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57–251 PDF 2010

THE SAFETY OF HAZARDOUS 

LIQUID PIPELINES: REGULATED VS. 

UNREGULATED PIPELINES 

(111–124) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

RAILROADS, PIPELINES, AND HAZARDOUS 

MATERIALS 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

June 29, 2010 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

JOHN GARAMENDI, California 

HANK JOHNSON, Georgia 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

TOM GRAVES, Georgia 

(III) 

SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS 

MATERIALS 

CORRINE BROWN, Florida Chairwoman 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

NICK J. RAHALL II, West Virginia 

JERROLD NADLER, New York 

ELIJAH E. CUMMINGS, Maryland 

GRACE F. NAPOLITANO, California 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota, Vice Chair 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

ALBIO SIRES, New Jersey 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

LEONARD L. BOSWELL, Iowa 

RICK LARSEN, Washington 

MICHAEL H. MICHAUD, Maine 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

JAMES L. OBERSTAR, Minnesota 

(ex officio) 

BILL SHUSTER, Pennylvania 

THOMAS E. PETRI, Wisconsin 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

JIM GERLACH, Pennsylvania 

CHARLES W. DENT, Pennsylvania 

LYNN A. WESTMORELND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

VERN BUCHANAN, Florida 

BRETT GUTHRIE, Kentucky 

AARON SCHOCK, Illinois 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

TOM GRAVES, Georgia 

(V) 

CONTENTS Page 

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

TESTIMONY 

Epstein, Lois N., P.E., LNE Engineering and Policy, Anchorage, Alaska, and 

Consultant, Pipeline Safety Trust ...................................................................... 5 

Falgoust, Stephen, Director, Asset Integrity, Plains All American Pipeline 

LP, also on behalf of the Association of Oil Pipe Lines and the American 

Petroleum Institute .............................................................................................. 5 

Hersman, Hon. Deborah A., Chair, National Transportation Safety Board ....... 5 

Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous Materials 

Safety Administration .......................................................................................... 5 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Cohen, Hon. Steve, of Tennessee ............................................................................ 30 

Oberstar, Hon. James L., of Minnesota ................................................................. 31 

Richardson, Hon. Laura, of California ................................................................... 35 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Epstein, Lois N. ....................................................................................................... 40 

Falgoust, Stephen .................................................................................................... 51 

Hersman, Hon. Deborah A. ..................................................................................... 56 

Quarterman, Hon. Cynthia ..................................................................................... 64 

SUBMISSIONS FOR THE RECORD 

Quarterman, Hon. Cynthia, Administrator, Pipeline and Hazardous Materials 

Safety Administration: 

Response to request for information from Hon. Brown, a Representative 

in Congress from the State of Florida ..................................................... 22 

Response to request for information from Hon. Larsen, a Representative in Congress from the State of Washington ...................................... 18 

Response to request for information from Hon. Sires, a Representative 

in Congress from the State of New Jersey .............................................. 12 

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(1) 

THE SAFETY OF HAZARDOUS LIQUID 

PIPELINES: REGULATED VS. UNREGULATED 

Tuesday, June 29, 2010 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON RAILROADS, PIPELINES, AND

HAZARDOUS MATERIALS, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:00 p.m., in room 

2167, Rayburn House Office Building, Hon. Corrine Brown [Chairman of the Subcommittee] presiding. 

Ms. BROWN. The Subcommittee on Railroad, Pipelines and Hazardous Material will please come to order. 

The Subcommittee is meeting today to hear testimony on the 

safety of hazardous liquid pipeline. Today’s hearing will focus on 

which pipelines are regulated, which pipelines are exempt from 

safety regulations, and any gaps that may exist in those regulations. 

With almost 200,000 miles of on-shore and off-shore hazardous 

liquid pipelines in the United States, it is critical that DOT ensure 

that all pipelines, regardless of their size and location, are being 

operated in a safe manner. 

A few things have become crystal clear as a result of the Deepwater Horizon oil spill. One is that the industry cannot be relied 

upon to regulate itself. It is up to Congress and the Federal agencies to establish that high bar of safety that the industries must 

meet and that our constituents expect and then to enforce those 

safety standards. 

Second, although the industry talks a lot about safety, it is clear 

that the culture of safety is not there. This is evident in their history of accidents, their lack of compliance with existing regulations, 

and their disregard for worker safety. 

What we have also seen is an unhealthy, often cozy relationship 

between the oil industry and the agencies that are responsible for 

regulating them. We saw this when we conducted our hazardous 

materials investigations with DOT, and we have seen it in the past 

with other investigations of the DOT’s Office of Pipeline Safety. 

And although pipeline releases have caused relative few fatalities 

in absolute numbers, a single pipeline incident is a catastrophe. 

For example, in 1999, a gas pipeline explosion killed two children 

and an 18-year-old man and caused $45 million in property damage. In 2006, a corroded pipeline in the North Slope of Alaska 

leaked more than 200,000 gallons of crude oil in an environmentally sensitive area. And on May 25, 2010, during a scheduled 

2 

shutdown of the 800-mile Trans-Alaska pipeline for maintenance, 

a relief tank overflowed and spilled 210,000 gallons of crude oil. 

Even with the new low-stress regulations issued by PHMSA, 

there are still gaps in regulating the safety of hazardous liquid 

pipelines, and I don’t believe we truly know if the industry is prepared to react to an accident. That is why it is critical that Congress ensures that PHMSA has all the tools it needs to protect our 

community and environment from harm. It is obvious that we have 

a lot of work to do to ensure that pipelines in the United States 

are made as safe as possible and that companies involved in the 

oil and gas industry are making safety their number one priority. 

With this, I want to welcome today’s panelists and thank them 

for joining us. I look forward to hearing their testimony. 

Before I yield to Mr. Shuster, I ask that Members be given 14 

days to revise and extend their remarks and to permit the submission of additional statements and materials from Members and witnesses. 

Without objection, so ordered. 

I yield to Mr. Shuster for his opening statement. 

Mr. SHUSTER. I thank the Chairwoman and thank you for holding this hearing today. 

As the authorization for pipeline safety programs is set to expire 

in September, it is important that we continue to hold hearings 

like this to identify what parts of the law are working and what 

parts need to be revisited. 

I think the situation in the Gulf is certainly a catastrophe, and 

BP needs to be held accountable. When I saw the fact that BP has 

had over 700 willful violations of drilling and pipeline safety out in 

the Gulf, and the next closest violator is Sunoco with eight, there 

certainly is a problem with what BP is doing, and we need to make 

sure that we are safe in what we are doing out there in the Gulf. 

We need to, obviously, first of all, stop the spill, stop the oil from 

coming out into the Gulf; second, focus on the cleanup; and then 

we will have plenty of time to assess the blame and hold those accountable for the situation. 

But as you hold these hearings on pipeline safety that is not 

dealing with deep shore pipelines, it is dealing mainly, almost exclusively, with pipelines that are on land or very close to the land, 

it is important to remember that these pipelines are the safest 

mode of transportation. In 2008, there were 39,000 transportationrelated fatalities. Only eight of those deaths were attributed to 

pipeline accidents, and only two were attributed to liquid pipeline 

accidents. 

Certainly the loss of life, we don’t like to see any of that, but it 

is very low. It is very safe. And my view would be the only way 

to stop it, have zero fatalities, is to not ship anything. Because 

when you have even a low amount of risk, you are going to have 

accidents, and we want to make sure that they are held to very 

much a minimum, which it appears that they are. 

Pipelines are also the most efficient and environmentally sound 

way to transport petroleum liquids. Liquid pipelines transport 

more than 17 percent of our Nation’s freight but only account for 

2 percent of our Nation’s freight bill. In addition, for every barrel 

3 

of oil shipped 1,000 miles by pipeline, less than one teaspoon of a 

barrel is lost. 

But just because liquid pipelines are efficient and have a solid 

safety record does not mean there is nothing left to do. Earlier this 

month, an estimated 800 barrels of oil escaped from a leak in the 

Chevron crude oil pipeline near Salt Lake City. Incidents like this 

have steadily declined over the past 10 years, but we need to ensure that the pipeline industry and our pipeline safety regulators 

continue to work together so that this downward trend in pipeline 

incidents continues over the next 10 years. 

