Week Ending April 5, 2019

Under Scrutiny at House Hearing on Pipeline Safety, PHMSA Defends Delays

This Article Appears as Published in Foster Report No 3243
Under Scrutiny at House Hearing on Pipeline Safety, PHMSA Defends Delays

At a U.S. House of Representatives hearing on pipeline safety issues, the head of the federal agency responsible for oversight defended steps taken on numerous rules that are still pending eight years after pipeline safety legislation and directives from Congress or the National Transportation Safety Board (NTSB).

Pipeline representatives also defended their actions in light of several high-profile accidents in which people were killed in the past year. The April 2 hearing had testimony from pipeline industry speakers and those critical of industry actions, with discussion about cost/benefit analyses, the value of a human life in such analyses, pipeline operators being slow to close valves when an accident occurs and the resources available at the Pipeline and Hazardous Materials Safety Administration (PHMSA).

One of the few points of agreement among lawmakers and witnesses was that PHMSA should have issued several rules that have been pending for years. Congress passed pipeline safety legislation in 2011 and 2016 that called for PHMSA to complete rules about automatic shut-off valves, leak detection, natural gas transmission and gathering line safety, a hazardous liquids pipeline rulemaking and other items.

Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee, noted that in 2018, PHMSA reported 633 pipeline incidents in which eight people were killed and 92 others were injured.

In some accidents, including a February 2019 natural gas incident in San Francisco, pipeline operators take several hours or more than a day to isolate and shut down the facilities because leak detection, integrity management systems or other measures are not adequate, said NTSB Member Jennifer Homendy, who testified with Howard “Skip” Elliott, PHMSA administrator who was appointed by President Donald Trump and sworn in in the fall of 2017.

NTSB has made recommendations about shut-off valves and other safety measures that have not resulted in action from PHMSA and “it’s frustrating,” Homendy said. What is most concerning is when NTSB investigators arrive at a pipeline accident site and know full well that if NTSB recommendations had been acted on, the accident could have been prevented, she told lawmakers.

On the hot seat at the subcommittee hearing was Elliott, who said PHMSA has made “significant strides” in bringing some of the NTSB recommendations to successful conclusions. He acknowledged that PHMSA has a lot of work to do on pending items and said in the past year it prioritized rules that could be moved quickly through the rulemaking process, such as oil spill response plans for trains carrying crude oil, plastic pipelines and transportation of lithium ion batteries.

“I am committed to doing everything I can to complete all the remaining rulemakings that address Congressional directives related to pipeline safety,” he said.

Before he was able to address the House Subcommittee on Railroads, Pipelines and Hazardous Materials, Elliott heard from Reps. Lori Trahan and Seth Moulton, Massachusetts Democrats who spoke about the September 2018 accident in Merrimack Valley, Massachusetts, when multiple fires and explosions damaged 131 structures, destroyed homes and resulted in one death. The initial NTSB investigation report found that the distribution lines of Columbia Gas of Massachusetts, a subsidiary of NiSource Inc.,  were overpressurized and that Columbia Gas used a field engineer with limited knowledge of pressure sensing and monitoring. Columbia Gas “dawdled” and did not have enough people to respond to the incident, which never should have happened, Trahan and Moulton said.

Responding to questions from DeFazio, Elliott said PHMSA has worked to streamline the rulemaking process at the agency after finding inefficiencies through a two-track process – one for liquids pipelines and one for natural gas pipelines. It expects to publish a final rule on gas transmission issues in the near future and a proposed rulemaking on leak detection in August, based on the Department of Transportation (DOT) schedule for significant rules, Elliott said in his prepared testimony.

On the leak detection proposed rule, “we’ve completed our work” and the measure is undergoing internal review at DOT, Elliott told DeFazio. The process affords others within DOE to look at the rulemaking and make sure it aligns with their interests, he said, which prompted DeFazio to ask if DOT’s interest is delaying a rule to save money for pipeline operators. Elliott said he believes DOT’s interests align with the priority on safety at PHMSA and that the proposed rule is going through the normal review process.

Given the delays in completing such important rules, “we need to examine PHMSA’s rulemaking process to determine if there are obstacles to more swift promulgation of regulations, including the unique cost-benefit analysis that PHMSA is required to undertake” for any rulemaking, said Rep. Daniel Lipinski, (D-Ill.), chairman of the subcommittee.

