
    Ms. Darr. I think, you know, when I speak on behalf of my 
industry, I think of small businesses, and I think of 
prescriptions like the one to my right. And, you know, you 
think about railroads that have as few as eight employees. And 
when the Government starts to get very prescriptive, and the 
result is 26 manuals like this for 8 people that wear many hats 
to digest and go forward and implement and to be held 
accountable to, performance-based is best.
    I think the people on the ground know their industry, they 
know the tasks, and they feel a commitment already to safety. 
They want everybody to get home safe at night, and so they are 
going to do the right thing, and they know what the right thing 
to do is.
    Mr. Denham. Thank you.
    Mr. Nober?
    Mr. Nober. Well, at BNSF and in the rail industry I think 
we strongly believe that, ultimately, performance-based 
regulations mirror the way that we operate our companies, which 
is assuring a safe outcome.
    You know, a good example of that would be, for example, the 
PTC statute that Congress passed. While we disagree with the 
statute, it ultimately was a performance measure, right? It 
said you can't operate a train without a working PTC system. 
And how we meet it ought really to have been left to the 
industry to figure out.
    Now I will say that performance-based measures can be 
challenging to come up with what the right performance measures 
are. I will say that there are places where standards can be 
helpful, particularly on things like equipment, like the tank 
car rule, for example, where a Federal standard actually is 
helpful, particularly when you are looking at different 
commodities and interstate transportation.
    But, by and large, we think, for safety performance 
overall, that performance-based regulations should be the way 
that we measure things.
    Mr. Denham. Thank you. Mr. Rankin?
    Mr. Rankin. Congressman Denham, back in 1990 the Department 
of Transportation adopted a rulemaking, HM-181, which was, in 
fact, performance-oriented in nature. And, indeed, performance 
standards are the way we feel things ought to be addressed 
generally, across the board. There are certainly some 
prescriptive requirements that are required. But, generally 
speaking, performance standards are the way to go, specifically 
in my area of expertise, packaging, for example. All testing is 
performance-based.
    So, we certainly believe that is the way to go, and the IPs 
have supported that over the years.
    Mr. Denham. Thank you.
    Mr. Rorick?
    Mr. Rorick. As Mr. Rankin indicated, there is a time for 
prescriptive-based regulations. However, generally, as an 
industry, we believe performance-based regulations are much 
more effective, particularly with regards to safety. They are 
more comprehensive, they are more flexible. Prescriptive-based 
regulations tend to be very inflexible, and oftentimes they 
create, effectively, what is a ceiling, where companies try to 
meet that ceiling, meet the regulation, and then stop. Whereas, 
performance-based regulations create a floor where companies 
meet the floor, then develop programs that go above and beyond 
that.
    The other thing that we see is, as new technologies come 
out, prescriptive-based standards tend to restrict, as Mr. 
Santa indicated, and you are stuck using older technologies, 
whereas performance-based, you are constantly reviewing your 
programs and then adding new technologies into new techniques, 
wherever they are available.
    So--and then the last thing I will mention about 
performance-based standards, too, as I mentioned in my 
testimony, that it accounts for the flexibility to meet the 
needs of a unique facility, unique company. So it doesn't 
assume that a one-size-fits-all--and you can make sure that you 
are looking at the appropriate risk factors that you need to 
address, and not spreading yourself looking at things that are 
low-risk and low-probability issues.
    Mr. Denham. Thank you.
    Mr. Santa?
    Mr. Santa. We also support performance-based as the 
approach. I think that the integrity management rules are a 
good example of that, and adopt very much an approach that 
encourages a sophisticated approach to risk management.
    We also encourage regulations based on the standards that 
come out of the accredited standards development processes. 
These are very transparent processes. They include academics, 
industry, regulators, and what comes out of them, we think, 
provides the basis for getting through the rulemaking process 
in a very efficient manner.
    Mr. Denham. Thank you.
    Mr. Tolman?
    Mr. Tolman. I guess, from our perspective, it depends on 
the rule. Notice and comment period in rulemaking is very 
helpful. In all cases, the bottom line is to make sure it is--
we are working on safety-enhancing across the board.
    Mr. Denham. Thank you.
    Mr. Capuano?
    Mr. Capuano. I am going to let Mr. DeFazio ask questions 
first.
    Mr. Denham. Mr. DeFazio?
    Mr. DeFazio. Thank you, Mr. Chairman. As might have been 
noted, I am particularly concerned about lithium batteries on 
aircraft. This is the photo that I spoke of, where the pilots, 
you know, attempted to make an emergency landing, but were 
overcome by smoke. And that is the result. Luckily, they didn't 
crash into a heavily populated area and kill hundreds of people 
on the ground.
    As the manufacturers have said, these planes are incapable 
of withstanding fire, and there are no current suppression 
systems that work in the hold of an aircraft. Now, that 
particular aircraft was a 747 cargo.
    So, Mr. Rankin, I am puzzled. I would say Administrator 
Dominguez at PHMSA was probably the first good Administrator in 
my recent experience, and it seemed to me she was trying to 
clean up a really incredibly dysfunctional agency, and actually 
implement and put forward rules from things that Congress 
ordered 6 years ago. That was big progress down at PHMSA.
    But in your testimony you think we should take this 
dysfunctional agency that currently doesn't have a head, and we 
should put them on the ICAO board, which relates to aircraft 
and hazardous materials transport on aircraft, as opposed to 
the FAA, who are experts in aviation and aware of the fact 
that, when you are flying at 40,000 feet and a fire that cannot 
be repressed is a really bad thing.
    So, why do you think that PHMSA can do a better job than 
the FAA?
    Mr. Rankin. I appreciate the question and I appreciate your 
concerns, Congressman DeFazio.
    The statement we made in our testimony and which, of 
course, we stand by, is that PHMSA should take the lead in this 
matter, and also should have the seat at ICAO. The reasons for 
this are several.
    First, PHMSA is the recognized competent authority or lead 
agency for hazardous materials transportation, globally. So, in 
any respect, when any foreign government is interested in a 
movement into or out of the United States that deals with 
hazardous materials of any kind, PHMSA is the agency to which 
they go for expertise. And of course, as you know, an 
individual from PHMSA, Mr. Duane Pfund, currently chairs the 
U.N. Subcommittee of Experts on the Transport of Dangerous 
Goods, and is recognized as one of the leading authorities in 
hazmat transportation, globally.
    Secondly, the air movements of hazardous materials are, 
generally speaking, multimodal in nature. Such movements 
usually involve transport to an airport, loading on a plane, 
transport by air, unloading----
    Mr. DeFazio. OK. I have only got 2 minutes left, but, OK, 
you have given a couple of reasons. That is good. But I have 
got to say I still disagree, and I am hopeful that in the next 
FAA reauthorization we can correct this discrepancy. When we 
have something going in the hold of an airplane designated as 
hazardous we shouldn't give a dysfunctional bureaucracy the 
authority to be our lead at the International Civil Aviation 
Organization, about which they know nothing on these matters. 
So, in any case, thanks, but we do disagree on that.
    One other question. Do you support, or does your 
association support the promulgation of the rule that would 
just make us internationally consistent with ICAO? Because 
elsewhere in your testimony you are talking about the need for 
international consistency.
    Mr. Rankin. In my capacity here today representing the 
Interested Parties, the organization has not taken a specific 
position on this.
    Mr. DeFazio. OK.
    Mr. Rankin. I would be happy to determine that with the 
group----
    Mr. DeFazio. OK.
    Mr. Rankin [continuing]. And get back to you in written 
form.

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    Mr. DeFazio. OK, thank you.
    Mr. Nober, your railroad has invested a tremendous amount 
of money in PTC, despite the fact that you had concerns about 
implementing nationwide PTC.
    You know, a number of the other freight railroads have 
invested substantially, but they are not as far along as you 
are. Our commuter railroads, particularly New Jersey Transit 
and others, have been absolutely nonresponsive. They are 
pushing hard for a rollback. Would your railroad support a 
rollback saying, ``Oh, just forget about it, we are not going 
to go operational, you don't need PTC''?
    Mr. Nober. Well, at BNSF, we are planning on having all of 
our physical assets in the ground and our system up and running 
by the end of 2018. We are taking advantage of some of the 
provisions in the FAST Act that you all passed to allow us to 
have testing and operation go on, and work out bugs beyond 
that.
    So, at our railroad, we are planning on meeting the 
deadline and going forward. And, obviously, we are at the point 
in our implementation where bugs are almost on a one-off basis, 
right? Every month, we look at a very rigorous process for each 
train start. And then, if PTC worked, did it work properly the 
whole way through? If it failed, where in the sequence of 
events did it fail, and then sometimes ferreting out where in 
the system of systems the bug was.
    So, I can speak for us that we believe in going forward. I 
know that the passenger railroads and others have had resource 
issues, and, you know, I can offer for ourselves that we will 
meet the deadline, and we are prepared to go forward.
