DISCUSSION DRAFT ON THE 

PIPELINE SAFETY IMPROVEMENT 

ACT REAUTHORIZATION AND 

H.R. 5782, THE PIPELINE SAFETY 

IMPROVEMENT ACT OF 2006 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON ENEGY AND AIR QUALITY 

OF THE 

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

SECOND SESSION 

JULY 27, 2006 

Serial No. 109-133 

Printed for the use of the Committee on Energy and Commerce 

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 2006 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

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31-361PDF 
COMMITTEE ON ENERGY AND COMMERCE 

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

 Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

 Vice Chairman

VITO FOSSELLA, New York 

ROY BLUNT, Missouri

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOHN D. DINGELL, Michigan 

 Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, General Counsel

REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON ENERGY AND AIR QUALITY 

RALPH M. HALL, Texas, Chairman 

MICHAEL BILIRAKIS, Florida 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

VITO FOSSELLA, New York 

GEORGE RADANOVICH, California 

MARY BONO, California 

GREG WALDEN, Oregon 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

JOE BARTON, Texas 

(EX OFFICIO) 

RICK BOUCHER, Virginia 

 Ranking Member 

MIKE ROSS, Arkansas 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JOHN D. DINGELL, Michigan 

 (EX OFFICIO)

(II)
CONTENTS 

Page 

Testimony of: 

Barrett, Hon. Thomas J., Administrator, Pipeline and Hazardous Materials 

Administration, U.S. Department of Transportation ................................................... 11 

Mason, Hon. Donald L., Commissioner, Public Utilities Commission of Ohio, on 

behalf of National Association of Regulatory Utility Commissioners.......................... 16 

Jibson, Ronald W., Vice President, Operations, Questar Gas Company, on behalf of 

American Gas Association............................................................................................. 32 

Mohn, Jeryl L., Senior Vice President, Operations and Engineering, Panhandle 

Energy, on behalf of Interstate Natural Gas Association of America ........................... 38 

Felt, Timothy C., President & CEO, Explorer Pipeline Company, on behalf of 

Association of Oil Pipe Lines ........................................................................................ 45 

Epstein, Lois N., P.E., Senior Engineer, Oil and Gas Industry Specialist, Cook 

Inletkeeper, on behalf of Pipeline Safety Trust ............................................................. 52 

Additional material submitted for the record: 

Siggerud, Katherine, Director, Physical Infrastructure Issues, United States 

Government Accountability Office, prepared statement of........................................... 62 

(III) 

(1) 

DISCUSSION DRAFT ON THE PIPELINE 

SAFETY IMPROVEMENT ACT 

REAUTHORIZATION AND 

H.R. 5782, THE PIPELINE SAFETY 

IMPROVEMENT ACT OF 2006 

THURDAY, JULY 27, 2006 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON ENERGY AND AIR QUALITY, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 11:46 a.m., in Room 

2322 of the Rayburn House Office Building, Hon. Ralph M. Hall 

(Chairman) presiding. 

 Members present: Representatives Shimkus, Sullivan, Murphy, 

Boucher, Green, and Hall. 

 Staff present: Tom Hassenboehler, Counsel; David McCarthy, Chief 

Counsel for Energy and Environment; Elizabeth Stack, Policy 

Coordinator; Peter Kielty, Legislative Clerk; Bruce Harris, Minority 

Professional Staff Member; and Sue Sheridan, Minority Senior Counsel. 

 MR. HALL. The hearing will come to order. 

 Without objection, the Chair will proceed pursuant to Committee 

rule 4E and recognize members for 3 minutes for opening statements. If 

they defer, this time will be added to their opening round of questions. 

 Today, we meet to discuss two bills relating to pipeline safety 

reauthorization, one being a committee discussion draft that was put 

together in a bipartisan fashion, and another, H.R. 5782, that was 

recently reported out of the Transportation Committee. Pipeline safety 

reauthorization is a priority for this committee to get done this year, and I 

am hopeful that our efforts are going to move this bill forward when we 

return from the August recess. Hopefully we will not only be fruitful in 

the House, but I also have hopes for the Senate. 

 The drafts that we are here to discuss today are, in my opinion, 

attempts to make improvements to an already fairly good product that 

was signed into law in 2002. In addition to it being a good product, I am 

happy to know that the Pipeline and Hazardous Materials Safety 

Administration, PHMSA, has succeeded in achieving nearly all of the 

mandates set forth in the Pipeline Safety Improvement Act of 2002, and 
2

that the agency has done so in what I think is a timely manner. Because 

of this hard work, we have more information and statistics on causes of 

accidents, more information on integrity management, more information 

on what States are successfully doing to bring down damages from 

excavation, and more information on how PHMSA is working to 

complete upcoming regulations. 

 The committee discussion draft sets forth several new provisions that 

have been proposed by PHMSA, that pipeline industry safety advocates 

and the States, that reauthorizes the program through 2010, adds new 

one-call requirements for States to enforce, authorizes additional grants 

for States to set up damage prevention programs, requires the DOT to 

finalize regulations already underway concerning low-stress pipelines, 

addressing the Alaska BP incident, and further addressing enforcement 

transparency. In addition, the bill incorporates a proposal from Dr. 

Murphy to further enhance one-call requirements and emergency 

notification. 

I am also glad to see that the draft addresses the 7-year gas 

transmission integrity management assessment interval. And I look 

forward to being updated for the record by GAO after the hearing on 

their continuing efforts to finalize their work in recommendations 

regarding the 7-year interval that we asked them to do in 2002. I look 

forward to hearing any comments or concerns about the drafts from the 

witnesses today in trying to address any outstanding issues before we 

introduce the bill when we return in September. 

 [The prepared statement of Hon. Ralph M. Hall follows:] 

PREPARED STATEMENT OF THE HON. RALPH M. HALL, CHAIRMAN, SUBCOMMITTEE ON 

ENERGY AND AIR QUALITY

This hearing will come to order. Without objection, the Chair will proceed pursuant 

to Committee Rule 4(e) and recognize Members for 3 minutes for opening statements. If 

they defer, this time will be added to their opening round of questions. Today we meet to 

discuss two bills relating to pipeline safety reauthorization, one being a Committee 

discussion draft that was put together in a bipartisan fashion and another, HR 5782, that 

was recently reported out of the Transportation Committee. Pipeline safety 

reauthorization is a priority for this Committee to get done this year and I am hopeful that 

our efforts to move this bill forward when we return from August recess will not only be 

fruitful in the House but also the Senate. 

The drafts that we are here to discuss today are, in my opinion, attempts to make 

improvements to an already pretty good product that was signed into law in 2002. In 

addition to it being a good product, I am happy to know that the Pipeline and Hazardous 

Materials Safety Administration or PHMSA (FIM-sa) has succeeded in achieving nearly 

all of the mandates set forth in the Pipeline Safety Improvement Act (PSIA) of 2002, and 

that the agency has done so in a timely manner. Because of this hard work, we have 

more information and statistics on causes of accidents, more information on integrity 

management, more information on what states are successfully doing to bring down 
3

damages from excavation and more information on how the PHMSA (FIM-sa) is working 

to complete upcoming regulations. 

The Committee discussion draft sets forth several new provisions that have been 

proposed by PHMSA (FIM-sa), the pipeline industry, safety advocates, and the states. It 

reauthorizes the program through 2010; adds new one call requirements for states to 

enforce; authorizes additional grants for states to set up damage prevention programs; 

requires the DOT to finalize regulations already underway concerning low stress 

pipelines, addressing the Alaska BP incident; and further addresses enforcement 

transparency. In addition, the bill incorporates a proposal from Mr. Murphy to further 

enhance one call requirements and emergency notification. 

I am also glad to see that the draft addresses the 7 year gas transmission integrity 

management assessment interval, and I look forward to being updated for the record by 

GAO after the hearing on their continuing efforts to finalize their work and 

recommendations regarding the 7 year interval that we asked them to do in 2002. 

I look forward to hearing the any comments or concerns about the drafts from the 

witnesses today and trying to address any outstanding issues before we introduce a bill 

when we return in September. At this point I recognize the Ranking Member of the 

Subcommittee, Mr. Boucher, for purposes of an opening statement. 

 MR. HALL. At this point, I recognize the Honorable Ranking 

Member of the Subcommittee, Mr. Boucher, for purposes of an opening 

statement. 

 MR. BOUCHER. Thank you very much, Mr. Chairman. 

 I want to commend you for convening today’s hearing on legislative 

proposals to reauthorize the Pipeline Safety Act. This issue is both 

important and timely. 

 In 2002, this committee worked in a bipartisan manner to achieve 

enactment of a consensus pipeline safety law. In April, this 

subcommittee conducted a hearing at which we gained valuable advice 

from interested parties about the effectiveness of the 2002 law as well as 

receiving suggestions from those witnesses for improvements that can 

now be made. Today, we focus on legislation that we believe builds on 

the success that has been demonstrated for the 2002 law and would make 

recommended improvements. 

 For example, the draft bill encourages States to develop strong 

excavation damage prevention programs as a condition of being certified 

by the U.S. Department of Transportation to regulate and enforce within 

their State’s pipeline safety standards. The draft specifies that the State 

programs should include the nine components which are largely 

recognized as the formula for the most successful prevention programs. 

The bill further incentivizes the development of a vigorous damage 

prevention program by creating a new grant program for States which 

fully develop and implement a damage prevention program, including 

these nine elements. 

 These provisions are designed to encourage widespread 

implementation of damage prevention programs, such as the one that has 

been successfully deployed in my home State of Virginia. Since 
4

implementation of its program, Virginia has witnessed a dramatic 

reduction in the incidents of damage caused by excavation, and we think 

it is appropriate to encourage other States to adopt programs that are 

modeled on that very successful experience. 

 In addition, I was pleased that the 2002 law included a section 

authorizing technical assistance grants for communities, but I was 

somewhat disappointed to note that no grants have been awarded through 

that program by the Department of Transportation. I continue to think 

that providing assistance to local communities for technical assistance on 

local pipeline issues is a necessity, and I am pleased that the draft bill 

includes a provision that would require the Department of Transportation 

to publish criteria for the grants and to award at least three demonstration 

program grants. These requirements are in furtherance of the intent of 

our 2002 law and will ensure that the Technical Assistance Grant 

Program is, in fact, utilized. 

 One item, which is not contained within the draft but which I would 

like to see included as our bill moves forward, is a provision relating to 

the implementation of an Integrity Management Plan for natural gas 

distribution lines. During a hearing before this subcommittee 2 years 

ago, a Department of Transportation official testified that the Department 

was planning to develop such a plan for distribution lines, which account 

for more than 85 percent of all natural gas pipelines nationwide, but at 

that time, the idea of a comprehensive Integrity Management Plan for 

those distribution systems was merely a recommendation. 

 I am pleased that the Office of Pipeline Safety is moving ahead with 

the establishment of an Integrity Management Plan for these critical 

distribution lines and that OPS expects to publish a distribution integrity 

management rule in early 2007. This effort marks the first 

comprehensive and consensus-based attempt to develop an Integrity 

Management Plan for natural gas distribution lines, and I commend this 

effort. What I would like to see is a provision included in the bill that 

simply sets a deadline for the establishment of this rule so as to ensure 

that the progress that has been made to date continues. 

 There are other areas that I would hope to hear more about from our 

witnesses this morning. For example, the recent failure and subsequent 

crude oil leak from a low-pressure transmission line in Alaska highlights 

the need for regulation of low-pressure pipelines. And the draft 

legislation contains a provision that would require that minimum 

standards be established for regulation of those lines. I applaud that 

provision. 

 The consensus 2002 Act has produced positive results with an 

increased emphasis on safety and on accident prevention, both by the 

agencies of enforcement and by the industry. The discussion draft that is 
5

before us today builds upon that success, and I look forward to a 

continuation of the bipartisan effort that we have on this committee that 

has produced that discussion draft as we proceed in September to 

approval of this bill in subcommittee and hopefully rapid approval of the 

measure in the House as well. 

 Thank you very much, Mr. Chairman, for scheduling a timely 

hearing. 

 I look forward to hearing from the witnesses. 

 MR. HALL. I thank you, Mr. Boucher. 

 The Chair recognizes the gentleman from Pennsylvania, Dr. Murphy. 

 MR. MURPHY. Thank you, Mr. Chairman. 

 We have a lot to hear about with the complex but valuable bill, and I 

will leave some of those things to more in the category of listening to the 

comments to be made. 

 But I would like to say this. 

 I came before this committee 2 years ago with some ideas to help 

protect our communities and increase pipeline safety for the sake of our 

homes and our families. I came with a personal story that affected a 

family in my district. I went and I visited their home. I met with their 

children. They came to me not for themselves but with the idea of 

preventing families around this country from having tragedies or 

problems that potentially could come with pipeline problems. We were 

able to work out a method that is in this bill that simply responds in an 

efficient way with any potential emergency situations that will prevent 

potential problems from becoming tragic problems. 

 And I want to thank you, Mr. Chairman, for listening, you and your 

staff. I am very grateful, but more importantly, the family is grateful and 

our Nation’s families are grateful and our Nation’s communities are 

grateful for some of the elements in this bill, which will increase pipeline 

safety. 

 I thank you, and I yield back. 

 MR. HALL. Thank you, Dr. Murphy. 

 The gentleman from Texas, Mr. Green. 

 MR. GREEN. Thank you, Mr. Chairman, and I will ask unanimous 

consent to place my full statement in the record. 

 I want to welcome Admiral Barrett. Thank you for your previous 

service with the Coast Guard and also now at DOT. I have a district in 

Houston in the petrochemical area, and we have pipelines everywhere. 

We also have a lot of Coast Guard personnel in the Houston ship 

channel. And compared to 4 years ago, this legislation is much easier to 

deal with. Those of us who have lived and worked along pipelines for 

our whole lives, obviously, want the safety, but we also know we need 

new product. 
6

 So Mr. Chairman, I will yield back my time, and again ask that my 

statement be placed in the record, because I look forward to the 

testimony today and the markup on this hopefully in September. 

 MR. HALL. Without objection it will be placed into the record. 

 Mr. Boucher. 

 MR. BOUCHER. Mr. Chairman, I ask unanimous consent that 

Ranking Member Dingell’s statement be placed in the record. 

 MR. HALL. Without objection it will be placed in the record. 

 [The prepared statement of Hon. John Dingell follows:] 

PREPARED STATEMENT OF THE HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS 

FROM THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding this important hearing today. I want to also 

thank Chairman Barton for his contributions, as well. I believe this discussion draft is a 

good first step towards reauthorizing our pipeline safety laws and I hope that we can 

continue to work together as these bills move forward. 

One of the reasons that the discussion on reauthorization has been so civil this year 

is that we did so much hard work in writing the 2002 Pipeline Safety Act. It represented 

hard-fought compromises, both in this Committee and with our colleagues on the 

Committee on Transportation and Infrastructure. It made substantial improvements in the 

law that have yielded tangible benefits. For example, the requirement for natural gas 

transmission operators to conduct baseline assessments of their pipelines has been praised 

for helping detect and repair pipeline anomalies before they turn deadly. The 

establishment and continued promotion of a three-digit nationwide number that can be 

used prior to excavation activities will help us to prevent one of the leading causes of 

pipeline accidents. 

