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57–487 PDF 2010

THE SAFETY OF HAZARDOUS 

LIQUID PIPELINES (PART 2): 

INTEGRITY MANAGEMENT 

(111–128) 

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 

July 15, 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 

VACANCY 

(V) 

CONTENTS Page 

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

TESTIMONY 

Adams, Richard, Vice President, U.S. Operations, Liquids Pipelines, Enbridge 

Pipelines ................................................................................................................ 18 

Guttenberg, Hon. David, House District 8 - Area of Fairbanks, Alaska, Alaska 

State House Minority Whip ................................................................................. 18 

Jones, Greg, Senior Vice President, Technical Support Division, Alyeska Pipeline Service Co. ..................................................................................................... 18 

Kuprewicz, Richard B., Public Member, PHMSA’s Technical Hazardous Liquid Pipeline Safety Standards Committee and President of Accufacts, Inc. ... 18 

Quarterman, Hon. Cynthia L., Administrator, Pipeline and Hazardous Materials Safety Administration ................................................................................. 2 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Richardson, Hon. Laura, of California ................................................................... 45 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Adams, Richard ........................................................................................................ 51 

Guttenberg, Hon. David .......................................................................................... 57 

Jones, Greg ............................................................................................................... 60 

Kuprewicz, Richard B. ............................................................................................. 70 

Quarterman, Hon. Cynthia L. ................................................................................ 79 

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(1) 

HEARING ON THE SAFETY OF HAZARDOUS 

LIQUID PIPELINE (PART 2): INTEGRITY 

MANAGEMENT 

Thursday, July 15, 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 10:00 a.m., in room 

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

Ms. BROWN OF FLORIDA. The Subcommittee on Railroads, Pipelines, and Hazardous Materials will come to order. 

The Subcommittee is meeting today to hear testimony on pipeline operation management of the safety of hazardous liquid pipelines, more common known as ‘‘integrity management.’’ This hearing is the third in a series of oversight hearings the Subcommittee 

will hold as we look toward reauthorizing the Department’s pipeline safety program. 

On February 1, 2000, in the wake of several tragic pipeline ruptures, PHMSA issued a Final Ruling, requiring pipeline operators 

to develop and implement a written Integrity Management Program. Under the program, operators are required to identify all of 

their pipeline segments that could affect a high-consequence area, 

such as a high-population area, an environmentally sensitive area, 

evaluate the integrity of such pipeline segments and repair and report certain defects identified as a result of these evaluations. 

A lot of successes came out of the Integrity Management Program. For example, operators have reported to PHMSA that they 

have made more than 31,000 repairs to hazardous liquid pipeline 

segments, that if left unaddressed, could have resulted in a spill. 

Of these, about 7,000 detects were considered to be so serious that 

immediate repairs were required under the regulations. Another 

25,000 detects had to be repaired within a 60- to a 180-day time 

period. 

This is a real success, and I anticipate that we will see similar 

successes from the gas Integrity Management Program, but there 

is always room for improvement, and that is why we are here 

today. 

I hope we can get some of the areas that might need some refined tuning up front. We do have concerns about the Integrity 

Management Program of BP Exploration and Alyeska Pipeline 

Service. BP, as evidenced by the Deepwater Horizon spill, has a 

long history of taking too many risks and cutting corners to pursue 

2 

economic growth and profits. BP Exploration was invited to this 

hearing, but could not attend. 

Recent press reports allege that Alyeska, at the direction of BP, 

which owns almost 50 percent of the company, is following in BP’s 

footsteps by making dangerous cuts in safety and inflating the 

amount of money the company is spending on corrosion control. A 

day after these reports surfaced, the Alyeska President, who has 

worked for BP for almost 27 years, announced his resignation. 

Alyeska stated that his retirement was already planned, but the 

timing of this most recent announcement is questionable. 

I am concerned about a few recent incidents at Alyeska, one of 

which was a near miss indicident that resulted in the release of 

flammable vapors. According to PHMSA’s Corrective Action Order, 

Alyeska did not verify the safety of the pipeline before it restarted 

operations. 

Another incident occurred at Pump Station 9, which lost power 

during firing testing. As a result, the station dropped off the radar 

screen at Alyeska Pipeline’s control center. Crude oil began to flow 

without anyone realizing it, and in the end, 22,000 barrels of oil 

flowed into a relief tank and then spilled over, spilling another 

5,000 barrels of oil onto the ground. Alyeska seemed to minimize 

the significance of this spill in its written testimony, stating that, 

because the oil spilled into secondary containment, no environmental damage or injuries occurred. The fact is, while the lining 

of the containment area is designed to prevent oil from leaking into 

the soil, when crude oil meets the air, it releases toxic gas. These 

gases have been proven to cause significant health effects in humans, and workers involved in the cleanup of this spill suffered the 

highest level of exposure. 

This last month, the National Institute of Environmental Health 

Sciences testified before Congress that, historically, the workers involved in the cleanup have reported the highest level of exposure 

and most acute symptoms when compared to subjects exposed in 

different ways. So I would caution Alyeska against minimizing the 

impact of this incident. 

With that, I welcome today’s panelists, and thank you for joining 

us. I look forward to this hearing. 

I am pleased to introduce the Honorable Cynthia Quarterman, 

who is the Administrator of the Pipeline and Hazardous Material 

Safety Administration. 

Welcome. We are pleased to have you here with us this morning. 

Your entire written statement will appear in the record. Madam 

Administrator, please proceed. 

STATEMENT OF THE HON. CYNTHIA L. QUARTERMAN, ADMINISTRATOR, PIPELINE AND HAZARDOUS MATERIALS SAFETY 

ADMINISTRATION 

Ms. QUARTERMAN. Thank you. Good morning. 

Chairwoman Brown, Ranking Member Shuster, if he should 

show up, and Members of the Subcommittee, thank you for the opportunity to appear today. 

Secretary LaHood, the employees of Pipeline and Hazardous Material Safety Administration, and the entire Department of Transportation all share public safety as their top priority. The DepartVerDate Aug 31 2005 11:18 Mar 22, 2011 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\DOCS\57487.TXT JEAN
3 

ment is committed to preventing spills on all pipelines through aggressive regulation, oversight and enforcement. 

PHMSA is focused on improving the integrity of pipeline systems 

and reducing the risk of pipeline failure. Integrity Management 

Programs were created to ensure pipeline integrity in areas with 

the highest potential for adverse consequences, promote a more rigorous and systematic management of pipeline integrity and risk, 

improve the government’s prominent role in the oversight of integrity plans, and assure the public’s confidence in the safe operation 

of the Nation’s pipeline network. 

PHMSA’s regulations consist of prescriptive measures pipeline 

operators must follow and perform at standards that consider a 

pipeline’s unique characteristics and operating conditions. Together, these regulations seek to prevent the leading causes of 

pipeline failure, and require operators to implement corrosion prevention, leak detection, and leak containment technologies. 

Integrity Management Programs ensure pipeline operators adequately identify, evaluate, and address risks of the entire pipeline 

systems. The integrity management rule specifies how pipeline operators must identify, prioritize, assess, evaluate, repair, and validate the liability of hazardous liquid pipelines in or near high-consequence areas. That rule also emphasizes the prompt detection of 

leaks through the monitoring of operational parameters and engineered leak detection systems. In addition, Integrity Management 

Programs are intended to improve an operator’s analytic processes 

and risk management. We are proud to say integrity management 

is working. 

Since this program has been mandated, all hazardous liquid 

pipelines within high-consequence areas have been assessed. That 

assessment resulted in the identification and repair of over 35,000 

dangerous conditions. In addition, 86 percent of hazardous liquid 

pipeline mileage has been assessed, and an additional 78,000 

anomalies outside of high-consequence areas have been remedied. 

PHMSA has also ensured that operators comply with corrosion 

standards through inspection and aggressive enforcement. Since 

2000, PHMSA has issued 657 probable violations or procedural inadequacy notices involving corrosion, and has proposed $1.7 million 

in fines. 

PHMSA has taken unprecedented steps to inform the public and 

all stakeholders about the protections provided by the Integrity 

Management Program and PHMSA’s oversight. PHMSA has an integrity management Web site to provide information to the public 

on the rule as well as PHMSA’s oversight of the program. This 

publicly accessible Web site includes hundreds of frequently asked 

questions to explain the rule’s provisions and PHMSA’s expectations. This transparency helps PHMSA improve its oversight and 

increase its stakeholder understanding and evaluation of its program. 

PHMSA looks forward to working with Congress to address 

issues related to hazardous liquid pipeline safety, including finding 

ways to be more effective in preventing pipeline failures and mitigating the effect of any failure. PHMSA very much appreciates the 

opportunity to report on hazardous liquid pipeline Integrity Management Programs. 

4 

I would be happy to answer any questions that you might have 

today. Thank you. 

Ms. BROWN OF FLORIDA. Thank you. 

Mr. Walz, you can ask any questions or make any opening statement that you want. 

Mr. WALZ. Thank you, Madam Chairwoman, and thank you for 

holding this important hearing. I certainly wish more of my colleagues were here. 

Ms. Quarterman, thank you for coming back here again. You 

have been a regular up here, and I appreciate that. Just a couple 

of thoughts for you. 

In 2006, the Inspector General over at DOT reported concerns 

about operators’ overreliance on integrity management assessments. Is that a concern of yours or have we fixed that in the subsequent 4 years? 

Ms. QUARTERMAN. I don’t believe there were any specific recommendations that came out as a result of the IG’s findings. However, the program did go in and try to remediate the concerns that 

were addressed by the Inspector General by following up on reporting errors that had been made by operators, and now it is a regular 

part of our inspection protocol that they should review reports that 

have been made and whether the data has been accurate or not. 

Mr. WALZ. OK. Tell me through this procedure, if you can, Ms. 

Quarterman: How do I know of the integrity and of the safety of 

the pipelines in southern Minnesota today? How would I go about 

finding that out? How do I know? How do I verify? How do I assure 

that somebody is not just checking the block on a form? How do 

I know that that integrity is real, in the ground, and how do we 

verify that? 

Ms. QUARTERMAN. Well, the operator is the first person responsible for ensuring that the integrity of a pipeline is sound. Historically, the program had produced a series of regulations that were 

very prescriptive in nature and essentially required or allowed a 

pipeline operator to just comply with those minimal technical requirements. The inspectors at the time would go out and do what 

you said, essentially check a box to make sure that those prescriptive requirements were met. 

The Integrity Management Program was intended to create a 

systematic approach for pipeline operators, one in which the inspectors could check what they were doing. The Integrity Management Programs should take into account the individual characteristics of each operator’s pipeline—size, location, product being 

shipped, all of that. 

As a result of that program being in place, we have created a 

new inspection protocol, and I will tell you our Integrity Management Program inspections usually include three to five engineers 

on a team, and they go out for 3 to 4 weeks. This is the inspection 

protocol that they go through. It is extremely thorough, extremely 

complicated. 

Mr. WALZ. This comes to a good point, and I was going to ask: 

Are all pipeline operators created equal? Obviously not in terms of 

size, product and all that. Are they created equal in their culture 

of safety? 

Ms. QUARTERMAN. Unfortunately not. 

5 

Mr. WALZ. OK. Does the Integrity Management Program compensate for that in terms of assuring public safety if we do have— 

for lack of a better term—a bad actor in this business? Are we capturing that or does it come back to the issue, as you said, of fundamentally when I asked the question of southern Minnesota, and 

you said it basically falls upon the operator? 

Ms. QUARTERMAN. Well, that is the first line of defense. We do 

have inspectors to go out and inspect, obviously. The purpose of the 

Integrity Management Program was to do just what you said, to 

try to help embed into the industry a culture of safety by requiring 

them to look at the details of their operations and go through an 

assessment of their pipeline and of the situation surrounding their 

pipelines to come up with the best plan for their particular pipelines as opposed to just abdicating responsibility altogether and 

saying, OK, well, our pipeline meets a certain recommended practice in terms of the type of steel, and that is it. 

Mr. WALZ. Is it unfair for us to draw conclusions to Deepwater 

Horizon and how the integrity management there was given over 

to the operators, obviously, to a point where we didn’t catch an 

error? Is that unfair? Is it apples to oranges here or is it similar 

in terms of the culture and the redundancies of safety to say, yes, 

Deepwater Horizon should show us something about pipelines? 

Ms. QUARTERMAN. Well, I think there are lessons for all of us to 

learn from the Deepwater Horizon incident. 

One of those lessons—and I know there is an ongoing investigation, but based on the public information that has been made available is the role of contractors in industry, and it is not just in offshore operations. It is true across all industries, and it is also true 

in the pipeline industry and one in which we have to take a very 

close look at how operators are managing their contractors. 

We are reviewing opportunities to create a further system for 

quality management systems to ensure the contractors that are 

hired by companies meet the same requirements as those people 

who are on the ground every day—or who should be on the ground. 

Mr. WALZ. Very good. Thanks, Ms. Quarterman. 

I yield back. 

Ms. BROWN OF FLORIDA. Thank you. 

Mr. Shuster. 

Mr. SHUSTER. I thank the Chairwoman, and I welcome the administrator. You have become a regular guest with us here. I appreciate your coming up here and spending time with us. 

I really don’t have any questions for you. I think I will probably 

ask you many times over all the questions that I have. 

I am not going to read my whole statement, but I would like for 

the entirety to be put in the record. 

I would like to point out that, of course, today’s hearing is on Integrity Management Programs and that pipelines are only required 

by law to test the high-risk areas, but in practice, many of them 

do much more than that. Our next witness from Enbridge will talk 

about how only 40 percent of their system is in high-risk areas, but 

they perform internal inspections on nearly 100 percent of their 

pipelines. Only 40 percent of the Transatlantic Pipeline passes 

through high-risk areas, but they hold the entire pipeline to the 

high-risk standard. So I think that is important to point out. 

6 

Again, thank you, Administrator Quarterman, for being here, 

and I look forward to hearing our other panel of witnesses. 

I yield back. 

Ms. BROWN OF FLORIDA. Thank you. 

Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Madam Chairlady, and 

thank you for holding this hearing. 

Ms. Quarterman, let me just ask you a few questions. 

According to your Web site, since the integrity management rule 

was implemented in 2001—is that right? Was it 2001? 