Today, we will be hearing testimony on types of liquid pipelines 

regulated by the Department of Transportation and the types of 

liquid pipelines that are regulated by State agencies or other Federal agencies. It is important to remember that just because a pipeline is not regulated by the Department of Transportation does not 

mean that the pipeline is not subject to any regulation. State regulators and other Federal agencies, such as the Coast Guard, the 

EPA, and OSHA, have the ability to regulate certain pipelines. 

I know that some of the witnesses feel there are gaps in the regulation of liquid pipelines that must be closed. Others believe that 

DOT has broad enough regulatory authority to address any gaps 

that may exist. So I look forward to hearing our witnesses today. 

Thank you all for being here. I appreciate you taking the time. 

And I yield back. 

Ms. BROWN. Mr. Sires from New Jersey. 

Mr. SIRES. Thank you, Chairwoman Brown and Ranking Member, for holding this hearing. I will be very brief. 

Basically, I represent the part of New Jersey, northern part of 

New Jersey, the Jersey City area, Hoboken area; And near that 

area 16 years ado we had the rupture of the Edison pipeline. When 

it was all over, the plume was 400 feet high; and it burned something like 1,500 apartments in the area. 

My concern is that, as more and more development takes place 

in those areas, the pipelines are running right under some of the 

most heavily urban areas in the country. We have a pipeline that 

is running through Jersey City and under the Hudson River to 

bring gas to New York. One of the concerns that I have is that 

sometimes even the municipalities do not have a hearing concerning these pipelines, although this particular pipeline that is 

running through Jersey City now held public hearings, to their 

credit, and informed the public of what is happening. I am very 

concerned about the safety of people that live near these pipes, especially with the experience that we had in New Jersey and Edison. They are running closer and closer to urban areas, and I am 

very concerned about the safety. 

And now the rest of the remarks, Madam Chair, I would like to 

submit for the record. 

Ms. BROWN. Thank you. 

The congresswoman, Grace Napolitano from California. 

Mrs. NAPOLITANO. Thank you, Madam Chair; and thank you for 

holding this really important issue to me and my district. 

There are two major pipeline issues in my area that are currently affecting the 30th Congressional. First is the pipeline safety 

project under a railroad track which several cities in the district 

4 

have worked together to close two railroad grade crossings that are 

not only a nuisance but also creates a railroad diversion for Union 

Pacific through Cal Poly Pomona University’s agricultural fields in 

order to accomplish it. However, this project has $80 million of taxpayer money, 99 percent complete, but not finished because of a little debate between Kinder Morgan and Union Pacific. 

The issue is how to protect the pipeline, which has been greatly 

delayed and is costing some of my project people $70,000, $80,000 

just because of that delay. The California State Fire Marshal has 

stepped in and directed the Pipeline and Hazardous Material Safety Administration to visit, which they have done, and to spur them 

into action. There is an issue about what guidelines do they use. 

Do they use the Federal guidelines or the State guidelines? 

I will put these questions when my time comes up for questions. 

The second one is, Kinder Morgan is another pipeline in my district which has leaked jet fuel over the last 30, 40 years into an 

area that is highly populated. It is a plume that has been cleaned 

up by the Air Force, who is the owner of the property, and is 

spreading on to park and homes. The California Regional Water 

Quality Control Board has been given the authority by U.S. EPA 

to be the lead investigator and be the regulator and has conducted 

tests. But these pipelines—it may not be just my area, we have 

been dealing with it now for at least 25 years that I can think of— 

is what is happening in other areas where there is underground 

piping of fuels that are supposedly monitored, supposedly tested on 

a regular basis—and the Ranking Member says a teaspoon of oil, 

this is a whole leak where it has contaminated a small body of 

water and, according to some of the residents in the area, has other 

health effects such as cancer. 

So we need to be ensuring that these old systems, the aging infrastructure, is looked at more thoroughly in areas where there 

may be residential people or bodies of water underneath that might 

be tainted and would produce some health effects for the people 

that eventually get that water. 

Thank you, Madam Chairman. I look forward to the questions. 

Ms. BROWN. Thank you. 

Congressman Walz from Minnesota. 

Mr. WALZ. I thank you, Madam Chair; and I want to thank our 

witnesses for being here. I would like to ask for consent to submit 

a statement for the record, and I will yield the time to the witnesses. 

Ms. BROWN. I am pleased to introduce our panel of witnesses. We 

tried to schedule this hearing for an earlier time, but the room 

wasn’t available. So, due to the time constraints, I am going to put 

all of the witnesses on the same panel for this hearing. 

We are pleased to have with us The Honorable Cynthia 

Quarterman, who is the Administrator of Pipelines and Hazardous 

Materials; Mrs. Deborah Hersman, Chair of the National Transportation Safety Board; Mr. Stephen Falgoust, Director of Asset Integrity, Plains All American Pipeline, also on behalf of the Association 

of Oil Pipe Lines and the American Petroleum Industry; and Mrs. 

Lois Epstein, P.E., Consultant, Pipeline Safety Trust. 

With that, Honorable Quarterman, you have the floor. 

5 

TESTIMONY OF THE HONORABLE CYNTHIA QUARTERMAN, ADMINISTRATOR, PIPELINE AND HAZARDOUS MATERIALS 

SAFETY ADMINISTRATION; THE HONORABLE DEBORAH A. 

HERSMAN, CHAIR, NATIONAL TRANSPORTATION SAFETY 

BOARD; STEPHEN FALGOUST, DIRECTOR, ASSET INTEGRITY, 

PLAINS ALL AMERICAN PIPELINE LP, ALSO ON BEHALF OF 

ASSOCIATION OF OIL PIPE LINES AND THE AMERICAN PETROLEUM INSTITUTE; AND LOIS N. EPSTEIN, P.E., LNE ENGINEERING AND POLICY, ANCHORAGE, ALASKA, AND CONSULTANT, PIPELINE SAFETY TRUST 

Ms. QUARTERMAN. Good afternoon, and thank you. 

Chairwoman Brown, Ranking Member Shuster, Members of the 

Subcommittee, thank you for the opportunity to appear here today 

and for your continued interest in pipeline safety. We very much 

appreciate it. Safety is our number one priority at PHMSA and one 

that we share with Secretary LaHood and the rest of the Department. I want to thank the Chairwoman for her leadership and the 

attention given to this issue by the Subcommittee. 

Examining the regulatory framework and the oversight of the 

Nation’s hazardous liquid pipeline system is important in light of 

changing industry practices and new technologies. Our discussions 

today will identify current and needed protections for public safety 

related to hazardous liquid pipelines. 

For years, PHMSA has worked to utilize the authority given to 

it by Congress to enhance the safety of hazardous liquid pipelines. 

PHMSA’s oversight of America’s pipeline transportation is broad 

and covers the vast majority of pipelines located within our borders. Unfortunately, this oversight is not unlimited, and PHMSA 

can only provide protections from pipelines under our jurisdiction. 

PHMSA has used responsible and methodical approaches to focus 

on high-risk infrastructure issues first and provide effective solutions through enforcement and rulemakings. This tiered approach 

has helped PHMSA devise and implement effective rulemakings, 

like the one in place and the one proposed for low-stress lines. 

For hazardous liquid pipelines, PHMSA’s jurisdiction includes 

the movement of highly volatile or other hazardous liquids through 

pipelines meeting certain specifications, including those crossing 

commercially navigable waters. However, PHMSA does not have 

complete authority to regulate certain gathering lines, a safety concern we share with the National Transportation Safety Board. 

PHMSA is in the process of developing legislation that would address our jurisdiction over the transportation of hazardous liquids 

by pipeline in the future. We would like to collect more fulsome 

data related to the safety of hazardous liquid pipelines and study 

the regulation of the transportation of nonpetroleum hazardous 

pipelines, such as biofuels and chlorine by-pipeline. 

Finally, we are reviewing all instances where PHMSA has not 

historically exercised its jurisdiction to determine whether those 

exceptions still make sense or should be revoked. 

The support of Congress is critical to the safe and effective regulation of the transportation of hazardous liquid pipelines. PHMSA 

looks forward to working with Congress to address any issues you 

may have concerning its pipeline safety program and the regulation 

of hazardous liquid pipelines. We very much appreciate the opporVerDate Aug 31 2005 09:38 Mar 24, 2011 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 P:\DOCS\57251.TXT JEAN
6 

tunity to report on our authority over hazardous liquid pipelines 

and the opportunities that exist to strengthen our oversight. 