While this discussion draft does not make sweeping changes to our work from 2002, 

it does offer some modest and important improvements, including the following: 

Enforcement transparency: The Department of Transportation’s (DOT) enforcement 

of pipeline safety regulations has long been a concern of mine. In the past, a lack of 

clarity and direction characterized the Department’s approach to enforcement, an 

assessment supported by the Government Accountability Office (GAO) in its 2004 report 

entitled “Management of the Office of Pipeline Safety’s Enforcement Program Needs 

Further Strengthening.” Although the GAO reports that the situation has improved, my 

concerns remained as recently as this March, when Ranking Member Boucher and I sent 

a letter to DOT on its enforcement strategy. I believe the transparency requirement in the 

draft will benefit all parties involved in pipeline safety, be they energy companies or 

safety advocates, who want to understand how DOT is applying its enforcement 

authority. In addition, DOT’s enforcement authority is enhanced in several other 

important areas such as one-call and integrity management. 

Low-Stress Pipelines: When a British Petroleum (BP) pipeline ruptured in March of 

this year, spilling over 250,000 gallons of crude oil on Alaska’s North Slope, the longheld conventional wisdom that “low-stress” equaled “no-risk” was turned on its head. 

Investigative work by the Democratic staff of the Committee has shown that a lack of 

oversight by the company and a lack of regulation by DOT contributed to this situation. 

The requirement in the discussion draft that DOT issue minimum operating standards for 

low-stress lines will begin to address this issue. Whether that will resolve the problem 

remains to be seen, but I can assure my colleagues that I will be keeping a close eye on 

the situation. 
7

Damage Prevention Programs: One of the leading causes of pipeline accidents and 

damage is the direct result of errors made in excavation. The discussion draft addresses 

this issue by encouraging States to develop their own damage prevention programs and 

by awarding grant money to those States that take action. 

In sum, Mr. Chairman, I believe we are on the path to producing good legislation 

and I look forward to the testimony of the witnesses here today. 

 MR. HALL. The Chair recognizes Mr. Sullivan from Oklahoma. 

 MR. SULLIVAN. Thank you, Mr. Chairman, for holding this 

important hearing today on the draft bill and Pipeline Safety 

Improvement Act Reauthorization and H.R. 5782, the Pipeline Safety 

Improvement Act of 2006. 

 I am also pleased to welcome Mr. Timothy C. Felt, the President and 

CEO of Explorer Pipeline Company in Tulsa, Oklahoma, who is 

testifying on the second panel on behalf of the Association of Oil 

Pipelines. 

 Explorer Pipeline operates a 1,400 mile pipeline system that 

transports gasoline, diesel fuel, and jet fuel from the Gulf Coast to the 

Midwest, serving Tulsa, Houston, Dallas, Fort Worth, St. Louis, and 

Chicago. 

 Nearly half a million miles of crude oil, petroleum products, and 

natural gas transmission pipelines cross the United States. These 

pipelines are vital to U.S. energy supply, and have important links to 

other infrastructure. The 107th Congress passed the Pipeline Safety 

Improvement Act to improve pipeline safety and security practices and to 

provide Federal oversight of pipeline operators’ security programs and to 

provide for pipeline safety education programs. 

 The pipeline industry and the Department of Transportation have 

cooperated to achieve significant improvement in pipeline safety, and 

this improvement is demonstrated by the industry’s record. I am glad 

that Mr. Felt is here to share his insight in pipeline safety. 

 Thank you, again, for holding this important hearing, Mr. Chairman. 

 MR. HALL. I thank you. 

 [Additional statements submitted for the record follows:] 

PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY 

AND COMMERCE

Thank you, Mr. Chairman, for holding this hearing on the Committee’s discussion 

draft on pipeline safety reauthorization and the Transportation Committee’s recently 

reported bill, HR 5782. Continuing the Committee’s tradition regarding this Act, the 

Subcommittee has worked in bipartisan fashion to put together this draft. I hope that 

after this hearing we will introduce a bill and move to markup soon after Congress 

returns in September. 
8

Reauthorization of the Pipeline Safety Improvement Act is an important effort that should 

be completed this year, and I am hopeful that our friends in the other body share our 

desire to enact this legislation. 

The draft we are discussing today incorporates several new provisions and 

amendments to the existing law that have been proposed by various stakeholders, 

including the Administration, industry, and safety advocates. It also incorporates some 

legislative language that was introduced by Mr. Murphy. 

The bill strengthens state one-call requirements for excavation damage, provides 

new authority and grant money to the states to develop their own damage prevention 

programs modeled after the successful programs already in place, and puts some sunshine 

on enforcement actions. 

The draft also addresses the pending GAO study and the seven year reassessment 

interval, as well as addresses a clarification in the law to direct-sales laterals. I thank the 

witness for appearing before the Subcommittee today and I look forward to hearing their 

comments and testimony. I yield back the balance of my time. 

PREPARED STATEMENT OF THE HON. MICHAEL G. BURGESS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS

Thank you, Mr. Chairman for holding this important hearing. 

When our constituents think of the movement of products and goods across the 

country -- most of them think about large trucks on the highway carrying everything from 

ice cream to new cars. 

Some think of the railroads and others think about the barges that traverse the 

Mississippi. But few think of the interstate transmission pipelines that transport huge 

volumes of crude oil, refined products including gasoline and natural gas; unless 

something goes wrong. 

Congress last updated the federal pipeline safety law in 2002. Among other things, 

the bill required operators of regulated gas pipelines in densely populated areas to 

conduct risk analysis and periodic inspections, and to strengthen public education 

regarding pipeline safety. 

The good news is that the provisions adopted as part of this legislation are working -

- safety has improved and lives have been saved. But we can always do better, and I am 

hopeful that this year's reauthorization will yield continued improvements in safety. 

I am looking forward to hearing from the witnesses today about the discussion draft 

before us today, as well as H.R. 5782, considered by the Transportation and 

Infrastructure committee last week. 

With that, Mr. Chairman, I yield back. 

 MR. HALL. And I apologize to our witnesses and to those in 

attendance, and I thank Mr. Boucher for allowing us to delay this 

hearing. We had what was termed an emergency calling of one of the 

parties here in Congress that Mr. Boucher was not a member of, and he 

allowed me to go. But we are sorry for the delay. 

 But let’s get underway. Admiral Barrett, we are honored to 

recognize you from, the Pipeline Hazardous Materials Administration, 

the Department of Transportation. If you could, summarize, and we will 

get around to getting into your statement with the question-and-answer 

period, if you don’t mind. 

 Thank you, sir. 
9

STATEMENTS HON. THOMAS J. BARRETT, 

ADMINISTRATOR, PIPELINE AND HAZARDOUS 

MATERIALS SAFETY ADMINISTRATION, U.S. 

DEPARTMENT OF TRANSPORTATION; AND HON. 

DONALD L. MASON, COMMISSIONER, PUBLIC 

UTILITIES COMMISSION OF OHIO, ON BEHALF OF 

NATIONAL ASSOCIATION OF REGULATORY UTILITY 

COMMISSIONERS 

ADMIRAL BARRETT. Mr. Chairman, thank you, and Ranking 

Member Boucher, and members of the committee. 

 I appreciate the opportunity to discuss your draft proposal to 

reauthorize the pipeline safety program. 

 Mr. Chairman, I also truly appreciate your leadership and the 

subcommittee’s stewardship on pipeline safety. I am pleased to provide 

my first testimony before this subcommittee on ways to improve an 

already forward-leaning and positive program and build upon the 

progress that has been made to date. And frankly, that has been 

achieved, I believe, because of the cooperation and leadership by the 

Congress, the Administration, the Pipeline Safety Administration, and 

also the pipeline industry, States and local authorities, the public, and the 

first responder community working together effectively toward a 

common goal. 

 I also want to thank and acknowledge Ms. Stacey Gerard, who is 

with me here this morning. She has been instrumental in moving the 

agency forward on these programs over the last several years since 2002. 

And I would also like to note that I have just appointed her to be the 

Assistant Administrator of the Office of Pipeline Safety and Hazardous 

Materials and the Chief Safety Officer on a permanent basis. 

 So Stacey, thank you. And she is here this morning. 

 And with her is Dr. Ted Wilke, who will step up and become the 

Acting Chief of the Office of Pipeline Safety. And Dr. Wilke is also here 

this morning. 

 The Department and PHMSA are committed, like you, to 

strengthening the pipeline safety program. We welcome your very 

strong proposal and its key concepts, and I believe they will clearly help 

us reach our goal of eliminating pipeline incidents and providing a 

foundation for energy transportation infrastructure needs and also the 

economic growth that our country depends on. And reauthorization now 

will help us achieve that. 

 The 2002 reauthorization, which you sponsored and the President 

signed into law, introduced the Integrity Management Program, a key 

concept and a key component of a systems-based approach to managing 
10

and reducing pipeline risks. In turn, as you noted, we have seen a steady 

decline in the number of pipeline accidents that cause serious harm to 

people or our environment, and we need to stay the course and step up 

our efforts as we look to achieve further success in this area. 

 The Pipeline Safety Improvement Act of 2006 will be another 

important milestone for the safety program. Based on the data we have 

and experience under the 2002 law, the proposal places more emphasis 

on damage prevention, enhancing State program oversight of distribution 

pipelines, and clarifies our responsibility and emergency waiver 

authority during natural disasters and other emergencies. 

 Managing pipeline safety based on system risk clearly suggests we 

must minimize damage to pipelines associated with construction damage. 

Several States, including Virginia, as Mr. Boucher noted, and Minnesota, 

have led the way in developing strong damage prevention programs, and 

we have seen up to 50 percent reductions in damages to pipelines from 

construction-related activities. We would expect similar results from 

other States if we can ensure our State partners have more resources and 

authority and share responsibility with us in getting this job done. The 

committee’s proposal recognizes this need and adopts important 

concepts, which the Administration forwarded, including new civil 

enforcement authority, incentive for States to improve their programs, 

technology grants to advance the safety and efficiency of the one-call 

notification process, and more funding for State programs. 

 State partners oversee over 90 percent of operator compliance with 

pipeline safety regulations. This proposal would also raise the cap on 

grants provided to State agencies over 6 years from 50 percent to 80 

percent to offset the increasing costs of the programs they execute 

consistent with the programs of the Department. We, frankly, need 

them, and they need our help to be more effective. 

 We also learned a great deal from last year’s devastating Gulf Coast 

storms on the vulnerabilities that exist within the pipeline infrastructure 

to natural and manmade disasters. The Administration’s proposal 

provides specific authority for emergency waivers when necessary to 

help operators anticipate or respond expeditiously to national or regional 

disasters at the earliest possible time. We believe this can help minimize 

pipeline safety disruption while maintaining safe operations. 

 And like you, Mr. Chairman, I strongly favor a systems-based 

approach to assessing and managing risk, especially as risks to large 

infrastructure systems, like pipelines, change over time. And an 

effective systems risk management approach, which this subcommittee 

helped devise, is getting positive results. Integrity Management 

Programs focus operators on making the best use of information as it 
11

becomes available. This is a dynamic process to enable an operator to 

deploy attention and resources against the greatest risks, the worst first. 

 Reliance on stipulated retesting intervals, as established in the 

current law, seems a disincentive to continuous evaluation and 

adjustment of a dynamic systems approach, in effect, a whole health 

review of pipeline systems. Our goal should be to regularly and 

systematically utilize the most current information about the system so 

that they can be maintained to operate in the best condition for the 

longest amount of time. 

 These reauthorization concepts have been generally supported across 

our stakeholder communities, including the Federal and State family, and 

we are pleased to see many of the same priorities reflected in the 

committee’s draft. 

 Mr. Chairman, like you, Acting Secretary of Transportation, Maria 

Cino, and PHMSA are wholly dedicated to ensuring the safe operation of 

our pipeline transportation system under both normal and emergent 

conditions. We understand how important this is to the safety and 

security of our citizens and the continued growth of America’s economy. 

 Thank you very much. I would be pleased to answer any questions 

and ask that my full statement be inserted in the record. 

 [The prepared statement of Hon. Thomas J. Barrett follows:] 

PREPARED STATEMENT OF THE HON. THOMAS J. BARRETT, ADMINISTRATOR, PIPELINE AND 

HAZARDOUS MATERIALS ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

I. INTRODUCTION

Chairman Hall, Ranking Member Boucher, members of the Subcommittee, thank 

you for the invitation to appear to discuss your draft proposal to reauthorize the pipeline 

safety program. I appreciate the Subcommittee’s stewardship on pipeline safety and I am 

pleased to provide my first testimony before this subcommittee on ways to improve an 

already forward leaning safety program, and to build upon PHMSA’s progress to date. 

I believe your proposal embodies key concepts that will help us reach our goal of 

eliminating pipeline safety incidents and provide a foundation for the energy 

transportation infrastructure we need to continue our strong economic growth into the 

future. 

Americans depend on pipeline transportation for the safe movement of critical 

energy supplies. This dependence makes it crucial to keep the system safe and reliable. 

Over 97 percent of the nation’s transportation energy needs are met by petroleum 

products, and 64 percent of these energy products are moved through America’s pipeline 

networks. The system is near capacity all the time. In times of emergencies, this lack of 

redundancy and system capacity makes it important for PHMSA to work along with our 

state partners to assure that energy product transportation is not interrupted. In the years 

to come, we hope to contribute to increasing the resiliency of this infrastructure. 

“The Pipeline Safety Improvement Act of 2002” which you sponsored and the 

President signed into law was a most important milestone. The Act reinforced the 

importance of integrity management, operator qualification, public education, research, 

mapping, construction damage prevention and other initiatives, including one national 

number for One-Call. Most importantly in my view, the Act set the stage in law for a 
12

systems approach to managing and reducing pipeline risks. Over the past five years we 

have seen a steady decline in the leading causes of pipeline failures and the serious 

accidents in which people are injured or the environment is harmed. We need to stay the 

course and step up our efforts. 

In the past few years, PHMSA has taken a hard look at incidents, their causes and 

what can be done to prevent them. One thing is crystal clear-the leading cause of 

incidents in which people are hurt or killed is construction-related damage causing an 

immediate rupture or damage which later grows to failure. This occurs most often on the 

distribution systems which run through the neighborhoods where people live and work. 

This part of the pipeline system, the distribution network, is almost entirely under the 

jurisdiction of states, our foremost partners in pipeline safety. 

II. ADMINISTRATION PROPOSAL

The Secretary of Transportation recently submitted to Congress the Administration’s 

legislative proposal to reauthorize and improve pipeline safety and protection for the 

environment, and also to enhance infrastructure reliability. The proposal, the “Pipeline 

Safety and Reliability Improvement Act of 2006” looks to build on our progress in 

achieving the mandates of the 2002 Act by placing more emphasis on damage prevention, 

enhancing state programs’ oversight of pipelines, and clarifying our responsibilities and 

emergency waiver authority during natural disasters and other emergencies. 

Managing pipeline safety based on system risk clearly suggests we must minimize 

damage to pipelines associated with construction-damage. Construction damage is almost 

always preventable and we have worked to find practices that will eliminate this problem. 