Ms. QUARTERMAN. It essentially started around 2000, 2001, 2002. 

There was a layering of who it was applied to. 

Mr. CUMMINGS. Since that time, pipeline operators have made almost 32,000 repairs to hazardous liquid pipeline segments that 

could have affected a high-consequence area if there was a release. 

How does PHMSA verify that each of these repairs has, in fact, 

been made and made to a standard that would be satisfactory? 

Ms. QUARTERMAN. During our integrity management inspection 

process, we review the data that the operators have that show 

where these particular anomalies were and the fact if they were repaired or not. There may be spot-checking on a particular repair, 

but we certainly are not there every day to review it as a repair 

is done. We do, during our inspection process, do a thorough review 

of those particular incidents where they should have done a repair 

to ensure that it has been performed. 

Mr. CUMMINGS. But is that spot-checking? I mean do you actually go out and look at each situation? 

Ms. QUARTERMAN. We don’t have the personnel to go out and 

look at each situation. 

Mr. CUMMINGS. So it is just a matter of taking somebody’s word. 

Is that basically it? 

Ms. QUARTERMAN. On an annual basis, the management of each 

pipeline operator has to certify the reports of repairs that have 

been performed on their pipeline. So, while we can’t go out there 

individually, if it were the case that someone fraudulently wrote 

down that they had done a repair, we would be, obviously, able to 

go after them on criminal charges. 

Mr. CUMMINGS. Well, you know, one of the things that we have 

seen with BP is—and I am trying to put this nicely. There have 

been some questionable integrity issues, and the sad part is, when 

these issues come along, they cannot only be harmful—they can be 

deadly—and I guess sometimes management has to say to themselves, you know, do I take the risks? I mean is profit more important than safety? 

I guess I am just asking: Has there ever been a time when folks 

actually went out and even spot-checked, I mean at any time? Do 

you follow me? 

Ms. QUARTERMAN. Yes, I follow you. 

Mr. CUMMINGS. We are talking about verifying. Just going back 

to Ronald Reagan, you know, you can believe them, but you have 

got to verify. 

I guess the only reason I am raising this is because of the situation that we find ourselves in right now where we assume—see, 

sometimes in this country, I think we assume too much. We asVerDate Aug 31 2005 11:18 Mar 22, 2011 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\DOCS\57487.TXT JEAN
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sume, assume, assume, and we assume that when the rubber 

meets the road that everything is going to be fine. Then when the 

rubber comes to meet the road, we discover there is no road. I 

think that is what happened in Katrina. I think that is what has 

happened here. 

Also, as Chairman of the Coast Guard Subcommittee, I talk 

about this whole idea of making sure that there is integrity in all 

of our systems. So I was just wondering. 

Go ahead. 

Ms. QUARTERMAN. Yes, we do do field inspections that spot-check 

repairs. When an inspector goes in to look at the integrity management plan, they look at the list of locations where these significant 

anomalies were found as well as the repair record to double check 

and make sure that there is support for the fact that a repair was 

done. In addition, there are spot-checks done in the field. 

Mr. CUMMINGS. You know, the IRS, when you talk to them about 

why they audit people, there are certain things that they put in 

their computer, certain information that triggers inspections. I was 

wondering, is there any triggering information, mechanisms, data, 

whatever, that would automatically cause alarm bells to go off and 

for you all to do these spot checks you are talking about other than 

your routine ones? 

Ms. QUARTERMAN. Well, certainly, if in looking at the paperwork 

something were to appear to be amiss—and I can tell you there has 

been an instance where some welding records were amiss, and we 

are following up on that—then they would go and check it. 

So, yes. The inspectors are engineers, and they are trained to 

look at this data, and if something looks weird—for example, if a 

record keeps repeating itself over and over and over again and it 

is clear it is not addressing the issue—then, yes, there are triggering mechanisms. 

Mr. CUMMINGS. Thank you very much, Madam Chair. 

Ms. BROWN OF FLORIDA. Thank you. 

Mr. Teague. 

Mr. TEAGUE. Yes. Thank you, Madam Chairwoman, for having 

this meeting and for letting me be here. 

A couple of questions, I guess, were already asked, but I wanted 

to ask them a little bit differently. 

In talking about the integrity test that we run, is there a standard frequency of time that we run those tests depending upon the 

size of the line or the pressure of the line? 

Ms. QUARTERMAN. Under the Integrity Management Program, 

there was a requirement that operators do an assessment, most of 

which were inline inspections with pigging instruments within a 

certain time period. That time for most operators ended either at 

the end of 2008 or at the beginning of 2009, and this was in highconsequence areas, and then they had to reassess again 5 years 

later. They had to start with their riskiest 50 percent and then do 

the last 50 percent, look at those assessments and determine which 

ones, based on our standards, were the most problematic, fix those 

first, and go from there. Most operators are now in that reassessment period, meaning that they are beginning to do a second run 

of those high-consequence areas. 

8 

Mr. TEAGUE. Do we know the way that it is set up in that 5-year 

time frame? Is every single line tested? 

Ms. QUARTERMAN. Every line that is in a high-consequence area 

must have a test, and I said 5 years. Five years is the outlying 

number. If an operator determines that, because of the attributes 

of their particular line that it should be tested more frequently 

than that, then they should do that. That would be part of their 

plan. In 5 years—or I think it is 68 months at the outside—they 

must be retested. 

Mr. TEAGUE. But we know that every line is tested at least once 

every 5 years? 

Ms. QUARTERMAN. Right. In high-consequence areas, yes. 

Mr. TEAGUE. Are we ever on site when they test the lines? 

Ms. QUARTERMAN. Not always, no. Occasionally, we go after, usually, the assessment has been done to see what has occurred and 

what anomalies have been found and how they have remediated it. 

Mr. TEAGUE. When do we get the test results? Like, if they test 

the line today, when do you get the test results? 

Ms. QUARTERMAN. We do not receive the data in-house at the 

time it is tested. When we go out on an inspection, we review their 

records there, so we don’t have a repository of their data. 

Mr. TEAGUE. When you do go out and do the on-site testing, do 

you just go to their office and review the test results from that or 

are you actually there like when they put the pig in the line and 

drive down the road and be there when they pick the pig up? 

Ms. QUARTERMAN. Most of what we do is reviewing the paper 

records. We do do spot tests, and we are there on occasion when 

people are pigging their line. We simply don’t have the resources 

to be at every assessment. 

Mr. TEAGUE. But you are at some on-site tests to see them put 

the pig in and see them take the pig out? 

Ms. QUARTERMAN. Yes. Yes. 

Mr. TEAGUE. Are there any other tests or requirements to the 

pipeline as to the type of material, the wall thickness or anything 

else when it is installed? 

Ms. QUARTERMAN. Before a pipeline is installed, this is in the 

construction phase, it has to go through a hydrostatic test to ensure they can operate above the maximum allowable operating 

pressure on the line. 

Mr. TEAGUE. You said a while ago that we had collected a large 

amount of money, millions of dollars in fines. What happens with 

that money? 

Ms. QUARTERMAN. That money is returned to the Treasury. 

Mr. TEAGUE. OK. You know, there was a question asked about 

how comparable this should be to the Deepwater Horizon, and was 

it apples and oranges. You know, I do think that it is apples and 

oranges. I don’t think there is much more comparison to this and 

the Deepwater Horizon than there is to this and driving unless, 

maybe, the Pipeline and Hazardous Material Safety Administration—we are not in any comparison to MMS or anything in the way 

that we are operating. 

I mean, if there are comparisons to pipeline safety and Deepwater Horizon, is there a comparison also to Pipeline and Hazardous Material Safety Administration and MMS? 

9 

Ms. QUARTERMAN. MMS regulates drilling operations, and 

PHMSA regulates pipeline operations. The differences between the 

two are that, in the instance of a drilling operation, as we have 

seen it in Deepwater Horizon, there is the opportunity for a blowout, which has an unlimited flow of oil. In the instance of a pipeline, it is sort of like a garden hose in that it has a finite amount— 

well, it is not like a garden hose in that it is finite, but it does have 

a finite amount of product in it. There are valves that can be shut 

off, so there is a finite amount of spill that can occur as a result 

of an incident. 

Mr. TEAGUE. OK. In regards to our testing and spot-checking and 

stuff like that, do you think we are a lot more efficient than MMS 

apparently was in what they were doing? 

Ms. QUARTERMAN. I can’t really speak to that. 

Mr. TEAGUE. Thank you. 

Ms. BROWN OF FLORIDA. Ms. Richardson. 

Ms. RICHARDSON. Thank you, Madam Chair, and thank you for 

having this very timely hearing in the series that we have been 

going through. 

Administrator, thank you for being here. I have about four or five 

questions if we could go through them as quickly as possible. 

From 2000–2008, the U.S. DOT Pipeline and Hazardous Material 

Safety Administration reported on its Web site that 21 oil spills occurred in my district, California’s 37th Congressional District. Between 2005–2009, the national average stated that 68 percent of 

the total incidences were reported to your administration but were 

not made public via your Web site. My questions are: 

How many oil spills or incidents have occurred in the 37th Congressional District? I would like to know the number of what was 

reported and not reported. 

Ms. QUARTERMAN. I will have to get you the details for your particular district. I can tell you that the reporting requirements have 

changed and have been reduced over time, so now 5-barrel spills 

are being reported, and maybe that is the difference between the 

data, but I am not sure about that. We would have to verify that 

for you. 

Ms. RICHARDSON. Who are they reported to besides your Web 

site? Are the Members notified? 

Ms. QUARTERMAN. They are reported to us, and we put it on the 

Web site, and it is available to the public. If you would like to have 

notification of every instance that occurs in your district, we would 

be happy to do that. 

Ms. RICHARDSON. Well, I think, for this Committee’s jurisdiction, 

it might be helpful to have an ongoing report on a periodic basis 

and then, that way, Members who have this interest would have 

the ability to check, but I would like my district’s information. 

Ms. QUARTERMAN. Absolutely. 

Ms. RICHARDSON. My next question is: Do you believe that 21 

spills are large enough to change the current process and consider 

that that is probably not an acceptable number and how communities should be maybe more engaged in what is happening? 

Ms. QUARTERMAN. Well, I think there should be no spills, and 

that is our goal and what we are working towards. I can tell you 

10 

that the number of spills has been reduced by about 50 percent 

over the past decade or so. 

Ms. RICHARDSON. These were 21 within this decade, 2000–2008. 

Ms. QUARTERMAN. I am just saying from the beginning of the 

decade until today that the number of spills has gone down dramatically, but it has not gone to zero, which is our ultimate goal. 

In terms of how communities can be involved, there are a number of grants that PHMSA provides to communities, especially 

those interested in being involved in the pipeline safety program, 

one of which is a base grant to a State if they would like to assist 

by having an agreement with PHMSA. California is a State that 

has an agreement with PHMSA to oversee the pipelines within 

their State. On top of that, there are State damage prevention 

grants that are provided to States so they can help ensure that 

pipelines are not damaged within their communities. 

There are also 811, or One Call Grants, that are useful, because 

one of the leading causes of pipeline incidents is excavation damage, and that is to assist communities in providing information to 

the public about calling 811, so before they dig, they know the location of a pipeline. There are also—— 

Ms. RICHARDSON. I am down to a minute and 30 seconds. If you 

could supply that to us, that would be sufficient. 

Ms. QUARTERMAN. Absolutely. 

Ms. RICHARDSON. I have several other questions along the same 

line. 

After the first round of operator-performed assessments that 

were completed in February of 2009, pipeline operators reported to 

your organization that they had made 31,855 repairs in high-consequence areas. My question is: 

How many repairs were performed in my district, and do you 

have a map or data that informs people of exactly where the repairs are made? 

Building on that same question, in my district we contain 643 

total pipeline miles, and 558 of those consist of hazardous liquid 

pipeline. My question is: 

Are these pipelines regulated? Have they been inspected? What 

type of inspection has been done, and what is the condition that 

has been found? 

Then finally—I have got about 34 seconds—I recently had the opportunity this last weekend to spend some time in the Gulf for 

about 2–1/2 days. One of the things that I saw that seemed to be 

a problem is we could have had the companies better required to 

have the resources in place to handle a spill better. I don’t know 

if that is a shared resource that companies in the area all have, 

you know, those devices. So my question would be and if you could 

supply it to this Committee: 

What materials are required? If in the event you were to have 

an incident, what are those that you know of? 

One of the things we found out in the Deepwater Horizon situation is we found out that many of the things we were using weren’t 

effective. So to what degree has your group documented? What resources would be needed? Are they being stockpiled appropriately 

in the areas that need them? Because we didn’t have enough 

booms. We are still in, you know, day 80-something, and we don’t 

11 

have enough boom material. We don’t have enough skimmers. They 

are now getting this air-conditioned kind of mat material, and we 

shouldn’t be doing that after the incident. We should know what 

is needed, and it should be sufficiently available so we can respond. 

So, if you could provide this Committee that information, it 

would be helpful. Thank you very much for your time. 

Ms. QUARTERMAN. Sure. Thank you. 

Ms. BROWN OF FLORIDA. Would you like to respond to any part 

of her questions? 

Ms. QUARTERMAN. Well, as to the specifics with respect to the 

district, we will provide that to the record. 

On the oil spill response, I will say that PHMSA issued a safety 

advisory a few weeks ago to all of the onshore oil pipeline operators. That is our responsibility to make sure that those plans are 

in place, asking them to review their oil spill response plan in light 

of Deepwater Horizon to make sure that their worst case spill is 

accurate and that the personnel that they have identified and the 

resources they have identified are available and capable of responding to a spill if it is a worst case spill. We gave them an exception 

for, obviously, a response that is necessary for Deepwater Horizon, 

but we want to make absolutely sure that the oil spill plans that 

are in existence for the onshore pipelines are the best they can possibly be. 

Ms. RICHARDSON. Madam Chair, if I could just respond to that 

very briefly. 

I think, though, the problem is we need more than a plan. We 

need to know: Do you physically have the boom? Do you physically 

have the skimmers? Do you physically have whatever it is, and is 

someone within your organization checking to see that it is there? 

Because, if there is anything we have learned, it is that we need 

more than a plan. We need to know that it is not just a plan and 

that it is actually something that is ready to do. 

Thank you, though, and I do appreciate your efforts in these 

tough times. 