Thank you, and I would be happy to answer any questions you 

might have. 

Ms. HERSMAN. Chairwoman Brown, Ranking Member Shuster, 

and Members of the Committee, thank you for the opportunity to 

discuss the issue of pipeline safety. 

The NTSB is responsible for determining the probable cause of 

transportation accidents and promoting transportation safety. The 

Board now has 18 open recommendations to PHMSA regarding the 

gas and liquid pipeline industry. 

Today, I am going to focus on two concerns in my oral testimony. 

One of those concerns gained much attention following corrosion 

failures on a BP exploration low-stress pipeline in 2006. While this 

leak in Alaska resulted in improved regulations for low-stress pipelines, the Board believes that more can be done. 

This slide shows the complex system of low-stress and gathering 

lines regulations prior to the BP incident, then to the phase one 

PHMSA role and the proposed phase PHMSA role. Last week, 

PHMSA released phase two, which proposes to extend regulations 

to additional low-stress pipelines and use risk-based monitoring as 

a means to conduct oversight. The NTSB believes that a risk-based 

approach can work if effective oversight is exercised by PHMSA 

and the pipeline operators. This rulemaking does not address offshore pipelines or on- or off-shore gathering lines. 

As mentioned previously, an area of concern is risk-based pipeline safety programs which require that the operators develop, implement, and evaluate individual programs and plans. PHMSA has 

the responsibility to review these plans for regulatory compliance 

and to conduct audits to evaluate their effectiveness. However, in 

recent investigations, the NTSB has seen indications that PHMSA 

and the operator oversight has not been adequate. 

This photo is from a November 1, 2007, rupture of a propane 

pipeline in Carmichael, Mississippi, that resulted in two fatalities, 

seven injuries, and over $300 million in damage. It is the responsibility of the pipeline operator to raise public awareness about the 

pipeline. The operator hired two contractors to administer its program, but the mailing list did not include all residential addresses 

within the mailing area. This mistake was not caught until after 

the accident. The NTSB recommended that PHMSA initiate a review of all public education programs. 

Likewise, consideration of leak history is an important factor in 

determining an operator’s integrity management plan. But in a 

2004 anhydrous ammonia pipeline rupture in Kingman, Kansas, 

we discovered that the operator left out the factor assessing leak 

history. PHMSA did not catch the omission, and it resulted in a deferred inspection. The pipeline ruptured 2 years before it was 

scheduled to be inspected. 

As a result of these accidents and other investigations, the NTSB 

believes that PHMSA must establish a more aggressive oversight 

framework so that risk-based integrity management programs are 

not only effectively designed but effectively executed as well. 

Thank you very much. 

7 

Mr. FALGOUST. Thank you, Chairwoman Brown, Ranking Member Shuster, and Members of the Subcommittee. I am Stephen 

Falgoust of Plains All American Pipeline, representing the Association of Oil Pipelines and the American Petroleum Institute. We appreciate the opportunity to participate in this hearing. 

I am Director of Asset Integrity for Plains, and I have over 20 

years experience in pipelines for petroleum transportation. My experience is in regulatory compliance and, to a greater extent, asset 

integrity. 

Plains is a publicly traded master limited partnership engaged in 

the transportation, storage, terminal ling, and marketing of crude 

oil, refined products and liquefied petroleum gas and other natural 

gas-related products. Plains operates 12,000 miles of pipeline to the 

United States. 

I am pleased to provide an overview of key components of hazardous liquid pipeline safety regulations. A mix of Federal and 

State oversight ensures the safety of our Nation’s hazardous liquid 

pipelines. I will first discuss the primary Federal safety regulator 

in the Office of Pipeline Safety and then discuss other regulatory 

oversight of pipeline safety. 

OPS’s liquid pipeline safety regulations cover the vast majority 

of pipelines engaged in transportation of crude oil, petroleum products, and other hazardous liquids. OPS is charged with inspection 

and enforcement of pipeline safety regulations over interstate pipelines and intrastate pipeline transportation. In many instances, individual States also enforce stringent pipeline safety regulations 

over intrastate pipeline transportation within their boundaries. 

Lines not subject to OPS’s liquid pipeline safety regulations fall 

within the purview of State agencies, such as State oil and gas 

commissions and other State and Federal agencies. 

Pipeline facilities involved in the transportation of liquids or carbon dioxide in or affecting interstate or foreign commerce, including 

pipeline facilities on the Outer Continental Shelf, are covered by 49 

CFR 195 and regulated by OPS. All pipelines subject to Part 195 

must meet numerous requirements, including corrosion control, 

damage prevention, public awareness, reporting, design standards, 

construction methods, operational controls and limitations, pressure testing, maintenance standards, qualification of personnel, 

and emergency response. OPS’s safety regulations also apply to related pipeline facilities such as breakout tanks, valves, meters, 

pumping units, pressure regulating devices, and other equipment. 

In addition to all of the other provisions of Part 195, operators 

of pipelines that could affect high-consequence areas, or HCAs, are 

required to develop an integrity management plan. Pipelines are to 

perform integrity assessments of the condition of their pipelines 

regularly and mitigate features that could reduce pipeline integrity 

detected by those assessments. This is an extra layer of oversight 

based on the fact that consequences of a release are potentially 

greater if there is an impact on such areas. 

Certain liquid pipelines are regulated by State agencies and Federal agencies other than OPS. For example, pipelines that serve oil 

and gas production facilities within a local producing area or that 

traverse between production facilities may be regulated by States, 

except when they cross Federal land, in which case they are reguVerDate Aug 31 2005 09:38 Mar 24, 2011 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\DOCS\57251.TXT JEAN
8 

lated by Federal agencies. These include pipelines sometimes referred to as flow lines or production lines. 

In addition, lines that gather crude oil from producing areas and 

deliver it into a transportation pipeline may be regulated by States 

or by other Federal land management agencies. They are regulated 

by OPS if they cross non-rural or are covered by the OPS lowstress pipeline rule. 

The U.S. Coast Guard has safety oversight of pipelines that serve 

as offshore facilities, marine facilities, and terminals. Pipelines 

that operate on the OPS upstream, generally seaward, of the last 

valve on the last production facility, and those operated by producers that cross into State waters without first connecting to a 

transportation operator’s facility on the OCS, are subject to the 

oversight of the Mineral Management Service. 

Intrastate pipelines are subject to OPS jurisdiction, unless a 

State agency is federally certified to regulate and inspect intrastate 

pipelines. Federal law specifically allows States to assume responsibility for enforcing regulations over intrastate pipelines through 

an annual certification. States may have additional or more stringent requirements in place as long as they are not inconsistent 

with Federal standards. 

If a State does not meet the requirements for certification, it can 

still enter into an agreement with OPS to oversee certain aspects 

of intrastate pipeline safety, but OPS retains responsibility of enforcement for any violations on intrastate pipelines. 

States also enforce State damage prevention laws. In 2006, Congress granted OPS limited authority to enforce Federal damage 

prevention laws in States which did not have adequate State damage prevention programs. 

Unfortunately, not every State plan is adequate and adequately 

enforced. As our association witness mentioned on May 20, we recommend OPS move forward with its proposal on damage prevention and include a minimum requirement that State programs 

must disallow one-call exemptions for State agencies, municipalities, and commercial excavators. Third-party damage is a leading 

cause of significant incidents along the right of way, and we ask 

for your continued help in reducing those risks. 

Thank you. 

Ms. BROWN. Ms. Epstein. 

Ms. EPSTEIN. Good afternoon and thank you for inviting me to 

testify today. 

My name is Lois Epstein, and I am an Alaska- and Marylandlicensed engineer. My background in pipeline safety includes membership for 12 years on PHMSA’s Hazardous Liquids Advisory 

Committee, testifying before Congress many times on pipeline safety, and analyzing the performance of Alaska’s Cooke Inlet pipeline 

infrastructure. 

Currently, I am a consultant for the Pipeline Safety Trust, a public interest non-profit located in Bellingham, Washington. My testimony today reflects the Trust’s views. 