The challenge is managing this activity without damaging a very crowded underground 

infrastructure – one that gets more crowded every day, not just with pipelines but new 

telecommunications, electric, water and sewer, and other infrastructure. 

Several states including Virginia and Minnesota have led the way with strong 

damage prevention programs and seen up to 50% reductions in this type of damage. We 

need to prioritize the resources for pipeline safety to be sure that our state partners have 

more resources to share responsibility with us in getting this job done. The Committee’s 

proposal recognizes this need by adopting important concepts which the Administration 

forwarded, including new civil enforcement authority, incentives for states to improve 

their damage prevention programs, technology grants to advance the safety and efficiency 

of the one call notification process, and more funding for state pipeline safety programs. 

The following chart from a PHMSA report gives a picture of the progress possible 

with a strong enforcement program. There are degrees of success with enforcement and 

two model states, Virginia and Minnesota both have fewer than 3 damages per 1,000 one 

call tickets by enforcing the practice of calling before digging. 
13

Our proposal addresses this concern by establishing a state grant program to provide 

more incentives to states to develop effective damage prevention programs. State 

agencies and PHMSA would also gain authority to conduct civil enforcement actions 

against anyone who fails to contact “One-Call” prior to digging, with our focus being on 

state enforcement. 

Ensuring the safety of 2.3 million miles of pipelines is an enormous task. Our state 

partners oversee 90 percent of operator compliance with pipeline safety regulations. We 

seek to raise the cap on grants provided to state pipeline agencies over 6 years from 50 

percent to 80 percent to offset the increasing cost of the programs they execute, 

consistent with the programs of the Department. State agencies do utilize PHMSA’s 

national regulatory pipeline safety standards to inspect the majority of the pipeline 

infrastructure and we increasingly invest in state training and decision support as we 

function as a coordinated workforce. We need them and they need our help to be most 

effective. 

Last year’s devastating Gulf Coast storms also taught us lessons about the 

vulnerability of pipelines to natural and man-made disasters. In the wake of last years 

storms, PHMSA’s inspectors deployed to State emergency operations centers, operator 

control rooms, and to critical pumping stations across Louisiana and Mississippi to 

monitor operator efforts to work to keep energy moving without standard electric power. 

To assist with recovery of the pipeline infrastructure during future emergency 

events, the Administration’s proposal provides for specific regulatory authority to use 

emergency waivers when necessary to help operators anticipate or respond expeditiously 

to national or regional disasters at the earliest possible time. We believe this can help to 

minimize pipeline system disruption while maintaining safe operations. 

Like you, I strongly favor a systems-based approach to assessing and managing risk, 

especially as the risks to large infrastructure systems like pipelines often change over 

time. I expect to see an effective systems risk management approach, which this 

subcommittee helped devise, getting positive results for pipeline safety. The integrity 

management program has focused operators on making the best use of information as it 

becomes available. But this must be a dynamic process in which the operator is able to 

deploy attention and resources against the greatest risks, worst first. Reliance on 

stipulated retesting intervals, as established in current law, is inconsistent with a systems 

approach and a disincentive to continuous reevaluation and readjustment. 
14

Reliance on stipulated retesting intervals as established in current law seems a 

disincentive to the continuous evaluation and readjustment of a dynamic systems 

approach. It is a basic element of an ongoing “whole-health” review of a pipeline 

system. The goal is to regularly and systematically utilize the most current information 

about the pipeline system so that it may be maintained to operate safely in the best 

condition for the longest amount of time. 

These reauthorization concepts have been generally supported across our 

stakeholder community, including the federal and state family, and we are pleased to see 

many of the same priorities reflected in the Committee’s proposal.

III. CONCLUSION

I assure the members of this Subcommittee, that the Administration, Acting 

Secretary Cino, and the dedicated men and women of PHMSA share your strong 

commitment to improving safety, reliability, and public confidence in our Nation’s 

pipeline infrastructure. 

Like you, we understand the importance of our mission to the safety of our citizens 

and the energy security and continued economic growth of our great Nation. 

Thank you. 

I would be pleased to answer any questions you may have. 

 MR. HALL. Thank you, sir. 

 We have a vote on, and we would like to go ahead and let Mr. Mason 

give his 5-minute presentation, if you would, and then we will recess for 

probably 20 minutes. We have two votes: a 15-minute vote and a 5-

minute vote. We will probably be back in 30 minutes when we leave. 

 All right. I recognize you for your preliminary statement. 

 Thank you. 

COMMISSIONER MASON. Thank you, Mr. Chairman, Ranking 

Member Boucher, and members of the subcommittee. 

 I am Don Mason, Public Utilities Commissioner, State of Ohio, but I 

am also here to represent the National Association of Regulatory Utility 

Commissioners where I am the Chairman of the Gas Committee. And 

we prepared our testimony in conjunction with NAPSR, which is the 

National Association of Pipeline Safety Representatives, which are 

people who actually have their boots on the ground doing the inspection 

of the pipe. 

 Again, NARUC is a quasi-governmental, non-profit organization as 

well as NAPSR, so we do; in fact, represent the State partnership to the 

Federal agencies. 

 I will focus in on the four key points we would like to bring to the 

table at this point. We do strongly support the funding provisions found 

in the discussion draft, and we appreciate the efforts to up the funding to 

80 percent for State funding, but we do remind all that in all likelihood, 

the actual funding is probably going to be around 55 percent when all is 

said and done with regard to how much the States end up spending. The 

States are still a major partner in our endeavors. 
15

 But State pipeline safety program funding is heavily dependent upon 

PHMSA’s proper sharing of the user fees. State pipeline safety programs 

represent approximately 80 percent of the Federal/State inspector 

workforce that oversees pipeline inspections nationwide, as also 

indicated by the Admiral. Without adequate funding, States would not 

be able to conduct the required inspections of the existing pipeline 

facilities or new pipeline construction projects, and we do hope there are 

new projects helping to bring more competitive cost natural gas to the 

market. 

 I will just briefly touch upon the issue of certification. We do have 

some concerns in the way the certification language could possibly be 

read, not that it is necessarily being read this way, but we want to ensure 

that the States have flexibility in moving forward aggressively, even 

though they may not, in fact, meet all nine conditions as indicated. The 

theory being is that those might be some of the States we want to help 

move forward eventually hitting all nine elements. 

 Also, it is key to say that it is our understanding that the intent of the 

subsections 601 through 604 in H.R. 5782, when taken together, give the 

Secretary the discretion to make damage prevention program grants to 

States not only to support an existing damage prevention program, but 

also to provide an incentive to improve programs that currently may not 

be able to meet all of the elements outlined in legislation. However, with 

additional assistance, we think we can implement and maintain effective 

programs as contemplated by the bill. 

 And moving on to, perhaps, the fourth point, I would like to say, are 

damage prevention grants. Our last concern is contained in the draft 

discussion, as well as H.R. 5782. There is prohibition against lobbying, 

which we, of course, understand, but there is presently a prohibition 

against using funding for litigation. And we might remind that one of the 

elements is having civil penalties in place. So basically, to have civil 

penalties in place, but not allow funding of litigation, actually is 

discouraging and perhaps may be construed to be an unfunded mandate. 

Additionally, I think those in the Congress recognize that if we have the 

authority to have civil penalties, there will be a percent of the population 

out there that will, in fact, litigate. So we do need to be armed when we 

go against them. 

 That will be my summary, and I am available, of course, after the 

break, Mr. Chairman and Members of Congress. 

 [The prepared statement of Commissioner Donald L. Mason 

follows:] 
16

PREPARED STATEMENT OF THE HON. DONALD L. MASON, COMMISSIONER, PUBLIC 

UTILITIES COMMISSION OF OHIO, ON BEHALF OF NATIONAL ASSOCIATION OF REGULATORY 

UTILITY COMMISSIONERS

• Grant funding must increase to meet resource requirements of State pipeline 

safety programs. States strongly support the provisions found in both the 

Discussion Draft and HR 5782 that would provide up to 80% funding for State 

pipeline safety programs. 

• The language amending Section 60105(b)(4) as proposed in both the 

Discussion Draft and HR 5782 will encourage the States to establish 

effective damage prevention programs without creating a certification criteria 

that a State may not be able to meet due to reasons outside the control of the 

State's pipeline safety agency. We believe that the language contained in the 

Discussion Draft is more beneficial to the State programs. 

• States should be able to access damage prevention program grants to begin, 

maintain and/or improve their damage prevention programs. 

• States should be able to use grants for litigation. States are mandated in both 

the Discussion Draft and HR 5782 to use civil penalties, if necessary, therefore 

litigation could be necessary as well. 

Good Morning Mr. Chairman, Ranking Member Boucher and Members of the 

Subcommittee. 

I am Donald L. Mason, a commissioner at the Public Utilities Commission of Ohio 

(PUCO). I have served in that capacity since 1998. I also serve as the Chair of the 

Committee on Gas for the National Association of Regulatory Utility Commissioners 

(NARUC). As Chairman of the NARUC Committee on Gas, I am testifying today on 

behalf of that organization and the National Association of Pipeline Safety 

Representatives (NAPSR). In addition, my testimony reflects my own views and those of 

the PUCO. On behalf of NARUC, NAPSR and the PUCO, I very much appreciate the 

opportunity to appear before you this morning. 

NARUC is a quasi-governmental, non-profit organization founded in 1889. Its 

membership includes the State public utility commissions serving all States and 

territories. NARUC’s mission is to serve the public interest by improving the quality and 

effectiveness of public utility regulation. NARUC’s members regulate the retail rates and 

services of electric, gas, water, and telephone utilities. We are obligated under the laws 

of our respective States to ensure the establishment and maintenance of such utility 

services as may be required by the public convenience and necessity and to ensure that 

such services are provided under rates and subject to terms and conditions of service that 

are just, reasonable, and non-discriminatory. NAPSR is a non-profit organization of 

State pipeline safety directors, mangers, inspectors and technical personnel who serve to 

support, encourage, develop and enhance pipeline safety. 

We greatly appreciate your efforts, Mr. Chairman, as well as the members and staff 

of the Subcommittee on Energy and Air Quality, to make this legislation helpful and 

useful to the State agencies that are charged with ensuring the public safety with regard to 

pipelines. Additionally, we greatly appreciate the efforts of your colleagues and staff on 

the Transportation and Infrastructure Committee for their assistance to the States. Today, 

I would like to bring your attention to four issues found in both the Discussion Draft and 

HR 5782. 
17

1. Funding 

 States strongly support the provisions found in both the Discussion Draft and HR 

5782 that would provide up to 80% funding for State pipeline safety programs. The rapid 

expansion of federal pipeline safety initiatives in recent years (such as operator 

qualification, public awareness, integrity management, homeland security) has greatly 

increased the cost and resource demands of State participation. However, the grants 

authorized to be appropriated under both the Discussion Draft and HR 5782 are not 

adequate to move the States anywhere close to the 80 percent, even by 2010 or 2012. As 

an example, if the States' pipeline safety costs remain the same as the amount projected 

for 2006, even the 2010 authorization for pipeline safety ($25,855,000 - $2,000,000) is 

only 54.8% of the cost of the State pipeline safety programs. 

State pipeline safety program funding is heavily dependent upon Pipeline Hazardous 

Material Safety Administration (PHMSA) proper sharing of these user fees. State 

pipeline safety programs represent approximately 80 percent of the federal/State 

inspector work force that oversees pipelines nationwide. Without adequate funding, 

States will not be able to conduct the required inspections of the existing pipeline 

facilities or new pipeline construction projects, and encourage compliance with new and 

existing safety regulations. Grant funds are an effective way to leverage resources and 

increase total inspection capability since States match or exceed federal funding provided 

for pipeline safety. 

2. Certification 

 The language amending Section 60105(b)(4) as proposed in both the Discussion 

Draft and HR 5782 will encourage the States to establish effective damage prevention 

programs without creating a certification criteria that a State may not be able to meet due 

to reasons outside the control of the State's pipeline safety agency. The States agree that 

this is necessary language to include in this legislation and we support the provisions 

found in both the Discussion Draft and HR 5782, however we believe that the language 

contained in the Discussion Draft is more beneficial to the State programs. 

 

3. State Damage Prevention Programs 

 It is our understanding that the intent of subsections (a)(2), (c), and (e) of Section 

60134 of HR 5782, taken together, gives the Secretary the discretion to make damage 

prevention program grants to States not only to support an existing damage prevention 

program but also to provide an incentive to improve a program that currently may not be 

able to meet all elements outlined in the legislation; however, with additional assistance 

can attain and maintain an effective program as contemplated in the bill. Additionally, it 

is our understanding that the intent of subsection (c) of Section 60134 of the Discussion 

Draft is to provide the Secretary with the same discretion found in HR 5782 and outlined 

above. 

Provided our interpretation of the language found in the referenced sections and 

subsections is correct, we believe that both bills are moving in the right direction. 

However, we also believe that both bills, with regard to the damage prevention program 

grants, contain a large degree of ambiguity and therefore leave much up to the 

interpretation of these subsections. 

If the intent is indeed to enable the States to receive damage prevention program 

grants so that their programs can meet and exceed all the Damage Prevention Program 

Elements, we would suggest that language be added to both measures that clearly state 

that the States shall receive damage prevention program grants for the purpose of 

meeting, maintaining, or exceeding any or all the Damage Prevention Program Elements, 

thereby encouraging the States to work to establish the effective damage prevention 

programs envisioned by the Discussion Draft and HR 5782. 
18

We bring this issue to your attention because it is our opinion that under the Discussion 

Draft language and HR 5782 an argument can be made that a State must be found to have 

an effective program in order to be awarded a grant. Therefore, a State that has 

implemented some, but not all, of the effective program elements may not be eligible to 

obtain grant support for action it is currently taking, or for improving its existing 

program. If the intent of this legislation is to encourage States to adopt effective damage 

prevention programs, it seems counterproductive for States that have progressed in that 

area, or that could make progress if funds were available, to be ineligible for any funding 

at all. 

4. Damage Prevention Grants to States 

Our last concern is contained in both the Discussion Draft and HR 5782. Subsection 

60134(c)(2) APPLICATION of the Discussion Draft a and subsection 60134(g) 

NONAPPLICABILITY OF LIMITATION of HR 5782 both stipulate that damage 

prevention grant funds cannot be used for lobbying or in direct support of litigation. The 

Lobbying prohibition is understandable; however, “litigation” could include State 

enforcement actions or State defense of actions taken under its damage prevention 

program. Additionally, under the Damage Prevention Program Elements in element 

seven of both pieces of legislation, the language makes reference to the fact that in order 

for a State to have a “effective” program, the program must include “...the use of civil 

penalties....” If the State authority is mandated under federal law to enforce states’ 

damage prevention laws which could include civil penalties, it must be contemplated that 

these penalties may be appealed and that the State would need to litigate. We therefore 

respectfully suggest that “in direct support of litigation” be deleted, or the intent of this 

language clarified. 

Mr. Chairman, that concludes my remarks and I am available to answer any 

questions that you or the Subcommittee members may have. Thank you again for that 

opportunity to appear before you today. 

 MR. HALL. All right. Thank you very much. 

 We will take a break now. We will pick up again at, say, 12:30. 

