PHMSA Pipeline Safety Programs Update

Office of Pipeline SafetyOffice of Pipeline Safety2007 Western Regional Gas

Conference

Tempe, Arizona

August 21, 2007

Office of Pipeline Safety

Presentation Overview

Basic Message Things We Worry About, Not Covered Today Pipeline Soapbox Government’s Challenging Context Regulatory Philosophy Performance Equation Regulatory Approach Menu PHMSA Programs Update

Heavy Focus on DIMP

Office of Pipeline Safety

Basic Message

Your Work is Vital to The Country Your performance is watched closely and that’s

growing in relation to your criticality Good people are helping on many fronts

Times Have Changed – For the Better Incrementalism is out and performance is in

You Have Strong Representation Both at State and industry level

Your Voice Has Been Heard and Heeded Recognize there are constraints

Office of Pipeline Safety

Things We Worry About

Transportation Fuels and Products Supply Capacity, constraints to growth, new fuels, and

the market influence on prudent planning Natural Force Events Made-Made Threats Community Engagement and Education ROW Encroachment Enforcement Transparency

Office of Pipeline Safety

Pipeline Soapbox

Energy is our Lifeblood and a Birthright Our Economic Mobility is Fueled by Energy Energy Demand is Growing but Changing Growing Criticality of Pipelines in a Rate Constrained

Day Pipelines and the Environments They Cross Are Unique Regional Constraints in Capacity

Supply and Consumption Centers Are Shifting Demographics Are Changing Pipelines Are Increasingly Interdependent with Other Utilities Potential Consequences of Long-Term Disruptions Are Growing

BANANA Cake – Confidence is Improving but Strained

Office of Pipeline Safety

Government’s Challenging Context Change Averse (i.e. – slow) Requirements Partisan Environment with Myopic Interests Growing Competition for Resources

Both within government and within industry Aging Workforce – Little Time for Training Rapidly Evolving Technology and Knowledge Performance Based Budgeting and Evaluation

Age of metrics v. Inability to gather sufficient data Continually Changing Face of Pipeline

Industry

Office of Pipeline Safety

Regulatory Philosophy at PHMSA Goals:

Safe, clean & reliable energy transportation Objective:

Improve the performance of this critical infrastructure Overall Strategy:

Positively impact the performance of individual operators and industry direction

One size does not fit all and can misallocated resources Reliance on systematic management for performance Deliberative, risk-based, data driven decisions Commitment to continuous improvement

Office of Pipeline Safety

Performance = R / S + C.O. + B.C.

P = Performance Quantitative and qualitative Must factor contributions from people, processes, and technology

All are critical and are heavily intertwined All are important layers of defense in risk reduction and loss control

R / S = Regulations and Consensus Standards Regulations as minimum floor fleshed out/improved by standards Includes waivers and interpretations Development must be transparent, inclusive, and communicative

C.O. = Compliance Oversight Inspections, audits, accident investigations, use of enforcement

toolkit Credibility is important to both government and industry

B.C. = Beyond Compliance Excavation damage prevention, emergency preparedness, research

& Development, Partnerships, Communications, ROW Management

Office of Pipeline Safety

Regulatory Approach Menu

Command and Control (aka, Prescriptive) Performance Management Composite – A Blend of All of the Above

Pros and Cons to Each Approach For both the industry and the regulator A blend of all approaches is working for PHMSA Requires data, documentation, and active

assessment

Office of Pipeline Safety

Inspection Approach

PHMSA Uses a Mix of Inspection Approaches Ensure compliance with fundamentals

Standard inspections Operations and maintenance manual reviews

Drive performance through systematic approaches based in continuous improvement

Integrity Management Operator Qualification

Defensible risk ID, assessment, and mitigation are not only important but essential to inspection success

Documentation is a necessary evil/ingredient

Office of Pipeline Safety

PHMSA Programs Update

Process Distribution Integrity Management – Only Rule Discussed in Depth Transmission Integrity Management LNG Community Preparedness and Siting Standards Adequacy

People Operator Qualification Drug and Alcohol Programs Control Room Management / Fatigue Management Public Awareness Emergency Responder Training and Outreach – NASFM Damage Prevention: CGA, State Efforts, and PHMSA Support

Technology Maximum Allowable Operating Pressure Research and Technology Development/Demonstration

Office of Pipeline Safety

Distribution Integrity – The Rule Enterprise Approach to Rule

Development In Rulemaking Now

NPRM publication ~ Nov-Dec 2007GPTC Guidelines pending NPRM publicationDIMP Final Rule ~ Summer 2008

EFV Requirement Effective 6/1/2008 DIMP Effective Date ~Early 2010

Office of Pipeline Safety

Why DIMP?