PHMSA regulation of pipelines has progressed greatly in the 

past decade largely as a result of the work of Chairman Oberstar 

and this Committee as well as other Committees which provided 

vigorous oversight and statutory direction in the wake of several 

9 

tragic accidents. Of particular significance were the 1999 Bellingham gasoline pipeline accident that killed three youths, the 

2000 Carlsbad natural gas pipeline accident which killed 12, and 

the costly 2006 BP Pipeline releases on Alaska’s North Slope. The 

first two accidents resulted in PHMSA’s integrity management requirements. The Alaska releases resulted in PHMSA finally proposing last week the second and final phase of a congressional 

mandate issued in 2006 dealing with unregulated rural low-stress 

pipelines. This mandate followed a 1988 resolution—that was 22 

years ago—by the National Association of Pipeline Safety Representatives sent to U.S. DOT asking for elimination of that exemption. 

What is problematic about PHMSA’s history and ominous for the 

future is the reactive nature of its actions and the at-times overlynarrow and inconsistent nature of its regulations. PHMSA does not 

act proactively in preventing major pipeline problems, a circumstance not unlike the now familiar situation with the Minerals 

Management Service. 

In the rest of my testimony, I discuss pipelines that PHMSA 

needs to regulate to prevent future accidents proactively, using 

some examples from Alaska that I am familiar with. However, the 

problems with these types of pipelines occur elsewhere as well. 

Regulating some of these types of pipelines requires statutory 

changes, and others can be addressed administratively. 

As we have heard today from PHMSA, its pipeline regulation can 

be described as patchwork at best. Near the end of my testimony 

I discuss two long-standing, important deficiencies in PHMSA’s 

transmission line regulation. Please refer to figure one showing 

what pipelines are regulated by PHMSA and which are not and 

also the Alaska scheme for regulating those pipelines. 

Both Congress and PHMSA are responsible for PHMSA’s extremely limited regulation of so-called ‘‘gathering lines.’’ Since 

2006, the State of Alaska does not use this term at all for pipelines 

that are not facility piping. They are now regulated as flow lines 

or transmission pipelines. 

It is not clear where federally defined gathering lines end and 

transmission line begin. Given these two types of pipeline similarities, one would think that PHMSA has sufficient technical justification to regulate these similar lines in a similar fashion. The 

Trust believes that Congress should require PHMSA to regulate 

gathering lines as transmission lines to prevent releases. NTSB’s 

testimony before the Senate Commerce Committee on June 24, 

2010 supports this position. 

Flow lines are multi-phased pipelines that take materials from 

wells to separation facilitates. Particularly in the early part of winter, Alaska commonly has releases from these unregulated pipelines. 

State regulation of these pipelines alone has not stopped these 

spills, largely due, I believe, to the lack of enforcement. On November 29, 2009, for example, BP had a release of approximately 

46,000 gallons from an 18-inch flow line. Congress needs to require 

PHMSA to regulate flow lines under 49 CFR 195 rules by a date 

certain. 

10 

Following separation of oil, gas, and water during crude oil production, produced water lines carry briny water contaminated with 

oil to injection wells for disposal. Produced water may be considered hazardous liquid. These produced water lines can and do fail 

in manners similar to other pipelines. For example, on Christmas 

day in 2008, at the ConocoPhillips Kuparuk oil field on Alaska’s 

North Slope, a corroded pipeline released nearly 100,000 gallons of 

toxic produced water. 

Drilling for natural gas in shale and coal formations has grown 

enormously in recent years and results in large quantities of produced water. These pipelines carry toxic materials to wells or surface disposal facilities, including evaporation ponds. Congress 

needs to required PHMSA to regulate produced water lines under 

49 CFR 195 by a date certain. 

On the topic of regulatory deficiencies for currently regulated 

pipelines, in its hazardous liquid pipeline integrity management 

rule PHMSA rejected the comments of NTSB, U.S. EPA, and others 

and chose to leave shutoff valve location decisions up to pipeline 

operators. Congress needs to reiterate its previous mandates to 

PHMSA on shut off valve use and ensure they are followed. 

Similarly, there are no performance standards for leak detection 

systems. The Chevron pipeline release near Salt Lake City earlier 

this month is an example of what can go wrong when a pipeline 

with a leak detection system has no performance standards for that 

system, and I included an attachment on that leak. Congress also 

needs to direct PHMSA to issue performance standards for leak detection systems by a date certain. 

In conclusion, hazardous liquid pipeline releases can have serious 

adverse public environmental and economic consequences. These 

consequences can nearly be eliminated and certainly can be significantly reduced with adequate Federal pipeline safety requirements 

and adequate enforcement, but that is a topic for another day. Investing in pipeline safety as a Nation pays off over the long term. 

Thank you very much for your attention to these important issues. 

Ms. BROWN. Thank you all for your testimony. 

Now Mr. Sires. 

Mr. SIRES. Thank you, Madam Chairman. 

Ms. Quarterman, I understand that special permits may be requested in certain instances by an operator that can waive and 

modify compliance with an existing regulation. While I understand 

that PHMSA must ultimately approve this request, to me this still 

appears that the industry is given the opportunity to regulate 

itself. Do you know how many special permits are approved and do 

you know what percentage of special permits are approved that are 

submitted? 

Ms. QUARTERMAN. I believe there are about 85 special permits 

that exist in the pipeline program. 

With respect to special permits, there is a requirement that those 

permits equal or better the regulatory requirements in the rule. 

There is a detailed process that takes sometimes as much as 2 

years before a special permit has been approved. It includes involvement of subject matter experts. Our engineering group, all of 

the regional directors for the program have to all agree that it is 

appropriate to have a special permit. 

11 

As to the numbers that have been rejected, I don’t know that. 

Across the board, I think, in the past year about 22 out of—about 

one-third I think were not approved, but I can get those statistics 

to you for the record. 

[The information follows:] 

12 


Insert offset folio 11 here 57251.011
13 

Mr. SIRES. So two-thirds were approved. 

I don’t understand why, if it takes 2 years, why do they have to 

file for a waiver, these operators? 

Ms. QUARTERMAN. Well, if they don’t file for a waiver, they have 

to follow the pipeline safety requirements. 

Mr. SIRES. And how long does that take? 

Ms. QUARTERMAN. Well, that is the existing rules, which is 

straightforward. They can do that immediately. 

Mr. SIRES. The other question that I had is, in terms of municipalities, how do you inform the municipality that this is taking 

place? Because I understand there are no requirements for a municipality to give the approval for these pipes. 

Ms. QUARTERMAN. With respect to hazardous liquid pipelines, 

there is no Federal agency that is responsible for siting unless 

those pipelines cross the international borders, in which case the 

Department of State becomes involved in terms of siting. PHMSA 

is not involved in siting decisions for any pipelines. 

Mr. SIRES. In other words, if I have a municipality, that pipe is 

coming through my municipality, that municipality does not have 

to give approval in order for that pipe to go through. 

Ms. QUARTERMAN. Well, in order to put a pipeline through a 

State or municipality, a pipeline owner has to obtain the right of 

way. So there can be involvement, usually at a State, perhaps at 

the municipal level, in terms of determining whether those State 

or municipal standards are met. 

Mr. SIRES. And the other thing I am concerned about is, when 

you have one of these accidents, usually the first people that respond is the fire department. How quickly do you inform those fire 

departments of the kind of chemicals that may be going through 

a pipeline? 

Ms. QUARTERMAN. Immediately. Usually, the fire department 

knows before we do because they are closest to an incident. But 

there is a national incident system whereby we are notified; and 

we immediately notify, if it is in a State, the State officials who are 

involved. The NTSB is also often notified of those instances. Of 

course, the emergency responders. 

Mr. SIRES. So you tell them exactly what is in that pipeline? 

Because one of the things that happened in my district was there 

was an accident with a railroad car, and the chemical was spilled, 

but the mayor of the town was afraid to send in the firemen because he said that it was not proper for the firemen. He was afraid 

for the firemen. 

Ms. QUARTERMAN. In the hazardous material program—and I 

think this probably applies to the hazardous material portion of our 

responsibility—we do fund I think it is $28 million in hazardous 

materials emergency response grants to States to assist them in 

preparing for an instance where there is a hazardous material 

spill. 