 [Recess.] 

 MR. HALL. All right. We will get underway. 

 I have some questions now, if you gentlemen would. 

 And without objection, we will put into the record the Pipeline 

Safety Improvement Act Reauthorization Statement from the National 

Utility Contractor Association. 

 Without objection, it is admitted. 

 [The information follows:] 
19
20

 MR. HALL. And the statement of Steven Sandhur, CEO on behalf of 

the American General Contractors, offered for the record. 

 Without objection, it is entered into the record. 

 [The information follows:] 
21
22
23

 MR. HALL. At this time, we will start visiting with you gentlemen 

about your opening statements. 

 Admiral, with your background as a risk manager from the first order 

of the United States Coast Guard, can you lend us some of your 

experience regarding managing pipeline safety based on system risk and 

how this risk system lends its application to the current 7-year 

reassessment interval under discussion? 

 ADMIRAL BARRETT. Thank you, Mr. Chairman. 

 As you know, with your experience, these pipeline systems are very 

long-life systems. They are going to be in place for 10, 20, 30, 40, or 

even 50 years. And approaching risk management from a systems 

perspective allows you to concentrate on the most serious risks, which is 

always essential. And one of the issues you have on long-lived systems 

is those risks change over time. They can change because of the nature 

of the product that goes through the system. They can change from just 

fatigue. They can change from development coming in around the lines. 
24

But fundamentally, the risk profile may change. And an effective system 

risk management perspective is dynamic. It has to constantly reassess 

and direct its attention at the most serious concerns at any point in time. 

And I frankly believe a fixed interval mandate for re-inspection, as it is 

in the law now, at a fixed point in time, detracts from that systematic, 

continuous updating type of thing. You may have a need to re-inspect in 

2 or 3 years, based on certain conditions. On other lines or in other 

segments, frankly, you may not need to do it for 10 or 15 years, 

depending on what your current information is showing you. 

 And the other thing, aside from the changing conditions, 

fundamentally, there is only so much time and attention and resources 

that you can direct at issues. You always want to direct it at the most 

important ones, and putting it against something that may not be the most 

important, frankly, I think just takes your eye off the ball. That is a 

general perspective, sir. 

 MR. HALL. Could you explain the current draft? It contains a 

deadline for low-stress pipelines, like the BP line that was involved in an 

accident up on the North Slope a few weeks back, and I understand there 

was a public meeting on this proposed rule. When will that be released 

for comment, if you can tell us? And can you describe for us how the 

meeting went and what issues were raised? 

 ADMIRAL BARRETT. Sure. We had a public hearing to address 

regulation, or potential regulation, of low-stress lines. We are actively 

working on a Notice of Proposed Rulemaking that we would expect to 

have out early this fall. It would address situations like the BP lines and 

other low-stress lines. Our approach would look at things like corrosion 

control, damage prevention programs, operator qualifications, the types 

of things integrity assessments, integrity management that go to an 

overall systems look at these things and bring them under the Federal 

umbrella. And I think you will see better results, particularly in areas 

where, again, there are unusually sensitive areas or high-consequence 

areas where the risks from low-pressure lines, although they are lower 

than they are with other types of lines, frankly are just simply not going 

to be acceptable anymore. This was an issue the Administration and the 

agency was working on. It was not, unfortunately, at the top of our list 

prior to the BP incident, but it is clear we need to move that forward 

quickly, and we are doing so, sir. 

 MR. HALL. What other issues were raised, then, and discarded or 

considered and accepted? 

 ADMIRAL BARRETT. In terms of the hearing or in terms of the lowpressure lines? 

 MR. HALL. The hearing. 
25

 ADMIRAL BARRETT. I think we covered many of the items that we 

are talking about in the reauthorization, the types of approaches we are 

taking here with respect to damage prevention programs, with respect to 

the technical criteria for integrity assessment, operator qualifications and 

a broad range of technical issues getting at some of the corrosion control 

issues, pretty broad-ranging set of topics, of which low pressure was just 

one. 

 MR. HALL. I thank you. 

 Mr. Mason, regarding the certification of State programs that are 

encouraging and promoting effective State damage-prevention programs 

and the actual awarding of grant money, the States that have effective 

State damage prevention programs, why should we, as Congress, 

authorize additional money for grant programs to States that might not be 

engaged in an effective damage prevention program, and there are some? 

 COMMISSIONER MASON. Thank you, Mr. Chairman. 

 What it goes to the heart of is some States may not presently have all 

nine elements, but may be working towards it. As many Members of 

Congress know, who may have been State legislators in the past, many 

State general assemblies meet every other year for a limited time period, 

and so it might take a period of a couple biannual budgets of that State 

government in order to get them to a stage where they actually meet all 

nine elements. And what we would like to see is the discretion in the 

Department that they can evaluate if that agency is headed in the right 

direction, perhaps has language proposed or is introduced that, again, is 

taking the agency towards having all nine elements. Therefore the 

Secretary would have that discretion of giving grants in that case. But if 

it is absolutely in place, you must have these nine before you get one 

dollar, that is almost like saying if you are a sinner, you are not allowed 

into church. 

 I thought I would throw that in there. 

 ADMIRAL BARRETT. Mr. Chairman, I agree with that, by the way. 

 MR. HALL. We had a preacher one time that said he had good news 

and bad news for us. He said, “The good news is, there is enough money 

in the church right now to pay off all of our debt. The bad news is, it is 

still in your pockets.” 

 All right. My time is up. I recognize Mr. Boucher. 

 MR. BOUCHER. Why thank you, Mr. Chairman. 

 Mr. Mason, if a State can show that it is well on the way toward 

implementing the nine-point program, what does that mean? If you are 

going to implement something, why not just do all nine points and have 

that done at the outset? And then you could comply with the bright-line 

standard that says no money unless you have done it. I mean, we know it 
26

works. We know what they are. What is wrong with simply saying, “Go 

on and do it, if you want the funds.”? 

 COMMISSIONER MASON. Congressman, I represent 50 State 

commissions and 50 State pipeline administrations in today’s testimony, 

and I think everybody has their heart in the right place and is focused on 

this, but again, when they go back to their general assemblies, sometimes 

they get more authority in order to actually have all nine elements, they 

are competing against everything from healthcare costs to education to 

transportation within their own State general assembly’s time. And so, 

again, they might be headed in the right direction, they just might not be 

there yet. 

 MR. BOUCHER. You are saying there are some States that might not 

have adequate statutory authority to implement by rulemaking the ninepoint program and they would have to get the statute amended to do that, 

and that necessarily takes time. 

 COMMISSIONER MASON. Yes, sir. 

 MR. BOUCHER. That is the source of your suggestion? 

 COMMISSIONER MASON. Yes, sir. 

 MR. BOUCHER. Okay. Mr. Barrett, do you have anything to add to 

that? 

 ADMIRAL BARRETT. No, sir. I agree it is an issue and one we 

should address. 

 MR. BOUCHER. Mr. Barrett, let me ask you this question. 

 The Administration had proposed to us that we include a change in 

the pipeline safety law regarding safety orders. And you may notice that 

our bill incorporates your recommendation. We have a provision in our 

bill that very closely reflects what you had suggested. Could you please 

tell us why the Administration needs this authority and how you would 

implement the authority and what kind of context would it be applied? 

And the reason I ask you this is because some of our witnesses will 

testify later in opposition to this and will say that it is overly broad and 

that, just to quote one of the witnesses, it “would eliminate the due 

process benefit by practically abolishing any threshold or burden of proof 

for DOT in triggering a safety order.” So I would like to give you an 

opportunity to respond to that criticism before it is formally lodged with 

us. 

 ADMIRAL BARRETT. Thank you, sir. As you know, the 2002 Act 

actually has a provision that would allow us to issue this type of order 

and really does not have much in the way of criteria for it. And our 

intent, frankly, was to provide a little more due process in that to allow 

people to come in. And the type of order we are talking about here is 

where there is not an imminent hazard yet. There is not a good longterm solution in place. Something needs to be done within some 
27

responsible timeline: 60 days or 6 months or what have you. And these 

are safety-related conditions that we are talking about, not just anything. 

But clearly our intent is to do that in a way that is tied to a specific 

concern that is identified as a safety-related problem on a particular line 

and to issue an order that the operator or the industry can come in and get 

an opportunity to contest before we would put something out firmly. 

And that dialogue process, my experience has been, frankly, wrings out 

most of the problems in terms of the agency doing something untoward 

or, I don’t want to say irresponsible, but whimsical, if you will. And I 

think that our intent was to actually tighten the process up, because there 

is authority in the existing law, and we would like to be a little more 

specific and provide for that opportunity for due process a little more, 

quite frankly. 

 MR. BOUCHER. Okay. Thank you. 

 Two other questions to you. 

 With respect to the Technical Assistance Grant provision, you may 

have noted, from my opening statement, that I was a major proponent of 

including the opportunity for Technical Assistance Grants in 2002 and 

have some measure of disappointment that grants have not been made. 

Not only have grants not been made, but your office has not actually 

published the criteria that would be utilized in determining the kinds of 

grants that would be made, giving guidance to applicants as to how their 

applications should be structured. Can you talk a little bit about your 

intention in terms of publishing the criteria that would govern the grantmaking process for the Technical Assistance Grants? 

 ADMIRAL BARRETT. I think we would have no problem with 

identifying those criteria a little more clearly so that people know what 

we are about. 

 MR. BOUCHER. Would you publish a set of guidelines? 

 ADMIRAL BARRETT. I would have no objection to doing that, a 

broad set of guidelines. Yes, sir. 

 MR. BOUCHER. So the answer is yes? 

 ADMIRAL BARRETT. Yes, sir. 

 MR. BOUCHER. All right. Thank you. 

 Can you give us a timeframe within which you might be able to do 

that? 

 ADMIRAL BARRETT. I could, but I don’t want to speculate here. 

 MR. BOUCHER. You could, but you would rather not. 

 ADMIRAL BARRETT. I think responsibly, we are probably talking 3 

to 6 months. That would be about the timeline we would be looking at 

there. 

 MR. BOUCHER. That is great. We will start the clock. 

 ADMIRAL BARRETT. Yes, sir. We have no problem with that. 
28

 MR. BOUCHER. All right. Thank you. 

 Second question. 

 I know that you have a rulemaking underway with respect to 

Integrity Management Plans for natural gas distribution lines. This is a 

provision that we strongly support, and we have duly noted your progress 

in this regard and commend you for it. My question to you is this. 

Would you be able to accept, would you be amenable to a reasonable 

deadline contained in the statute by which your rulemaking would have 

to be completed? And we could talk with you about what a reasonable 

amount of time is and reflect that, but would such a deadline in the 

statute be acceptable to you? 

 ADMIRAL BARRETT. Under the conditions you raise there, that we 

would work to get something that takes into account the type of process 

we have to deal with, no, sir, I would have no objection to that. 

 MR. BOUCHER. Thank you very much. 

 Mr. Chairman, that concludes my questions. 

 MR. HALL. The Chair recognizes Mr. Sullivan. 

 MR. SULLIVAN. Thank you, Mr. Chairman. 

 Admiral, how does the PHMSA envision the enforcement 

transparency authority to work that is contained in this discussion draft? 

Would allowing companies who are parties to the enforcement action to 

also post their side of the story be something you are open to? Would a 

rulemaking be appropriate to make sure due process and ongoing dispute 

resolution processes are not compromised? 

 ADMIRAL BARRETT. Sir, I think that is two different pieces. One, I 

am an absolute proponent of transparency in the enforcement process and 

generally. And I would tell you quite frankly, I believe that transparency 

breeds self-corrective behavior. I think most people out there, in this 

industry in particular, are generally trying to do the right thing, and so 

are we, and so are the other folks involved in this process. And so the 

more transparent we are about this, I think the less, frankly, we have to 

regulate. The more you get consensus standards, the more you get 

agreed-to practices. So I absolutely would have no problem whatsoever 

with doing this in a way that allows industry to come in with their 

position or their statement or their response on some process or some 

action that we are taking. 

 In terms of the second half of your question, I am sensitive. There is 

a formal process involved when we assess or take a penalty action of 

some type. There is opportunity for notice and a hearing and stuff like 

that. And many times, for example, there are settlement discussions or 

agreements that we look to reach. And we, obviously, would have to 

have measures in place to protect the ability to do that in a way that is 

fair to everybody. But in terms of the generic type of information we are 
29

posting and allowing people to put their side or their comment up, I have 

absolutely no problem at all with that. I would encourage it, quite 

frankly. 

 MR. SULLIVAN. Thank you, sir. 

 MR. HALL. All right. Do you have follow-up questions? I have no 

follow-up questions. 

 ADMIRAL BARRETT. Thank you, sir. 

 MR. HALL. Thank you very much, and thank you for the time, 

preparation, time you have attended, and the time it takes away from 

you. I appreciate both of you, and I thank you very much. 

 ADMIRAL BARRETT. Thank you, Mr. Chairman, and I look forward 

to continuing to work with the committee. 

 MR. HALL. Yes, sir. 

 ADMIRAL BARRETT. Thank you, sir. 

 MR. HALL. If we have the second panel: Ronald Jibson, Jeryl Mohn, 

Timothy Felt, and Lois Epstein. 

 All right. We have Mr. Jibson, Vice President of Operations, 

Questar Gas Company on behalf of the American Gas Association. We 

recognize you for 5 minutes. If you would, summarize, and then we will 

ask you questions. 

 Thank you, sir. 

STATEMENTS OF RONALD W. JIBSON, VICE PRESIDENT, 

OPERATIONS, QUESTAR GAS COMPANY, ON BEHALF 

OF AMERICAN GAS ASSOCIATION; JERYL MOHN, 

SENIOR VICE PRESIDENT; OPERATIONS AND 

ENGINEERING, PANHANDLE ENERGY, ON BEHALF OF 

INTERSTATE NATURAL GAS ASSOCIATION OF 

AMERICA; TIMOTHY C. FELT, PRESIDENT & CEO, 

EXPLORER PIPELINE COMPANY, ON BEHALF OF 

ASSOCIATION OF OIL PIPE LINES; AND LOIS N. 

EPSTEIN, P.E., SENIOR ENGINEER, OIL AND GAS 

INDUSTRY SPECIALIST, COOK INLETKEEPER, ON 

BEHALF OF PIPELINE SAFETY TRUST 

 MR. JIBSON. Thank you, Mr. Chairman, and good morning. 

 I would like to thank the committee for convening this hearing on 

this important topic of pipeline safety. My name is Ron Jibson. I am 

Vice President of Operations at Questar Gas Company. Questar Gas 

provides natural gas service to approximately 850,000 customers in 

Utah, southwestern Wyoming, and a small portion of southeastern Idaho. 

 I am testifying today on behalf of the American Gas Association, or 

AGA, and also the American Public Gas Association, or APGA. 
30

 Together, AGA and APGA represent more than 850 local natural gas 

utilities serving almost 56 million customers nationwide. 

 I would like to begin my testimony by first commending the 

committee, in particular Chairman Hall and Ranking Member Boucher 

and their staffs, as well as Congressmen Barton and Ranking Member 

Dingell, for putting together what we believe is overall a good legislative 

proposal. We believe the draft bill represents a positive first step and 

provides good foundation for moving the ball forward on pipeline safety. 