    Mr. DeFazio. OK. So you feel confident, despite the ongoing 
programming and other issues, that it will be a functional 
system, ultimately?
    Mr. Nober. We believe so. But there are still some big 
challenges to go.
    For example, we are just now beginning interoperability. 
And we and UP, for example, have exchanged some locomotives, 
and are just beginning that process.
    So if you take just within BNSF the various systems that 
have to go together, if now we have to do the same kind of 
process with another railroad, it is going to be a very manual 
and labor-intensive process to work out all these bugs. We 
believe that we will, we believe that it will work properly.
    But again, if we are at 85 percent effective, or somewhere 
to that effect now, where we are in BNSF, that still means we 
run 1,500 trains a day. So 15 percent of those is a significant 
number of trains that are having issues. And so those are a lot 
of--in the colloquial, the scientific term--bugs to work out. 
But we will get there.
    Mr. DeFazio. OK.
    Mr. Nober. I am confident that we will.
    Mr. DeFazio. All right. Thank you.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you, Mr. DeFazio.
    Mr. Duncan?
    Mr. Duncan. Well, thank you, Mr. Chairman, and thank you 
for the great job you do chairing this subcommittee.
    You know, I know that with only 4 percent of the world's 
population, we buy 22 percent of the world's goods. And I read 
recently that 58 percent of the people in this world have to 
get by on $4 or less a day. The standard of living that we have 
in this country is phenomenal, and I have long been convinced 
that the average person doesn't really realize how important 
our freight rail system is to that standard of living, getting 
goods and services--getting goods to market to--much more 
quickly and efficiently and, therefore, cheaper than they would 
otherwise be.
    And, you know, I am in my 29th year in Congress. I have 
served on four different committees, I have chaired many 
hearings, participated in hundreds of hearings. Almost all of 
those hearings have been to attack some agency or industry or 
problem.
    So, when we have something that somebody has done really 
well, or some really good news, I think we should point that 
out. And I read in the--in our briefing memo it says since 1980 
the rate of freight train accidents and incidents per million 
train miles has fallen 88.2 percent. Railroad employee on-duty 
fatalities, injuries, and illnesses have declined 91.7 percent.
    The freight railroads attribute their safety improvements 
in part to the Staggers Rail Act of 1980, which partially 
deregulated the industry and restored the industry to financial 
health. Since Staggers was enacted, the freight railroads have 
invested $600 billion in their systems. I think that needs to 
be commended.
    I noticed in Mr. Nober's testimony he said that, by all the 
measures, recent years have been the safest in rail history. I 
think that--I think we need to point out something like that 
when it occurs.
    I do have a couple of questions. Mr. Nober, I understand 
you are here because BNSF has been a leader in regard to some 
of the safety requirements, particularly on PTC. And Mr. 
DeFazio said he understood you had spent a tremendous amount on 
that. How much has BNSF invested or spent on PTC since we 
started with it?
    Mr. Nober. Well, we will expect, by the time we are 
finished putting all the assets in the ground, that our 
investment will be close to $2 billion.
    Mr. Duncan. $2 billion?
    Mr. Nober. $2 billion dollars. So----
    Mr. Duncan. And that is--and that, you said, is going to be 
by the end of 2018?
    Mr. Nober. We should have the system up and operating. And 
as I perhaps didn't emphasize clearly enough to--Congressman 
DeFazio is now gone--that, you know, we will meet the deadline, 
and we oppose extending it.
    Mr. Duncan. Ms. Darr, is there a significant difference 
between the safety record of the short line railroads in 
comparison to the big guys?
    Ms. Darr. Thank you, Congressman. Last year was the safest 
year in short line railroad safety history. So I think that we 
are on a very positive trend, and I think it is a result of a 
number of the changes that our member railroads have made over 
the years, and their commitment to safety.
    In addition, the--I want to mention the Short Line Safety 
Institute, that we appreciate the support of Congress in 
helping to fund that. And that is focused on going out and 
assessing every one of our member railroads when, you know, we 
can get to each one of them, and looking at the way that they 
have ingrained a safety culture in their workforce, and making 
sure that it is at a strong and sustainable level throughout 
the industry. So I think you will continue to see that trend 
upward.
    Mr. Nober. And, Congressman Duncan, if I could just add one 
thing.
    Mr. Duncan. Yes.
    Mr. Nober. I mean it is obviously the policies set forth by 
this committee and the Congress 35 years ago to begin to allow 
deregulation that have allowed companies like BNSF to have the 
financial health to invest that kind of money, those kinds of 
assets, in safety systems that we are able to do. And so it is 
all part of an overall holistic approach to the rail industry, 
where we are able to earn adequate revenues. And, through 
deregulation, we are able to invest in the reliability and the 
safety systems that have allowed us to have best ever safety 
results.
    Mr. Duncan. Well, that is an important point--important to 
point out, that deregulation, contrary to what some people say, 
doesn't always mean that something is going to be less safe. In 
your industry it became even more safe.
    Ms. Darr, what about this training rule that we passed 9 
years ago? Has that had an effect? What effect has that had on 
the short lines?
    Ms. Darr. It has--we actually were so concerned about the 
rule after we started the initial implementation and tested it 
out that we, for the first time in our history, sued the 
Department of Transportation for overly burdensome rules.
    So it has been a major focus of so many of our members. We 
have been trying to work with the Department to put off 
implementation of those rules, to make sure that the industry 
is prepared. We are in settlement talks with the Department of 
Transportation and trying to narrow down the focus of the rule. 
But it has taken a significant number of man-hours of our 
association and all of our members to try to get this tiger 
back in the cage. And it really, unfortunately, has diverted 
from a number of other safety priorities in the process.
    So, it was a very unfortunate ruling for our industry.
    Mr. Duncan. Thank you very much. My time has expired.
    Mr. Denham. Thank you, Mr. Duncan.
    Ms. Esty?
    Ms. Esty. Thank you, Mr. Chairman. I want to thank all of 
you for being here with us today.
    My district is served by class I, short line, and passenger 
rail service in Connecticut. Connecticut is, by no means, one 
of the most active States for freight rail, but the industry 
provides well-paying jobs for my constituents, and I place a 
great deal of value on the economic opportunity it provides. 
And, in fact, we have a lot of communities who want to seek 
expansion of rail service in my district.
    But ensuring the safety of crewmembers, of communities, and 
passengers is tremendously important. And that is why we are 
here today. There have been a number of both high-profile and 
smaller crashes in the Northeast in the last few years, a 
number of which have taken place in my district, including two 
freight rail incidents in the last year in New Milford and 
Brookfield, Connecticut, involving short line. And, obviously, 
the high-profile incident recently--multiple--at Penn Station. 
So we still have a ways to go.
    I wanted to drill down a little bit on--more on the 
difference between performance standards and prescriptive, 
because I am hearing a great deal of discussion here about 
deregulation has led to these reductions. Yet, at the same 
time, Mr. Nober, you are talking about the importance of PTC 
and the importance of technology. If we have multiple 
technologies in, say, something like PTC, the interoperability, 
you are going to require some prescriptive efforts, or 
otherwise it is not going to be able to talk to each other.
    So, I would like--maybe Mr. Nober, you can start with how 
can we best have innovation and safety, and recognize sometimes 
we are going to have to make specific decisions? Because 
without that we are not going to get the safety that the public 
needs and demands.
    Mr. Nober. Well, Congresswoman, I thank you for your 
question, and appreciate your concerns. And, as you said, there 
is a place for--in an industry like rail, with 
interoperability, with interchange, where cars go throughout 
the system, standards can be set that are uniform across the 
system, that can be a great help for a network like ours.
    On the other hand, we do have a number of individual safety 
mandates that go to railroads, and I listed several of them in 
my testimony, everything from how you originate a train, to how 
you inspect track, to how you look at each individual car, to 
how you investigate wheels, that are done a prescriptive way: 
``You will look at how reflective the tape has to be on the 
side of cars,'' or that are done based on time: ``You will 
inspect this each and every time.'' And railroading is quite 
diverse.
    You have passenger rails, like you said, in the Northeast. 
In the West, where we operate, we can have trains that are 
8,000 or 10,000 feet long going through very unpopulated areas, 
which would stand in stark contrast to a heavily populated 
area, like Connecticut. And the safety rules that should apply 
to those ought to be able to take into account the different 
environments in which they are operating.
    So, when we talk about performance regs, it is to try to 
come up with a safety outcome that we are looking for--for 
example, in track or in inspections--that looks at how often--
how well maintained are the cars, how often are they having 
problems, how often are derailments happening, as opposed to 
``You will inspect them every so often, regardless of what the 
needs are.''
    And so, I do think that it is hard to do. There is no 
question about that. It is more difficult to measure and 
regulate on a performance basis than it is to regulate based on 
what we would call command and control, but activity-based, 
right? Because if you are a regulator--and, you know, I have 
run an administrative agency, it is much easier for them to 
say, ``We are going to ensure that you do X,'' and if you do X, 
then they can say, ``Hey, we have done our job.''