Ms. BROWN OF FLORIDA. Thank you, Ms. Richardson. 

If the Members would like, we could have another round. 

Mr. Sires. 

Mr. SIRES. Thank you, Madam Chair, for holding this hearing, 

and I apologize if this question was asked before. 

I come from a very congested area. Just to give you an idea, the 

town that I live in is 1 square mile, and we have 50,000 people, 

so pipelines going through some of this area is one of my biggest 

concerns, especially in a congested area. 

I know that we check the pipelines every 5 years. I was just wondering if it is prudent in heavily congested areas to increase that 

and make it less than 5 years. I was just wondering what you 

think of that. I am concerned about the safety feature of it, the 

safety factor of it. 

Ms. QUARTERMAN. I am concerned as well. 

A congested area, as you referred to, a highly populated area— 

and I live in one as well—is one that would be considered a highconsequence area. In those instances, the operator should be considering whether it is appropriate to do more frequent assessments 

of those pipelines in those areas given the situations that they run 

12 

into in that particular area. Whether or not doing it more frequently would make a bigger difference, I don’t know. We haven’t 

looked at that issue. 

Mr. SIRES. Can you handle more frequent inspections? You know, 

can you handle the paperwork and all the things that go with it? 

Ms. QUARTERMAN. Well, now I am talking about assessments. 

This is something that the operators, themselves, do with these 

tools. 

Mr. SIRES. Right. 

Ms. QUARTERMAN. Then we go in and inspect after the fact. We 

would probably require more inspectors in order to do more frequent inspections, absolutely. 

Mr. SIRES. What can we do in Congress to make that happen for 

you? Don’t ask for too much. 

Ms. QUARTERMAN. Well, additional resources are always welcome. 

Mr. SIRES. Just additional resources? 

It is just that, you know, in my district, every time you dig something up, there is a problem. I am talking now as a former local 

mayor. Even to do a sidewalk, you have got to worry about cables 

and so forth. So, as to the fact that excavating in many of these 

areas may not damage the pipe right then and there, it might just 

make it where, down the line, it would be a problem. So that is 

when I ask you, in terms of heavily populated areas, that I think 

we need to make it more often. I think I pointed out to you the Edison accident years ago. That is how dangerous it is. 

So I don’t have any further questions. Thank you very much. 

Ms. BROWN OF FLORIDA. Thank you. 

Ms. Quarterman, according to your Web site, pipeline operators 

report 32,000 defects were found outside of high-consequence areas. 

Is this reporting a requirement by regulations or is it voluntary? 

If operators find defections outside of that area, the high-consequence area, do the operators have to repair these defects in accordance with the integrity management rule? If not, do you think 

they should report on it and repair these defects? 

Ms. QUARTERMAN. There is no requirement that they report that 

information. I imagine that people are reporting it to get credit to 

show that they were doing, not just what is required by the rule, 

but above and beyond what is required by the rule. 

There are no requirements that those anomalies that have been 

found in areas out of high-consequence areas meet the terms of the 

integrity management rule. I would say that a prudent operator 

and one with a strong safety culture, once they find the indication 

of an anomaly of great concern, would repair those. If not and there 

were an incident, they would, obviously, be subject to great penalties from PHMSA, and hopefully, everybody is aware of that. 

Ms. BROWN OF FLORIDA. What do you think would be our responsibility as we rewrite the law? Not the rule. Our responsibility as 

lawmakers as we move forward. 

Ms. QUARTERMAN. Well, I think you are doing the right thing to 

hold this hearing to ask questions about how the program is working and how we might improve it. 

We are at a point in time when we have identified that 44 percent of oil pipelines could affect an HCA. It appears as though opVerDate Aug 31 2005 11:18 Mar 22, 2011 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 P:\DOCS\57487.TXT JEAN
13 

erators have assessed about 86 percent of those pipelines, so the 

vast majority—86 percent of all pipelines. Sorry. The vast majority 

of all pipelines, hazardous liquid pipelines, have been assessed at 

least once. 

We are in the process of a reassessment. Forgive me for this 

analogy, but I think of it a little bit like a mammogram. You have 

the baseline, and then the next assessment shows you the change 

that has happened and whether there is cause for concern. 

At the end of this reassessment period, which would be 5 years 

from the end of the first assessment, I think we will have a much 

better picture of pipelines in those high-consequence areas, and we 

should consider what the next step should be for the other areas. 

Ms. BROWN OF FLORIDA. You mentioned that DOT issued enforcement letters for 85 percent of all the integrity management inspections. What are the top three or four problems DOT has found? 

Ms. QUARTERMAN. The number one problem—and there were 

about four or five that were close to the top—was the evaluation 

of their leak detection capability to protect the HCAs. We found 

that operators had not done enough to ensure that their leak detection system was adequate. That was number one. 

Shortly after that, we were concerned that they had not done an 

adequate analysis and documentation supporting their program. 

There was not enough to show that they had gone into great detail 

considering, for example, what is a high-consequence area. 

We initially put out some baseline information about the locations of high-consequence areas, and the requirement was that operators would go the next step with respect to their particular line 

and the neighborhoods associated with it and look deeper and not 

just at the immediate vicinity; but if there is, for example, a water 

intake point where, you know, liquid flows down that would flow 

down further away from the area that we have identified, they 

would do a deeper analysis of that, and we found some inadequacies in those kinds of analyses. 

Third, we were concerned about the process that they used to 

qualify personnel for assessment results review. This is a key part 

of the analysis. They run the inline inspection tools or do hydrostatic tests or whatever. It is extremely technical analysis that is 

shown, and it is very difficult to determine what exactly you are 

being shown in one of these runs. We were concerned that the people who were reviewing the runs because we essentially put up this 

new requirement, and everybody in industry had to then get up to 

speed in order to do that, and some of the people were not as qualified as we might like to see them. 

So those were the top three. 

Ms. BROWN OF FLORIDA. Last question. 

If we find a company that is not in compliance, what kinds of 

penalties or fines do we have? What kind of enforcement mechanisms are in place? 

Ms. QUARTERMAN. We do have penalties that were instituted in 

the PIPES Act of 2006. I would say those penalties have not been 

updated according to inflation over time. At the moment, we are 

probably maxing out on the penalties at about $100,000 a day, I 

think. 

Ms. BROWN OF FLORIDA. OK. 

14 

Congressman Young. 

Mr. YOUNG. Thank you, Madam Chairman. 

My interest in this, of course, is the TAPS line, the Alyeska line. 

For the Committee, I am not going to ask her any questions. I am 

just going to suggest respectfully—and this is a creation of myself—that a little history, a little institutional memory, in this body 

does serve. 

When we discovered oil in Alaska—when I say ‘‘we,’’ it was discovered in Alaska by the oil companies—at that time, we had to 

pass the Trans-Alaska Pipeline. In this Congress in 1973, the industry itself wanted to, in fact, operate the pipeline. They do not 

do so. Contrary to what some of your staff have said, they own 

parts of the pipeline, but they do not run it. It is a separate entity, 

entitled by itself to run itself, and it does run itself by itself. There 

have been three incidences in that pipeline where there have been, 

in fact, spills. 

One was being shot at. It took them seven shots, by the way, 

with a .338 Magnum. The problem that arose then was the fact 

that they thought it was a terrorist attack, which was right after 

9/11. It was an irate individual who just decided to do it. If we 

could have stopped it at that time, instantly, there would have 

been no spill at all, but the automatic shutoff valve did work. The 

oil did come through the bullet hole, and by the time they got done, 

there was a spill. That was not the fault of the pipeline. 

In the recent one that we have had, it worked. There was a 

human error factor. There was a breaker that was forgotten to be 

checked. The oil that did spill at the pump station was contained, 

as it was designed. It worked excellently, and there was no environmental damage. I have to say that again because, according to 

the report I read from your staff, there was. In fact, there was not. 

Thirdly, I take great pride in this pipeline. It was built in 1976. 

It was built in 3 years, and it has supplied oil to the United States 

of America. It has all gone to America but two tankers. This pipeline has been under scrutiny constantly, and to somehow tie this 

in with BP I think is piling on. 

We have a lot of great Americans who work for BP, and for some 

reason now, if you work for BP, you are a bastard. I am saying that 

is totally wrong. These are honorable people. The company may 

have done something wrong in the Gulf. I am not going to defend 

them in that area, but as far as the Alyeska Pipeline, I am quite 

excited about their record, and I know some people in this room 

who are going to testify later will say, Well, they have transferred 

people out of Fairbanks. Yes, they have. I do not like that, but in 

reality they are a business, and they have the opportunity and the 

responsibility to make sure that the business is run correctly, and 

they have not had any damages. 

So let’s not tie this Alyeska Pipeline in. They have supplied 17 

billion barrels of oil to America—to Americans—to be utilized 

there, and they have run this operation extraordinarily well. I just 

want everybody to understand that. This company is dependent on 

itself. It may be funded by oil companies, but it is independent on 

itself, and that is the way it was constructed. 

If you want to check the record, Ralph Nader called me the most 

powerful freshman Congressman in Congress because he didn’t 

15 

think I would vote for that, to have an independent agency run the 

pipeline and not the oil companies, themselves. 

So I just want to remind people, when we start pointing fingers, 

make sure you point them in the right direction. This is not BP’s 

problem. It is not a problem. This is a good pipeline. It has supplied us with 17 billion barrels of oil without any incident at all. 

I yield back the balance of my time. 

Ms. BROWN OF FLORIDA. I ask unanimous consent that Mr. 

Young be permitted to participate in today’s hearing and sit and 

ask questions of the witness. 

Without objection. 

Ms. Richardson. 

Ms. RICHARDSON. Well, after that, I will tell you. Welcome, Mr. 

Young. 

Mr. YOUNG. I always add a little bit of spice to any Committee 

meeting. I will guarantee you that. 

Ms. RICHARDSON. All right. Well, I won’t speak to Alaska because 

I don’t live in Alaska, and I haven’t studied it, but I have been to 

the Gulf, and I have been studying that, and I don’t think you can 

call it ‘‘honorable’’ at all. 

Ms. Administrator, I just want to go back to my question and 

make sure we have your commitment on two things. 

One, the raw data of all spills on your Web site today are perceived by laymen—I am not a chemist. I am not a biologist. I am 

not an engineer— so, in my mind, they are basically unreadable— 

a bunch of codes—but it is not really clear. In fact, the only ones 

that can really be read are the incidences and spills that are referenced as ‘‘significant’’ or as ‘‘serious incidences.’’ 

It is my understanding that the Committee has brought this to 

your attention and that there has been a verbal understanding that 

you will make the changes and make sure that all of the spills and 

incidences which are listed on the Web site are readable in layman’s terms and are clearly, obviously, available to this Committee 

on a regular basis; is that correct? 

Ms. QUARTERMAN. That is correct. The Committee has brought it 

to our attention that it could be improved. We appreciate those 

comments, and we will ensure that the data is accessible. The purpose of it is for the public to be able to review it and understand 

what it means, and if it is not doing that, we need to fix it. 

Ms. RICHARDSON. Thank you. 

Then my last question is: It has also been brought to my attention that, with your department, many of the regulations and 

standards that have been adopted don’t provide a specific certain 

date that the regulations must be met. 

Then, further, if someone in the public or even in my office, in 

a government office, contacts and wants to get a copy of a particular standard, they are told that they have to buy the information from an industry association, and that seems completely contrary. Specifically, what I am referencing are standards—when we 

were looking into the issue, we couldn’t find the API Standard 

1130. When we contacted your organization, the response was that 

staff had to purchase it from API. 

Safety advocates have raised this concern with your organization 

on numerous occasions, including hearings in this Committee. They 

16 

have been told that they have to purchase the document from the 

industry association. Needless to say, I think that is absurd. So I 

would also appreciate your looking into that and the information 

being available to the public, whether it be electronic or that we 

be able to get from your department. 

Ms. QUARTERMAN. We had talked about this a little bit at the 

last hearing. 

The standards that you are referring to are industry standards 

across, for example, engineering organizations, and they are ones 

that are—there is a statute that requires—or encourages the government to use these standards. OMB encourages them to use it. 

It is not just a PHMSA issue. It is a government-wide issue. Any 

organization or government agency, regulatory agency, that oversees an industry has adopted these kinds of standards. 

I agree with you that it would be more pleasing if they were 

available for free to anyone who would want to see them. They are 

not available for free. We will commit to looking at ways in which 

we might make some of the standards that have been adopted 

more available to the public, and we have done that in many instances by either explaining in detail what is in the standards or 

providing them at our offices for people to come and inspect them 

or having them available electronically. 

Ms. RICHARDSON. Well, it is my understanding my office was told 

to buy it from an industry. So we look forward to your updating 

and improving that system. 

Thank you very much. 

Ms. BROWN OF FLORIDA. Ms. Quarterman, there have been incidents, to my understanding, involving both Alyeska and BP, and 

BP does own 47 percent of the company, and their budget and 

management decisions have to be approved. I don’t know. 

Do you have the information that you can get to the Committee 

on the incidents that have occurred? 

Ms. QUARTERMAN. Do you mean all pipeline safety incidences associated with the Trans Alaska Pipeline System? 

Ms. BROWN OF FLORIDA. Yes. 

Ms. QUARTERMAN. I think that we can do that to the extent that 

they are available. 

The most recent incident is still under investigation, and we are 

in the process of an enforcement action with respect to that one, 

but as to any of the historic incidents, we can certainly give you 

information on those, and there have not been many. 

Ms. BROWN OF FLORIDA. And you said there have not been 

many? 

Ms. QUARTERMAN. There have not been many. 

Ms. BROWN OF FLORIDA. Well, we have found out from the Gulf 

we only need one. You know, one is just too many, and one can destroy the environment and destroy industry. So what we have to 

do is—we can’t afford not even one. 

Ms. QUARTERMAN. I agree. 

Mr. YOUNG. Madam Chairman. 

Ms. BROWN OF FLORIDA. Yes, sir. 

Mr. YOUNG. Madam Chairman, may I suggest respectfully, the 

recent incident, what they are investigating, was human error. A 

breaker was not checked. That is what happened. Then, unfortuVerDate Aug 31 2005 11:18 Mar 22, 2011 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 P:\DOCS\57487.TXT JEAN
17 

nately, there is the double standard there. The breaker was not 

checked by a human being. 