Elliott vowed to provide more information on the value of human life PHMSA uses in such analysis work, telling DeFazio “you can’t put a value on someone’s life.” But because the cost-benefit analysis is part of the process, there must be some calculation for pipeline safety measures, DeFazio said.

Homendy noted that in previous analyses completed by PHMSA, the value was $9 million for one human life.

Lipinski said Congress needs to assess the workforce capacity and staffing at PHMSA to ensure the agency has the resources needed to address mandates and keep regulations in line with new technologies and pipeline monitoring techniques. “This assessment should not only examine whether PHMSA adequately retains and has enough expertise and experience among pipeline inspector staff, but also whether PHMSA has enough technical and regulatory staff as well,” he said.

Responding to questions from lawmakers, Elliott said when he came to the agency in 2017, it was facing staff challenges to retain those with technical expertise as they near retirement age and competition with the industry for younger engineers and inspectors. He said PHMSA has made some headway in working with colleges to attract workers with an engineering focus while keeping some key experienced staff to transfer their knowledge before leaving the agency.

Lipinski and others expressed concern that some of PHMSA’s regulations are outdated or inhibit pipelines from using the latest technologies or innovations to improve safety. “The problem is federal regulations can’t keep pace with fast-moving technology innovations,” and PHMSA rules “sometimes conflict with the latest knowledge and techniques,” said Andrew Black, president and CEO of the Association of Oil Pipe Lines (AOPL).

Homendy noted that there are 24 safety recommendations from the NTSB that have not been acted on by PHMSA. She said she has had a good working relationship with Elliott and PHMSA staff on some of these issues, but there is a lot of work through a rulemaking that takes time. “Part of the problem is there’s no transparency in the rulemaking process,” she told the subcommittee. NTSB will have meetings or exchange information with PHMSA and “a lot of times the response is ‘well, we’re going to work on these recommendations,’ ” but NTSB does not know where a hold-up is, if it is with DOT or PHMSA.

Lawmakers from Texas, New Jersey and other states that experienced pipeline ruptures over the years questioned both the regulators and industry representatives on possible measures to improve pipeline safety and reach the industry goal of zero incidents. Rep Colin Allred (D-Texas) referred to a 2018 gas pipeline explosion on the Atmos Gas system near Dallas that killed one person and injured others.

The initial NTSB investigation showed that leaks were detected on that section of pipe before the incident, with failures of pressure testing, Homendy said. Atmos has claimed the rupture was due to heavy rain and soil composition in the area, and NTSB is awaiting information from the Army Corps of Engineers before the next step in its investigation. The agency expects to have a public docket available in June, with a report sometime after that on the incident, she told Allred.

Rep. Rick Crawford, (R-Ariz.) ranking member on the subcommittee, said the safety of the nation’s pipeline network will become even more important as U.S. exports of oil and natural gas increase in the coming years. He noted that the pipeline safety legislation passed in 2011 and 2016 was bipartisan efforts that called for collaboration and cooperation from the industry, federal and state agencies.

While he acknowledged the progress made by PHMSA to date, “there is still work to be done” to enhance safety, Crawford said. Lawmakers “must ensure that our balanced approach to safety regulations fosters innovation and best practices to improve safety,” he said.

Throughout the hearing, there were different figures used for the number of pipeline accidents, with several lawmakers referring to increased numbers in recent years. Black maintained that liquids pipelines have reduced the number of incidents impacting people or the environment by 20% over the last five years. Using PHMSA data, Black said pipeline incidents caused by corrosion, cracking or weld failures are down 35% over the last five years.

Carl Weimer, executive director of the Pipeline Safety Trust, challenged those numbers when asked about them by Lipinski. He noted that panelists could spend all day discussing data and the number of “reportable” failures on different types of pipeline systems. The overall figures from PHMSA show that the number of incidents is increasing, Weimer said. In the three years since the last reauthorization of pipeline safety legislation, there have been 775 significant incidents under PHMSA’s definitions, which amounts to 20 failures each month, across all types of pipelines, he said.

By Tom Tiernan TTiernan@fosterreport.com

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