    Ms. Esty. Although I think part of it is you have all 
talked about how there has been improvement in safety with this 
combination of the regime we have right now, which is some 
performance-based and prescriptive. So you can understand 
concern on the part of Members of Congress who have lines 
running through their district of moving away from a system 
that has, in fact, been improving safety.
    So that is--you are asking us to ``trust us,'' trust us--
some of us recently were on a trip to India, a place where 
there is a lot of issues with rail safety. Many other parts of 
the world the market clearly does not work to provide safety. 
And you can understand why we have concerns with the ``Just 
trust us'' attitude, ``We have a good culture,'' because you 
look around the world, that is not what happens if the market 
alone determines. And, obviously, that improvement in safety 
record has been a combination of those two, and I think it is 
unwise to suggest that it really--that it could be without 
prescriptive, as well.
    Mr. Nober. Well, we would like to say at BNSF that we are 
very--we think the freight rail system in the United States, 
which is principally deregulated--not completely--is the safest 
and the best in the world. And when we look at the way we 
operate our system, safety and reliability are the two most 
important things we have. Because if we want to grow, if we 
want to draw freight from the highway and bring it on to rail, 
which should be a policy goal that all of us should share, then 
we have to be able to provide reliable and safe service for our 
customers. And the way we do that is through ensuring equipment 
integrity, it is through ensuring track integrity, and it is 
through ensuring that, you know, our people are able to go home 
safely every day.
    There is probably no place on our railroad that we inspect 
at merely the FRA minimum. Now, the way we inspect it might be 
different, but we probably go beyond that in virtually every 
mile of our system. And in our heavily traveled, most, you 
know, core, dense routes, we go multiples beyond it. We do that 
because the importance of having one of our transcontinental 
mainlines operating and be able to provide the service that it 
provides is of paramount importance to us.
    So, just 2 weeks ago, we had an incident. It didn't involve 
our railroad. We had a grain elevator catch fire near Hereford, 
Texas, on our transcontinental mainline. And the fire and the 
resultant danger from the chance of explosion left that line 
out for about 20 hours. And we had over 100 trains delayed that 
were stopped because of that, because it was unsafe to go past 
it.
    Obviously, safety is first. We would never put any of our 
crew or our people in harm's way. But the consequence of an 
outage like that is tremendous for us, as well.
    Ms. Esty. Well, thank you, and I see my time has expired. 
But I would like to follow up with some further questions on 
some of these issues. Thank you very much.
    Mr. Denham. Thank you, Ms. Esty.
    Mr. Farenthold?
    Mr. Farenthold. Thank you, Chairman Denham. And I worry 
about Washington bureaucrats coming up with regulations from 
the top down, and like to see stuff actually come from the 
bottom up, or see industry and the public more involved.
    Mr. Santa, in your testimony you talk a little bit about 
the Gas Pipeline Advisory Committee. Could you tell me a little 
bit more about how that works, and their involvement in the 
regulatory process?
    Mr. Santa. Yes, sir, Mr. Farenthold. The GPAC, or Gas 
Pipeline Advisory Committee, is created by statute. It is a 
Federal advisory committee. It has equal representation from 
industry, the public, and regulators from both the State and 
Federal level. The purpose of it is to provide input to PHMSA 
in connection with its rules and its processes. In some ways it 
effectively functions as a peer review group for what PHMSA 
proposes.
    PHMSA is utilizing the GPAC to review the pending gas 
pipeline and gathering rule. We only wish that PHMSA had 
involved GPAC earlier in that process at the formative stages 
of coming up with that rule. And I think that probably would 
have produced a better rule. As a matter of fact, the GPAC was 
utilized in that manner in the development of the integrity 
management rule back in the early 2000s, and I think it 
produced a good result.
    Mr. Farenthold. All right, thank you.
    Mr. Nober, you were talking about how you used new 
technologies for inspecting your track. I have actually seen 
some of those technologies demonstrated. And I hear this from a 
variety of folks in a variety of industries, that the 
regulations that are in place at the Federal level are not 
keeping up with technology.
    So, in addition to your enhanced technological screening 
method with cameras and vibration sensors and things like that, 
you are still stuck with old regulations. Do you have any 
thoughts on how we could develop a process, when technology 
evolves, that we can get rid of or modify some of the existing 
regulations to take better advantage of the technology to 
create a safer environment at a lower cost?
    Mr. Nober. Well, Congressman, that is an excellent 
question. I would say the first step is to change the mindset 
of the regulators to be able to accept that technology can 
improve safety, and it is not in lieu of or a substitute for a 
safer method of doing things.
    A good example would be track inspection. The FRA mandate 
for track inspection would be a visual inspection, so people in 
a high rail, riding and looking at it. And that certainly 
catches a number of kinds of defects, and is an important part 
of inspecting track, and we do that more than the FRA minimum 
in most parts of our system.
    But beyond that, we have developed, first, geometry cars 
that have sensors that are able to look at and evaluate the 
inside of rail, and sense--are there any internal defects that 
could grow into the kind of problem, given the weight and the 
density and the mass of rail traffic that is on it, or broader 
defects that could create derailments?
    Now, we have geometry cars that are able to do that. And we 
have now a manned geometry car. And people are in the geometry 
car. And if they spot a defect, they have to stop and mark it 
and send somebody out immediately to be able to go and remedy 
it. And again, that is a laudable goal.
    But we also have developed unmanned geometry cars. And the 
benefit of those is that they can go on the back of any train. 
And so, therefore, using an unmanned geometry car, we can 
inspect the rail much more often. But implementing those has 
been difficult, because the existing regs would require that we 
stop and get out and mark it, and immediately remedy any 
defect.
    Mr. Farenthold. It can be adequately marked with a GPS.
    Mr. Nober. And so we are still working through the GPS. It 
is not 100 percent settled yet. But we think more inspection 
will create a safer rail, and that we will then dispatch our 
maintenance of way people to go out and fix the problems that 
are found, because we are able to inspect things more.
    So, rather than be a substitute for people, we think it 
will enhance safety. But the regulatory framework has to evolve 
to be able to allow and enhance that. And again, all of these 
are slightly different, they all have benefits, they all have 
downsides. We call it the swiss cheese approach. But if you 
layer all of these different safety systems together, overall 
you will catch more defects----
    Mr. Farenthold. All right, thank you. And I have one more 
question for Ms. Darr.
    Now, Mr. Tolman is talking a lot about safety and fatigue 
and the necessity for a two-man crew. Is that different in the 
short line industry than it would be with the class I? And how 
would you see that affecting your industry, a two-man-crew 
rule?
    Ms. Darr. Thank you for the question, Congressman. It is an 
excellent question. And I would say that it has a much more 
serious impact on short lines, because of the small staff. So 
when you are taking two men, you know, to operate a locomotive, 
then you are taking, conceivably, one of them away from some 
other critical operation of the railroad.
    So we are very concerned about this, and we do find it 
ironic that, at the same time that DOT issued a regulation 
calling for two-man crew, they were also conducting a study, I 
believe, with Duke University to look at whether or not crew 
size even had an impact on rail safety to begin with. So it 
seems to us to be a classic example of putting the cart before 
the horse, and it was confusing, at best.
    Mr. Farenthold. All right. Well, I see my time has expired. 
Thank you very much.
    Mr. Nober. If I could just add that----
    Mr. Denham. Thank you, Mr. Farenthold----
    Mr. Nober [continuing]. In addition, that----
    Mr. Denham [continuing]. Mr. Capuano?
    Mr. Nober [continuing]. DOT was funding autonomous truck 
technology, as well, to have no drivers in it.
    Mr. Denham. Mr. Capuano?
    Mr. Capuano. Thank you, Mr. Chairman, and I want to thank 
the panel for being here and for your testimony.
    But like a lot of these hearings, the truth is that not 
much of what you said I would disagree with. I am for 
effective, robust, clear, least-intrusive, safe, and reasonable 
regulations, and nothing more. But, then again, nothing less. 
So I am glad nobody said all regulations are bad. You are 
right. We need some regulations. Where they should be? Fine.
    Ms. Darr, a regulation that thick, you should have called 
me. I don't even know what is in there. I am hoping it is not 
just one big print.
    [Laughter.]
    Mr. Capuano. I mean that is not what we want. And, look, I 
am not afraid of regulations, but I am not in favor of over-
regulation. And I agree that some regulators, to cover their 
own Administrator's back, they over-regulated. I couldn't agree 
more. But those are details. And, you know, most of us are here 
to work out the details.
    And I think, as was pointed out, what we came up with with 
PTC was a pretty good compromise. It was like we want it. We 
gave the industry a period of time to do it, no one did it, and 
we kind of then required them to do it, but we did it in a way 
that says, ``You guys figure it out, but you got to get it 
done.'' And it seems to be good.