Again, though, the oil that was spilled there was collected as it 

was designed to do so. It has been built to do that in containment 

areas. This is a classic example of something that is engineered to 

do the right thing. That is why I am so defensive about the line. 

We built it. We designed it, and it has worked through two earthquakes, one an 8.8, and it did not have any spills. 

Now we had this spill caused by human error that was, in fact, 

contained as it should be. There was no dispersement of any oil. 

So there was no accident in the pipeline, per se. 

Is that correct, Madam Quarterman? 

Ms. QUARTERMAN. I am sorry. What is your question? 

Ms. BROWN OF FLORIDA. There was an investigation, is my understanding. 

Mr. YOUNG. Yes. The investigation is why the human error occurred but not on the pipeline, itself. 

Ms. QUARTERMAN. The investigation is ongoing. 

Mr. YOUNG. Yes. 

Ms. BROWN OF FLORIDA. Yes. 

Thank you for your testimony and you will get back with us and 

answer those additional questions. 

What I would like to do is to call up the second panel. We have 

a vote, or should we just wait until we come back? 

Mr. YOUNG. Madam Chair, start it because it will be 45 minutes, 

don’t you think? 

Ms. BROWN OF FLORIDA. Let’s call up—it is just one vote. 

Mr. YOUNG. One vote or two votes? 

Ms. BROWN OF FLORIDA. Let’s have the one vote and then come 

right back. I thank you all very much, and the second panel, you 

can take your seat and we will get started. We can stand informally in recess, and we are looking forward to a lively discussion 

of the second panel. All right. 

[Recess.] 

Ms. BROWN OF FLORIDA. Will the Subcommittee come back to 

order, please. 

I am pleased to introduce our second panel of witnesses. First, 

we have Mr. Richard Kuprewicz, who is the Public Member of 

PHMSA’s Technical Hazardous Liquid Pipeline Safety Standards 

Committee and President of ACCUFACTS, Inc. 

We have Mr. Greg Jones, who is Senior Vice President of the 

Technical Support Division of Alyeska Pipeline Service Company. 

And we have Representative David Guttenberg, who is the House 

Minority Whip of Alaska State House. He represents House District 8 in the area of Fairbanks, Alaska. 

And we have Mr. Adams, Vice President of U.S. Operations, Liquids Pipelines, Enbridge Pipelines. 

I want to welcome all of you here today and we are pleased to 

have you all here this morning. First let me remind each of you 

that under Committee rules oral statements must be limited to 5 

minutes. Your entire statement will appear in the record. 

Mr. Kuprewicz, you can start your testimony. Did I pronounce 

your name right? 

18 

Mr. KUPREWICZ. Kuprewicz. But I have been called a lot worse 

for 40 years. But that is very close, thank you. 

Ms. BROWN OF FLORIDA. OK. 

STATEMENTS OF RICHARD B. KUPREWICZ, PUBLIC MEMBER, 

PHMSA’S TECHNICAL HAZARDOUS LIQUID PIPELINE SAFETY 

STANDARDS COMMITTEE AND PRESIDENT OF ACCUFACTS, 

INC.; GREG JONES, SENIOR VICE PRESIDENT, TECHNICAL 

SUPPORT DIVISION, ALYESKA PIPELINE SERVICE CO.; THE 

HON. DAVID GUTTENBERG, HOUSE DISTRICT 8 - AREA OF 

FAIRBANKS, ALASKA, ALASKA STATE HOUSE MINORITY 

WHIP; RICHARD ADAMS, VICE PRESIDENT, U.S. OPERATIONS, 

LIQUIDS PIPELINES, ENBRIDGE PIPELINES 

Mr. KUPREWICZ. I would like to thank the Committee for the opportunity to comment this morning. My name is Richard B. 

Kuprewicz, and I am President of ACCUFACTS, Incorporated. I 

have over 37 years experience in the industry, and I have represented numerous parties within the U.S. and internationally concerning sensitive pipeline matters. I am currently a member of the 

Technical Hazardous Liquid Pipeline Safety Standards Committee 

representing the public. 

My comments today focus on two major pipeline integrity management, or IM, issues and apply to both liquid and gas pipelines. 

One, changes are needed in reporting IM performance measures. 

And two, pipeline corrosion regulations are inadequate. 

Given the many repairs, more public transparency is required in 

IM performance data gathering and reporting to assure this method is thorough and, more important, appropriate. This is especially 

true as more risk-based performance measures are applied by pipeline companies in both high consequence and non-high consequence 

areas. 

The Gulf of Mexico offshore release tragedy clearly underscores 

what can happen when risk-based performance approaches step 

into the realm of the reckless and prudent regulation and check 

and balances don’t come into play to prevent such tragedies. 

What is missing in the area of IM performance reporting from 

PHMSA are summaries by type of repair condition; for example, for 

liquid pipelines immediate repair, 60-day, 180-day, and other; by 

kind of threat; for example, internal corrosion, external corrosion, 

third party damage, construction, pipe material, et cetera, actually 

found at each repair site, by State. Congress should require 

changes in IM reporting, as I have just summarized, and should 

also require PHMSA to recompile and restate the anomalies repaired to date, as I believe critically important hindsight will be 

gained by this effort. 

PHMSA is also now taking a more active role in inspecting pipeline construction activities and has discovered very disturbing observations related to some new pipeline—poor manufacturing quality, poor girth welding and other construction-related activities that 

can seriously effect a pipeline’s integrity and IM program over its 

life cycle. 

Congress should assure that PHMSA has sufficient resources to 

perform these important construction inspections without harming 

other important efforts. All IM programs obviously should track 

19 

and report to PHMSA any related new construction, introduced integrity threats, to assure that they have been properly rectified or 

are under control during the long lifecycle of a pipeline. 

In reauthorizing the Federal pipeline safety laws, Congress 

should also take stronger action on reducing the risk that corrosion 

poses to the integrity of hazardous liquid and gas transmission 

pipeline. PHMSA has found wide variation and operators’ interpretation of how to meet the requirements of pipeline safety regulations in assessing, evaluating and remediating corrosion anomalies. 

This raises serious concerns related to how consistent corrosion 

anomaly evaluations are and stresses the importance of modifying 

the reporting of IM performance measures as discussed earlier. 

It is clear that additional corrosion regulatory standards are required for pipelines both in high consequence areas and non-high 

consequence areas. For example, mandatory uses of cleaning pigs 

and avoiding over reliance on corrosion inhibitors that can become 

ineffective. 

Some companies appear to be diluting their corrosion control programs to save money as they overly rely or missrely on IM inspections to catch such risks before failure. It is incumbent upon the 

pipeline operator to have corrosion and maintenance programs to 

assure corrosion is under control in all segments of their pipeline 

and not just rely on IM inspection. Congress should also require 

that special regulatory focus be directed towards the much higher 

rate selective corrosion, both internal and external, that can lead 

to pipeline failure well before the next IM regulatory reassessment, 

and it is not prudently handled correctly in current regulations. 

Given the shortcomings identified in my testimony, it is too early 

to address the issue of modifying the IM minimum reassessment 

intervals required by Congress. The matter is especially important 

for gas pipelines where IM requirements in many areas are less 

stringent and cover much fewer pipeline miles than that for liquid 

pipelines. 

I would especially advise that Congress pay special attention to 

gas pipelines, especially those capable of putting more tonnage of 

hydrocarbon into residential neighborhoods in a form that can 

cause greater destruction than many liquid pipelines. 

Gas transmission pipelines have yet to complete their baseline 

assessments, have longer reinspection intervals and different special requirements for scheduling remediation reporting than liquid 

pipelines. 

I thank you for your time. 

Ms. BROWN OF FLORIDA. Thank you. 

Mr. Jones. 

Mr. JONES. Chairwoman Brown, Ranking Member Shuster, and 

Members of the Subcommittee, thank you for the opportunity to appear to discuss the Alyeska Pipeline’s Integrity Management Program. I am Greg Jones, Senior Vice President of the Technical Support Division for Alyeska Pipeline. My division includes engineering; health, safety and environmental quality; projects and security. 

I have worked for Alyeska for 13 years. Before joining Alyeska, 

I served for 20 years as an officer in the United States Coast 

Guard. I am here representing the 1,600 people who operate and 

20 

maintain the 800-mile Trans-Alaska Pipeline System, transporting 

crude from Alaska’s North Slope to Valdez, where it is shipped to 

the West Coast. 

Safety and integrity of the pipeline are core values at Alyeska 

and a top priority for every employee. Over the past decade we 

have continually improved our safety and environmental performance, with 2009 being our best year on record. Although we are 

proud of our progress, we know that we have to perform well every 

single day. Regrettably, we did have a significant incident recently, 

which I will discuss in a moment. 

We are here today regarding the integrity management regulations that govern liquid pipelines. We have found the current pipeline safety regulations rigorous, comprehensive and appropriate. 

Federal regulations require a comprehensive corrosion control program. Alyeska’s program is extensive and is monitored by PHMSA. 

Our Integrity Management Program is also closely monitored by 

the Joint Pipeline Office, a unique consortium of 11 Federal and 

State agencies that provide oversight of TAPS. Our program is subject to inspections by PHMSA. The most recent inspection occurred 

on August 2009. The inspection team’s written exit summary included the following statement: The Alyeska Integrity Management 

Program document is well organized and addresses the important 

management system characteristics that are required for a successful program. 

Our Integrity Management Program is focused on maintaining 

the integrity of the pipeline and protecting public safety and the 

environment. While Alyeska implements and complies with Federal 

standards, many internal procedures exceed these requirements. 

We monitor the pipeline through visual inspections, overflights and 

valve inspections; we conduct internal inspections using smart pigs 

every 3 years. The regulatory standards require runs every 5 years. 

We are required to investigate pipeline segments that could affect high consequence areas when our data tells us there is a wall 

loss of 50 percent or greater. We actually go by a more rigorous 

standard of 40 percent. In addition, our corrosion control program 

includes numerous other elements. A cathodic protection system 

protects the below ground pipe from external corrosion. Other program elements include our valve maintenance program, river and 

flood plain maintenance and control. We also have an earthquake 

preparedness program, a leak detection system, and an over pressure protection system. 

Should TAPS experience a pipeline discharge, we have worked 

diligently to be prepared to respond to an incident. We exercise our 

personnel and equipment on a regular basis through company and 

agency-directed drills and under the scrutiny of regulators. 

Our spill response preparedness was demonstrated on May 25th, 

when during a scheduled shutdown of the system a breakout tank 

overflowed, resulting in a spill to secondary containment that surrounds the tank. There were no injuries and the spill did not escape into the environment. While the response went as required, 

we clearly find the incident unacceptable. We have done a full investigation into the event and are now working to implement recommendations to ensure that it will not happen again. 

21 

As I have outlined, our Integrity Management Program draws on 

a number of methods that we believe best protect Alaska’s environment and keeps the pipeline operating safely and reliably. In 

Alyeska’s 33 years of operations we never experienced a leak on the 

mainline pipe due to corrosion. We credit the skills and experience 

of our people, the current regulatory framework, the tools and 

strategies we use to protect the pipeline, and our aggressive attention to investigation and intervening whenever needed in order to 

ensure the integrity of TAPS. 

I will be happy to answer any questions. 

Ms. BROWN OF FLORIDA. Thank you, Mr. Jones. I want to point 

out that Mr. Jones and Mr. David Guttenberg came all the way 

from Alaska. So I really, really do appreciate it. 

And now the Honorable David Guttenberg, House District 8, 

Fairbanks, Alaska. 

Mr. GUTTENBERG. Thank you, Chairwoman Brown, Ranking 

Member Shuster, other Members of the Committee and Representative Young, my Congressman. Thank you for the opportunity to 

speak with you today. 

As you said, I am State Representative David Guttenberg and I 

represent House District 8, which is comprised of the west side of 

Fairbanks and goes all the way to the community of Cantwell, and 

the district includes the entire Denali National Park, including 

Mount McKinley, the highest point on North America. 

I spent 25 years of my life working around the pipeline and oil 

industry. As a young man in 1974, I joined the Labors Union and 

went pipelining. My first job for Alyeska was with a clearing crew 

clearing the right-of-way where the pipeline was going to be built. 

Prior to that I worked on a seismic crew out of Umiat for minimum 

wage, 14 hours a day at 40 below temperatures, and that is not unusual but here it certainly is. 

The next 25 years I worked for various contractors who worked 

for Alyeska, BP, Exxon and whoever else had a contract with the 

industry to build whatever was needed to be done. At one point I 

worked offshore building an island for development and exploration. My last job with Alyeska was in 1996, when we took Pump 

Station 6 offline. 

I am here today on behalf of Alyeska employees that have contacted me with concerns of the safety and integrity of the pipeline, 

and these concerns they feel have been largely ignored. 

My involvement specifically in this began in December of 2009 

when I received word that Alyeska was planning to transfer a 

group of employees from Fairbanks to Anchorage. The proposed 

transfer raised alarms for me. First of all, for two reasons, they 

were good jobs and they were leaving my community. Secondly, I 

couldn’t figure out what standard Alyeska used to determine that 

moving these personnel who were responsible for pipeline safety integrity 350 miles from the pipeline would be prudent and responsible. My initial thought is that it didn’t make any sense. When 

something goes wrong, it needs to be checked on the pipeline. 

These are the employees who get to the problem, the problem and 

location quickly. The pipeline goes through Fairbanks; it is 350 

miles from Anchorage. 

22 

When I began speaking out publicly, several Alyeska employees 

contacted me and confirmed my concerns. It was explained to me 

that many in the company shared my sentiment and attempts to 

express those concerns were squashed at the highest level by senior 

management who feared retaliation for going against the mandate 

of Alyeska’s then President. At that point it became clear to me 

that Alyeska’s open work environment was not working. Allowing 

poor decisions to go unchecked could have severe consequences for 

the State of Alaska. 

Alyeska’s predicted loss of almost 50 percent of the company’s integrity management unit group if the company moved forward with 

a transfer. This is a long-term negative impact on Alyeska’s Integrity Management Program, including deteriorating morale of remaining personnel, a significant loss of expertise and institutional 

knowledge, and the return to Alyeska’s previous history of compliance problems with integrity management issues. 