As a part of that program, we also have an emergency response 

guidebook, which is a little guidebook that almost every fireman 

carries with him on his fire engine and in police cars so that if they 

notice a hazardous spill they can look through it and immediately 

know whether they should get close to it or not based on the information that is contained there. 

14 

Mr. SIRES. Thank you very much, Madam Chairman. 

Ms. BROWN. In response to your question, that is one of the purposes that we are having a hearing, to find out whether or not the 

rule is adequate, whether we need to change the law, and what is 

the procedures in place for waiving the rules. So that was a very 

timely question. 

Mrs. Napolitano. 

Mrs. NAPOLITANO. Thank you, Madam Chairman. 

The question is for Ms. Quarterman. You’ve heard me in my 

opening statement refer to the issue with Union Pacific and Kinder 

Morgan on a pipeline and its corresponding bend. Apparently, 

there is a bend that they have to deal with. Their disagreement 

has delayed this project for a number of years, and your administration had the State fire marshal inspect it. 

The issue is, the pipeline company wants to use DOT load standards, and the railroad wants to use the American Railroad Maintenance Waste Standards in protecting that pipeline, that bend. 

What is the difference and why would there be such an issue—to 

me, it sounds like Union Pacific wants to move the whole pipeline. 

Well, that can’t happen. It is very expensive, in the millions of dollars—or more than that. 

UP claims that the pipeline must be protected and continues 

steel encasement of that bended pipe. Kinder Morgan says many 

of the safety regulators, including the State regulators, contend 

that continuous steel encasement is dangerous and leads to corrosion and electrical shorts in the pipe. 

Now this can happen at any other place. It isn’t just my area. 

But I am looking for clarification. Is this safe or not? 

And the pipeline company wants a full concrete cap. UP says. 

No, we want it moved or we want to do this particular kind of encasement. And yet there are questions about the safety of that steel 

encasement creating a short. 

Do disagreements between pipeline companies and the railroad 

happen often? How are they resolved? Do we have any way of being 

able to sit these two—I have already sat them down, had them 

meet, and they are still arguing over which is better or what 

should be done on it. And how can your administration help States 

oversee and regulate pipelines safety? Certainly we want to ensure 

that this is the best protection, but if both the State and the Federal agree and yet Union Pacific does not. 

Ms. QUARTERMAN. I thank you for your question. 

I am sure that this happens—maybe not frequently, but occasionally. In this instance, I believe that our staff has been trying to 

work to help resolve the issue there. The primary issue is that it 

appears that UP is the landowner and has that right of way, and 

they are requiring certain standards for the crossing underneath 

their facility. 

Mrs. NAPOLITANO. Well, that is questionable, ma’am. Because the 

land was Cal Poly Pomona University, and there was supposedly 

an agreement to be able to transfer some land in exchange for 

being able to allow that to happen on their land. I can check it out 

further, but go ahead, please. 

Ms. QUARTERMAN. I don’t know the specifics of that, but just 

under the assumption that was the end—— 

15 

As to the safety standard, I can tell you that the reason that the 

pipeline that PHMSA and the State have a view about the casing 

is in fact what you stated, is a question of corrosion. When you 

have encased pipeline, you have one metal within another metal, 

there is the opportunity for corrosion to be increased and to have 

corrosion-related events. It may be that the railroad is thinking 

about weight limitations, and I am not sure—maybe they just have 

the notion of having two pipes is better than one. I am not exactly 

sure what their rationale is there, but we would be happy to continue to work with you and try to reach resolution on that. 

Mrs. NAPOLITANO. I would really appreciate it. 

But, also, you might want to look at it from the standpoint of 

some other areas having the same issue of having a costlier resolution to an issue that doesn’t really need that higher standard. Because if both the Federal and the State are agreeing and the railroad is not, something is wrong. 

Ms. QUARTERMAN. Right. 

Mrs. NAPOLITANO. Thank you, Madam Chair. 

Mr. WALZ. [presiding.] Mr. Shuster is recognized for 5 minutes. 

Mr. SHUSTER. My question, Chairman Hersman—first question— 

in the Kansas pipeline failure, I believe you said it was a failure 

on the part of PHMSA not going through the process properly; is 

that accurate? 

Ms. HERSMAN. Yes, sir. There were actually a couple of failures. 

The first failure was that the company needed to take a number 

of factors into consideration when they are assessing the risk for 

the pipeline. One of those is leak history, and that would maybe 

bump it up for an inspection on a faster interval. They did not include that in their assessment, and PHMSA failed to catch that 

they omitted that particular factor. 

Mr. SHUSTER. It wasn’t that the regulatory regime that was in 

place was not adequate. It was that the bureaucracy didn’t go 

through the process. Is that a proper characterization? 

Ms. HERSMAN. The requirements were there. They were not followed. 

Mr. SHUSTER. And that is what concerns me, that you are proposing these low-stress pipelines and some of these—the gathering 

pipelines and the NPRM phase twos are not under DOT regulation. 

But isn’t it true that there is a State—in many cases, in some 

cases, in all cases—are overseeing the regulatory requirements on 

these pipelines? 

Ms. HERSMAN. I think the primary concern that the Safety Board 

has is that there is a bit of a patchwork system, that it is not consistent regulations to all of these different types of pipelines. There 

was actually a gathering line event in Garoset, Texas, last month 

that involved a fatality, and it is being investigated by the Texas 

Railroad Authority. But it was a gathering line incident. 

So I think the concern that the Safety Board has is whether 

there are risks to human beings or the environment. The diameter 

of the pipeline is not necessarily the controlling factor or the pressure in the pipeline isn’t necessarily the controlling factor. We saw 

a large release on BP property in 2009 that was a six-inch line. 

Mr. SHUSTER. And when the NTSB makes these recommendations, you put them under a cost-benefit analysis to try to underVerDate Aug 31 2005 09:38 Mar 24, 2011 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\DOCS\57251.TXT JEAN
16 

stand what the cost is going to be, what the benefit is we are going 

to gain? 

Ms. HERSMAN. Part of our charge from Congress is actually not 

to do that. So we investigate accidents and we make recommendations on what we think is best in the safety interests. It is up to 

the regulator and other entities to do the cost benefit. 

Mr. SHUSTER. And I understand that is your charter, and Congress chartered you to do that. But sometimes when we put these 

regulatory recommendations out there, at some point, as you said, 

the agency has to do a cost-benefit analysis because it—I don’t 

want to see an accident. I don’t want to see one life lost. But the 

reality is as long as there are human beings doing these types of 

things—driving cars, flying planes—there is going to be human 

error. There is going to be mechanical failure. 

So it becomes a concern of mine when we are looking at an industry that is very safe by all accounts to put forth new recommendations like this without an agency doing a cost-benefit 

analysis. Maybe at some point we need to relook at the NTSB’s 

charter and at some point look at those types of cost-benefit analyses. 

Ms. Quarterman, does the administration plan on developing a 

pipeline safety reauthorization bill? 

Ms. QUARTERMAN. We are working on a bill, yes. 

Mr. SHUSTER. And, in your view, would you characterize the industry as being very safe? 

Ms. QUARTERMAN. I think the pipeline safety record over the past 

20 years has improved markedly. There is always room for further 

improvement. Certainly, as compared to some of the other modes 

of transportation, it is safer. 

Mr. SHUSTER. And as we move forward, I certainly would like to 

work with you on this. Because, as I said, I think there has been 

some shortcomings over the years at PHMSA; and I think some of 

that, if not all of that, has to do with a lack of staffing and maybe 

the process not being in place that needs to be there. 

But, again, to put a whole new layer of regulations on an industry that, as I have said and some of the testimony here today, and 

I think if you go across the country, it is very safe. And we need 

to build upon that but not, again, put a whole new layer of regulatory burden on it that, in the end, I don’t believe is going to make 

it that much, if any, safer than it is today. 

I see my time is ready to expire, so I yield back. 

Mr. WALZ. Thank you, Mr. Shuster. 

Mr. Larsen, you are recognized for 5 minutes. 

Mr. LARSEN. Ms. Epstein, you recommend fully regulating gathering lines and produced water lines. Some say that because various lines are regulated by a State or by a Federal authority or 

State or Federal agencies there is no need for additional Federal 

regulation of those lines. Can you respond to that? 