    I am really happy to hear that people are reasonably 
satisfied with the FAST Act. And actually, the comments about 
the PIPES Act, without details, I haven't been terribly 
thrilled with the implementation of the PIPES Act. And you want 
to criticize PHMSA? You go right ahead, because you got Peter 
DeFazio right after you, and me right after him. They have been 
a problem for a long time. I agree with what Peter said. We did 
have one good Administrator for a little while, she is gone, 
and we will see what happens.
    So, all that being said, thus far I don't see a whole lot 
of controversy here. And, though I love seeing you guys, I am 
wondering what we are doing here. But that is OK.
    But because these kinds of testimony tend to be generic, 
apple pie, and puppy dogs, you know, obviously, my ears are 
always attuned to what is floating around, and I have been 
hearing things like--that some bills coming out of certain 
areas--I really like the one that wants us to do advanced 
notices of proposed rulemakings. Advanced notices of proposed 
rulemakings? That seems a little redundant, to me. Why don't we 
have preadvanced notice of possibly, maybe, someday regulation 
that I might want to think about 10 years from now?
    I mean, come on, that is ridiculous. It is just a way to 
kill whatever you don't like. I mean if the systematic problem 
is OMB, line up behind me. OMB has been a problem from day one. 
The process stinks. And I would be happy to kick them in the 
butt to get moving on it. What they do is nuts.
    I got to be honest with you, 1982, I think it was, we had a 
train derailment in my home city, and that train derailment 
released chlorine gas. And nobody died, but a lot of people got 
sick, and a big evacuation. The fire department didn't know how 
to fight it, because there hadn't been any training then. They 
put the wrong stuff on it, and it caused problems.
    Now I just presumed that every train carrying hazardous 
material would have emergency breathing apparatus on it, to be 
perfectly honest. And I found out not only is it not true, but 
the industry is fighting that. What are you, crazy? That is 
nuts.
    Now, you might want to argue exactly which breathing 
apparatus--and I am not the guy to answer that question--but I 
can tell you there are 1,000 guys I can find in my district who 
will tell you exactly which one you should have that is the 
safest. You have it once, you don't have to touch it again for 
a long time. It is not that big of an expense. Why would 
anybody fight having emergency breathing apparatus on a train 
that is carrying hazardous, deadly material? It makes no sense. 
And, to be perfectly honest, I am a little surprised to hear 
those kinds of things floating around.
    But, in general, I like it. The whole thing about 
performance-based rulemaking. Fine, sounds good. Again, 
motherhood, apple pie. We are all for performance-based, and I 
am all for it. I think the PTC thing is an example of that. But 
I am also glad to hear that some of you said that there is 
occasion for prescriptive regulation.
    And I think Mr. Tolman is right. I have only been on this 
committee for, I don't know, 15 years or so. Every single 
regulation that I have seen has come after not one, but a 
series of disasters. I have not yet seen a regulation that was 
done before a disaster happened. And, yes, when you do that, 
sometimes things get a little overboard, and we have to 
readjust. I am for that.
    But I guess I don't really understand what the difference 
of performance-based regulation is. What is so big about it?
    Mr. Tolman, can you tell me exactly? Why should I care 
whether it is performance-based or prescriptive, or alphabet 
soup?
    Mr. Tolman. You know, Congressman, thank you. In my mind, I 
don't think it makes any difference, as long as we are 
advancing safety issues, truthfully.
    You know, you mentioned emergency escape breathing 
apparatus. You know, if it wasn't for this committee, we 
wouldn't even be discussing. In 2005 we had a major accident, a 
Norfolk Southern, where a switch was left open in dark 
territory. And dark territory, in my mind, shouldn't even exist 
in the industry.
    Never mind that, the family--Chris Seeling was a 28-year-
old locomotive engineer who was operating the train. It was a--
switch was left open, they went in and struck a chlorine tank 
at 2 o'clock in the morning. The conductor knew enough--he was 
trained enough, talking about part 243, the training program--
he was trained enough that he went upwind. The engineer went 
downwind. He was not trained. They both walked into the 
emergency ward together, and Chris Seeling, 28 years old, 
succumbed to chlorine inhalation. So did nine other people 
that--in the factory right next door to that chlorine tank car 
passed, as well.
    Two hundred yards away, two hundred yards away, there was 
an elementary school. Thank the dear God that this happened at 
2 o'clock in the morning, and not 2 o'clock in the afternoon. 
Because none of this would be discussing emergency escape 
breathing apparatus.
    The interesting thing that--you know, I have been doing 
this for a long time. I have investigated some major accidents 
throughout the United States. Rips your heart out to see one 
person or one injury. The carnage, when you go there--I did so 
many accidents that I felt like I was getting PTSD. I mean, 
honestly, I had to step away, and I don't do them any more.
    But the passion for me is we need to prevent every single 
one of them, whether it is an investment in--the railroads, I 
applaud them. PTC, they are spending billions of dollars. Why 
are they doing that? In 1968 the NTSB told the railroad 
industry they need to implement some form of PTC, some form of 
train separation technology. It took 49 years, and we are still 
discussing it.
    If it wasn't for Congress, we wouldn't be moving in this 
direction. I have been an advocate to the railroad industry all 
my life. Let's work together. Let's work on these safety 
issues. Don't come to Congress. We can get them done together. 
We don't need to sit here and discuss all our safety issues 
when we know damn right well we should be doing them together.
    Mr. Capuano. Thank you. My time is well over time. Thank 
you, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Capuano.
    Mr. Rokita?
    Mr. Rokita. Oh, thank the chairman for organizing us today. 
I had a couple of questions, didn't know I was up next. Excuse 
me, let me find them here.
    Mr. Nober, I am interested in your testimony here, I am 
going to quote from it right away and get your reaction to it, 
because I think those are some questions that were asked of 
you. You said in your testimony that signal systems, grade 
crossing equipment, railcars, brakes, and locomotives have now 
microprocessor technology applications that monitor and report 
actual asset health.
    Regulations, nonetheless, still require visual inspections 
of these systems. And, while there is a role for visual 
inspections, regulations need to recognize the enhanced safety 
value of automated inspections and technical diagnostics, and 
build in appropriate operational flexibility. Can you further 
explain that?
    Mr. Nober. Sure. Our locomotives these days are mini data 
centers. They have any number of sophisticated data systems on 
them. And, in fact, one of the challenges we have is always 
finding a place to install new systems, like the PTC computers 
that go in there.
    And what we do is we have wayside detectors that will see 
the impact of wheels. We have something called wheel impact 
load detectors that will basically test if a wheel is out of 
round at all. We have wayside detectors that will sense if 
there is any heat coming out of the bearings, so if the 
bearings have any issues. And so, all of these are automated 
ways of seeing if we have any of our operating systems out of 
order.
    Mr. Rokita. Yes.
    Mr. Nober. But we still have regulations that require us to 
visually inspect a locomotive every day, so we have five 
locomotives, and somebody has to go out and walk around them. 
We have to visually inspect trains after a certain number of 
miles. And in large land-area geography like we are, that can 
just take additional time to inspect an 8,000- or 10,000-foot 
train that we think adds very little value to what all of these 
redundant data systems are adding.
    So we are not saying that you should never have an 
inspection at the beginning of a train. But we are saying that 
some of these en route or intermediate inspections that were 
done back when we had the daily locomotive inspection, which 
was required back in the steam days, on today's modern 
locomotives may not necessarily be the same and the right kind 
of test to do.
    The brake inspections, I included an article from the 
Chicago Tribune from 35 years ago----
    Mr. Rokita. Yes, 1982.
    Mr. Nober [continuing]. To show how difficult it can be to 
change longstanding sort of historical inspection requirements.
    And so, looking at what is the capability of modern 
equipment, what kinds of information is it giving, and what is 
the best way to evaluate that overall web of data, and then 
adjusting inspection requirements to meet that, we think is the 
best way to go forward.
    Mr. Rokita. I mean is there a mechanism--I have to get 
moving, because I only have 2 minutes left----
    Mr. Nober. OK.
    Mr. Rokita. Is there a mechanism where you can produce an 
alternate method of compliance, similar to what we might do in 
aviation, and say, ``Look, we are going to do this, because we 
invested in all these sensors, so we are going to get rid of 
the intermediate inspections, visual inspections, throughout 
the day''?
    Mr. Nober. FRA has a waiver process, where we can go in and 
say, ``Can you waive this requirement in this instance?''
    And we have worked with the FRA, and been able to do that. 
We think the waiver process is slow.
    Mr. Rokita. Yes. How much does it cost to do a waiver 
process?
    Mr. Nober. It can depend. Sometimes they can ask for a lot 
of data, sometimes they can ask for relatively little. It is 
the time. It can take 9 months or more to get a waiver done.
    Mr. Rokita. All right, OK, thank you. Regarding non-
Administrative Procedure Act guidance and Executive orders, 
such as informal actions by a regulator, what are your concerns 
with that?