 In our opinion, the 2002 Act has been working well, and only minor 

adjustments should be considered at this point, with one possible 

exception. Our companies have identified one major area that we believe 

requires considerable improvement, that area being excavation damage 

prevention. 

 Congressional attention to more effective State excavation damage 

programs can and will result in real measurable decreases in the number 

of instances occurring on natural gas distribution pipelines each year. 

Excavation damage is the single cause of a majority of natural gas 

distribution pipeline incidents, and we are very pleased that the 

committee’s draft addresses this very important issue. 

 What are some of the facts about most gas distribution safety 

incidents? 

 During last week’s Transportation and Infrastructure Committee’s 

markup of H.R. 5782, two members of the committee stated that between 

2002 and 2005, the greatest number of pipeline incidents occurred in the 

Nation’s gas distribution systems and that such incidents were on the 

increase. Any conclusions on relative safety between gas distribution, 

gas distribution on hazardous liquid pipelines must be tempered by the 

fact that distribution has almost four times the miles of pipe as both gas 

transmission and liquids combined. 

 Where do these distribution incidents come from? 

 Really, there are two types of incidents that involve natural gas 

distribution systems, and we have got charts depicting this. I think also 

in your packet, but first of all, there are those incidents that are caused by 

factors the pipeline operator, to some extent, have control, such as 

improper welds, material defects, incorrect operation, corrosion, or 

excavation damage by a utility contractor; and secondly, those caused by 

external forces, which are due to factors the pipeline has little or limited 

ability to control. Those would be cases such as excavation damage by a 

third party, earth movement, floods, vandalism, structure fires, and 

lightening. 

 The term excavation, as I have used it here today, is intended to 

include demolition, excavation, tunneling, or construction activities as 

presented in the bill being considered today by this committee. 
31

 [Chart.] 

 As you can see by the blue area in the chart, utilities do a very good 

job at minimizing instances that they have control over. The record 

shows that between 2002 and 2005, 82 percent of all reported instances 

were the result of excavation damage by a third party or other factors the 

utility company has little control over. In many cases, the typical littleor no-control area involves a party outside the jurisdiction of authorities 

overseeing pipeline safety. 

 [Chart.] 

 Furthermore, as shown in the second chart, you can see that during 

the same 4-year period, instances due to third-party excavation more than 

doubled. Excavation damage thus represents the single greatest threat to 

distribution system safety, reliability, and integrity. 

 Efforts by the Common Ground Alliance damage prevention 

organization and the nationwide education program on the three-digit, 

one-call, 8-1-1 dialing system to prevent excavation damage are great 

steps in the right direction, but more is needed. 

 AGA and APGA support the proposal before the committee to 

outline the required nine elements of an effective State damage 

prevention program in the legislation and to provide for additional 

funding for State implementation of the program. 

 Just a couple of other quick issues I would like to highlight for the 

committee. 

 First of all, funding for one-call grants and the Common Ground 

Alliance. AGA and APGA urge Congress to provide continued funding 

authority over the upcoming reauthorization period for grants to States to 

support one-call programs and the Common Ground Alliance. 

 In regards to instant response protocols, AGA and APGA also 

commend this committee for including language within the draft bill to 

establish protocols for post-incident activity. The language requiring a 

call to the operator any time a pipeline is damaged, regardless of 

severity, is a critically-important addition to the bill. Likewise, the 

requirement to call 9-1-1 and the utility operator whenever the substance 

being carried by the pipeline is escaping from the pipeline is a positive 

addition and consistent with current best practices established by 

consensus of all stakeholders in the Common Ground Alliance. 

 It is important that calls to 9-1-1 and the resulting mobilization of 

extremely busy emergency response personnel occur only when a 

substance is escaping from the pipeline. In those situations, as well as 

when a pipeline is damaged without leakage, a call to the owner-operator 

of the pipeline will also help more quickly and effectively mitigate 

potential hazard. 
32

 Regarding the issue of safety orders, we are pleased to see that the 

committee recognizes the importance of being accorded due process with 

regards to safety orders. However, it is important that there is some 

definitive guidance on when such a safety order is warranted. 

 Regarding enforcement transparency, we support the idea of 

transparency so long as the normal due process is preserved and 

confidentiality during negotiation and settlement of individual cases is 

protected. 

 Regarding transmission integrity assessment reassessment time 

interval, we are pleased that the committee recognizes the importance of 

letting the U.S. Government Accountability Office complete its report. It 

is our hope that in evaluating the appropriateness of the 7-year 

inspection, the GAO will cover all of the pertinent facts and then, based 

on the facts, Congress will consider allowing the Secretary of 

Transportation to change the interval or pursue another remedy. This 

will allow operators to continue to deliver natural gas safely and 

affordably. 

 In summary, AGA and APGA believe that congressional passage of 

pipeline safety reauthorization this year will result in timely and 

significant distribution system safety improvements. We commend the 

committee for putting together a solid discussion draft to address this 

important issue and commit to working with you to secure passage of 

this final bill this year. 

 The members of AGA and APGA emphatically support the 

recommendation that Congress enact legislation that gives States an 

incentive to adopt stronger damage prevention programs. 

 Thank you for the opportunity to appear today. 

 [The prepared statement of Ronald W. Jibson follows:] 

PREPARED STATEMENT OF RONALD W. JIBSON, VICE PRESIDENT, OPERATIONS, QUESTAR 

GAS COMPANY, ON BEHALF OF AMERICAN GAS ASSOCIATION

I would like to thank the Committee for convening this hearing on the important 

topic of pipeline safety. My name is Ron Jibson. I am Vice President of Operations at 

Questar Gas Company. Questar Gas provides retail natural gas-distribution service to 

more than 800,000 customers in Utah, southwestern Wyoming and a small portion of 

southeastern Idaho. 

I am testifying on behalf of the American Gas Association (AGA) and the American 

Public Gas Association (APGA). AGA represents 197 local energy utility companies 

that deliver natural gas to more than 56 million homes, businesses and industries 

throughout the United States. AGA member companies account for roughly 83 percent 

of all natural gas delivered by the nation's local natural gas distribution companies. AGA 

is an advocate for local natural gas utility companies and provides a broad range of 

programs and services for member natural gas pipelines, marketers, gatherers, 

international gas companies and industry associates. 

 APGA is the national, non-profit association of publicly owned natural gas 

distribution systems. APGA was formed in 1961, as a non-profit and non-partisan 
33

organization, and currently has 655 members in 36 states. Overall, there are 

approximately 950 municipally owned systems in the U.S. serving nearly five million 

customers. Publicly owned gas systems are not-for-profit retail distribution entities that 

are owned by, and accountable to, the citizens they serve. They include municipal gas 

distribution systems, public utility districts, county districts, and other public agencies 

that have natural gas distribution facilities. 

The Pipeline and Hazardous Materials Safety Administration (PHMSA) and the 

industry have made significant progress on the initiatives mandated by the 2002 pipeline 

safety act. 

In our opinion only minor adjustments should be considered at this point, with one 

exception: Our companies have identified one major area we believe requires 

considerable improvement: excavation damage prevention. Congressional attention to 

more effective state excavation damage programs can, and will, result in real, measurable 

decreases in the number of incidents occurring on natural gas distribution pipelines each 

year. Excavation damage is the single cause of a majority of natural gas distribution 

pipeline incidents. 

Distribution pipelines are operated by natural gas utilities, sometimes called “local 

distribution companies” or LDCs. The gas utility’s distribution pipes are the last, critical 

link in the natural gas delivery chain. Gas distribution utilities bring natural gas service to 

customers’ front doors. To most customers, their local utilities are the “face of the 

industry”. Our customers see our name on their bills, our trucks in the streets and our 

company sponsorship of many civic initiatives. We live in the communities we serve 

and interact daily with our customers and with the state regulators who oversee pipeline 

safety. Consequently, we take very seriously the responsibility of continuing to deliver 

natural gas to our communities safely, reliably and affordably. 

Our industry’s commitment to safety is borne out each year through the federal 

Bureau of Transportation Statistics’ annual figures comparing modes of transportation. 

Indeed, delivery of energy by pipeline is consistently the safest mode of energy 

transportation. 

The Difference in “Pipelines”

 Understandably, most customers link all “pipelines” together, however there are 

indeed significant differences between the liquid transmission systems, natural gas 

transmission systems and the natural gas distribution systems operated by local gas 

utilities. Each type of pipeline system faces different challenges, operating conditions and 

consequences of incidents. 

 Interstate transmission systems are generally made up of long, straight runs of large 

diameter steel pipelines, operated at high volumes and high pressures. These larger 

transmission lines feed natural gas to the gas distribution utility systems. 

Gas distribution utility systems, in contrast, are configured like spider webs, operate 

at much lower volumes and pressures and always carry gas that has been odorized for 

easy leak detection. Distribution pipeline systems exist in populated areas, which are 

predominantly urban or suburban. 

Distribution pipelines are generally smaller in diameter (as small as 1/2 inch), 

operate at pressures ranging upward from under one pound per square inch, and are 

constructed of several kinds of materials including a large amount (over 40 percent) of 

non-corroding plastic pipe. Distribution pipelines also have frequent branch connections, 

since most customers require individual service lines. Most distribution systems are 

located under streets, roads, and sidewalks and when working on them, care must be 

taken not to unnecessarily disrupt the flow of traffic and of commerce. Because 

distribution pipelines provide a direct feed to customers, the use of in-pipe inspection 

tools usually requires natural gas service to customers to be interrupted for a period of 

time. 
34

Federal regulations recognize the differences between these types of pipelines, and 

different sets of rules have been created for each. 49 CFR Part 192 sets out the 

regulations for natural gas transmission and distribution pipelines and the rules 

discriminate between the two, while 49 CFR Part 195 sets out the regulations for liquid 

transmission lines. 

Regulatory Authority

As part of an agreement with the federal government, in most states, state pipeline 

safety authorities have primary responsibility to regulate natural gas utilities as well as 

intrastate pipeline companies. However, state governments are encouraged to adopt as 

minimum standards the federal safety standards promulgated by the U.S. Department of 

Transportation (DOT.) In exchange, presently DOT reimburses the state for up to 50% of 

its pipeline safety enforcement costs. Therefore, the actions of Congress affect state 

regulations and our companies. The states may also choose to adopt standards that are 

more stringent than the federal ones, and many have done so. Questar and many other 

distribution system operators report being in close contact with state pipeline safety 

inspectors. As a result of these interactions, distribution operator facilities are subject to 

more frequent and closer inspections than required by the pipeline safety regulations. 

Natural Gas Utilities Are Committed to Safety

 Our commitment to safety extends beyond government oversight. Indeed, safety is 

our top priority -- a source of pride and a matter of corporate policy for every company. 

These policies are carried out in specific and unique ways. Each company employs 

safety professionals, provides on-going employee evaluation and safety training, 

conducts rigorous system inspections, testing, and maintenance, repair and replacement 

programs, distributes public safety information, and complies with a wide range of 

federal and state safety regulations and requirements. Individual company efforts are 

supplemented by collaborative activities in the safety committees of regional and national 

trade organizations. Examples of these groups include the American Gas Association, 

the American Public Gas Association and the Interstate Natural Gas Association of 

America.

 We continually refine our safety practices. Natural gas utilities spend an estimated 

$6.4 billion each year in safety-related activities. Approximately half of this money is 

spent in compliance with federal and state regulations. The other half is spent, as part of 

our companies’ voluntary commitment to ensure that our systems are safe and that the 

communities we serve are protected. 

What Are The Facts About Most Gas Distribution Safety Incidents? 

During last week’s Transportation and infrastructure Committee’s mark-up of H.R. 

5782, two members of the committee stated that between 2002 and 2005 the greatest 

number of pipeline incidents occurred in the nation’s gas distribution systems, and that 

such incidents were on the increase. For clarification sake, I would like to qualify this 

statement. Any conclusions on relative safety between gas distribution, gas transmission 

and hazardous liquids must be tempered by the fact that distribution has almost 4 times 

the miles of pipe than gas transmission and liquids combined 

So, where do these distribution incidents come from? 

There are two kinds of incidents involving natural gas distribution systems, depicted 

in the attached chart titled: “Most Distribution Incidents Caused by External Forces”: (1) 

Those caused by factors the pipeline operator can to some extent control, such as 

improper welds, material defects, incorrect operation, corrosion or excavation damage by 

a utility contractor; and (2) those caused by External Forces, which are due to factors the 
35

pipeline has little or limited ability to control, such as excavation damage by a third party, 

earth movement, structure fires, floods, vandalism and lightning. 

The term “excavation” is intended to include demolition, excavation, tunneling or 

construction activities as presented in the bill being considered today by this committee. 

As you can see by the blue area in the chart, utilities do a good job in minimizing 

incidents that they can control. 

The record shows that between 2002 and 2005, 82 percent of all reported incidents 

were the result of excavation damage by a third party or other factors the utility company 

had little or no control over. In many cases, the typical “little or no control” incident 

involves a party outside the jurisdiction of authorities overseeing pipeline safety. 

Furthermore, as shown by the second attached chart titled: “Incidents Caused by 

Excavators Have More than Doubled Since 2002”, during the same four-year period, 

incidents due to 3rd party excavation more than doubled. Excavation damage thus 

represents the single greatest threat to distribution system safety, reliability and integrity. 

Efforts by the Common Ground Alliance (CGA) damage prevention organization 

and the nationwide education program on the three-digit One Call 811 dialing to prevent 

excavation damage are steps in the right direction. But more is needed. 

AGA and APGA support the proposal before this committee to outline the required 

nine elements of an effective state damage prevention program in the legislation and to 

provide for additional funding for state implementation of the program. Data from the 

last five years demonstrates that states that have stringent enforcement programs 

experienced a much lower rate of excavation damage to pipeline facilities than states that 

do not have stringent enforcement powers. 

AGA and APGA urge Congress to provide continued funding authority over the 

upcoming reauthorization period for grants to the CGA and to the states to support One 

Call programs. 

The statistics are clear. Excavation damage prevention presents the single greatest 

opportunity for distribution safety enhancements, and we urge Congress to take decisive 

action on this front. 

AGA and APGA also commend this committee for including language within its 

draft bill to address the issue raised by Congressman Murphy during an earlier pipeline 

safety oversight hearing, regarding establishing protocols for post-incident activity. The 

language requiring a call to the operator anytime a pipeline is damaged, regardless of 

severity is a critically important addition to the bill. Likewise, the requirement to call 

911 and the facility operator whenever the substance being carried by the pipeline is 

escaping from the pipeline is a positive addition, and consistent with a current best 

practice established by consensus of all stakeholders in the CGA. It is important that 

calls to 911 and the resulting mobilization of extremely busy emergency response 

personnel, occur only when the substance is escaping from the pipeline. In those 

situations, as well as when a pipeline is damaged without leakage, a call to the owner or 

operator of the pipeline will also help more quickly and effectively mitigate the potential 

hazard. 