Ms. EPSTEIN. Sure. And there was a reason, in addition to my 

having ready access to Alaska data, that I use Alaska as an example. Because we do, in fact, have good, comprehensive regulations 

of flow lines, produced water lines, and gathering lines in the 

State. However, we don’t do enough enforcement in Alaska. 

17 

I think some of that is similar to the situation that is now wellknown with the Minerals Management Service, where there is a 

conflict of interest in the sense that the State gets revenue from 

leases and having wells produce oil and sending it through the 

Trans-Alaska Pipeline. So, therefore, you have a situation where 

the State is conflicted in terms of how it approaches enforcement. 

But those were very major examples of 46,000 gallons released in 

one case, 100,000 in another. 

And with due respect to Congressman Shuster, part of the mandate of PHMSA is to approach pipeline safety in terms of safety 

and environmental protection; and these pipelines have been unregulated by PHMSA to date. I would argue the produced water 

lines, they have the existing authority to go forward with regulating those lines, but in terms of the other lines, we would need 

some help from Congress to ensure that those are covered. 

Mr. LARSEN. Ms. Quarterman, Washington State has an agreement with PHMSA. We have our own pipeline safety agency. How 

many States have requested and received agreement to share certain responsibilities with PHMSA? 

Ms. QUARTERMAN. On the hazardous liquid side or more generally? 

Mr. LARSEN. On hazardous liquid. 

Ms. QUARTERMAN. On hazardous liquid, I believe there are about 

14 States that have an intrastate agreement. Another two have— 

well, 15 have a certification, two have an agreement, and another 

six serve as interstate agencies on behalf of PHMSA. 

Mr. LARSEN. And perhaps you don’t have the number now, how 

many inspectors do those States have with authority? 

Ms. QUARTERMAN. I don’t have the number. 

Mr. LARSEN. Can you get that? 

[The information follows:] 

18 


Insert offset folio 12 here 57251.012
19 

Mr. LARSEN. And then can you compare that to the number of 

enforcement inspectors that you have? 

Ms. QUARTERMAN. Well, I can tell you how many we have. We 

have authorization for 135. In the President’s budget for fiscal year 

’10, we have 136 positions. Right now, we have 102 people onboard 

in the inspection and enforcement area. There are 18 people who 

we are in the process of interviewing. There are another 10 people 

that we have essentially—it is out on the street. An advertisement 

is on the street. And I think there are another six people who we 

have made an offer to and hope to start soon. 

Mr. LARSEN. Ms. Hersman, I didn’t see it in your testimony, and 

perhaps I missed it—and perhaps NTSB doesn’t have a position— 

the idea of PHMSA being responsible for regulating the entire pipeline. When we put this together in 2002 and in 2006, we really did 

look at the high-consequence areas, places where people live, places 

where people played, and that kind of thing, as opposed to bringing 

a certain level of regulation to the entire length of a pipeline. Does 

NTSB have a position on that? 

Ms. HERSMAN. The NTSB supports expanding integrity management to the entire system. 

One of the biggest concerns that we have is when operators fail 

to identify a high-consequence area correctly. We are investigating 

a gas accident in Florida where a segment of pipeline ruptured 

right close to the Florida turnpike, and it was not accurately designated as a high-consequence area in the pipeline’s plans. 

Mr. LARSEN. Mr. Falgoust, in the short time I have left, if you 

can just answer the question: How would you all then see that, expanding the integrity management planning to the length of a 

pipeline? 

Mr. FALGOUST. Well, OPS, guided by Congress, focuses its regulatory efforts on pipelines that pose the greatest risk to the environment and to the people. Pipelines have every incentive to ensure integrity. There are a lot of millions of dollars that are spent 

on integrity management. And due to failure analysis, taking integrity management further beyond HCAs will put an economic burden upon the pipeline industry. We are investigating the impacts 

of that right now, doing studies for the Association. I believe we are 

looking into it. 

Right now, every segment of a pipeline is monitored by control 

rooms, SCADA systems, corrosion protection, air and ground patrol, damage prevention; and not all pipes have capability of running in-line inspections. 

So there are different challenges that we face when we go to different areas that go beyond HCAs, and we definitely want to keep 

it to a risk-based platform and putting our resources where it is 

the best place. 

Mr. LARSEN. And just if I may, are you going to be able to share 

information back to us at some point in the near future about your 

results of looking at the impact of this? 

Mr. FALGOUST. We absolutely will. 

Mr. LARSEN. And I just want to know what the timeline is for 

the administration to get us a proposal on the bill. 

Ms. QUARTERMAN. I don’t have a particular timeline. We are 

waiting for feedback. 

20 

Mr. LARSEN. Well, we will give it to you. 

Ms. BROWN. [Presiding.] We have less than 3 minutes before it 

is time to vote, so we are going to stand in informal recess. We 

have at least 30 more minutes of questions and answers. We can 

have a second round if you are interested, Mr. Larsen, but what 

we are going to have to do now is go and vote. 

So we are going to stand in informal recess, and we will be back. 

Thank you. 

Ms. BROWN. The Committee come back to order. 

Before I get into my line of questioning, Mrs. Quarterman, BP 

which is in the news every day, had several violations. What is the 

status of their civil penalties or possible decree as a result of the 

2006 spill? And I want to say that on March 5th, there was fines 

by the State of Washington for 27 violations, is that correct? Can 

you give me an update on that? 

Ms. QUARTERMAN. I can give you a limited update because it is 

in, as I understand it, in the midst of settlement negotiations. The 

Department has been working with EPA and the Department of 

Justice and with BP regarding the incident that occurred in 2006. 

And to be candid, I don’t know the ins and outs of the negotiations 

that are going on, counsel’s office is working with Justice Department on that. It is ongoing. 

Ms. BROWN. Washington State had given them 27 serious violations on, I want to say March 5th, and the incident occurred 

around March 20th. If the oil had been on leaving the well, it 

would have been our responsibility. It would have been you-alls responsibility? If, for example, it is another Committee because it 

was drilling, if they had gotten the oil up and it was bleeding. 

Ms. QUARTERMAN. It depends on where it was if you were on a 

transmission pipeline or the pipeline covered by our rules then, 

yes, it would be within our jurisdiction but—— 

Ms. BROWN. My question is what would have been different 

then? What safety procedure was in place to ensure that we could 

have contained the spill. 

Ms. QUARTERMAN. Well, a drilling operation and a pipeline operation—— 

Ms. BROWN. I understand the difference. I understand if it was 

pipeline and this spill occurred, how could we ensure that we 

would have been able to cut it off? 

Ms. QUARTERMAN. Well, pipelines have shutoff valves to stop the 

flow. Pump stations are shut down and that kind of thing occurs. 

Of course that doesn’t mean that a spill would not occur, but it 

would probably not be of a magnitude of a drilling spill—— 

Ms. BROWN. I guess my question is what assurances do we have 

to the public that those cutoff valves work? Who inspects them? 

Ms. QUARTERMAN. There is a requirement that they test the 

shut-off valves. 

Ms. BROWN. Who is they? 

Ms. QUARTERMAN. The companies who operate them are required 

to test them. 

Ms. BROWN. OK, and my question to you, I understand that is 

the problem that we have. We have the fox watching the fox. Who 

is ensuring that the hen is being protected? 

21 

Ms. QUARTERMAN. Our inspectors are responsible for reviewing 

the test records during an inspection for tests of that nature. So we 

are responsible for that. 

Ms. BROWN. And well, I guess I want to see the procedures in 

writing as far as ensuring, I hear what you are saying. That is part 

of the problem that we have that the industry inspects, and then 

I guess then they tell us the results. I mean, what kind of oversight, what procedures do we have in place to ensure that what 

they are saying is actually what is happening? 

Ms. QUARTERMAN. We will be happy to supply additional information to you for the record. 

[The information follows:] 

22 


Insert offset folio 13 here 57251.013
23 

Ms. BROWN. OK, in 2009, there were 331 reported hazardous liquid pipeline incidents, 331. Only 100 of those 331 incidents was reported to the public Web site meaning 68 percent of the pipe line 

incidents that occurred in 2009 were not reported to the public. 

This is because DOT just provide information to the public on serious and significant incidents which meet certain criteria. This style 

of reporting is misleading about the safety of the industry. Why not 

provide information to the public on all incidents reported to DOT? 