    Mr. Nober. Well, first of all, if there is a formal 
rulemaking, where there is notice and comment--and the ranking 
member referred to that earlier--you can have a chance to put 
information in, you can refute the assumptions of the industry, 
you can put more information in that can then be used to 
evaluate and ultimately challenge.
    If you have a guidance or an emergency order or a safety 
advisory, those are ones where the agency may consult the 
industry on it, or they may not. And, as a practical matter, 
for a company like BNSF, those are binding, because we--if we 
ever have an incident where the Federal Government has said, 
``Well, we think the proper inspection requirement, or the 
proper''----
    Mr. Rokita. So we are in an environment now, like in many 
agencies, where guidance, although it is supposed to have no 
legal effect, actually has legal effect.
    Mr. Nober. Yes, and----
    Mr. Rokita. It has procedural effect.
    Mr. Nober. It has procedural, and because of tort 
liability----
    Mr. Rokita. Yes.
    Mr. Nober [continuing]. If we go against the Government----
    Mr. Rokita. Do you have ideas to bifurcate that back to the 
way it was originally intended?
    Mr. Nober. Oh, absolutely, we----
    Mr. Rokita. OK. Could you give them to me, privately?
    Mr. Nober. Absolutely.
    Mr. Rokita. Thank you. And I have 5 seconds left for Mr. 
Rankin.
    Mr. Rankin, when talking about making sure that PHMSA is 
properly regulating the transport of hazardous materials, what 
do you define as hazardous materials? Is it only products 
categorized as regulated by the U.N., or what about group 3, 
group 2, group 1?
    Mr. Rankin. Forty-nine CFR provides the guidance here. The 
United Nations is a model regulation. So, while they are 
effectively exactly the same, because the United States tends 
to adopt the U.N. model regulations into our own to ensure that 
international transport is unimpeded, we look to 49 CFR, and 
that can include classifications, and those classifications 
include packing groups 1, 2, and 3, for example.
    So, not every hazardous material is listed. For example, 
acetone may be named, but if another type of material meets a 
criteria--flammability--it would be classed--class 9 in this 
case. So it is a very broad area, and each new material that 
comes on to the market has to be properly classified before it 
can be put into----
    Mr. Rokita. Is this good or bad?
    Mr. Rankin. This is very good.
    Mr. Rokita. Thank you.
    Mr. Denham. Thank you, Mr. Rokita.
    Mr. Lipinski?
    Mr. Lipinski. Thank you, Mr. Chairman. The State of 
Illinois has 36 short line railroads, 2,600 miles of short line 
track, and it is 37 percent of the entire rail network in the 
State of Illinois. So many on this subcommittee from both sides 
of the aisle are cosponsors of a bill to make section 45(g), 
the Short Line Railroad Tax Credit, permanent. In fact, there 
are 158 cosponsors on the bill the last time that I checked.
    The bill incentivizes additional investment in the critical 
short line freight railroad infrastructure. And so I wanted to 
ask Ms. Darr the impact that the short line tax credit has on 
railroad safety.
    Ms. Darr. Thank you very much, Congressman Lipinski, and I 
want to just say that I know the--your constituents in Illinois 
appreciate your support of the small freight railroads in your 
State back home.
    And 45(g) is enormously critical to short line railroads 
and, in particular, the safety of short line railroads. I think 
you know that the number-one cause of derailments in the 
railroad industry is broken track. And so, 45(g) allows for the 
rehabilitation of abandoned track that has been, you know, not 
maintained or poorly maintained, so we are able to bring that 
up to standard through 45(g).
    The first time that 45(g) was put into effect was 2005. It 
was passed in 2004, but in 2005 it started to pay back to the 
railroad industry and allow us to invest. And since then we 
have seen $4 billion worth of investment in rehabbing track. So 
that is, you know, 12 or 13 years, roughly. So it has certainly 
had a major impact. This year I believe we are up to 158 
cosponsors in the House in an effort to try to make 45(g) 
permanent, and we are very hopeful that, through support of the 
BRACE Act [Building Rail Access for Customers and the Economy 
Act], this year we will be able to do that.
    Mr. Lipinski. Hopefully we will get that done this year.
    Mr. Nober, I wanted to talk about the eManifest. I 
introduced a bill last Congress directing DOT to complete a 
MAP-21 mandate to develop voluntary standards for the use of 
electronic shipping papers, which we commonly call eManifest. 
The goal is to provide real-time information on the content of 
railcars in the event of an accident to better inform first 
responders, because--much easier to get that electronically 
than to have to go and get the paper manifest out of the 
locomotive.
    The AskRail app, I was on hand in June of 2015 for the 
launch of that at the BNSF facility in my district.
    I wanted to ask about the--first of all, how far along BNSF 
is and what you know about other railroads, in terms of having 
an eManifest available for first responders. And second, do you 
think that this should negate the requirement for hard copies 
of an eManifest to be carried in the locomotive, or will it 
still be necessary to have that hard copy, if this is fully 
implemented?
    Mr. Nober. Well, Congressman, again, we thank you for your 
help and leadership in that area. But, as you mentioned, BNSF 
did roll out our app for first responders. And it is available 
to first responders and State fusion centers. So we believe it 
is widely available now for our manifests, where it is needed.
    I think the AAR has an app, as well. And I believe the 
other railroads all have them, although I can't swear to that. 
I know of some of them, but we can make sure we nail that down. 
But I believe all of the major class I railroads have an app. 
Certainly the four largest do.
    In terms of electronic delivery of documents, we think that 
is an area where there is a lot of room for further changing 
some of the regulatory--Ms. Darr was pointing to a manual. We 
think having manuals be made electronic, electronic--mandatory 
directives coming in electronically, all of that could be more 
accurate and more timely in an electronic manner than it will 
be through requiring paper records.
    So we think that that is an area, looking forward toward 
modernization and adopting technological solutions, that entire 
area of tracking and documents and manifests that are now paper 
have a lot of opportunity to be made electronic, and we would 
like to see this further go in that direction.
    Mr. Lipinski. Well, I think we should continue to work 
towards greater safety in the use of the electronic 
availability of this type of information. So, Mr. Chairman, I 
think it is something good for this subcommittee to work on, 
going forward.
    And, with that, I will yield back.
    Mr. Faso [presiding]. Thank you. Mr. Lewis?
    Mr. Lewis. Thank you, Mr. Chairman. I want to go back a 
little bit over these special permits on Federal hazardous 
materials transportation right now. And I will start my 
questions with Mr. Nober, and then anybody else can answer, as 
well.
    But as you know, the DOT can issue these variances, these 
special permits for hazardous materials regulations and the 
like, and--if this is consistent with the public interest. You 
have to keep applying before it is codified into law or 
regulation. So I am just wondering that, while not all of these 
individual special permits for new technology and the like are 
appropriate for incorporating into a regulation, we are 
starting to get some duplication here and some added expense.
    As I recall--and it was before I got here, but the MAP Act, 
MAP-21, directed PHMSA to review these special permits and 
determine which ones could be actually converted into a 
regulation, so you wouldn't have to keep applying every time 
there is a new technology that had already applied for a 
special permit in the past.
    So, you know, would this help? Would the special permits or 
waivers, by making them permanent in regulation--obviously, 
would it streamline things, lower the cost? But would it also 
make certain that we had a consistent safety scheme, with 
regard to the transportation of hazardous materials?
    Mr. Nober. Well, Congressman, I would say, in general, we 
are for making individual waivers that have proven their worth 
on a temporary basis to be made permanent.
    Now, on shipping hazardous materials on the railroad, 
packaging is really in the hands of our customers, so I 
probably will defer to the representatives of our customers who 
are here. And then, obviously, we have, for certain kinds of 
hazardous materials, key trains and for carrying TIH and PIH, 
various operational requirements. And so we will have 
requirements for, say, things like tank cars.
    But I think the waivers you are referring to, I believe, 
are about packaging for individual matters, as opposed to the 
transportation routing. So I will defer to my colleagues.
    Mr. Lewis. Yes, go ahead.
    Mr. Rankin. Thank you for the question. The--I believe you 
are referring to a reference in MAP-21, when Congress directed 
PHMSA to conduct a general review of existing special permits 
that had been in effect for 10 years or longer, which they did. 
In fact, PHMSA issued a rulemaking incorporating some of them, 
I think about----
    Mr. Lewis. About 100 of them.
    Mr. Rankin. About 100, correct, into the hazardous 
materials regulations. But the review was only done once. And 
what we have suggested in our testimony is that this process 
becomes a regular annual activity. It is our view that special 
permits can live for--not forever, but certainly for a long, 
long time, and they are constantly reviewed and renewed every, 
well, 2 and then 4 years afterwards, generally.
    We would suggest that after about 6 years of implementation 
for special permits, that PHMSA mandatorily take a look at 
these for incorporation into the hazardous materials 
regulations. If they would do that on an annualized basis, it 
would reduce the amount of work they have to do in the renewal 
process, and, secondly, we think it is much more efficient and 
realistic. And it certainly does not negatively affect safety. 