Gas Transmission Integrity Reassessment Time Interval

It is our hope that in evaluating the appropriateness of the 7-year re-inspection 

requirement, the U.S. Government Accountability Office (GAO) will uncover all of the 

pertinent facts and, that based on the GAO findings, Congress will consider options for 

allowing the Secretary of Transportation to change the interval, consistent with the GAO 

findings. This will allow operators to continue to deliver natural gas safely and 

affordably. Consequently, AGA and APGA support the provision for the seven-year reinspection proposed in the committee’s draft bill. 
36

Summary

AGA and APGA believe that Congressional passage of pipeline safety 

reauthorization this year will result in timely and significant distribution system safety 

improvements. 

The members of AGA and APGA emphatically support the recommendation that 

Congress enact legislation that gives states an incentive to adopt stronger damage 

prevention programs. We look forward to working with you to secure passage of 

legislation this year. 

 MR. HALL. Thank you, Mr. Jibson. 

 Mr. Mohn, we recognize you for 5 minutes. Stay as close as you 

can. Thank you. 

MR. MOHN. I will do so. 

 Thank you, Mr. Chairman. 

 Good afternoon. I am Jeryl Mohn from Panhandle Energy. 

 Today, I am speaking on behalf of the Interstate Natural Gas 

Association of America, or INGAA. INGAA is the trade association that 

represents virtually all of the interstate and interprovincial natural gas 

pipelines in North America. 

 In April, I testified before the subcommittee on progress being made 

in gas transmission integrity management programs, and I suggested 

some relatively modest improvements in the current Federal Pipeline 

Safety Program. Today, I will focus my comments on a few of the 

specific legislative proposals that you are considering. 

 The first item is the 7-year reassessment interval for gas transmission 

pipelines. I testified in April that the 7-year interval was not based upon 

any engineering or risk analysis, but rather a compromise between House 

and Senate negotiators. In reaching this agreement in 2002, however, 

Congress recognized and required that GAO prepare an analysis on the 

reassessment interval in time for you to consider options for this year’s 

reauthorization. 

 INGAA has been one of the stakeholders working with GAO over 

the last year to develop this report. However, we understand that it will 

be released after the August congressional recess. We don’t know 

precisely what GAO will say, but our impression in talking to them is 

that they will indeed recommend to Congress that DOT be directed to 

develop an alternative to the 7-year mandate that instead employs best 

engineering practices. The committee discussion draft includes a 

placeholder provision on this issue requiring the DOT send Congress any 

legislative recommendation once the GAO report is complete. This 

provision does not otherwise change the reassessment interval, however. 

 Mr. Chairman, we appreciate that the discussion draft references this 

issue; however, the provision does not direct DOT to make any further 

change without further congressional action. Absent the reauthorization 
37

bill before us today, such additional action would be unlikely for another 

4 years. 

 Therefore, we ask that the subcommittee do as I believe you intend 

to do and collect the views of GAO prior to marking up a bill. If GAO 

views support of such an action, we urge you to adopt the provision that 

has already been recommended by DOT as recognized in H.R. 5678. 

This would keep the 7-year reassessment interval in place unless or until 

DOT completes the rulemaking on an alternative based on technical data, 

risk factors, and engineering analysis. 

 Another issue I would like to address is the regulation of pipelines 

we call direct sales laterals. A direct sales lateral is typically short in 

length, connecting one of our interstate pipelines to a large single 

customer, such as a power plant or industrial facility. Under current law, 

these lines are regulated for safety purposes at the State level even 

though they are owned by interstate pipeline to which they are 

connected. A Federal agency, namely FERC, already has Federal 

authority to regulate these direct sales laterals for economic purposes. 

We believe Congress should also clarify that these laterals be regulated 

by DOT in the same way other interstate pipeline facilities are 

conducted. This would provide consistent regulation for all of the 

pipeline facilities owned by our interstate systems. The discussion draft 

does make this change, which has also been recommended by DOT, and 

we certainly appreciate that and endorse that provision. 

 And last, Mr. Chairman, but not least, I want to focus on damage 

prevention. Mr. Jibson did a good job in explaining to you the exposure 

faced by distribution companies. For gas transmission companies, it is 

not much different. 

 In 1998, this committee approved legislation that was part of the T21 highway bill to encourage improvement in State damage prevention 

programs. The programs are often referred to as one-call or call-beforeyou-dig programs. The 1998 legislation accomplished a great deal to 

enable improvement in these programs, but we believe now is the time 

for another substantial improvement. INGAA strongly supports the 

damage prevention provisions proposed by DOT that are incorporated in 

the discussion draft. The development of national standards, along with 

modest grant funds for States that meet those standards, is an excellent 

proposal. You heard testimony in April to support our belief that these 

efforts will result in reducing a significant number of accidents. 

 My written testimony includes some additional comments on several 

other issues, and, Mr. Chairman, I would be happy to answer further 

questions for you at the appropriate time. 

 [The prepared statement of Jeryl L. Mohn follows:] 
38

PREPARED STATEMENT OF JERYL L. MOHN, SENIOR VICE PRESIDENT, OPERATIONS AND 

ENGINEERING, PANHANDLE ENERGY, ON BEHALF OF INTERSTATE NATURAL GAS 

ASSOCIATION OF AMERICA

Mr. Chairman and Members of the Subcommittee: 

Good morning. My name is Jeryl Mohn, and I am Senior Vice President of 

Operations and Engineering for Panhandle Energy. I am testifying today on behalf of the 

Interstate Natural Gas Association of America (INGAA). INGAA represents the 

interstate and interprovencial natural gas pipeline industry in North America. INGAA’s 

members transport over 90 percent of the natural gas consumed in the United States 

through a network of approximately 200,000 miles of transmission pipeline. These 

transmission pipelines are analogous to the interstate highway system – in other words, 

large capacity systems spanning multiple states or regions. 

Panhandle Energy, headquartered in Houston, Texas, is a subsidiary of the Southern 

Union Company and owns or holds a major ownership interest in five interstate pipelines 

and a liquefied natural gas import terminal. Our pipelines serve a significant share of 

markets in the Midwest, the Southwest including California, and Florida. In addition, our 

Trunkline LNG terminal in Lake Charles, Louisiana is one of the nation’s largest LNG 

import facilities. 

Mr. Chairman, I submitted extensive testimony in April on the reauthorization of the 

Pipeline Safety Act, including information on the natural gas transmission Integrity 

Management Program (IMP) and the safety of gas pipelines. My comments today will 

focus on several specific legislative proposals, but I would refer the Committee back to 

my earlier testimony for more general background on this topic. 

REASSESSMENT INTERVALS 

As you know, the Pipeline Safety Improvements Act of 2002 mandated a natural gas 

transmission integrity management program pursuant to which the industry would 

undertake a 10-year baseline inspection program to ensure the safety of all gas 

transmission pipeline segments located in populated areas. Three years into this program, 

the inspections are progressing well, and the industry is generally on track for meeting 

the 10-year baseline requirement. 

The 2002 Act also included the requirement that these pipeline segments be 

reassessed every seven years thereafter. It is fair to say that the seven-year number was 

not based on any engineering analysis; instead, it represented a political compromise 

between the Senate position favoring five-year re-assessment interval and the House 

position favoring a 10 -year interval. Sixty years of operational experience in pipeline 

industry strongly suggested that, for most pipelines, anything shorter than ten years was 

both unnecessary and a waste of resources. Nonetheless, Congress settled on the sevenyear interval as a compromise between the two positions. In recognition of this, 

however, the 2002 Act also required the Government Accountability Office to analyze 

the re-assessment question and to report to the Congress in time for the next 

reauthorization debate. 

Mr. Chairman, that debate is today. The GAO has been working on a report for 

almost a year now, and we understand that it will be completed soon – probably by the 

middle of September. The Administration’s bill (HR 5678) already includes a provision 

addressing the issue by retaining the seven-year requirement unless and until the 

Department of Transportation promulgates an alternative requirement based on 

engineering and risk analysis. INGAA strongly supports this provision. 

Why not just stick with the current requirement for another reauthorization period? 

There are several reasons for a change now. First, the DOT has interpreted the sevenyear reassessment requirement to begin after each individual segment is first inspected, 

rather than once the 10 -year baseline period is complete. This means that segments first 
39

inspected in years 2003, 2004 and 2005 must be reassessed in years 2010 through 2012, 

while the first battery of baseline inspections is still ongoing. This overlap of baseline 

inspections and re-inspections could create pipeline capacity constraints that would have 

the potential to result in higher natural gas prices for American consumers than would 

otherwise be the case. Inspection and maintenance work reduces pipeline operational 

capacity, and some inspections even require complete system shutdowns for weeks at a 

time. Getting these requirements right, so that inspection work is rational and justified, is 

critical to minimizing the likelihood of gas supply problems attributable to integrity 

management work. 

Next, the internal pipeline inspections covered in the IMP program primarily 

addresses one type of pipeline integrity threat – corrosion. Corrosion causes about 25 

percent of all gas transmission lines accidents. While this is the largest single cause of 

accidents on gas transmission pipelines, it is not the only cause. For example, excavation 

damage is the leading cause of accidents associated with fatalities and injuries. Focusing 

scarce resources on a single cause of accidents, without looking at other areas where 

other safety improvements can be made, will not provide the best level of overall safety. 

Finally, there is the one-size-fits-all nature of the current seven-year requirement. 

The best method for improving safety, however, is to weigh risks and prioritize work 

based on those potential risks. Some pipeline segments may, in fact, need to be inspected 

more often than every seven years due to their inherent risk, while others do not need to 

be re-inspected for 10 to 15 years (once the baseline is complete) due to their low risk. 

We will end up with an even safer pipeline system if the focus is on reducing risks to the 

public, rather than just compliance with a mandated set of requirements that may bear 

little relation to actual risk. 

The Committee’s Discussion Draft includes a “placeholder” provision on this issue, 

wherein the Secretary of Transportation would be required to report back to Congress 

with any legislative recommendations once the GAO report is complete. We would 

simply note that the Secretary has already provided a legislative recommendation on this 

matter, which is included in HR 5678. The placeholder provision in the discussion draft 

would not allow the Secretary to initiate any change in the seven-year requirement 

without further action by Congress – action that would be unlikely to occur again for the 

next four years. INGAA therefore urges the Committee to adopt the provision from HR 

5678, which allows the Secretary to initiate a rulemaking on this matter and make a 

change based upon “technical data, risk factors, and engineering analyses.” 

DIRECT SALES LATERALS 

As part of its earlier testimony, INGAA provided the Committee with a history on 

the safety regulation of direct sales laterals. Suffice it to say here that continued state 

regulation of sales laterals owned by interstate pipelines is anachronistic and unnecessary. 

It also diverts resources away from what should be the states’ primary focus on intrastate 

pipeline facilities, including distribution lines. 

The Discussion Draft includes a provision to move the safety regulation of direct 

sales lateral pipelines owned by interstate pipelines from states to the Pipeline and 

Hazardous Materials Safety Administration within DOT. This would be consistent with 

the existing economic regulation of these pipelines at the federal level. The Federal 

Energy Regulatory Commission regulates a direct sales lateral owned by an interstate 

pipeline as a part of the interstate pipeline, a result that is backed by judicial precedent. 

There is no legitimate reason why safety regulation should be treated any differently. 

States that are “interstate agents” on behalf of DOT would be able to oversee and audit 

the regulation of direct sales laterals owned by an interstate pipeline as part of the 

interstate agent function. 
40

The language in the Discussion Draft does not affect direct sales laterals owned 

either by a customer (such as a power plant or factory) or by an intrastate pipeline. These 

direct sales laterals still would be regulated by the states. 

INGAA strongly supports the provisions in the discussion draft and in the 

Administration bill on this matter. 

OTHER ISSUES IN HR 5782 AND THE DISCUSSION DRAFT 

One-Call Civil Enforcement 

One-call damage prevention systems are created, and managed, at the state level. 

INGAA believes that enforcement of these state programs, including civil penalty 

enforcement, should also be at the state level. Consequently, INGAA has some concern 

about the federal Department of Transportation enforcing state one-call laws. Damage 

prevention requires cooperation between both underground utility owners and excavators. 

Enforcement is best handled by the regulator that has responsibility for administering the 

one-call programs, i.e., the state regulators, so that enforcement strategy can be 

coordinated achieving the private sector participation and cooperation that is essential for 

success. 

If Congress feels strongly about civil penalties for one-call enforcement, then we 

urge you to review the approach taken by the Transportation and Infrastructure 

Committee, whereby federal enforcement would only be permitted in those states that 

have not adopted civil penalty authority on their own. We believe the end-goal should be 

effective state enforcement of one-call laws, not the preemption of state one-call law 

enforcement by the federal government. 

State Damage Prevention Programs 

The goals behind this program – the further improvement in state damage prevention 

laws – have been an INGAA priority for many years. From the standpoint of reducing 

pipeline accidents, this is the single most important issue in the 2006 reauthorization bill. 

INGAA strongly supports this provision. 

Grants to States and State Pipeline Safety Grants 

These two provisions provide additional federal grant funds to the states, for both 

improving state one-call programs and assisting in the regulation and enforcement of 

safety standards for intrastate pipelines and natural gas distribution lines. 

Natural gas and hazardous liquid transmission lines are under federal safety 

jurisdiction while natural gas distribution lines (LDCs) and intrastate pipelines are under 

state jurisdiction. Transmission line operators – and only transmission line operators – 

pay the annual user fees to PHMSA that fund the federal pipeline safety program and all 

of the associated grants to the states. 

HR 5782 and the Discussion Draft both anticipate significant increases in grants to 

the states. Still, based on the current regime for collecting user fees, federally-regulated 

pipelines would fund an increasing share of the cost of regulating of intrastate pipelines at 

the state level. This would include the costs of developing and implementing the 

Distribution Integrity Management Program, which is focused on reducing accidents 

involving state-regulated gas distribution lines. 

INGAA accepts the premise that transmission line operators should contribute to the 

cost of programs the directly benefit transmission lines, such as the damage prevention 

program. INGAA also believes that distribution line operators should contribute a fair 

share of the cost of this program as well, because a national damage prevention initiative 

would be a central part of the distribution integrity management program. If Congress 

increases the matching funds for state pipeline safety grants as well, from “up to 50 

percent” to “up to 80 percent,” distribution operators regulated by the states should also 

help to offset the additional cost of these grants. There is no justifiable reason why 
41

interstate transmission pipeline operators – regulated at the federal level – should 

continue to subsidize state-regulated entities. DOT should consider a new user fee 

formula that includes gas distribution lines in federal user fee collections, and if 

necessary, Congress should authorize user fees to be collected from distribution 

operators. 

Safety Orders 

Both the Discussion Draft and the Administration Bill propose modifying the 

existing statute with respect to the issuance of safety orders. The first change to existing 

law would be a requirement that any safety orders be issued only after notice and 

opportunity for a hearing. This is an excellent change that INGAA supports. The 

provision, however, also would expand the conditions for which a safety order could be 

issued from the current “potential safety-related condition” to “any condition that could 

affect public safety, property, or the environment.” This would be an overly-broad 

expansion of authority. The considerations in (2) are also vague and overly-broad, except 

for (2)(A), which is specific and understandable. A standard that could lead to shutting 

down a pipeline delivering energy on a real-time basis to millions of consumers must be 

specific in order to avoid unnecessary (and to consumers, costly) disruptions. 