It seems to me that this sort of information would be valuable 

to the States that we are talking about, Florida, Mississippi, Alabama, Washington State, Oregon, so can you answer that question? 

Ms. QUARTERMAN. I agree with you that that information is valuable, and I believe it is available on a link to that Web site. The 

reporting of the hundred incidents is there, it is really sort of a 

basis for people to be able to compare past with past incidents. In 

2002 the reporting requirements changed, and we have on the Web 

site sort of a trend analysis that goes from before 2002 forward, 

and I believe that there is also a link on that site that shows all 

incidents. This is—I believe those are just showing the serious and 

significant incidents based on the trend which you can go backwards in time, but the other incidents should be available there. 

I will verify that. 

Ms. BROWN. OK, well, maybe we can get the staff together and 

go over it because my staff tells me it is not readable to the public, 

it is not user understandable, the way it is reported. 

Ms. QUARTERMAN. We can check on that absolutely. We try to be 

as transparent as possible. 

Ms. BROWN. Yes. The industry standards published in your regulation are these industry standards published in your regulations, 

are these published on the Web site or does DOT make it publicly 

available in any way? My understanding is that the Committee 

staff asked DOT for a certain industry standards references in regulations. They were told that they would have to purchase it from 

the industry, which is what the safety and environmental community is also told. This seems to be unacceptable. It is part of the 

Federal regulations. Can you explain? Do you understand what I 

am talking about? 

Ms. QUARTERMAN. I do understand it, and I agree with you that 

that is a cause for concern as you are probably aware there is a 

piece of legislation that encourages Federal agencies to incorporate 

by reference industries standards into their regs. There is also 

OMB guidance suggesting that, and there are many industry organizations that create these standards, and we serve on the boards 

of many of those if they are going to affect our regulations. However, because of copyright issues, and we also publish them in the 

Federal Register for comment. 

However, when we publish them, we are not permitted to publish 

the entire contents of the standards because of copyright concerns, 

and I think it is something that could be improved. 

Ms. BROWN. I think so too, because are you saying the Federal 

standards, that you are working with the industry? I am confused. 

Ms. QUARTERMAN. There are industry standards, for example, 

when we talk about corrosion, there is a National Association of 

Corrosion Engineers, which are experts in issues of corrosion. And 

24 

they come up with standards with respect to what is the best way 

to protect against corrosion. And those standards are ones that are 

considered industry best practices and ones that we would want to 

include and ensure that the industry follow those guidelines. So 

those are the things we are talking about. 

Ms. BROWN. I understand that. But if we, let’s say you are doing 

a report for me and that is part of the report. That should be part 

of what is made public. And it shouldn’t be that I have to purchase 

it from this particular association, if you are doing a comprehensive 

report. I am confused. Would someone else like to respond to that? 

Ms. Epstein or someone else? Because I understand you indicated 

that you have to purchase this from the industry? Explain it. I am 

confused. 

Ms. EPSTEIN. Yes, the industry developed consensus standards, 

and they are for purchase, and they are copyrighted. And so in 

order for the public to get a copy of it, they obviously need to buy 

it and they are fairly costly documents. When PHMSA incorporates 

that full standard, they cite it, but they don’t include all the details 

that are in it, and that is a problem so industry needs to abide by 

the standard because it is part of PHMSA’s regulations. But it is 

impossible in some sense for the public in general to know what 

is in it because we can’t just go online and look it up. We need to 

purchase it. 

Ms. BROWN. I guess I am confused because I understand that we 

are working on best practices. But trust but verify. So just because 

it is in the report, how do I know it is accurate? 

Ms. EPSTEIN. Yes I think what you are referring to is the industry will say, OK, we are complying with the standard, and as I understand how it works, PHMSA inspectors will try and look at the 

paperwork and verify that. But there are definitely some instances 

where the inspectors are not there to ensure compliance, and many 

cases that may not be that critical, but in some particular testing 

operations and other things, it could be very critical that the inspectors be there. 

Ms. BROWN. Mr. Falgoust, what does the industry have to say 

about this? 

Mr. FALGOUST. Well, my experience is when we are applying for 

permits and things of that nature, if we reference an industry 

standard, we generally supply industry standards. We supply industry standards and discuss that with PHMSA on a regular basis 

during inspection modes. And I don’t know the whole framework of 

how the public has access to all the industry standards. There are 

many of them. However, when we use them for representation on 

things that, for certain regulations, we generally make them available, especially referenced for a permit or other things of that nature. 

Ms. BROWN. I guess if we publish a documentation saying that 

this is the standards, then why is it that the government would 

have to purchase it in order to get a copy of it? 

Mr. FALGOUST. I can’t speak to that. I would have to get API or 

one of the associations and their standards committee to answer 

that question. 

Ms. BROWN. I understand that it could be a standard. But I don’t 

know how we just take their standards without verifying it in addiVerDate Aug 31 2005 09:38 Mar 24, 2011 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 P:\DOCS\57251.TXT JEAN
25 

tion. If you are saying that you are doing certain procedures, corrosion is a good one, and that you have come up with certain procedures and these are the checkpoints, then we need to verify that 

these are the checkpoints. I think that is our job. And then we 

should publish it. And it should be available for everybody. Or we 

get an independent person or independent organization to verify. 

But I think the government has a responsibility. What do you 

think? 

Mr. FALGOUST. I believe industry, when they reference certain 

standards, generally will offer that standard up and show where 

they are in compliance with that standard and what they are trying to cover. Transparency we view as a very good thing. I don’t 

know the whole framework at how that goes and access completely. 

There is many associations and different standards that are out 

there, and they each had their own kind of framework there. So 

that is the best I can speak to that. 

Ms. BROWN. Ms. Hersman and Ms. Epstein, DOT reported, and 

I guess this is a follow-up committee that it has incorporated by 

reference in full or part, 69 separate industry standards into the 

pipeline safety regulations and 151 separate industry standards 

into the hazardous material safety regulation. What safety concern 

does this rise for the NTSB and the Pipeline Safety Trust? 

Ms. HERSMAN. The Safety Board doesn’t necessarily take exception to incorporating professional standards. But what we do have 

concerns about is to make sure that those are adequate and that 

those are followed and that is really the job of PHMSA to ensure 

that that happens. We do sometimes, in our investigations, look at 

some of those consensus or industry standards to see if they are effective. And if we find that there are problems, as in public awareness, educating the public about the pipelines in the Carmichael, 

Mississippi accident, we made a recommendation directly to API to 

evaluate their public education programs. And so the safety board 

in our investigations will look at those standards. 

It is not uncommon throughout the transportation industry to incorporate some of those industry standards. But I do think the previous questioning that you had, it is very critical that everyone understand exactly what those standards are for them to be easily accessible and for them to be transparent. If you want people to follow them, they have got to know what they are. 

Ms. BROWN. I guess the follow-up question that I have there is 

that, for example, on the education portion, you made the recommendation what was the outcome of the recommendation to educate the public, because the question earlier was about the firefighters and the community, and we have had lots of discussions 

about how do you notify the community as to what is going through 

the community, so they can be prepared for a spill or something 

that comes up. 

Ms. HERSMAN. That is a great point. One of the critical issues 

that we see with respect to pipeline safety is actually knowledge 

that the pipeline is there and what it is carrying. This comes into 

play with respect to one call programs and excavation and digging, 

which is one of the big causes of accidents. 

In addition, for emergency responders, it is to make sure that 

they have adequate training and awareness and familiarization. 

26 

And then it goes back also to the companies that are on that route 

to make sure that they have good communication with operators 

and law enforcement and first responders along that line so that 

they do have adequate shut-off if a leak is reported to make sure 

that they know how to shut that pipeline down quickly and safely. 

And so marking is important, making sure that there is inspection 

and making sure people that are educated and have awareness. 

We have seen a lot of improvements over the years with respect 

to those systems and now there is a three digit call before you dig 

system Nationwide, and that has been effective. 

Ms. BROWN. 811. My indication is that it is working. But can you 

respond to that a little bit more? 

Ms. HERSMAN. We have some anecdotal information that the 

number of calls has gone up. But we still see a number of accidents. I think the good news is that it is improving. The bad news 

is that this is still one of the highest causes of accidents and it is 

completely preventable. The Safety Board is launched on an accident in Texas right now in Clairemont, Texas, where there was a 

fatal event, and then a day later in Darrouzett, Texas, there was 

another fatal accident that the Texas Railroad Commission is investigating, and so we remain concerned about these preventable 

accidents and think that certainly more can be done. 