It is quite positive, in fact, in its impact on safety.
    Mr. Lewis. In fact, there was--yes, I think they found 96 
could actually be adopted, but over 1,000 could not be adopted. 
So no one is suggesting that, if you have got a new technology 
that hasn't been reviewed, that you can let an extant 
regulation handle that. So there would still be a role for 
special permits.
    Mr. Rankin. There still will always be a role for special 
permits, just because new technologies emerge all the time, new 
packagings emerge all the time. If the special permit is still 
in existence, the agency has, de facto, made a representation 
that the activity is a safe practice.
    We are just suggesting that it be reviewed and, hopefully, 
more of them incorporated----
    Mr. Lewis. And we are talking about special permits that 
are applied to the same technologies in general, over and over 
again.
    Mr. Rankin. That is correct, yes. To the same process 
technology packaging. But in this case, let's just say 
packaging. If you are reviewing a packaging or new technology 
every 4 years, at some point you should put that into the 
hazardous material regulation. That is the----
    Mr. Lewis. Quickly, anyone else?
    [No response.]
    Mr. Lewis. Thank you, Mr. Chairman. I yield back.
    Mr. Faso. Mr. Smucker? Oh, I am sorry, Mr. Payne?
    Mr. Payne. Thank you. I really think that Mr. Capuano 
really captured the sentiments of a lot of us.
    And I would just like to ask, Mr. Tolman, in your testimony 
you highlighted just a few of the rail accidents that have 
happened over the last decade. We all know that the rail 
industry is very safe. And I see this as a good result of good 
balance struck between the railroads, labor, and Government.
    In the last few years there have been several fatigue-
related accidents on commuter rail lines in the New York-New 
Jersey region. Can you speak more about the Government's role 
in protecting train engineers and rail riders?
    Mr. Tolman. Sure, thank you. You know, in those two 
accidents, both individuals were diagnosed with sleep apnea.
    In the railroad industry, when you first start up, you 
know, you are 18, 20 years old. You are an astronaut, you are 
in the best shape of your life.
    Mr. Payne. Right.
    Mr. Tolman. And the railroad industry is extremely 
difficult and enduring regimen. You go to work 24/7, you are on 
call 24/7, except in passenger service. But that is where you 
start out. You typically would start out in the freight 
industry, which you are on call. You have no idea when you are 
going to get--go to work next.
    So, therefore, then you get called in the middle of the 
night. You haven't--and what are you going to eat? Where do you 
eat? What do you do?
    There are so many little issues that you deal with, whether 
it is whole body vibration because of excessive lateral motion 
or horizontal motion, you go--your body goes through major 
changes. And you know, unfortunately, the--as you come in an 
astronaut, now they want a person that is there 10, 15, 20 
years, they want him to still be that astronaut, and that is 
impossible, with the schedule you keep, the distance you are 
traveling.
    I mean, my God, when I mentioned the super pools, can you 
imagine trying to have the knowledge of 1,500 miles? That is 
every physical characteristic along the right-of-way. When 
there is fog or a snow storm in front of you, it is extremely--
it is so imperative to know exactly where you are at every 
single moment, so that no incident or accident happens.
    Listen, we are professionals in the industry. We are the 
best professionals in the industry, across the board. From the 
signal maintainers to the maintenance of way workers, we are 
doing our best under extreme conditions. And you can't always 
be that astronaut. We are heartbroken that any type of incident 
ever happens in our career. And I will tell you. Every time we 
hear an incident, our heart aches, because you--something 
happened there. And what happened, God only knows, and we 
usually find out later.
    I don't know if I answered your question.
    Mr. Payne. No, that was----
    Mr. Tolman. There is a lot----
    Mr. Payne. Absolutely.
    Mr. Tolman. There is a lot to it.
    Mr. Payne. Thank you.
    Mr. Tolman. Thank you, Congressman.
    Mr. Payne. Let's see, Ms. Darr and Mr. Nober, the 
railroads, you know, are much safer than they were 40 years 
ago. The data proves that. No doubt this is due, in part, to 
the deregulation of the industry. But tragic accidents over the 
years have prompted Congress and the FRA to reassess industry 
practices.
    While I am receptive to the arguments that regulations can 
sometimes be burdensome, I also know that regulations have 
saved lives. Despite what you might consider the present 
burdensome regulatory environment, many railroads, including 
BNSF, are as prosperous as they have ever been in decades. The 
railroads are prosperous, the railroads are safe. Why should we 
rock the boat?
    Ms. Darr. Thank you, Congressman. I would just say, 
``Exactly.''
    Mr. Nober. Well, Congressman, I would probably give a 
little longer answer, so if you will forgive that, and that is 
that, over time, we have been prosperous. And, as you have 
seen, our safety record has never been better. But, as we look 
to the future, it is important that we remain prosperous and we 
remain competitive with the other modes. And in order to remain 
prosperous and remain competitive, to be able to invest in our 
systems, invest in technology, and to grow, we need to be 
efficient, and we need to adopt the best available 
technologies, and we need to have regulation evolve with 
technology.
    You see it in the trucking industry, where you can't read 
any media without seeing about the idea of autonomous cars and 
autonomous trucks. And at BNSF we are not talking about 
autonomous trains, but we are talking about some flexibility to 
look at automating particular manual safety functions, that has 
both the safety benefit and an efficiency benefit. And so that 
will free up the existing people we have to be finders, and 
from finders to fixers, and let the automated technologies that 
are better at finding continue to find. So it is certainly a 
balance.
    And I just would like to mention one thing. Mr. Tolman was 
referring to super pools, which is, obviously, about BNSF. We 
are the railroad that has implemented those. And you know, I 
would say that we think, sort of bringing this all together, 
that technology is helping--we agree that fatigue is a problem. 
And technology is helping these jobs improve to let these folks 
do a better job, and to reduce fatigue.
    And we may have to agree to disagree with Mr. Tolman about 
the impact of some of these things but, you know, we believe 
that all these implications are making things safer and 
enabling rest.
    Mr. Payne. And----
    Mr. Nober. But again, I mean, I have the greatest respect 
for my colleague, and you know, we may have a difference of 
opinion on that.
    Mr. Payne. Thank you. And, Ms. Darr, I didn't--your answer 
was so quick, I didn't catch it. What was it?
    Ms. Darr. I said exactly, and that was to agree with you. 
And it is also to demonstrate that short lines are also often 
short-worded.
    [Laughter.]
    Mr. Payne. Very clever. Thank you.
    Mr. Faso. Mr. Babin, you are recognized for 5 minutes.
    Dr. Babin. Thank you, Mr. Chairman. I appreciate it. Wow, 
sorry. I would like to direct a couple of questions to Mr. 
Santa and Mr. Rorick.
    Can you briefly discuss the consequences of delayed 
rulemakings on the regulated community and your members? And 
what are the costs and inefficiencies produced by delay?
    Mr. Santa?
    Mr. Santa. Yes, Mr. Babin. Thank you for the question.
    INGAA and its members are committed to a voluntary program 
of improving pipeline safety after the San Bruno tragedy. And a 
lot of those commitments parallel what is being addressed by 
PHMSA in the proposed rule. And while we are committed to that, 
I think there is apprehension on the part of some of our member 
companies to make the investment and incur the cost to do, for 
example, certain types of pipeline testing, where there is the 
risk that, when PHMSA comes back with its rule, it says, 
``Well, that is not quite up to the standard of the new rule. 
Therefore, you need to do it over.''
    And this is more than just cost. It is disruption of 
service, it is the risk of perhaps not recovering those costs 
in the rates of the pipeline. So I think that that is one of 
the inefficiencies and costs that results from this delay.
    Dr. Babin. Thank you.
    Mr. Rorick?
    Mr. Rorick. I think Mr. Santa captured it well. One of the 
things that our industry depends on--and a lot of industries 
depend on--is just consistency. And when--as I indicated in my 
testimony, these companies plan out 10, 20 years in advance 
multibillion-dollar projects. The expectation is that when they 
are investing in these projects, they are going to know what 
they need to do when they actually build the projects, that may 
take multiple years.
    So, contrary to what many people may think, we are not an 
industry that is opposed to regulation. And, in fact, we 
support it, as Mr. Santa and I both attested. We supported the 
development of the liquid pipeline safety rule and the natural 
gas pipeline safety rule. We did that because we need that 
consistency. That delay creates uncertainty, and it makes it 
difficult to move forward with investments.
    Dr. Babin. Yes. OK, thank you. And then one more, if I 
could direct it to you same two gentlemen, can you please 
discuss the benefits from robust stakeholder engagement at the 
outset of a rulemaking? What stakeholder and Government 
collaboration, if any, precedes commencement of a rulemaking, 
and does industry and other stakeholders expend any effort 
developing a consensus on safety standards before the 
commencement of a rulemaking?