Technical Assistance Grants 

This provision in the Discussion Draft extends the authorization of the “technical 

assistance grant to communities” that was part of the 2002 Act. INGAA supports this 

provision, with a request that pipeline operators also be eligible for grants to fund 

activities that an operator might undertake to educate local communities about pipelines 

or improve safety communications targeted at communities located near pipelines. Such 

education and/or communication efforts would be consistent with the spirit of what was 

authorized in 2002. 

Enforcement Transparency 

INGAA generally supports increased enforcement transparency, and therefore 

supports this provision, with the following suggestions. First, we believe that companies 

involved in enforcement proceedings should be allowed to provide information “telling 

their side of the story” to DOT for inclusion in any electronic posting. This would be 

optional, but it would possibly provide a more balanced view of a pending action. In 

addition, we urge the Committee to include language protecting due process and the 

confidentiality of parties engaged in settlement proceedings. 

INCIDENT REPORTING 

INGAA would like to highlight one final issue that is not part of either bill, but that 

was raised in its earlier testimony. This is the manner in which accident data is collected 

for natural gas transmission lines. The current criteria result in an inaccurate measure of 

accidents on natural gas transmission pipelines and thereby provide the Congress and the 

public with a misleading impression about accident trends. 

The tally of natural gas transmission accidents reported by DOT annually is based 

on the number of “reportable incidents.” “Reportable incidents” are defined as those 

which: 1) cause a fatality, 2) cause an injury, or 3) result in property damage of $50,000 

or more. These criteria create a misleading impression, because the value of property 

damage includes the dollar value of the natural gas lost as a result of the accident. 

During the last six years, natural gas commodity prices have increased more than 

300 percent. Prices that were approximately $2 per mcf in 2000 now fluctuate between 

$5.50 and $10 per mcf. These higher natural gas commodity prices, which are a function 

of market forces, have greatly increased the number of “reportable incidents” for gas 

transmission lines, since the $50,000 threshold has remained constant. This is skewing 
42

accident data and giving the impression that accidents are increasing, when in fact they 

are not. Accident criteria and subsequent data analyses and conclusions should not be 

based on the market price of natural gas, which in recent years has been extremely 

volatile. Instead, such data should be based on a constant measurement, such as the 

volume of gas lost, etc. We ask that the Committee consider a requirement that DOT 

initiate a rulemaking to change the criteria for property damage. 

CONCLUSION 

Mr. Chairman, I again want to thank you for the opportunity to testify today. 

INGAA hopes the Committee marks up this legislation soon, so that a final bill can be 

enacted before the adjournment of the 109th Congress. We stand ready to work with you 

on completion of a bill in 2006. 

Witness Contact Information: 

Jeryl L. Mohn 

Senior Vice President, Operations and Engineering 

Panhandle Energy 

5444 Westheimer Road 

Houston, Texas 77056 

713-989-7410 

INGAA Contact Information 

Martin E. Edwards III 

Vice President, Legislative Affairs 

Interstate Natural Gas Association of America 

10 G Street, NE, Suite 700 

Washington, DC 20002 

202-216-5910 

Summary of Testimony 

INGAA appreciates the opportunity to testify on reauthorization of the Pipeline Safety 

Act. We support the timely reauthorization of the Act, and want to provide some specific 

comments on the key bills that have been introduced. Our recommendations for 

legislation to reauthorize the Act in 2006 include: 

• Re-examination of the seven-year reassessment interval that was part of the gas 

integrity management requirement in the 2002 legislation. We recommend a 

reassessment interval based on scientific and/or engineering criteria. The 

provision contained in the Administration bill (HR 5678) accomplishes this 

objective and has INGAA’s support. 

• Incentives to further improve state damage prevention programs nationwide. 

• Amend the definition of “direct sales lateral” pipelines in the Pipeline Safety 

Act to make those owned by interstate pipelines jurisdictional to federal, rather 

than state, oversight. 

• Amend natural gas transmission accident reporting criteria to remove the 

linkage to the cost of natural gas lost, since this value fluctuates significantly 

over time and therefore provides misleading data. 

 MR. HALL. Well, thank you, sir. 

 Mr. Felt. 
43

MR. FELT. Mr. Chairman, members of the subcommittee, my name 

is Tim Felt. I am President and CEO of Explorer Pipeline Company 

headquartered in Tulsa, Oklahoma. 

 As Mr. Sullivan graciously acknowledged earlier, Explorer operates 

1,400 miles of petroleum products pipeline, serving 16 States extending 

from the Gulf Coast throughout the Midwestern United States. 

 I appreciate the opportunity to appear today on behalf of API and 

AOPL. Together, API and AOPL represent the companies responsible 

for the vast majority of U.S. oil pipeline transportation. 

 I will summarize my written testimony and ask that the full text and 

attachments be included in the record of this hearing for the 

subcommittee’s consideration. 

 Mr. Chairman, the Pipeline Safety Improvement Act of 2002 is a 

success. Industry and DOT have cooperated to achieve significant 

improvement in pipeline safety, and this improvement is demonstrated 

by our industry’s record. This record is reflected on the charts that 

accompany my testimony. 

 The oil pipeline industry plans to invest over $1 billion in pipeline 

safety improvements over the next 5 years. Because of this, it is very 

important that Congress reauthorize the DOT Pipeline Safety Program in 

2006 to send a clear signal that these investments are appropriate and 

DOT is on the right track in implementing the Pipeline Safety 

Improvement Act of 2002. 

 We suggest extending the Act at least 5 years to guarantee as much 

certainty as possible to DOT, the affected industry, and the public 

regarding the rules governing the safety oversight of our national 

pipeline infrastructure. 

 The prospects for a single, widely-supported pipeline safety 

reauthorization bill are excellent. The three proposals before us have a 

number of elements in common and address, for the most part, the same 

issues. The parties with an interest in pipeline safety ought to be able to 

work together to achieve a compromise that has very broad support. Our 

goal of passage of legislation this year is within reach. 

 In these short remarks, I will only address the key provisions of these 

various proposals. We urge the Energy and Commerce Committee to act 

promptly on these issues, reconcile any differences of the Transportation 

and Infrastructure Committee’s version, and move to passage by the full 

House. 

 At the center of both bills are similar provisions that will strengthen 

enforcement of State laws designed to prevent underground damage. All 

include a comprehensive list of the elements, including effective 

enforcement, that characterize successful State underground damage 

prevention programs. We strongly support these provisions and urge the 
44

committees to build the final legislative product around underground 

damage prevention. 

 I serve on the Common Ground Alliance as a Board Member for the 

oil pipeline industry. The CGA is one of the best things that has 

happened to pipeline safety in many years. CGA provides a forum to 

work underground damage prevention issues that simply don’t exist 

anywhere else. One of CGA’s current roles is to lead the public 

awareness campaign to promote use of the nationwide, toll-free, 8-1-1 

telephone number for one-call notification. It actually originated in this 

committee and then became required by the 2002 Act. We believe the 

legislation you are considering should reauthorize Section 6105 of Title 

49, which authorizes funds that could be used to support CGA and the 8-

1-1 campaign. 

 As Mr. Boucher mentioned earlier, I would like to address the 

provision that modifies DOT’s current authority to issue mandatory 

orders to pipeline operators. 

 Current law allows DOT to issue a safety order to an individual 

operator in situations that appear to require action, but do not rise to the 

level of danger implied in a hazardous facility designation. As we 

understand it, the intent is to provide DOT with an enforcement tool with 

a lower threshold that would not require DOT to first declare that an 

operator’s facility is or would be hazardous before actions would be 

required of the operator that could be documented in the public record. 

The discussion draft adds to current law a welcome notice requirement 

and opportunity for a hearing at DOT before any such safety order could 

be issued. However, the draft goes on, in effect, to eliminate this due 

process benefit by practically abolishing any threshold or burden of proof 

for DOT in triggering a safety order. 

 The Secretary of Transportation may order an operator to make 

possibly extensive expenditures on all or a portion of the operator’s 

system to address any condition that poses a risk based on any factors the 

Secretary considers appropriate. 

 We appreciate DOT’s desire to develop an enforcement tool to 

document and address situations where DOT and the operator can 

identify conditions that are not yet severe, but may become so. 

However, the proposal in the discussion draft goes too far in the direction 

of preventing the possibility of arbitrary action against an individual 

operator who has violated no DOT regulation. Under these provisions, 

an operator would be virtually powerless to contest effectively any DOT 

requirement to make what the operator believes an unnecessary 

expenditure of scarce resources to address questionable risks. 

 We would like to work with this subcommittee to develop a 

provision that provides Mr. Barrett and the DOT what it needs in terms 
45

of documentation of its interactions with operators about needed safety 

improvements, but which contains the proper protections to ensure that 

all actions ordered, in fact, are justified, prudent, and represent real 

safety improvements. 

 In summary, current pipeline safety law is working, and working 

very well. Improvements can be made, particularly in strengthening the 

underground damage prevention, but fundamental changes are not 

needed. The legislative proposals before the House all seek to make 

improvements in the fundamentally-sound DOT Pipeline Safety Program 

based on the Pipeline Safety Improvement Act of 2002. We need to 

move promptly to agree on the improvements that can gain broad support 

and incorporate these improvements into a Pipeline Safety 

Reauthorization Bill that can be enacted this year. 

 The oil pipeline industry stands ready to help in any way we can to 

achieve this worthy goal. 

 Thank you. 

 [The prepared statement of Timothy C. Felt follows:] 

PREPARED STATEMENT OF TIMOTHY C. FELT, PRESIDENT & CEO, EXPLORER PIPELINE 

COMPANY, ON BEHALF OF ASSOCIATION OF OIL PIPE LINES

Mr. Chairman, Members of the Subcommittee, my name is Tim Felt. I am President 

and CEO of Explorer Pipeline, headquartered in Tulsa, Oklahoma. Explorer operates 

1,400 miles of petroleum products pipeline serving 16 states extending from the Gulf 

Coast throughout the mid-western United States. 

I am a member of the API Pipeline Committee, vice-chairman and treasurer elect of 

the Association of Oil Pipe Lines, and the board member representing the oil pipeline 

industry’s interests in the Common Ground Alliance, a voluntary, private sector 

organization composed of the key stakeholders in the prevention of excavation damage to 

underground facilities. I appreciate the opportunity to appear today on behalf of API and 

AOPL. Together, API and AOPL represent the companies responsible for the vast 

majority of U.S. oil pipeline transportation. 

As the Subcommittee reviews the current state of pipeline safety and the progress 

that has been made since the 2002 Act, these are the main points I would like to 

emphasize: 

• The Pipeline Safety Improvement Act of 2002 is a success. Industry and DOT 

have cooperated to achieve significant improvement in pipeline safety, and this 

improvement is demonstrated by our industry’s record. This record is reflected 

on the charts that accompany my testimony. 

• The oil pipeline industry is making the investments that are required to fully 

comply with the law and in many cases to exceed the law’s requirements. The 

oil pipeline industry plans to invest over $1 billion in pipeline safety 

improvements over the next five years. Because of this it is very important that 

Congress reauthorize the DOT pipeline safety program in 2006 to send a clear 

signal that these investments are appropriate and DOT is on the right track in 

implementing the 2002 Act. 

• There are three principal legislative proposals to discuss, and, the prospects for 

a single, widely-supported bill are excellent. Earlier this year, the Bush 

Administration transmitted proposed reauthorization legislation, introduced as 
46

HR 5678. Last week the Transportation and Infrastructure Committee 

unanimously reported HR 5782, a bill that our industry can wholeheartedly 

support. HR 5782 has been re-referred to the Energy and Commerce 

Committee, which last week released its own discussion draft for comment. 

These proposals have a number of elements in common and address, for the 

most part, the same issues. The parties with an interest in pipeline safety and 

pipeline infrastructure ought to be able to work together to achieve a 

compromise that has very broad support. Our goal of passage of legislation this 

year is within reach. 

My testimony will discuss the provisions of these various proposals that we think 

need the most focus in working towards this compromise. We urge the Energy and 

Commerce Committee to act promptly to mark up HR 5782, reconcile any differences 

with the Transportation and Infrastructure Committee’s version and move to passage by 

the full House. 

The Role of Pipelines in Petroleum Supply

As we begin discussion of pipeline safety legislation, it is useful to remind the 

Subcommittee of the role oil pipelines play in energy supply. An understanding of this 

role leads to appreciation of the need for effective and workable policies to provide the 

certainty that this key part of the petroleum distribution system can carry out its role 

efficiently and safely. 

About 40 percent of the total U.S. energy supply comes from petroleum, but the 

transportation sector depends on petroleum for 96 percent of its energy. Two-thirds of 

domestic crude oil and refined products transportation is provided by pipeline. Pipelines 

do this safely and efficiently. The cost to transport a gallon of petroleum by pipeline is 

very low, typically 2-3 cents per gallon. Transportation in the US would quickly come to 

a halt without pipelines to deliver crude oil to refineries and petroleum fuels to consumers 

in various parts of the country. 

Oil pipelines are common carriers whose rates are controlled by the Federal Energy 

Regulatory Commission. Oil pipeline income is driven only by the volume transported 

and does not depend on the price of the products transported. In fact, high oil prices have 

a negative impact on oil pipeline income by raising power costs and reducing demand for 

petroleum. 

Progress in Pipeline Safety

Oil pipeline operators have been subject to the DOT’s pipeline integrity 

management regulations since March 2001, before enactment of the 2002 Act. DOT’s 

inspections of operators’ plans show that integrity testing will eventually cover 

approximately 82 percent of the nation’s oil pipeline infrastructure. The oil pipeline 

industry is past the halfway point in the implementation of integrity management. Large 

oil pipeline operators (greater than 500 miles of pipeline) completed the required 50 

percent of their baseline testing of the highest risk segments prior to the September 30, 

2004 deadline set by the regulations. DOT has audited each of these operators under 

these regulations at least two times – an initial “quick hit” audit and one subsequent full 

audit. Many are involved in a third audit cycle. Although operating under a different 

deadline, similar progress towards their requirements has been achieved by the small 

operators. 

Operators are repairing conditions in need of repair and less serious conditions that 

are found in the course of investigating defects. Operators are fixing what they find, 

often going beyond the requirements of the law. 
47

Improved spill record

As a result of this program, the oil pipeline spill record has improved dramatically in 

the last five years, as the exhibits show. The data for these exhibits comes from a 

voluntary industry program that since 1999 has collected extensive data on oil pipeline 

performance. These figures represent line pipe releases, which are those that occur 

outside the company’s facilities and are the releases most likely to impact the public and 

the environment. 

The trend is down for each cause category. The number of total releases dropped 51 

percent, releases due to corrosion dropped 67 percent, and releases due to operator error 

dropped by 63 percent. Finally, releases from third party damage from excavation 

dropped 37 percent. 

The safety improvement has been dramatic even though the data only covers half the 

7-year baseline assessment period for oil pipelines. We expect this trend to continue as 

we complete the first full cycle and begin the reassessment intervals. This provides a 

clear indication that the federal pipeline safety program is working. 

This background underscores the importance of using this reauthorization cycle to 

endorse and, where appropriate, strengthen DOT’s current pipeline safety program. 