In 1997, under the direction of then Alyeska President Bob Malone, Alyeska transferred employees from Anchorage to Fairbanks 

to increase pipeline safety and enhance environmental reliability. 

This was the right move to make and it is difficult to understand 

how Alyeska’s claim of synergy and efficiency justified reversing 

Malone’s decision. Common sense and Alyeska’s internal documents suggest that they are making the wrong decision on this 

one. 

Alyeska frequently mentions its recent safety or environmental 

record when trying to reflect recent criticisms related to the management of its Integrity Management Program; for example, low 

accident rates. Alyeska’s definition of safety refers to the prevention of bodily harm or fatalities to employees or contractors performing work. This safety attribute has little or no bearing on the 

likelihood of TAPS having a significant spill, which is the issue 

that brings us here today for this hearing. 

For example, a pipeline operator could have an excellent work 

safety record because there is little or no maintenance being performed on the pipeline, while at the same time it is about to fall 

apart in 20 locations. The same logic could be applied to Alyeska’s 

environmental record, which can have little or no bearing on the 

likelihood of a pipeline having a significant spill event. 

Finally, I would like to address Alyeska’s recent public commentary about emergency spill response capabilities in the first 12 

or 24 hours. 

Alyeska no doubt continues to have adequate employee and contractor support, but it is not the primary concern related to the 

transfer integrity manager and personnel. The Trans-Alaskan Pipeline carries an overwhelming majority of Alaskan State revenue 

and is an integral part of the U.S. Energy infrastructure. With a 

declining throughput, the line is no less important now than it was 

30 years ago. Even through the declining input, the line is no less 

important now. However, the TAPS infrastructure is rapidly aging 

and problems are bound to occur. Now is not the time for Alyeska 

to skimp on pipeline safety and integrity lest we have a significant 

spill. 

Thank you. 

Ms. BROWN OF FLORIDA. Thank you. 

23 

And Mr. Adams. 

Mr. ADAMS. Thank you, Chairwoman Brown, Ranking Member 

Shuster, Chairman Oberstar, my Congressman, and Members of 

the Subcommittee. I am Rich Adams of Enbridge Energy Pipeline 

Company and appreciate the opportunity to participate in this 

hearing. I am Vice President, U.S. Operations for Enbridge Liquids 

Pipeline and have more than 20 years of experience working for 

Enbridge in various engineering, operating, and leadership positions with Enbridge’s North America natural gas and liquids petroleum pipeline businesses. 

Our liquids pipeline business unit delivers more than 11 percent 

of overall U.S. oil imports, stretching from Canada into United 

States refined hubs, delivering about 50 percent of the crude oil refined in the Great Lakes region. More information is included in 

my written testimony. 

The pipeline integrity management regulations respond to societal expectations of safety and build on advances of new technology 

and pipeline operating experience. The result, a measurable significant reduction infrequency and severity of releases from liquid 

pipelines. This is a strong indication that Congress’ passed mandate of a risk-based integrity safety reg regime is working, and 

while we are encouraged by this record, our overall goal is zero. 

Zero releases, zero injuries, zero fatalities, and zero operational 

interruptions. 

To continue this encouraging trend, I urge Congress and the Office of Pipeline Safety to remain focused on a risk-based approach 

that has delivered this overall performance. The current regulations are extensive and recognize that safety starts with the design 

stage and continues with a broad range of operating, maintenance, 

reporting, inspection, and worker qualification requirements. 

Reduction of risk considers both the probability of a pipeline failure as well as the potential consequence of such a leak. Congress 

was on the right track more than a decade ago in focusing regulatory and industry attention on high consequence areas to protect 

people and the environment. The focus imposed additional protective measures for pipelines at high consequence areas, or HCAs, regardless of whether a pipeline operations in a HCA or non-HCA 

area, comprehensive Federal regulations still apply to the entire 

pipeline regarding design, construction, operating, maintenance, 

and emergency preparedness standards. As such, we cannot agree 

with those who suggest that non-HCA segments somehow receive 

little oversight simply because they do not fall under the integrity 

management plan mandate associated with HCAs. 

The whole point of risk management is to aggressively apply our 

best engineering skills and science to determine the probability and 

consequence of a potential pipeline failure at any single point along 

a pipeline. 

While only 40 percent of Enbridge’s liquids pipeline system could 

affect an HCA, nearly 100 percent of the mileage has been inspected with internal inspection inline devices. So you might ask 

why wouldn’t the industry just support an expansion of the integrity management rules beyond HCAs. We believe such a mandate 

would effectively take the industry back to a prescriptive, one-sizefits-all requirement that would abandon the entire science behind 

24 

risk management, suggesting that the likelihood and consequence 

of a pipeline incident are essentially the same no matter where 

they occur. 

Collectively, we have been successful at implementing a riskbased approach that directs additional resources to HCAs where a 

potential release would have the greatest consequence on the public and the environment. 

In summary, I think the data shows that Congress, OPS, and industry have been on the right path in the current comprehensive 

pipeline safety rules and the supplementary Integrity Management 

Program implementation. When the overall record and trends are 

taken in context, we have shown noteworthy, continuous improvement in pipeline safety, leading to today’s record that is second to 

none in transportation safety of petroleum. 

This concludes my testimony, and I am happy to answer any 

questions that Members of the Committee may have. 

Ms. BROWN OF FLORIDA. Thank you. 

The Chairman of Committee the Full Committee has joined us, 

Mr. Oberstar, and we want to recognize you for any openings statements and we are so happy that you are here. 

Mr. OBERSTAR. Thank you. The Committee got disrupted at the 

beginning with a vote on the floor. I was delayed getting here 

working on other Committee matters, including our aviation bill. 

We are hoping to get some progress from the Senate in reaching 

an agreement on an aviation bill. 

Ms. BROWN OF FLORIDA. Well, Mr. Chairman, I just want you to 

know the whole country appreciates you all moving forward and 

the Senate moving forward, the other body. We need that aviation 

bill. 

Mr. OBERSTAR. If we can get the Senate to move anything, including time of day, that would be an achievement. 

I appreciate you holding these hearings and the participation of 

Mr. Shuster, but also I was having a conversation, as you turned 

to me, with Mr. Young, who was Chairman at the time he wrote 

the most recent pipeline safety bill, but I have been involved with 

this for at least 25 years, with pipeline safety, from the time that 

pipeline leaked gasoline in the City of Mounds View just outside 

my district. A 7-foot long crack in the pipeline leaked gasoline for 

hours until an automatic shutoff valve finally detected and cut off 

the flow. But by that time the volatiles had moved up through the 

soil to the surface, and because those are heavy aromatics they 

stayed close to the pavement surface. And at 2:00 in the morning 

a car driving along the street had a loose tailpipe that struck the 

pavement, the spark ignited the volatiles, the entire street erupted 

in flame, buckled, melted the pavement, and a mother and her 6- 

year-old emerged from the house to see what was happening and 

they were engulfed by flames as they emerged from the front door. 

Their father-husband took their son and went out the back door 

and they were the two victims, but houses were burned, the street 

melted, trees burned. It was a horrific scene. Cause: Corrosion, corrosion that went undetected. 

That is what happened with the BP pipeline in 2006, corrosion. 

It went undetected. We had hearings on that issue in this Committee in 2006. 33,000 barrels it turns out spilled, most of it into 

25 

a containment vessel but then it spilled over, 5,000 barrels spilled 

over that containment tank into understandably a contained area, 

but it was still on the ground and the volatiles just evaporated into 

the air. They are a hazard to the environment as well. It took three 

orders from the Office of Pipeline Safety to get BP to take the action they needed to take to correct that problem, and an order, and 

in fact to DOT’s credit at the time, Secretary Mineta, moved the 

Administrator of PHMSA out, brought in a retired Coast Guard admiral, Admiral Barrett, to take charge of pipeline safety and bring 

to it the skills of a Coast Guard safety officer, his career had been 

in safety, and set the Pipeline Safety Administration right. 

And then they had to order BP to remove that section of pipeline 

and replace it altogether. That is something good management 

should have done on its own; it should not have yaken an order. 

I have said this in all of the areas of safety under the jurisdiction 

of this Committee. There has to be a corporate culture of safety; 

safety starts in the board room. The role of government is to set 

standards that must be met, but the government doesn’t run these 

corporations. Corporations have to have people in charge whose 

first concern is safety. 

I grew up with understanding safety in an iron ore miners family. My father worked in the Godfrey underground mine. The lives 

of miners were at risk every day when they were down 300, 600 

feet. Now they don’t have methane as we have in coal mines, but 

you have the risk of cave-ins and failures of pilings, of support columns or they are using wood that isn’t properly kiln dried and the 

mine can cave in on people, and there are many other hazards in 

the underground mines that require a corporate culture of safety. 

We had the Steelworkers Union that insisted on safety. They didn’t 

have a mine safety and health organization until I was elected to 

Congress and I authored that legislation to create it. 

The same with pipelines. Pipelines, we have nearly 3 million 

miles in America, they run through communities, in many cases 

communities built up around the existing pipeline, but that doesn’t 

mitigate the company’s responsibility to be vigilant and to take action and to watch over corrosion. That is the enemy of safety. Corrosion is the culprit in most of the pipeline failures. 

And then response by organizations—I just want to ask this 

question, Mr. Kuprewicz, Mr. Jones, Representative Guttenberg, 

thank you for traveling all the way from Alaska. Mr. Adams, I was 

at the ceremony for Enbridge in Carlton in my district where I saw 

more steel pipe in one place than I have seen anywhere in my lifetime. It all looks good now, or then. We want to watch and see 

what happens to it after it has been buried for a while. 

What do you mean by risk management? Mr. Kuprewicz, I will 

start with you. 

Mr. KUPREWICZ. Well, I think it embodies the concept of a corporate culture that knows the difference between speculative risk 

and risk based on sound engineering principles that don’t violate 

the laws of science. If you assume—like an example would be in 

corrosion. If regulations have been written, let’s say, for general 

corrosion, the corrosion rate is 12 mills per year, 12 thousandths 

of an inch per year, and you have selective corrosion like microbiological induced or influenced corrosion and it is 200 mills per 

26 

year, you are way out of line. And I think there is a lot of science 

and technology out there that everybody understands and most corporate cultures and risk management understand general corrosion. What we have found in too many instances that resulted in 

failure there has been a misunderstanding of what I call selective 

corrosion. And I believe the Minnesota event you described in 1986 

was also an example of a selective type corrosion attack. And by 

selective corrosion it is a different animal. It can really—first of all, 

it isn’t constant over time and it can change. A lot of the regulations and standards are written as if we have general type corrosion. Now I want to be very clear here there are companies who 

are way ahead of this curve. They understand this science isn’t 

rocket science, it has been around for many decades, and they 

apply rational risk management, and if they believe they have selective corrosion they are saying I reassess at more frequent intervals. That is a long winded way and I am sorry. 

Mr. OBERSTAR. No, it is very important, but the underlying issue 

is can risk management and in fact doesn’t it slip into just a paper 

management based on historical records, previous experience, and 

if you have very few incidents then we are going to relax the oversight and relax the requirements. Isn’t that an outcome of risk 

management? 

Mr. KUPREWICZ. Well, that can be an outcome, but I would say 

the more prudent pipeline companies, and they are out there, I 

want to be very clear about that, this science has been around and 

developing well for 60 years. They don’t drop their guard, they 

don’t make this assumption that it is a paper science. They will 

look at it and say, looking at our systems, we have different types 

of risk here. And while we need the paperwork to be sure that we 

know what we are doing, they don’t drop their guard and they will 

look for signs. Now after enough times you can say I don’t have selective corrosion of certain types, for example, but they don’t drop 

their guard, it is a continual evaluation. So I would say the really 

good companies don’t just make it a paper exercise it is an integrated process. 

Mr. OBERSTAR. That is the concern I have and that is where we 

need the constant vigilance on management of risk, and in aviation 

there was a drift toward this kind of historical experience, will 

have confidence in if you have had a good record of management 

instead of the constant reporting and recordkeeping and day-to-day 

oversight of maintenance. 

Mr. Jones, I will give you and Representative Guttenberg and 

Mr. Adams on it, and then I will stop at this point because other 

Members have questions. 

Mr. JONES. I would look at risk management as a way of looking 

at the things you have to do, the likelihood of something occurring, 

of incidents happening and then of course the consequences if they 

do occur. So you are weighing priorities, and of course a robust integrity management program does exactly that. And we have that 

at Alyeska. The program—when we run a smart pig, we take a 

look at and we basically analyze the data and we determine which 

anomalies need to be investigated first and we follow that sequence 

in everything. We are also more conservative than the regulations 

and it has produced very good results. 

27 

Mr. OBERSTAR. Does that also include running cleaning pigs in 

addition to smart pigs? 

Mr. JONES. Yes, it does. 

Mr. OBERSTAR. That was the problem in 2006, that BP had not 

run a cleaning pig through that line and had allowed waxes and 

other corrosive elements to build up within the pipeline. 

Mr. JONES. Well, my understanding from reading is that is what 

happened. For Alyeska we run a cleaning pig every 7 to 14 days, 

and when we are going to do a smart pig run, we actually run a 

series of those ahead of the smart pig to make sure that we get 

good data. 

Mr. OBERSTAR. Are those practices what you understand by and 

include in risk management, periodic, whether you have had a failure or not a periodic run of the cleaning pig through the pipeline 

and periodic on schedule of running a smart pig through the line; 

is that included in the risk management? 

Mr. JONES. Correct. 

Mr. OBERSTAR. OK, Representative Guttenberg. 

Mr. GUTTENBERG. Thank you, Congressman. You are always 

going to have risk management no matter what you do, but my 

concern is when you take it out of the hands of the qualified engineers that we have on projects like this and put in budgetary concerns for a yearly budget cycle, it might influence something on a 

budget influence instead of what is the most efficient thing for integrity management and safety. So when we look at those things 

and are dealing with them in that aspect I think that should probably be—not be part of the review is have the budgetary influence 

overwhelming the engineering. 

Mr. OBERSTAR. When you are operating in what is essentially a 

hostile environment—I understand that somewhat. We don’t have 

as many months of hostility in northern Minnesota as you do in 

Alaska, but certainly understand a hostile environment—you need 

an increased level of vigilance, right? 