    Mr. Santa. I think there are two good examples where 
collaboration has paid big benefits. One of them is, as I noted 
earlier, in the lead-up to the integrity management rule that 
was adopted by PHMSA in 2004 there was pretty extensive 
stakeholder engagement, both through the Gas Pipeline Advisory 
Committee and through other means. And I think that resulted in 
a very, very good rule.
    The other one is, even though we have been critical of 
PHMSA and their process on the underground gas storage interim 
final rule, in fact I think that is a success story. Because 
what is happening there is that rule is predicated on the two 
recommended practices that were adopted in the API standards 
development process.
    Those came out of--on behalf of INGAA, those pipeline 
safety commitments, voluntary commitments we made that, years 
before the rule came up, we were working through that standards 
development process. That has involved regulators, it has 
involved academia, other interested parties. Very transparent. 
And I think that provided the platform for PHMSA to move quite 
quickly to proposing a rule in an area where, quite frankly, it 
had no regulation prior to that.
    Dr. Babin. OK, thank you. And Mr. Rorick?
    Mr. Rorick. And maybe just to add a little bit onto the 
standard-setting process, as a standard-setting organization we 
are accredited by ANSI, which means that there are strict 
guidelines that we have to follow. As part of that, as Mr. 
Santa indicated, it is an open process.
    So, if you are an expert in the field, whether from 
academia, the public, Government, industry, you are allowed to 
participate in the development of that standard. And that 
collaboration is crucial because what you are doing is you are 
taking the experts in the field and developing something, 
oftentimes in advance of the regulation because we don't want 
to wait for the regulation to develop.
    Mr. Santa talked about the two recommended practices for 
underground storage. We recently developed another one on 
developing pipeline safety management systems. And this is a 
standard that companies can use to make sure that, in all of 
their practices that they are implementing, whether it is for 
emergency response or underground storage or whatever, that 
there is a system where you are constantly reviewing what you 
are doing, to make sure you can improve it. And it is an ever-
growing process.
    It is a similar system that is used by the nuclear 
industry, by the airline industry, as well. PHMSA was an 
integral part, as well as NTSB, in the creation of that 
standard, and we have got a very good product moving forward 
that we both--both regulator and industry--can agree upon.
    Dr. Babin. OK, and I think my time has expired. Thank you, 
Mr. Chairman. I yield back.
    Mr. Faso. Thank you.
    Mr. DeSaulnier?
    Mr. DeSaulnier. Thank you, Mr. Chairman. I want to make my 
comments as somebody who represents an area in northern 
California that, measured by per capita or geography, has the 
highest areas of hazardous materials. We have five refineries 
in--between the county I represent and the neighboring one 
across the water in Suisun Bay. And, having been on regulatory 
boards at the local, regional, and State level, I think one of 
the things I get from this meeting is both an opportunity to 
celebrate the progress we have made, but also a cautionary tale 
that we get--continue to get it right.
    So, first, Mr. Tolman, you mentioned human factors. And in 
so many industries the importance of human factors in safeties 
of culture--as I have experienced it in chemical refining 
plants, hospitals--we are learning so much more. I know in the 
national laboratories in northern California, they do a lot of 
studying on human factors in different fields. And one of the 
key things is making sure that the rank and file people have 
some input.
    So could you talk about that input? And maybe, Mr. Nober, 
you could follow up. Particularly when it comes to new 
technologies. So we want to acknowledge that new technology can 
make it safer, but we also want to work when it comes to human 
factors, and not just drive costs down with an excuse that it 
is going to make it safer, but actually have a full 
understanding that it is going to make it safer, and it 
benefits the workers, as well.
    Mr. Tolman. Yes. First of all, Mr. Nober had mentioned that 
there is technology out there that allows the carriers now to 
address fatigue in the industry. Well, it really doesn't 
address fatigue. There is no technology that addresses fatigue. 
Knowing when a person comes and goes to work is how you address 
fatigue. It is a commonsense issue.
    You know, and the railroad industry moves more and more 
hazardous material throughout our Nation. And we usually don't 
get a regulation until they start moving a serious thing, or 
serious accident happens. And you know, in the near future--and 
currently there is some nuclear waste moving across the United 
States. And at the present time there is no regulation that 
protects the employees from any nuclear waste. And there is a 
very simple device, I think we are all familiar with it, it is 
a device that would measure any nuclear waste. I mean that is 
the common sense that we need to have in the industry if we are 
going to start moving these things.
    You know, the emergency escape breathing apparatus, I mean, 
that is another practical safety issue. I mean, sure, we didn't 
have an accident in 10 years, but, you know, God forbid that 
that happened, you know, at 2 o'clock in the afternoon, instead 
of 2 o'clock in the morning. But never mind. I mean you can't 
forget the nine people that were in that factory. That 
destroyed that factory, it destroyed their lives.
    I mean you constantly--technology is great, but it doesn't 
ever replace human interface, period.
    Mr. DeSaulnier. Thank you. I am going to let you respond, 
Mr. Nober, but I want to make another point and you can respond 
to this, as well, because my time is limited. And then Mr. 
Rorick and Mr. Rankin.
    So, short-term versus long-term investment and prescriptive 
versus performance-based. Eighteen years ago, in my local 
Government, when I was a county supervisor, we had two 
explosions, killed five of my constituents. A competing 
refinery lobbyist called me and said, ``We do all long-term 
investment. Our competitors do not. They are getting a higher 
return after-tax profit in publicly traded companies. If you, 
as a regulator, don't bring them up to a higher standard, then 
we are going to have to come down to theirs.''
    That second incident was the largest in the history of the 
State, and resulted in a very large private right of action.
    So, when we did a full facility audit, what came back was 
the auditor said it was the corporate culture that led to these 
deaths. So the struggle between long-term investment, short-
term investment being successful in the marketplace, but also 
doing what is clearly the best thing in long-term investment--
so that is my question, particularly Mr. Rorick and Mr. Nober. 
And if you could follow up----
    Mr. Nober. I would. First, I would just like to clarify 
that, and maybe I misspoke earlier--that we think that 
technology can help reduce exposure for employees and improve 
safety. And obviously, things like the long pool that we 
think--and perhaps disagree with Mr. Tolman--that can reduce 
fatigue. But fatigue is hard, because there are minimum 
requirements. But what people do in their off time, it is not 
something that we can control. And so it is something that has 
to happen holistically.
    Now, you asked about how we bring a culture of safety. At 
BNSF--because, obviously, the human and human exposure and 
human choices are the single most important thing to us. And we 
have a philosophy and a program called Approaching Others. And 
what we do is we train everybody in our railroad, from the CEO 
on down, on how to ensure and feel enabled to approach others 
if you see somebody take an unsafe act, or bring themselves or 
put themselves in a situation where they are exposed to danger, 
to feel that you are empowered to go and talk to them and say, 
``Hey, you know, there is a safer way to do that.''
    And, you know, we really are proud of our Approaching 
Others--it has been going on for years--ensuring that people 
don't put themselves in harm's way is job one of improving 
safety. And technology can help reduce exposure by not having 
people put themselves in compromising positions.
    And I will just say that, over time, in terms of your 
investment question, you know, we are a believer that a safe 
operation is the best and the most efficient and the most 
profitable operation. And so, our long-term improvements in 
safety are where we go--I can't imagine our company ever 
saying, ``Hey, if you don't reduce safety standards or bring 
them up, we are going to have to reduce ours.'' We are about 
keeping our network, which is our business, operating 
efficiently and safely, and getting our people home safely 
every night. And I think Mr. Tolman and I agree on that.
    Mr. Tolman. Congressman, if I may, just to--and I don't 
mean to go back and forth, but I just want to comment on the--
of course you--we can't control people's off time. But the 
railroad industry can control scheduled work, calling times, 
mandatory attendance policies. Those are the things you can 
control. Window-calling times, et cetera.
    I mean there are a lot of things, and these are the things 
that the rail labor and management should be sitting down, 
working together, and not pretending that fatigue doesn't exist 
in the industry. There are some--BNSF has had some great pilot 
programs, but we are beyond pilot programs. Enough pilot 
programs. We know by now that certain things address--can 
address fatigue in the industry. Let's get them working. Let's 
focus on them. These--this is what safety is about.
    Mr. Faso. The gentleman's time is expired. If you have--Mr. 
Rorick, if you have additional comment to add, please do and we 
will add it to the record.
    The gentleman from Pennsylvania?
    Mr. Smucker. Thank you, Mr. Chairman.
    I would like to follow up, Mr. Nober, to respond to prior 
questions in regards to the competitiveness of the rail 
industry compared to other modes. And I think you are correct 
that we will see changes in other modes that may--has potential 
to change that equation. And so new technology that will enable 
you to drive out efficiencies and have a more efficient 
operation, I think, will be important, going forward. At the 
same time, it appears those technologies can actually increase 
the safety.
    So I just wanted to go back to your written testimony, 
where you note that BNSF intends to leverage PTC to develop the 
next generation of train operation. It is known as moving 
block. And so I would like to just hear a little more about 
that. Can you just give us some sense of how much moving block 
would have potential to increase your capacity in your company?