Distribution Incidents Continue to Occur – Recently Trending Upward, Resulting in Significant Share of Consequences

Effecting a Significant Reduction in Pipeline Accidents, Deaths, and Injuries Cannot be Done Without Addressing Distribution

Integrity Management Principles Can Help Operators Focus on/Control System Risks

U.S. Congress Required It – PIPES Act of 2006

Office of Pipeline Safety

Pipeline Accident Frequency – 1999 - 2006

0

200

400

600

800

1000

1200

Liquid Transmission Distribution

Nu

mb

er

of

Rep

ort

ed

Sig

nif

ica

nt

Liq

uid

Ac

cid

ents

an

d G

as

Inc

ide

nts

36% 36% 27% 81% by operators with equal or more than 12000 services

5% by operators with less than 12000 services

13% by operators of unknown service size

Source: PHMSA Liquid Accidents and Gas Incidents Reports

Data as of 2/15/2007.

Office of Pipeline Safety

Major Issues in Rule Development Excess Flow Valves (EFVs) Development/Use of Industry

Guidance Leak Management Performance Measures

Reportable at the national levelOperator specific

Office of Pipeline Safety

Excess Flow Valves (EFVs)

EFVs Are One Mitigation Option When Properly Specified & Installed, EFVs

Function As Designed Fire Fighters Strongly Supported Mandatory

Installation Of EFVs On New Services Pipes Act 2006 Requires EFV Installation NARUC Resolution GA-4 Emphasizes Caution

In Promulgating New Requirements

Office of Pipeline Safety

Guidance – Overview Larger Operators Want Choices; Smaller Operators

Require Clarity - Not Choices GPTC Asked To Develop Guidance Describing

Candidate Approaches To Implement Such A Regulation

GPTC Divisions Approved The Draft Guidance In November ’06. Guide Will Publish For Public Comment After The NPRM

APGA, With PHMSA Funding, Is Developing A Model DIMP Plan (SHRIMP) For The Small Operators

PHMSA Proposed Rule Will Include Even Simpler Guidance (Baby SHRIMP) For MM And LPG Operators

Office of Pipeline Safety

Guidance – “SHRIMP”

APGA’s SIF To Develop More Detailed Guidance For Smallest Operators

Simple, Handy, Risk-based, Integrity Management Plan (SHRIMP)Turbo Tax-like ApproachFlexibility Traded Off For SimplicityDevelopment Planned For 2007-2008

Office of Pipeline Safety

Leak Management

Require Process For Managing Leaks Locate the leak Evaluate its severity Act appropriately to mitigate the leak, Keep records Self-Assess to determine if additional actions

are necessary to keep the system safe Require Better National Data Reporting &

Expansive Analysis By Operator National reporting changed to focus on

hazardous leaks removed & pipe materials Guidance to be developed on operator-

specific measures and analysis

Office of Pipeline Safety

Performance Measures Both Reportable, National Measures &

Operator-specific Measures National-Level

Incidents & normalized incidents Excavation damages per 1000 tickets Hazardous leaks removed and normalized EFVs installed

Operator-Specific Tailored to operator circumstances Measures to clarify management effectiveness in

addressing and reducing key identified threats GPTC Guidance will provide choices

Office of Pipeline Safety

Elements of an Operator’s Distribution Integrity Management Program Operators Should Have:

Written PlanUnderstanding of their infrastructureProcess to identify the threatsProcess to assessing the risksProgram/plans to address the threats and

risksProcess to monitor performance and adjust

approach as neededPlan for reporting results

Office of Pipeline Safety

Elements of Effective Statewide Excavation Damage Prevention Programs Enhanced Communications between operators and

excavators Fostering support & partnership of all stakeholders Operator’s use of performance Measures Partnership in employee training Partnership in public education Dispute resolution process Fair and consistent enforcement of the law Use of technology to improve process Analysis of data to continually evaluate/improve

program effectiveness

Office of Pipeline Safety

Regulatory Outreach

PHMSA Advisory Bulletin Industry/Public Meeting(s) During The Rule

Comment Period – Maybe Web-Based Overview APGA Working To Assist Small Operators

Planning 12 Regional Workshops States Will Need To Reach Out To Master Meter

And LPG Operators PHMSA Will Support State Operator Meetings Community Assistance And Technical Services

(CATS) PHMSA Website PHMSA Training &Qualifications Program Will

Provide Training To States and Outreach to Operators

Office of Pipeline Safety

The End

Closing ThoughtLeadership Matters – You are leadersMake a difference with your system,

your people, and your customers and it will pay, as well as feel good

Thanks for Your Time More Importantly – Thanks for Taking

Time to Do It Well