Mr. GUTTENBERG. Yes, not just certainly for personal safety but 

for everything that you do, because little things turn into big 

things very fast, and in Alaska they are in your face all the time. 

Mr. OBERSTAR. What was the significance of Alyeska moving personnel from checkpoints along the line out of those areas where 

they would be available for quick response and consolidating them 

into Anchorage? 

Mr. GUTTENBERG. Well, I think that was the point to begin with 

why they were moved there in 1997 by then President Malone, is 

that is where the job is, that is where the response capabilities 

come from. If you can put somebody there immediately, you might 

not have a problem. But if you move them 350 miles away, it is 

going to take a lot longer to do the analysis and to get there and 

to figure out that if you were there 3 hours ago this would have 

never happened. 

Mr. OBERSTAR. Mr. Adams. 

Mr. ADAMS. Congressman, I think certainly when Enbridge and 

our industry talks about risk management what we are trying to 

do is we are trying to apply resources where they will have the biggest mitigation of risk. And I think we need to look at our facilities 

on a case-by-case basis. We have pipelines that have different 

28 

risks. We have pipelines because perhaps the product that carry or 

the original installation practices that demand a lot more diligence 

around corrosion type issues. We have other pipelines that may run 

through a very populated area that have a very—that transport a 

very friendly product that have excellent coating, an excellent cathodic protection system that we focus on third-party damage perhaps. 

I think even Congress, in applying what they have done in recent 

years, has looked at pipeline management, integrity management 

from that risk-based approach. If you look back some years ago, our 

risks were around third-party damage. That was the number one 

risk that pipelines had. There has been legislation, there is one 

called changes that have been enacted that have reduced that and 

overall risk and all aspects of pipelines have dropped, but certainly 

in that area it has dropped more than others. We think there are 

some things that can be done to even enhance that further, but I 

think all in all that is the attack we need to take to mitigate the 

risk associated with pipelines. 

Mr. OBERSTAR. Thank you, Mr. Chairman. I yield at this point. 

Mr. WALZ. [Presiding.] Thank you, Mr. Chairman. Mr. Shuster is 

recognized. 

Mr. SHUSTER. I am going to let myself be passed over for Mr. 

Young. 

Mr. WALZ. Mr. Young is recognized. 

Mr. YOUNG. Mr. Jones, how are you picked for the job you have 

got? 

Mr. JONES. I am picked for the job that I have because at 

Alyeska we have to be competent, we work hard, and we have very 

professional people, and actually as a leader you surround yourself 

with good people. That is what I have tried to do and—— 

Mr. YOUNG. How are you specifically picked, you are now 

what—— 

Mr. JONES. You mean to be here today? 

Mr. YOUNG. Yes. 

Mr. JONES. I am the head of the group that does our Integrity 

Management Program as the Senior Vice President of Technical 

Support, and Mr. Hostler asked me to come here. 

Mr. YOUNG. Who do you respond to, Mr. Hostler? 

Mr. JONES. I respond to Mr. Hostler. He is the CEO. 

Mr. YOUNG. And he is picked by whom? 

Mr. JONES. He is a BP employee. 

Mr. YOUNG. But not for Alyeska? 

Mr. JONES. He is picked by the board, the board that basically 

oversees Alyeska, but he is a BP employee. 

Mr. YOUNG. I know, but what I am trying to get across, we set 

this up specifically so you are not dependent upon the oil companies. When you take that job, if you were to take that job you respond to the Alyeska board and that board is independent of the 

oil companies. 

Mr. JONES. That is correct. 

Mr. YOUNG. And that is the way it is set up? 

Mr. JONES. That is correct. 

Mr. YOUNG. Now in your statement you said you have never had 

a spill since 1976; is that correct? It wasn’t—you know, I admit to 

29 

two, the one being shot at and the other one the recent one. I 

think—when was that, that was last—4 months ago, 5 months ago? 

Mr. JONES. It was May 25th. 

Mr. YOUNG. That at a pump station? 

Mr. JONES. Pump Station 9. 

Mr. YOUNG. Am I correct it was a breaker, someone hadn’t 

checked the breaker and the pump didn’t work or something like 

that? Physically there was a person there? 

Mr. JONES. Yes, there were people there and it was—we did have 

a failure of a circuit breaker that caused total power loss and that 

resulted in the relief tank overflowing. 

Mr. YOUNG. And the relief tank overflowed into a containment 

area. 

Mr. JONES. That is correct. 

Mr. YOUNG. Now this oil that we pumped through that pipeline 

of 600 and I believe, David, you can tell me, 620,000 barrels a day 

now or 640,000 barrels? 

Mr. JONES. About 640,000 barrels a day. 

Mr. YOUNG. Are there any additives added to that oil different 

than had been added before? 

Mr. JONES. No, but what we are experiencing with declining 

throughput, we are having to deal with changing crude characteristics. 

Mr. YOUNG. It is a natural change? 

Mr. JONES. Right. 

Mr. YOUNG. Now is that more corrosive? 

Mr. JONES. It can be, yes. 

Mr. YOUNG. And In reality are you running your pigs more often 

because of that probably added corrosive factor? 

Mr. JONES. Yes, we are. In fact we steadily had to reduce the period there that we are running our cleaning pigs because we are 

experiencing more waxing and everything as throughput comes 

down. 

Mr. YOUNG. You know we have come a long ways though, Mr. 

Jones, because I can remember the first time Mr. Chairman, 

Madam Chairman, when I was in this chair actually sitting in this 

room, I said that we were going to use pigs to go through the pipeline, and someone said, oh, those poor little piggies. Had no knowledge of what we were talking about, but that shows how far we 

have progressed in this business of pipeline and safety and what 

we do to find out. 

The question, as Mr. Guttenberg has said, the movement of people that was not your decision? 

Mr. JONES. The movement of people was a decision supported by 

the senior leadership team, it was certainly one that Mr. Hostler 

made but we basically supported as his executive team. 

Mr. YOUNG. Now was that a business decision or was that a safety decision? 

Mr. JONES. It was a business decision and it did not affect safety. 

Mr. YOUNG. Now this is where I question—I happen to like the 

idea and I don’t like to interfere with his private business, but 

when you say it doesn’t affect safety, how do you justify that when 

the representative said you are 300 miles away. Did you move the 

30 

pipeline operators from the stations or did you move people out of 

the Fairbanks region that were in management? 

Mr. JONES. We moved people that were in the Fairbanks office. 

Their duties were principally office based. We still have our full 

complement of people. There are over 200 people on any given day 

that are spread throughout the pipeline that are basically—— 

Mr. YOUNG. Do you have people on site. Let’s say the question 

about 300 miles away, do you have people on site that can respond 

to the bullet hole? 

Mr. JONES. Yes, we do. 

Mr. YOUNG. How soon? 

Mr. JONES. Well, we have 69 people who are ready basically for 

immediate response, they are 24/7, you know both shifts, all the 

time. 

Mr. YOUNG. All right. The alarm system goes off because of lack 

of pressure or increased pressure at one of the stations, goes 

through the management arena, you have the whole computer 

board, I have seen it. I am in Fairbanks, how long do it take me 

to get to pump station let’s say—what would it be, Dave, 6, 5? 

Mr. GUTTENBERG. Well, 7 or 8. 

Mr. YOUNG. How long would it take me to get there? 

Mr. JONES. Well, to go to Pump Station 7 you can drive. 

Mr. YOUNG. But the one that I can’t drive is what I am leading 

up to. 

Mr. JONES. Right. 

Mr. YOUNG. Between 1 and 3. 

Mr. JONES. Between 1 and 3? Well, we would have the responders that are based out of 4 and we have some people at Pump Station 3, but we have a response base—— 

Mr. YOUNG. You have people onsite to respond to that. 

Mr. JONES. Right. We have them at all active pump stations. 

They all have personnel and—— 

Mr. YOUNG. You have them in all active pump stations now? 

Mr. JONES. Correct. 

Mr. YOUNG. And when you say active, the ones that are not active they have been shut down because of a lack of need of oil or 

what is that? 

Mr. JONES. Well, yeah, as throughput has been coming down we 

don’t need the same pumping capacity. So again for business reasons we take out of service the stations that we don’t need. 

Mr. YOUNG. And lastly, the Chairman mentioned this, Mr. Oberstar, the illusion of what happened with BP was they were collective lines, weren’t they, that had the corrosion in them? 

Mr. JONES. Correct. 

Mr. YOUNG. And they have been replaced? 

Mr. JONES. Right now—— 

Mr. YOUNG. That has really nothing to do with you does it? 

Mr. JONES. That is correct. I was going to say, I don’t work with 

them. 

Mr. YOUNG. You don’t work with them, that is a different unit? 

Mr. JONES. Correct. 

Mr. YOUNG. And this is Alyeska and not the collective pipelines? 

Mr. JONES. That is correct. 

Mr. YOUNG. I am out of time. Thank you, Mr. Chairman. 

31 

Mr. WALZ. Thank you, Mr. Young. I said always with the Chairman and with Mr. Young here I feel like I should pay tuition for 

the lessons and the learning I get. And I want to commend Mr. 

Young. I think when he talked about his vision of having Alyeska 

having a separate entity was visionary, was wise in that. I think 

the point I am trying to get at is since that time of that inception 

has there been a morphing, a loss of that autonomy? That is what 

I am trying to get at. I certainly don’t want to pile on, I don’t want 

to make the assumption, but I think it is a fair assumption. 

Alyeska is a for-profit company, correct? 

Mr. JONES. That is incorrect. We are not. 

Mr. WALZ. It is incorrect. So you make nothing then. The issue 

is to stay there. So the autonomy issue of having these experts 

from BP and things is to bring in their expertise but not to necessarily have day-to-day say over the pipeline operation? 

Mr. JONES. Well, they are one of five companies that comprise 

our board, and so they could not dominate the decisions even if 

they wanted to. We are an independent consortium. We run our 

company, we have a distinct culture. Our employees are uniquely 

Alaskan. In fact we are a very diverse company, we hire 20 percent 

Alaska Natives, the laborers and crafts that work on our pipeline 

actually choose to want to come work for us due to our safety culture. So we are very distinct. We are proud of all the employees. 

Mr. WALZ. I want to get at this point. I think Chairman Oberstar 

and many others, and yourself, Mr. Jones, with your military history, and I spent about a quarter century as a senior enlisted soldier. There is culture of safety in risk management. It is the air 

we breathe. I think the Chairman is right, it starts at the top, it 

starts as a culture. It starts being engrained in every decision that 

is made. And I just want to ask you, Mr. Jones, if you can see why 

some people were concerned, the statement that out of the Fairbanks paper November 17th of last year where you indicated—and 

this move we are talking about, movement of employees, and am 

I right there were integrity management employees that were part 

of this move? 

Mr. JONES. Yes, sir, there were. 

Mr. WALZ. OK. It said all support groups should be looking at 

Valdez in addition to Fairbanks and asking what the business purpose is for the staff to be based at these locations, Jones wrote. The 

bias needs to be in favor of them working in Anchorage unless 

there is a compelling business case to the contrary. Is there not 

room also for this idea that there is not a mutually exclusive delineation between safety and the smooth running of the company and 

of the pipeline; why stressing the business case on this as the sole 

purpose? 

Mr. JONES. Well, we were talking specifically about people that 

are based in offices, we were not talking about our field-based people. And so we had an opportunity to consolidate office buildings 

there. We were paying for almost 60 percent more space than we 

were utilizing. And so we—and we had also been involved in a centralization effort back towards Anchorage since 2002. This was just 

a continuation of that effort. 

Mr. WALZ. So the 1997 decision in your opinion was wrong or the 

situation changed since that time to warrant a review of policy? 

32 

Mr. JONES. I would say the 1997 decision was right for that time. 

Today we are in a different business environment with throughput 

declining 6 percent every year, so we need to be as efficient as we 

can. 

Mr. WALZ. So this was Alyeska and their board’s decision alone. 

What input, explain to me so we can explain to our constituents, 

do BP or the other owner companies, what input do they have, sign 

off, budgeting, things like that, where do they have a role in this? 

Mr. JONES. Well, we have an approval authority guide that specifies what levels of authorities and everything that we have as officers of the company and then what things that we have to send to 

the board for approval. But in this particular case for the office 

that was an Alyeska decision and it was supported by the senior 

leadership team. 

Mr. WALZ. OK. I want to go to you, Mr. Adams, and ask on this. 

Where are your integrity management personnel placed? Alaska is 

big, real big. North Dakota is pretty big, and your pipeline operations. Where are your integrity management people placed? Do 

you centralize that location? 

Mr. ADAMS. There is some centralization. We have many of our 

integrity management people certainly at higher levels and technical levels actually out of Edmonton, Canada. They provide some 

overall support. And then strategically based throughout the system within regional areas we do have some integrity management 

folks. We do have field folks that have responsibility for some parts 

of integrity management, things such as cathodic protection systems and those sort of things, and they are on the pipe end themselves, via the technician level. 

Mr. WALZ. OK, I just have one more before we move to Mr. Shuster. Talking about this May 25th incident, and Mr. Young did a 

good job of elaborating to us and I think there are some positives 

in this in containment. One of the questions—and we are seeing 

this again. I think we would be remiss when one of my colleagues 

said there is nothing, what is happening with BP in the Gulf, that 

has relationship to this. I think there is in terms of response and 

in terms of response plans. I know those best laid plans and I am 

glad to hear—and one of things, Mr. Jones, you talked about that 

they gave you flying colors on your document when they looked at 

it. It is still a document, and I want to know what the indication 

is on the ground. 

My question is the workers that responded to that May 25th incident, do you have a plan for long range watching their health concerns? Is there anything we should be concerned about of vapors, 

of contact, with was released or anything like that. 

Mr. JONES. Well, we do have a plan where we would monitor 

that, but in this particular case we kept our personnel away from 

the area until the volatiles were able to essentially flash off. That 

is one of the things you do in a response, is you look at the hazards 

and we keep our people out of harm’s way. 

Mr. WALZ. Will there be a follow-up on those folks to see if there 

is a cohort of these folks who responded to this thing, if they develop any abnormalities or health conditions? 

33 

Mr. JONES. Well, we certainly would, but we were very careful, 

we did atmospheric monitoring to make sure that we did not put 

our people in harm’s way. 

Mr. WALZ. Last thing I would say, Mr. Guttenberg, would you respond on any of these that you maybe have a difference of opinion 

on these questions that were asked as this applied? 