    Mr. Nober. Well, I will first do my best to explain it. And 
hopefully that--and then there is a lot of debate about how 
much of a capacity improvement.
    But right now our line of road, if you will, our capacity, 
is constrained by many factors, but one of which is how far 
apart trains have to be to operate safely. And, as you know, we 
have blocks. They kind of segment the track into 4-mile 
segments, and only one train can be in a 4-mile segment at a 
time.
    PTC, the opportunity we see with PTC, is that it will have 
a GPS, real-time knowledge of every train on the system, where 
it is at all times. And it is not just knowing where the trains 
are, but the key is we have an infinite number of combinations 
of trains. Some are longer, some are loads, some are empties. 
And the weight of a train, the mass, the speed, the terrain all 
affect how long it takes to stop.
    And PTC is a system that has to learn that, right? That is 
the complexity of it. You have to know if it is a loaded, 
8,000-foot coal train versus an empty set of intermodal going 
back and you are going up the Rocky Mountains versus, you know, 
in the Mississippi River Valley. What does it take to stop 
them? PTC solves that, technologically.
    And so, what that will allow us to do is, by a moving 
block, have a real-time ability to know how close together two 
trains can be to be able to stop and operate safely. And that 
will allow us to be more efficient on our existing tracks. And 
what we need is for help from the regulators to help us begin 
to--what we call next generation PTC, to be able to leverage 
that technology to be more efficient in the long run.
    And, you know, we think that is a great opportunity. It is 
not going to be easy. It is going to take some time. But that 
is the benefit of PTC technology down the road.
    Mr. Smucker. So can you expand on that? You say you will 
need help from Congress, as the regulators. What can we do to 
remove any disincentives that are in place to allow you to 
bring this new equipment into service?
    Mr. Nober. Well, I would say, at the beginning it is going 
to be--you know, the FRA can be slow, in terms of looking at 
new technology. A few years back we started experimenting with 
LNG locomotives, and just wanting to look to develop that. And 
it was, admittedly, a slow process.
    Now, times and market changes have really kind of altered 
the equation on that some, but it was a new, promising 
technology that we wanted to look at. And being able to see 
some benefits to that, to be able to compensate for the amount 
of capital cost we would have to do when it would be an 
improvement, that was something that probably would have taken 
some nudging of the FRA.
    And for moving block, that would be a change in the way the 
regulators look at the traditional notions of safety, and their 
mindset would have to be willing to look at--through the waiver 
process and through a cooperative technological advancement 
process, to be able to let us experiment and test new 
technology, and be able to move faster and encourage the 
development of that.
    Mr. Smucker. And do you believe that this is industrywide? 
So, for instance, have other railroads like CSX--are they 
looking to adopt this technology, as well?
    Mr. Nober. I don't know that the other railroads--again, it 
would depend a little bit on their geography and their system 
and the types of traffic that they have. So I don't know if 
other railroads would see the opportunity in moving block that 
we necessarily would.
    Mr. Smucker. All right, thank you.
    Mr. Nober. But I don't know that they wouldn't.
    Mr. Smucker. All right, thank you. I yield back.
    Mr. Faso. The gentleman from Texas.
    Mr. Weber. They saved the best for last. Mr. Rorick, does 
PHMSA ever come out on pipeline construction, not just in the 
permitting or in the--I guess the permitting phase. Do they 
come out and actually witness a pipeline going in?
    Mr. Rorick. They are--they will come out periodically and 
check as the construction is taking place, to ensure that they 
are meeting the plans. When a pipeline is permitted, the plans 
have to be submitted to PHMSA. PHMSA then can give feedback to 
the pipeline operator with any suggested changes. They will 
work that out between the operator and PHMSA.
    And then, during the construction process, PHMSA can, in 
fact, come out, check the facility, and then, certainly during 
operations, they will come out and inspect the facility, as 
well.
    Mr. Weber. If there is an accident, a spill of some kind, 
do they come out? Do the same people come out and see what 
happened after the fact?
    Mr. Rorick. They--well, there is--the--PHMSA will then 
investigate the release, and then take that information back, 
and then compare that to----
    Mr. Weber. But is it the same people? Do you get the sense 
that, you know, they are really paying attention, and they are 
wanting to be involved, start to finish?
    Mr. Rorick. I can't speak as to whether it is the same 
people, but they definitely are paying attention, because they 
share the same objective we do, which is to reduce the spill. 
So----
    Mr. Weber. OK. Same way for the Federal Railroad 
Administration.
    I guess, Ms. Darr, I will start with you. I understand that 
you all have a facility that tests locomotives and accidents 
and stuff like that. Is--do I remember that correctly? Or 
somebody does. It may have been Mr. Nober.
    Mr. Nober. Yes, we have--it is called the TTCI, and it is a 
research center that is in Pueblo, Colorado, that is a 
cooperative railroad-FRA facility where we have test tracks, 
and we test all sorts of things there.
    Mr. Weber. So they get to witness the accident before and 
after, and see how the regulations may or may not have affected 
or played a part?
    Mr. Nober. We are able to conduct real-time research, and 
even do crashes, test crashes.
    Mr. Weber. OK. Do they ever get involved in going to some 
of the factories for locomotive design, or do they just simply 
see all this after the fact?
    Mr. Nober. I don't know if the FRA is involved in 
locomotive design.
    Mr. Weber. OK. So once they have seen an accident, and seen 
a locomotive come apart, so to speak, I am just curious if they 
try to follow that through on the front end.
    There are manufacturing facilities that build cars----
    Mr. Nober. They do.
    Mr. Weber. They do?
    Mr. Nober. They do----
    Mr. Weber. I am glad to know that there is--Trinity 
Industries in Texas, Navasota, Texas, that manufactures tank 
cars, for example.
    Mr. Nober. Right. And GE and Caterpillar manufacture 
locomotives.
    Mr. Weber. I had a meeting with them just the other day. 
Does the FRA regulators--do they ever go to the manufacturing 
facilities and watch when a car is being built, and see what 
the regulations do to that process?
    Mr. Nober. Absolutely.
    Mr. Weber. You are getting the nod from the learned few 
behind you.
    Mr. Nober. Yes, I am. Actually, I am cooperating with them.
    [Laughter.]
    Mr. Weber. When you talk about these emergency escape 
breathing apparatuses, I am not familiar with that accident 
that occurred with the chlorine. I am very familiar with what 
chlorine does. Was the emergency breathing apparatuses--was 
that just for the engineers? What was the subject there? Or was 
it to have more available for people off the track?
    Mr. Nober. No, it was to have it in the cab of locomotives.
    Mr. Weber. Have it in the cab of locomotives.
    Mr. Tolman. Mr. Congressman, if I can mention----
    Mr. Weber. Sure.
    Mr. Tolman [continuing]. A little bit about that, in the 
Rail Safety Improvement Act passed in 2008, that was a mandate 
in the act. Today we have a guideline. We don't have--they 
haven't acted on the law just yet.
    Mr. Weber. OK.
    Mr. Tolman. And it has happened. There isn't any emergency 
escape breathing apparatus, although BNSF does it in some of 
the tunnels. But however, it is not regulated or mandated in 
any way, shape, or form.
    Mr. Weber. I got you. So you could also say that about 
other hazardous chemicals that you--the trains carry, whether 
it is oil or gasoline or ammonia or anhydrous ammonia. The 
trains carry a lot of hazardous materials. Is that accurate?
    Mr. Nober. Correct. Overall, it is a small--I mean there 
are different categories of it. There is what you are referring 
to, anhydrous and chlorine are what we call poisonous, or toxic 
by inhalation.
    Mr. Weber. Yes.
    Mr. Nober. And so that is for BNSF, a very small percentage 
of what we carry. But things that are classified as hazardous 
is larger.
    Mr. Weber. Yes. Trains aren't--carriers aren't mandated to 
carry fire-fighting equipment. You would have a different foam 
to fight an oil or a gasoline or a diesel, or some kind of 
chemical, right?
    Mr. Nober. We preposition fire-fighting equipment 
throughout our system to be able to move it when we have an 
incident.
    Mr. Weber. Is that true about all the rail lines?
    Mr. Nober. I don't know if every class I railroad does 
that, but I believe they all do, to some extent. But we do, 
particularly in our crude network and our key train network.
    Mr. Weber. OK. Well, that is very interesting. Good to 
know. Thank you. I am going to yield back, because the hour is 
late.
    Mr. Faso. Are there further questions from any members of 
the committee?
    Seeing none, I would like to thank each of the witnesses 
for your testimony today. Your contribution to today's 
discussion has been very informative and helpful.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may have been submitted to them 
in writing, and unanimous consent that the record remain open 
for 15 days for additional comments and information submitted 
by members or witnesses to be included in the record of today's 
hearing.
    Without objection, so ordered.
    If no other members have anything to add, the committee 
stands adjourned.
    [Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
    
    
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