Ms. BROWN. Ms. Epstein. 

Ms. EPSTEIN. Yes, I would like to raise a number of points associated with developing of the standards and implementing them to 

get at your earlier questioning. 

Development of the standards is, as I noted, a consensus process 

and generally that means the industry together comes to consensus. There are, if they have the resources, State regulators involved and also Federal regulators as well. Rarely, if ever, are 

there members of the public involved. That is one concern. So it is 

a regulatory effort that does rarely have enough involvement by 

people outside the industry except when there is sufficient governmental involvement. 

Secondly, because they are consensus standards and sometimes 

there may be just a small number of companies that might oppose 

something more stringent, and so you have a situation where at 

times you could have a lowest common denominator. And an example of that may be instead of using the language ‘‘shall,’’ it may 

might say ‘‘may’’ or ‘‘may consider’’ in order to get consensus. 

Thirdly, there are certain things that aren’t addressed. These are 

gaps in the standards and those are the types of things that whether or not consensus is involved, I would absolutely encourage them 

to look for and address through regulatory means. 

And the other thing that PHMSA needs to do is make sure that 

the standards are, in fact, enforceable because they can be written 

in a way where there is an enormous amount of the discretion on 

the part of industry, again, the example of may consider instead of 

industry shall do this. 

So if, in fact, there are constructed that way then I believe there 

is an obligation on the part of PHMSA to basically put in their regulation something that would take that portion and make it enforceable if appropriate. Thank you. 

27 

Ms. BROWN. Thank you. Ms. Quarterman, do you want to add to 

that? 

Ms. QUARTERMAN. I would just add that PHMSA is actively involved in creation of many consensus standards. I believe at the 

moment we are involved in about 35 different standards that are 

being developed for by consensus on these professional organizations. 

Ms. BROWN. What procedures do we have in place, when we say 

industry, and I understand that it hasn’t been a lot of accidents, 

but we have got to err on the side of the public and the safety because we have several drill, deepwater drills, but one accident can 

destroy the lives of the community, the environment. So we want 

to make sure we have the procedures in place to protect the environment. I mean that is what we are supposed to do. That is our 

job. 

So what procedures do we have, we say the industry, to get input 

from the public? Do we publish? Do we have a reviewing period before we come up with the final documentation? 

Ms. QUARTERMAN. In terms of our rules we, of course, have to 

put them into the Federal Register and have public input. 

I believe with respect to the ANSI standards, they also have a 

public process, so public members can be involved at that point in 

the process. 

Ms. BROWN. On the question of 811, how can we improve that 

educational process? I understand it is working. How can we make 

it work better? 

Ms. QUARTERMAN. I agree with Chairwoman Hersman that these 

accidents are absolutely preventable. And you may know that 

PHMSA was responsible for creating the 811 number and making 

a national effort in this way. 

And I would hope that one day it becomes as well known as 911 

so that people will call before they dig, especially recently with 

these two incidents in Texas, I can tell you that the Secretary is 

very much focused on these events and wants to ensure that we 

have a strong campaign through the summer, which is a big 

digging month, for people to pay more attention to calling before 

they dig. 

We have been funding the Common Ground Alliance, which really brings all the underground stakeholders together, not just pipeline companies, but also utilities, telecom, and educating them 

about calling—being involved in 811. Perhaps we need to spend 

some more money in a public campaign to educate people than we 

are right now. 

Ms. BROWN. I guess the last question, both the NTSB and Ms. 

Epstein suggest that DOT should regulate all gathering lines. Ms. 

Epstein recommend regulations of waterlines. In fact, there are a 

number of pipelines that are exempted from Federal regulation. 

What is your response to this? Is DOT willing to review these exemption? At the very least, why not require reporting of incidents 

of all exemption pipelines so that DOT can see if there is a need 

to regulate? And would this not be beneficial to the States? 

Ms. QUARTERMAN. There are three statutory exceptions to oversight for pipelines. One of them relates to onshore production, refining manufacturing facilities, a second to storage or inplant pipVerDate Aug 31 2005 09:38 Mar 24, 2011 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 P:\DOCS\57251.TXT JEAN
28 

ing systems associated with onshore production refining manufacturing facilities, and then there are gathering lines which are defined as less than 6 inches of low pressure and in not unusually 

sensitive areas, in rural areas. 

And as I said in my opening, the administration is in the process 

of reviewing the existing law and looking for opportunities to ensure that pipeline safety covers as much of the pipeline system as 

possible. 

In addition, we are looking internally at exemptions that have 

been in the regulations for many, many years and some of which 

nobody even remembers how they got there todetermine whether or 

not they are still appropriate. So the notion of gathering data, reporting data from those entities that are responsible for—who own 

those pipelines, I think, is a good one. 

Ms. BROWN. What is the name of the trans-Alaska pipelines extend 800 miles, there is not any control. They are unmanned. We 

are extending to another company about 1,300 miles. Are we going 

to require a certain man—manned-ing of these? Because in a lot 

of cases when there is problems, we find out because someone report and it could go on for a long period of time. 

Ms. QUARTERMAN. As you know there was a recent incident with 

respect to Alyeska Pipeline where—— 

Ms. BROWN. May 25th. 

Ms. QUARTERMAN. Yes, May 25th incident, and I have had conversations with the president of Alyeska about that incident and 

will have further conversations shortly. As you may be aware, the 

production there has gone from about 2 million barrels a day to 

about 600,000 and they are in the process of a strategic realignment which includes shutting down many of their pump stations 

and some of which may or may not be manned. 

At this point, I think we are going to continue to work with them 

and talk with them about what is the appropriate coverage for that 

pipeline. 

Ms. BROWN. TransCanada is the new company that is coming in. 

They have 1,300 miles. Is it going to be manned, or unmanned. 

Ms. QUARTERMAN. I believe you are talking about the Keystone 

XL line TransCanada is from the building from the oil sands in 

Canada down to the Gulf. I don’t know the details of what their 

plans are about the pump stations on that system. 

Ms. BROWN. Do we have to give them permits? 

Ms. QUARTERMAN. We do not have authority to give them any 

citing permit. They have come to us with a request for a special 

permit to operate that pipeline at 80 percent, and that is in the 

process of being reviewed. 

Ms. BROWN. Well, what are some of, and you don’t have to tell 

me right now, what are some of the factors that you all consider 

in order to give them the special permit? 

Ms. QUARTERMAN. Well, there are many factors, and each special 

permit varies from one to the other. This would be a new pipeline 

so we would probably go above and beyond, most certainly, we 

would go above and beyond the regular regulations, we would probably also go above and beyond the requirements under the integrity 

management plan in terms of how often they have to inspect the 

line for corrosion, run pigs, that sort of thing. Obviously it is still 

29 

in process so we haven’t reached a determination as to whether or 

not to proceed with it. But I can certainly give you copies of other 

permits, special permits where we have permitted a company to go 

above 80 percent. 

Ms. BROWN. How important do you think the manning of these 

stations with personnel if that seemed to be the problem? When 

there is an incident on the line, there is no reporting. 

Ms. QUARTERMAN. I don’t think I have the technical expertise to 

answer that question. I will be happy to ask my staff to get back 

to you. I understand many locations can be manned with remote 

control. So I don’t know what manning requirements there might 

be. 

Ms. BROWN. Well, is there a trigger, and I am not a technical 

person either, but is there a trigger to notify someone if an accident 

has occurred, if there is a breakage in the system? 

Ms. QUARTERMAN. There are requirements in the rule for a leak 

detection system. Usually in the instance of a special permit, the 

requirements would be much, shall we say, more strenuous than 

those that are in the regular regs. 

Ms. BROWN. Well, I want thank you all of you for your testimony 

today. 

We are going to leave the record open so that Members and myself can ask additional questions. But as we move forward, I am 

looking forward to working closely with you and other Members to 

make sure that we are very proactive in our approach to dealing 

with the industry wherein you know it has to be a balance but any 

error should be on the side of the public which is our job to protect. 

With that, this meeting stands adjourned. 

[Whereupon, at 4:20 p.m., the Subcommittee was adjourned.] 

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