Mr. GUTTENBERG. Well, the placing of personnel is a key part of 

this equation that is ongoing for me. If you have agency people that 

need to respond with other agency people, they need to be in proximity to them, but the integrity management people that need to 

be in the field or in proximity to it that is very important. And I 

think that is a key to what is a concern for a lot of employees internally. Think there is something wrong, we have a difference of 

opinion, we are the people that do—they are the people that do the 

work. And the senior management made a decision that they felt 

was not in the best interest in the safety and integrity of the pipeline. 

Mr. WALZ. You stated, and I will end on this, that there is a culture of folks—I have looked at some these from screen names—I 

know for protection of integrity, afraid of spill, and some of these 

folks have written to your and some of the names have come out 

there. Is there a culture that they fear retribution on this? I know 

in a military setting that Mr. Jones is familiar with, and everyone 

else, is that anyone can call a ceasefire, anyone call a safety violation. You can shut down an operation from the lowest private to 

the general based on that. Do you feel that is not present in this 

operation? 

Mr. GUTTENBERG. Well, I am kind of the cynic when it gets to 

the top anyway. My history in construction is you sit in a meeting 

where they say priority is top and the most important thing and 

you can stop it right now. But when you get to the point when you 

have to do something, it has to get done. But Alyeska does have 

a good history, they do have a good dialogue with employees and 

project employees over the years, but I am not in those offices 

watching and witnessing what happens. 

Mr. WALZ. OK. Well, I thank you all. 

Mr. Shuster. 

Mr. SHUSTER. Mr. Jones, first of all, I just want to point out 

based on what the Chairman said and Mr. Walz about your military background, you are a former commander in the Coast Guard, 

which I think brings great knowledge and that culture of safety to 

bear on the organization that you work with and work for. 

I understand that Alyeska has a major maintenance shutdown, 

is that accurate? 

Mr. JONES. Correct. 

Mr. SHUSTER. And how significant is that to the operation, to the 

safety and to the integrity plan that you have in place? 

Mr. JONES. Well, it is very significant. We have been actually 

doing two major maintenance shutdowns per year where we may 

do valve work, we may do piping work. And so it is usually major 

work to where we have to actually be able to isolate a valve or piping from pressure, which is why you do the shutdown, but it is all 

part of our overall effort for integrity management. 

34 

Mr. SHUSTER. As an event is it one of the most significant things 

you do, those two shutdowns all year? 

Mr. JONES. It is a big event and we do tremendous planning to 

make sure that we can do that safely. 

Mr. SHUSTER. When will that occur? 

Mr. JONES. The next one will be July 31st. 

Mr. SHUSTER. And so I would imagine you have all hands on 

deck? 

Mr. JONES. It is all hands on deck. 

Mr. SHUSTER. Everybody is working? 

Mr. JONES. From top management right on down. It is a serious 

thing. 

Mr. SHUSTER. I want to point out to the Committee that sometimes in Washington in general there is a disconnect on what goes 

on in the real world and what goes on in Washington. I would have 

hoped that we would have taken that into consideration and maybe 

brought you here after the major maintenance was done, so you 

probably have spent a number of hours preparing, researching to 

be before us here today. So when we talk about here in Congress 

a culture of safety it needs to be start here also in Congress. So 

again I would hope in the future that the Committee staff and the 

majority would take those kind of events into consideration because 

taking you away, being the Senior Vice President for Technical 

Support, you probably have a lot to do with the maintenance coming up and here you are in Washington when you would better 

serve the safety culture and the culture of safety back there in 

Alaska. I just want to make that point. 

The question, back to the moving of the staff, I just want to put 

into the record, ask unanimous consent to put in the Joint Pipeline 

Office of the Federal-State organization that oversees, has oversight up there in Alaska, put out this letter on—I don’t know the 

date—July 14th and just one paragraph, to read that ‘‘We consider 

Alyeska’s transfer of integrity environmental staff from Fairbanks 

to Anchorage is a business decision because it does not involve first 

responders.’’ 

So I would like the entire letter to be in the record to make sure 

that we have that because as I think it has been pointed out a 

number of times this is a business decision, it doesn’t effect safety. 

And with technological changes from computers to monitoring devices to the transportation system, you don’t always—in a business 

model you have got to make decisions to make sure you are efficient. I want to point out when you say nonprofit I think a lot of 

people think you don’t make any money. But a nonprofit has to 

have more revenue or it should have more revenue than it does expenses or it is going to go down the tubes or you will come to 

Washington, D.C. And ask for us to bail you out. We need to make 

sure it is on the record that people know that you have got to be 

self-sustaining. So you have got to have a positive revenue flow 

over expenses. 

Also, we wanted to ask how does Alyeska spending—how much 

do you spend annually on your integrity management activities to 

comply with the Federal pipeline safety laws and regulations? 

Mr. JONES. Well, since 2005 coming up to present, we have had 

a steady increase in the funding for our Integrity Management ProVerDate Aug 31 2005 11:18 Mar 22, 2011 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 P:\DOCS\57487.TXT JEAN
35 

gram. 2005 expenses were right around $45 million total. And then 

leading up to today where it will be a little over $60 million. 

Mr. SHUSTER. Do you exceed the Federal standards, the Federal 

requirements, safety requirements? 

Mr. JONES. Well, you know, I don’t have a breakdown of that, but 

that is, you know, comprehensively everything that we are putting 

into the Integrity Management Program. The program is very effective, and, you know, we can see that also in our performance. 

Mr. SHUSTER. One final question for you. 

Have you ever had a leak on the 800-mile pipeline that was due 

to corrosion? 

Mr. JONES. No, we have not. 

Mr. SHUSTER. If I could, I will ask one final question of Mr. 

Adams. 

In your testimony, you claim, in the effort to strive towards the 

industry goal of zero releases, zero injuries, zero fatalities, no operation interruptions, that Enbridge holds managers accountable for 

those performance measurements designed to meet those goals during their personal performance evaluations. 

If somebody fails to hit those goals, what actions do you take to 

rectify this? 

Mr. ADAMS. Certainly, it depends on the position, but it is incorporated into our overall performance in terms of our bonus structure’s pay for employees, and it depends on the level of the organization. Certainly, as you get to higher levels within your organization, there is a bigger impact on that compensation related to safety performance and pipeline integrity performance. 

Mr. SHUSTER. I certainly think our goal should be zero fatalities, 

zero injuries. We certainly want to strive to do that. It is my view, 

though, that we are going to have human error and the possibility 

of mechanical breakdowns in striving for that goal as we should do; 

but I think the only way, realistically, that we can get to that 

point—and in talking to a company that has a stellar safety 

record—is you just don’t do it. That is the only way we get to zero 

fatalities. It is the only way we get to zero injuries, unfortunately. 

I mean would you agree with that? 

Mr. ADAMS. Absolutely. I think, traditionally, industry is looked 

at in terms of safety overall, a pyramid. If you get rid of the small 

issues, then you can eliminate the big ones in the long term. I 

think that conventional thinking has changed a little bit as a result 

of BP and what has happened in our own company with the issues 

that we have had. What we find is that any breakdown in the management system anywhere along the way—I think Congressman 

Oberstar mentioned that senior management in the boardroom has 

to believe in it, but every single one of your leaders within the organization has to believe in it, and when you get a breakdown at 

any level in that organization, you can have an issue. 

I think we, as an industry, and everywhere can get to the point 

where we can’t blame anything on human error because, if our 

management system works, we have those people trained. We have 

the right people in the right place doing the right job. 

Mr. SHUSTER. Well, I just thank both of you for being here—all 

four of our witnesses—but these are two great examples of companies that have cultures of safety. 

36 

Again, I just want to reiterate that I hope we on the Committee 

here in the future take under consideration when a pipeline has a 

major maintenance shutdown, that we bring them to Washington 

after they have done this major maintenance safety situation that 

they are going under right now and not drag then down here to 

Washington to take their eye off the ball on safety. 

So thank you very much. 

Mr. WALZ. Well, I thank the gentleman. 

Also, though, I take my responsibility of oversight seriously. 

Maybe the gentleman can arrange for us to get to Alaska and make 

it easier for Mr. Jones and to make sure we are doing our job. 

Mr. SHUSTER. I think Mr. Young has made a standing offer, and 

Mr. Oberstar has, I think, participated many times in that trip up 

to Alaska to see it firsthand. It should be done by all Members. 

Mr. WALZ. We really appreciate it. I think there is little doubt 

that this entire Committee wants, as I said, to be able to move the 

petroleum that powers our country, at the same time doing it safely and protecting our workers and the environment. 

The one thing I would bring back is this move of employees, 

though. I want to get at the decisions that were made in this because Alyeska asked its engineering director and the engineering 

integrity manager, who supervises the Fairbanks employees, to review the risks of moving integrity management personnel to Anchorage, which is exactly what was done. 

They generated a report, and the findings—and I quote—stated: 

There are significant safety and integrity risks associated with 

movement of the current IM teams to Anchorage. 

What overrode those inputs? I would think the engineering integrity manager and the engineering director would be pretty 

heavyweights in the decision on this. What was the decision then 

as it was being balanced out, Mr. Jones, to decide to do that? 

Mr. JONES. Right. Well, of course, this was not the only consideration, you know, that we looked at. 

In the report, they did not have any—we didn’t ask them how 

to mitigate measures or to look at things, and when we went 

through our analysis, we had lots of discussion. We involved some 

of those engineers in discussions, and what we came up with was 

a balance to where we left some people who definitely had more of 

a role in the field. We left them in Fairbanks—that was three of 

the engineers—and then the people who had essentially office responsibilities were the ones who we brought in to Anchorage. 

I had a conversation with one of the authors of that report just 

last week, and we talked about this issue. He has assured me, in 

how we have handled this, that we do not have a safety or integrity 

problem on the pipeline. 

Mr. WALZ. Would that person be willing to state that to us for 

the record and provide that to me? 

Mr. JONES. Well, I can’t speak for him, but based on what he told 

me, I would think he would. 

Mr. WALZ. OK. I would like to see if we can follow up on that 

to get these people who wrote this report. I would like to see if they 

have changed their position from this, and you are stating that 

they have. I would like to have them say that, if that is OK. 

37 

Mr. JONES. Just to be clear, I am stating that the integrity management manager, who was one of the authors of that report, has 

told me that. 

Mr. WALZ. Very good. Mr. Shuster hit on this, the $60 million on compliance and safety. Is that a greater percentage of your budget or less in terms of 

what you put into this? You stated that the number went up, but 

I think it is important in the context of things. Is maintenance 

being deferred because it is OK to do that and that the maintenance didn’t need to be done at that time or is it being deferred 

to keep the costs down? So Mr. Shuster talked about the $60 million. It sounds like a lot, 

but it depends on how big the pipeline is. It depends on how much 

needs to be done. It depends on what percentage of the budget that 

is. 

Are you increasing funding on compliance and maintenance in 

terms of your overall expenditures? 

Mr. JONES. We have been on our, what we call, baseline expenses. It has been relatively flat. You would have to look at individual components. 

The bottom line is we fund the essential work, and so we 

prioritize it, and we use that risk-based approach. That was one of 

the first questions that we had. So we always make sure that we 

go after the safety and integrity work. That is paramount, and it 

gets our utmost attention. We also know that if we had to go back 

for additional funding from the board in order to do that work that 

we could do so. 

Mr. WALZ. The last thing I would ask: 

Is there overregulation on pipelines? Is there overregulation? Are 

we stepping in there? Are we hurting your ability to operate by 

having too much regulation? I hear this a lot. There is too much 

government. There is too much regulation. There is too much cost 

to you or whatever. Is there too much? I will ask each of you, if 

you can. I know it is subjective, but I would like to hear how you 

would respond to it. 

Mr. KUPREWICZ. Do you just want to go down the line? 

Mr. WALZ. Yes. 

Mr. KUPREWICZ. No. 

Mr. WALZ. OK. 

Mr. JONES. What we look for are regulations that provide a very 

clear target, that are not moving, and that also get consistent application and enforcement of those clear targets. So, to the extent 

that regulation can do that, then, you know, we will take that on. 

We are not afraid of strict standards. You know, we understand 

that, but we need things to be very clear and uniformly enforced. 

Mr. WALZ. Are they that way now, in your opinion, Mr. Jones, 

or not? 

Mr. JONES. Well, there are issues. You know, there are definitely 

things that can be worked on. 

Mr. WALZ. OK. 

Mr. GUTTENBERG. Thank you. 

You know, my legislative career is similar to yours. One of the 

things, the caveats, that I put in is that it has to work. In some 

hearings, when people have come in and complained about being 

38 

overregulated, some of my colleagues from the other side of the 

table have said, ‘‘Give me an example.’’ ‘‘Tell me what the regulation is that is in the way or too cumbersome.’’ I don’t see the answer, and I sit on the Reg. Review Committee in the legislature, 

and I haven’t witnessed a lot of it. So, if they have something, they 

should come forward and be specific about it. 

Mr. ADAMS. My comments would mirror, certainly, Mr. Jones’. 

I would just add that I think there are some areas—and I mentioned them briefly—where I think we could use some additional 

regulation, and that is really around third-party damage and in 

some of the exclusions that exist out there, through municipalities 

or whatever, and I think that is certainly an area that we would 

like to see looked at from this body. 

Mr. WALZ. Great. 

Mr. Shuster, do you have any follow-up? Then we will see if the 

Chairman has anything. 

Mr. SHUSTER. Just on the third party, can you elaborate a little 

more on that? 

Mr. ADAMS. Yes. 

What exists out there—there are a number of different One Calltype programs from State to State, and there are certainly some 

variations. 

Mr. SHUSTER. Speak into the mike more. 

Mr. ADAMS. Yes. 

There are a number of One Call Systems that vary from State 

to State, certainly, but within those, from municipalities in some 

cases, there are exemptions given to certain contractors that are 

actually digging out there that aren’t required to utilize those One 

Call Systems. From an industry perspective, or at least from an 

Enbridge perspective, we would like to have those exemptions 

eliminated. 

Mr. SHUSTER. And why are they exempted? 

I mean, from a commonsense standpoint, if I am a contractor— 

well, I just—there was a point a couple months ago when I was 

digging up trees in my backyard. I made the call because I didn’t 

want to make the mistake of hitting a gas line and blowing myself 

up or something like that. 

Mr. ADAMS. Yes, I am not sure why those exemptions exist. 

Mr. SHUSTER. OK. Thank you. 

Mr. WALZ. Chairman Oberstar. 

Mr. OBERSTAR. Yes. Thank you, Mr. Chairman. 

I thank the witnesses for their responses to the previous questions. I want to come to Representative Guttenberg. 

These passages in your statement are very troubling to me, not 

troubling that you said them, but troubling about the condition of 

safety, that the move of personnel, which Mr. Jones described as 

a business decision and you described as a cost-saving measure, the 

company said would result in a onetime savings of $4 million, but 

then you go on to say that it would significantly decrease work efficiencies, increase travel costs. It would be the—and you point to an 

internal review by Alyeska that the loss of almost 50 percent of the 

company’s integrity management group would occur if the company 

moved ahead with the transfer and that it would have the effect 

of deteriorating morale for the remaining personnel and in a loss 

39 

of expertise and institutional knowledge and would return to 

Alyeska’s previous history of compliance problems with integrity 

management. 

That seems very much to be at odds with what Mr. Jones is saying, trying to sort of brush this over as just a little business decision. This is substantively more than a business decision, right? 

Mr. GUTTENBERG. Thank you. That is my feeling as well. 

I know the report that Alyeska had done, which was referenced 

by the Chairman, is where some of that information comes out of. 

The morale and the loss of employees is—you know, they moved 

people from Fairbanks to Anchorage. Now they are moving them 

back. A certain number of them decided not to take that move. I 

know they were looking for positions at other places. Up until 

today, it has still been an ongoing situation, but if you are an employee and if you are a highly skilled, trained, educated, experienced engineer, working in integrity management, and you see a 

situation in front of you that says, ‘‘I am not going to be able to 

do my job if I move to Anchorage, the way it is defined for me in 

looking at what I need to do,’’ then doing this job is no longer ever 

going to be satisfactory because I am not going to be able to do it. 

I am going to have to have more travel time. That is the increased 

cost. Then you are going to have a loss, and I think the institutional memory cannot be undervalued. 

Mr. OBERSTAR. What is the travel time from Anchorage to these 

outposts along the pipeline where personnel were stationed? 

Mr. GUTTENBERG. Well, if you were driving, it would be about 8 

hours. If you were flying, it would be an hour plus. 

Mr. OBERSTAR. But you wouldn’t be driving anyone to respond to 

an oil spill. You would fly them up there. 

Mr. GUTTENBERG. Well, that is not my decision. That is Mr. 

Jones’ decision, but how you get there, whether you go by 

Glennallen or anywhere in between or any of those small communities or even north, you know, there might not be an airstrip for 

20 miles. 

Mr. OBERSTAR. That is the other question of mine. 

Are there airstrips close to those checkpoints where personnel 

were located? 

Mr. GUTTENBERG. Well, since the construction of the pipeline— 

and I, you know, was involved in some of that—there are periodic 

airports and old construction camps all along the pipeline. 

Mr. OBERSTAR. Mr. Kuprewicz, you have been involved in pipeline safety for a great deal of your career. 

What do you think about the effect of moving personnel with the 

skills, the expertise, and the institutional knowledge, as Representative Guttenberg stated, and the effect on vigilance and response 

time and safety in this environment of the pipeline in Alaska? 

Mr. KUPREWICZ. Well, first of all, you need to understand the history of Alyeska is they have developed issues that have set some 

of the original technology because they had serious corrosion risks 

and problems. They didn’t have leaks, but they had corrosion, and 

those are well publicly known issues. 

Mr. OBERSTAR. Yes. 

40 

Mr. KUPREWICZ. So they have advanced the field in some of those 

areas, which are real important, so I don’t want to take that away 

from them. 

The other side of it is, as you tend to create chaos in an organization, you have to be real careful with this because there is importance to things likes institutional memory, and that is one of the 

roles of government—to be sure, I think, that you don’t reinvent 

the wheel. Some of the regulations should set certain minimums, 

and so you have got to be careful with all of this chaos, if it is real, 

and I am not up there, so I can’t say how this has affected that 

organization, but you did lose 50 percent of your group. 

Now, what was the group, and what were their skills? Those are 

the kinds of things. 

When you create this kind of chaos for a technically culturalbased knowledge skill required, you want to be real careful with 

that. It doesn’t mean you don’t have to make those decisions, but 

you want to be real careful. In some cases, I have seen it in other 

companies. They have missed that. They have missed that complication with the confusion that they can cause, and they have had 

to reinvent through various field errors—and some of them not always catastrophic, but they have had to reinvent their learning 

curve. 

So I would just caution folks on that. It is an issue. It is an issue 

your folks are pursuing. You need to understand that and be comfortable with it. That would be my advice. 

Mr. OBERSTAR. Thank you. 

Mr. Adams, what is Enbridge’s policy on the response and stationing of personnel? This is a very long pipeline that goes from 

Athabasca in northern Alberta, all the way to the Headwaters of 

the Great Lakes. 

Mr. ADAMS. Yes. 

What we have is we have our own emergency response personnel. Effectively, those emergency response groups are spaced 

probably 3 or 4 hours apart within our pipeline system. So, really, 

we can get people to the site sooner than that because we have 

technical-type people that are on call, but the emergency response 

crew, with equipment and certainly boom and recovery equipment, 

can be there in a 3- to 4-hour period typically. 

Mr. OBERSTAR. Three to 4 hours apart by what measurement? 

Mr. ADAMS. By initial reporting, reporting of the leak or the area 

of the leak. In some instances, that can be a phone call from a 

third party. It can be our own pilots or aviation observing that 

there is a leak along the pipeline or an issue. There are a number 

of different ways we can get notified through our control center. 

Mr. OBERSTAR. When the Koch Pipeline burst near Little Falls 

in Minnesota, it was a person driving by, going home from work, 

who saw this black geyser shooting into the air alongside Highway 

10. He was astute enough to realize that they don’t have oil. There 

are no oil wells there. It is not likely that oil just spurt out of the 

ground, and he realized it and smelled it. 

He called the county sheriff’s office, and the sheriff’s office then 

had a phone number for the pipeline company, called ‘‘Pipeline 

Company.’’ Then they called their office in Oklahoma to shut off 

the valve that controlled that segment of the pipeline. 

41 

You know, the time frame was relatively short, but I just wonder 

what would have happened if that had been the dark of night and 

no one had seen that going. I asked that question of Koch, and they 

said, Eventually our sensors would have detected a decrease in 

pipeline pressure, and eventually that would have caused a shutoff. 

Is that what you are talking about? Are those the kinds of automatic valves that are periodically located along the pipeline? 

Mr. ADAMS. Yes. We certainly have valves along our pipeline system, and in recent years, we have had programs where we are installing additional valves, automatically operated valves, on each 

side of the sensitive areas. 

Mr. OBERSTAR. But, that 3 to 4 hours, is that response time from 

the time someone hears or knows of it and is on scene? 

Mr. ADAMS. Yes, that would be getting people on scene. 

Mr. OBERSTAR. By driving? By flying? 

Mr. ADAMS. By driving, typically, in most of our areas. 

Mr. OBERSTAR. You measure your response time in hours on the 

road, driving? 

Mr. ADAMS. Yes, a response to have people physically at the site. 

Certainly, our response time from our control center can be almost 

instantaneous, and our large leaks are typically detected by our 

control center personnel. They have enough experience and training that, with usually a leak of any size, they can view that there 

is a change in the operating system, and there are provisions that, 

if there is uncertainty, they have to shut down within a period of 

time, and that would include the closing of automatic valves. 

Mr. OBERSTAR. The valve structure that you have on your pipeline and the frequency of valves is that there are more in urban 

settings and fewer in rural areas. Is that by your standards or are 

those by the Office of Pipeline and Hazardous Material standards 

or by State standards or what? 

Mr. ADAMS. Yes, there are some standards in place, but we go 

beyond those standards and set our own standards. We have a risk 

management group that evaluates our pipeline flows. It evaluates 

the terrain that the pipeline is going through. Obviously, if you are 

on flat terrain, if there is a leak that drains up, even if the pipeline 

is shut down, is relatively small. If you are in a large area where 

there are large hills, you probably would want to install more 

valves. You would want to install valves on each side of a river, for 

example. If, indeed, there were a break in the river, you would 

close those valves. 

So it is very dependent, again, on where the pipelines run and 

the terrain, and we try to be prudent and, again, looking at where 

we can minimize the impact if, indeed, we did have a leak. 

Mr. OBERSTAR. Now, Mr. Jones, you said in the course of your 

testimony that there was no effect on people of that spill. Yet the 

reports that we have are that an employee reported smelling crude, 

so somebody had to be affected by it. Clearly, somebody was—at 

least one person, maybe more—and volatiles are carried by wind, 

and they go considerable distances. 

Mr. JONES. Well, that is true that volatiles do travel with the 

wind. I am not familiar with that particular case. 

42 

What I do know is, in responding to that incident, we made safety and the concern about those vapors basically boiling off—you 

know, since it was a pool in secondary containment, it was important to us to not let our people, you know, get in there, and we 

waited a considerable amount of time. Then we did atmospheric 

monitoring, and we made sure that our people were outfitted in the 

appropriate gear before making site entry. That is a standard part 

of our response procedures. We actually had a very excellent response in this. It was very timely. 

Mr. OBERSTAR. Well, as to the cost-saving measure or business 

decision you made to bring personnel from the various locations on 

the pipeline into a consolidated area and to reduce the number of 

personnel, what is your time frame of moving personnel on scene? 

You heard what Representative Guttenberg said. What is your 

plan? Do you fly them? Do you drive them? Do you use a fixed-wing 

or a helicopter to get people on site? Have you done a risk management evaluation of time frames and moving personnel on scene in 

case of failures? 

Mr. JONES. We actually do extensive planning to know how long 

it takes us to respond to certain sites, and we have—— 

Mr. OBERSTAR. What is that time? 

Mr. JONES. Well, it varies depending on where you would have 

a spill, but we actually get into looking at all of the sensitive areas, 

and we develop very detailed plans to know exactly what we would 

need to do for a given scenario. 

One thing I need to correct here—and this is where I think there 

is some confusion—is that the people that we moved from Fairbanks to Anchorage were office-based. They were not part of our 

initial response team that we have. We have not changed any of 

our response capability for first responders. We have 69 people, as 

I said earlier, 24/7 that are ready to go immediately. They are dispersed throughout the stations, along the pipeline and also at the 

Valdez Marine Terminal. I would rate our response capability as 

‘‘best in class.’’ 

Mr. OBERSTAR. So how many integrity management personnel 

does that leave on the pipeline on scene at various checkpoints? 

Mr. JONES. We don’t have integrity management personnel at 

the pump stations. We never did. These personnel were in the Fairbanks office. There are about 20 total that are in the group. We 

currently have six vacancies. We have interim measures in place 

to cover those duties, and we are going through hiring and are actually doing interviewing right now. So I am very confident that we 

will replace the talent gap that we have, and we will not have safety or integrity impacted. 

Mr. OBERSTAR. So your plan is to fill those positions and bring 

it up to full steam. 

Does that satisfy you, Representative Guttenberg? 

Mr. GUTTENBERG. We will just have to see, at the end of the day, 

who is there. You know, where it hits the road is when something 

happens, and then you discover whether there were competent people in place who could actually do the response, not just the first 

response, but the secondary response to assess and take action on 

a spill or a problem. 

43 

Mr. OBERSTAR. Now, your constituents in the area of the pipeline 

where they have seen spills, are they comfortable with these management decisions now? 

Mr. GUTTENBERG. You know, Alyeska has been there for a long 

time. There is a history of taking care of problems. You know, there 

haven’t been any major spills. Spills at Pump Station 9 were contained within the bladder, but there were problems with how that 

happened as well. 

People are concerned, but, you know, we are an oil State at the 

end of the day, and we look upon that as our flow of revenue, and 

people are at times really concerned about what would happen if 

there was a problem. So we are all over the place as far as how 

we review Alyeska. 

Mr. OBERSTAR. I think what this hearing shows us all is vigilance, consistency, a high standard of safety management by the 

company, a high level of oversight by the Pipeline Safety Management Agency, both Federal and State in a cooperative relationship, 

particularly in a hazardous environment, all of which were absent 

in the Gulf. 

It is just intolerable that the Minerals Management Service, 

under the previous administration, exempted BP from filing a 

blowout failure response plan. None was prepared. None was developed. They are showing today, even today, this very day, that they 

are still experimenting with containment and protection because 

they didn’t think of it and they weren’t required to think of it 

ahead of time. They were exempted from thinking about how to 

contain a failure at the wellhead and in the water column. 

That failure jeopardizes 50 percent of the fish and shellfish resources of the United States, 300,000 jobs and the future livelihoods of millions of people in the Gulf area, and it stretches all the 

way up to the Chesapeake Bay where oystermen were counting on 

oysters from the Gulf off Louisiana to serve their customers here. 

I was up on Eagles Nest Lake last week, just after the 4th of 

July, just on the edge of the boundary waters of the Cuyuna area, 

with my son and granddaughters, listening to the call of the loons. 

In 4 months, those loons are going to be migrating to the Gulf, and 

they are going to meet with a terrible fate if that oil isn’t cleaned 

up, and it won’t be cleaned up by that time because that is where 

they winter. They will be flying right into those marshes where the 

oil is gathered, and they are going to be Minnesota casualties, Minnesota loon casualties. If those loons don’t return next spring, then 

BP is going to be to blame. 

I will leave it at that. 

Mr. WALZ. Well, thank you to the Chairman for that summation. 

I want to thank each of you on behalf of myself and the Committee for being here, helping us to understand this, helping to be 

partners in getting this right, as we said, to move a precious resource to fuel our country as well as doing it in a safe manner. It 

is invaluable. 

To Mr. Jones and Mr. Guttenberg, thank you. I don’t want to 

make light of the long travel you made. It truly was. 

The hearing will be open for 14 days for Members who wish to 

make additional statements or to ask further questions. Unless 

there is further business today, this Subcommittee is adjourned. 

44 

[Whereupon, at 12:55 p.m., the Subcommittee was adjourned.] 

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