Legislation

The legislative proposals under consideration in the House – HR 5678, HR 5782 and 

the Energy and Commerce discussion draft – all assume continuation of this good 

program and seek to make it better. I would like to highlight the provisions of these 

proposals that we believe are the most significant and deserve the most attention by the 

Subcommittee. 

Underground Damage Prevention

Pipeline releases caused by excavation damage are the most traumatic, the largest, 

and are the most likely to threaten the public and the environment. At the center of HR 

5678, HR 5782 and the discussion draft are similar provisions that will strengthen 

enforcement of state laws designed to prevent underground damage, and all include a 

comprehensive list of the elements, including effective enforcement, that characterize 

successful state underground damage prevention programs. These elements were 

developed with the assistance of the Common Ground Alliance. We strongly support 

these provisions and urge the committees to build their final legislative product around 

underground damage prevention. 

HR 5678, HR 5782 and the discussion draft all make it a federal crime to ignore 

state underground damage prevention laws. We believe this expression of the 

seriousness the federal government attaches to damage prevention is one of the most 

important safety advances proposed in these bills. HR 5782 structures this authority to 

encourage states to become effective in enforcing their damage prevention laws. 

Effective state enforcement of these laws is the most efficient approach to damage 

prevention and ought to be the goal of federal policy. We urge the Subcommittee to give 

serious consideration to directing DOT to forgo federal action where DOT determines 

state laws are being adequately enforced. 

There are three distinct steps in damage prevention: notification, prompt and 

accurate marking, and careful digging with due regard for the markings. HR 5782 and 

the discussion draft both provide for a balanced federal enforcement impact on the 

damage prevention process in the sense that both create, with slightly different drafting 

solutions, a federal cause of action against an operator who fails to respond to a location 

request or fails to accurately mark the location of a pipeline as well as against an 

excavator who fails to notify the one-call system or disregards location information or 

markings. We support this balance. 
48

Common Ground Alliance

As noted at the beginning of my testimony, I serve as the Common Ground Alliance 

Board member for the oil pipeline industry. The CGA is one of the best things that has 

happened in pipeline safety in many years. Industry stakeholders support the CGA 

financially and in return receive value that couldn’t be purchased. CGA provides a forum 

to work underground damage prevention issues that simply doesn’t exist anywhere else. 

DOT and other federal agencies with an interest in the underground infrastructure receive 

value as well, because CGA brings solutions to the table instead of problems. One of 

CGA’s current roles is to lead the public awareness campaign to promote use of the 

nationwide, toll-free 811 telephone number for one-call notification that was required by 

the 2002 Act. We believe the legislation you are considering should reauthorize section 

6105 of title 49, which authorizes funds that could be used to support CGA and its 811 

campaign. 

Low Stress Pipelines

Earlier this year there was a significant leak from a BP Alaska crude oil pipeline on 

the North Slope operating at or less than 20% of specified minimum yield strength -- low 

stress. Crude oil from this release covered an approximately two-acre area. Based on 

API’s Pipeline Performance Tracking System, our industry’s internal data library on oil 

pipeline spills, this leak is a statistical anomaly in its size and is not at all typical of 

releases from low stress pipelines. Nevertheless, this leak shows that anomalies do occur 

and must be considered in managing the risks pipelines present. That pipeline was 

regulated by the Alaska Department of Environmental Conservation at the time of the 

accident but was exempt from DOT oversight because it was operating at low stress, did 

not cross a navigable waterway, was in a rural area and did not transport highly volatile 

liquids. 

HR 5782 and the discussion draft both direct DOT to develop regulations to address 

low stress pipelines by a date certain. We support these provisions. Each allows DOT 

the flexibility to craft regulation that addresses risks appropriately. Pipelines operated at 

low stress are inherently less risky relative to the high stress transmission lines that are 

the proper principal focus of DOT’s pipeline safety program. We would recommend that 

DOT’s regulation of low stress pipelines 

• apply to low stress pipelines carrying high volume, as in the case of the line on 

the North Slope that leaked, 

• follow the DOT’s consistent risk-based policy of focusing an appropriate level 

of protection on areas where the consequences of a spill are high, 

• choose measures of protection that address the actual risks presented and 

• take care to balance costs and benefits. 

We have provided DOT with an outline describing a structure for regulating low stress 

pipelines. DOT can put low stress pipeline regulations in place using elements its 

successful integrity management regulations, and has begun the administrative process to 

do this. Existing legislative authority is adequate, but the setting of a date for completion 

of the process in legislation will ensure all interested parties that DOT will act in a timely 

manner. 

Safety Orders

The Subcommittee draft contains a provision similar to one in the Administration’s 

bill, HR 5678, that modifies DOT’s current authority to issue mandatory orders to 

pipeline operators. Subsection (l) was added to section 60117 of title 49 by the Pipeline 

Safety Improvement Act of 2002 to allow DOT to issue a “safety order” to an individual 

operator in situations that appear to require action, but do not rise to the level of danger 

implied in a “hazardous facility” designation under section 60112, the principal authority 
49

available to DOT to order actions by an operator. The intent in 2002, as we understand it, 

was to provide DOT with an enforcement tool with a lower threshold that would not 

require DOT to first declare that an operator’s facility “is or would be hazardous” before 

actions would be required of the operator that could be documented in the public record. 

The discussion draft and HR 5678 both add to section 60117(l) a welcome notice 

requirement and opportunity for a hearing at DOT before any order could be issued. 

Ensuring a modicum of due process addresses a significant omission in the 2002 Act. 

However, both provisions go on, in effect, to eliminate the due process benefit by 

practically abolishing any threshold or burden of proof for DOT in triggering a safety 

order. The Secretary of Transportation may order an operator to make possibly 

extensive expenditures on all or a portion of the operator’s system to address “any 

condition that poses a risk” based on any “factors the Secretary considers appropriate”. 

We appreciate DOT’s desire to develop an enforcement tool to document and 

address situations where DOT and the operator can identify conditions that are not yet 

severe but may become so. However, the proposal in HR 5678 and the discussion draft 

goes too far in the direction of permitting the possibility of arbitrary action against an 

individual operator who has violated no DOT regulation. Under these provisions an 

operator would be virtually powerless to contest effectively any DOT requirement to 

make what the operator believes to be unnecessary expenditures of scarce resources to 

address questionable risks. 

We would like to work with the Subcommittee to develop a provision that provides 

DOT what it needs in terms of documentation of its interactions with operators about 

needed safety improvements, but which contains the proper protections to ensure that any 

actions ordered in fact are justified, prudent and represent real safety improvements. We 

would also want to be sure that such orders to individual operators do not become a 

substitute for appropriately crafted regulations that apply to all operators. 

Enforcement Transparency

Section 2(j) of the discussion draft requires DOT to post on a website monthly 

information about pipeline enforcement actions taken by the Secretary or the Pipeline and 

Hazardous Materials Safety Administration. Enforcement information is made publicly 

available by DOT for other modes regulated by the Department. We have no objection to 

this proposal as long as the normal due process and confidentiality attaching to 

negotiation and settlement of cases is preserved. 

Other Provisions

My comments today have not addressed every provision of every proposal. Most of 

the provisions I have not discussed appear acceptable or do not directly affect the oil 

pipeline industry. We will continue to analyze the legislation and make our views 

available to those working on the legislation. The oil pipeline industry wants to work 

constructively with Congress, DOT and interested parties to achieve a compromise 

among the various legislative approaches that are offered that can achieve the broadest 

possible support. Our goal should be enactment of a bill this year that will reauthorize 

the pipeline safety program for several years – we suggest at least 5 years -- to guarantee 

as much certainty as possible to DOT, the affected industry and the public regarding the 

rules governing the safety oversight of our national pipeline infrastructure. That goal is 

within our reach if we all can continue to work together. 

Closing

In summary, current pipeline safety law is working, and working very well. 

Improvements can be made, particularly in strengthening underground damage 

prevention, but fundamental changes are not needed. The legislative proposals before 

the House all seek to make improvements in the fundamentally sound DOT pipeline 
50

safety program based on the Pipeline Safety Improvement Act of 2002. We need to 

move promptly to agree on the improvements that can gain broad support and incorporate 

these improvements in a pipeline safety reauthorization bill that can be enacted this year. 

The oil pipeline industry stands ready to help in any way we can in the achievement of 

this worthy goal. 

This concludes my remarks, I will be happy to respond to questions. 

 MR. HALL. Thank you. 

 Ms. Epstein, we recognize you for 5 minutes. 

MS. EPSTEIN. Thank you, Chairman Hall, Mr. Boucher, and other 

members of the subcommittee. 

 My name is Lois Epstein, and I am an Alaska and Maryland licensed 

engineer, and an oil and gas industry specialist with Cook Inletkeeper in 

Anchorage, Alaska, and a consultant to the Bellingham-based Pipeline 

Safety Trust. 

 My testimony today reflects both Cook Inletkeeper and the Pipeline 

Safety Trust’s views. 

 My background in pipeline safety includes membership since 1995 

on the U.S. Department of Transportation’s Technical Hazardous Liquid 

Pipeline Safety Standards Committee and testifying before Congress in 

1999, 2002, 2004, and 2006 on pipeline safety. 

 The safety and environmental constituents I represent commend the 

committee staff from both parties for an excellent discussion draft which 

should, with a minor change in the enforcement transparency section, 

proceed toward swift passage at the committee level and in the U.S. 

House of Representatives. These organizations are particularly 

supportive of the provisions in the discussion draft addressing technical 

assistance grants, enforcement, and enforcement transparency, and lowstress pipeline regulation, though we are disappointed that the bill does 

not include a mandate for public dissemination of pipeline maps. 

 Section 2(i) of the discussion draft reauthorizes a provision of the 

Pipeline Safety Improvement Act of 2002 on technical assistance grants, 

which has not been implemented by PHMSA to date, and which is the 

number-one priority of the safety and environmental protection 

communities in this bill. This provision, when implemented, will 

promote better technical policy decisions and will increase 

communication between diverse members of the public, governmental 

decision makers, and members of the pipeline industry. Technical 

assistance grants will allow members of the public to hire independent 

experts to explain, analyze, and interpret operator and policy-related 

data. 

 The language of Section 2(i) of the discussion draft ensures that there 

will be at least three demonstration grants not exceeding $25,000 for the 

purpose of demonstrating and evaluating the utility of grants under this 
51

section. And the language ensures broad dissemination of the grant’s 

technical findings. Both organizations are confident that there will be 

widespread support for continuing these grants, which is why we are not 

concerned that there likely will be only three demonstration grants with a 

maximum value of $25,000 per grant, as compared to the $50,000 per 

grant and an open-ended number of grants allowed in the 2002 statute. 

 Both organizations support the provisions of the discussion draft 

granting PHMSA additional enforcement authorities. Section 2(e) 

covering safety orders and Section 2(f) covering integrity program 

enforcement. 

 The enforcement transparency provision, Section 2(j) of the 

discussion draft, is a strong step forward. To date, PHMSA has not 

provided timely information to the public, State, local government, or 

industry on its enforcement activities. To ensure greater trust in this 

Nation’s pipeline safety programs, it is important for stakeholders to be 

aware of the enforcement activities taking place by having the Federal 

government post the enforcement documents it issues, such as orders, 

letters, and any applicable industry responses to those documents. 

 Enforcement transparency begins when enforcement actions are first 

proposed, continues with regular updates for each stage of the process as 

developments occur, and ends when cases are closed. The discussion 

draft language is close to this concept, but needs to make clear that 

PHMSA would make enforcement information available as cases 

progress, not only when cases are finalized. 

 The organizations I represent today support regulating low-stress 

pipelines to prevent releases to the environment, such as this winter’s 

release of approximately 200,000 gallons of crude oil from a BP lowstress transmission line on the North Slope of Alaska. Regulation of 

low-stress pipelines should be based on the data compiled by PHMSA 

and others, and regulatory definitions and thresholds should not be set by 

Congress. 

 Both organizations support the language of Section 2(k) of the 

discussion draft, which gives PHMSA the discretion it needs to develop a 

technically-sound rule, which by the way, H.R. 5782 does not do because 

of its specificity. 

 We also support Sections 2(a) through 2(d), 2(h), 2(k), and 2(l) of the 

discussion draft and the 4-year reauthorization period. 

 In areas where H.R. 5782 differs from the discussion draft, the 

organizations provide the following comments. 

 On Section 2, covering damage prevention and State damage 

prevention programs, based on our contacts with State pipeline safety 

regulators, both organizations prefer the language in the discussion draft 

to the language in H.R. 5782. 
52

 On Section 3, covering the distribution integrity management 

program rulemaking issue, both organizations support the 1-year 

rulemaking deadline and accept the language contained in Section 2(e) 

on standards for distribution integrity management programs. 

 On Section 4, covering pipeline control management, both 

organizations support the Section 4(a) language requiring standards to 

reduce the risks associated with human factors, including fatigue. 

 On Section 7, covering standards to implement NTSB 

recommendations, both organizations support inclusion of the three 

mandates to PHMSA to develop new regulatory standards. In addition, 

we support and have been working to ensure that PHMSA implements 

NTSB recommendation P-05, which would require “computer-based leak 

detection systems on all lines unless engineering analysis determines that 

such a system is not necessary.” This important recommendation should 

not be ignored by Congress and PHMSA. 

 Thank you very much for your interest in pipeline safety and 

environmental protection. Please feel free to contact me or Carl Weimer 

of the Pipeline Safety Trust at any time. 

 [The prepared statement of Lois N. Epstein, P.E. follows:] 

PREPARED STATEMENT OF LOIS N. EPSTEIN, P.E., SENIOR ENGINEER, OIL AND GAS 

INDUSTRY SPECIALIST, COOK INLETKEEPER, ON BEHALF OF PIPELINE SAFETY TRUST

The Discussion Draft 

Cook Inletkeeper and the Pipeline Safety Trust are particularly supportive of the 

provisions in the Discussion Draft addressing Technical Assistance Grants, Enforcement 

and Enforcement Transparency, and Low-Stress Pipeline Regulation. The Technical 

Assistance Grants provision is the number one priority of the safety and environmental 

protection communities. On enforcement transparency, Congress needs to direct the 

Pipeline and Hazardous Materials Safety Administration (PHMSA) to provide all official 

documentation to the public from the start of enforcement actions until cases are closed. 

With respect to low-stress pipeline regulation, the Discussion Draft language gives 

PHMSA the discretion it needs to develop a technically-sound rule (which H.R. 5782 

does not).

H.R. 5782 

Cook Inletkeeper and the Pipeline Safety Trust prefer the language in the Discussion 

Draft to the language in H.R. 5782 on damage prevention and state damage prevention 

programs, and H.R. 5782 does not contain important provisions covering Technical 

Assistance Grants and Enforcement and Enforcement Transparency. Both organizations 

support the one year rulemaking deadline for distribution integrity management programs 

and the Section 4 language on reducing the risks associated with human factors. 

Both Cook Inletkeeper and the Pipeline Safety Trust support a four-year 

reauthorization period. 

Good morning. My name is Lois Epstein and I am an Alaska- and Marylandlicensed engineer and an oil and gas industry specialist with Cook Inletkeeper in 

Anchorage, Alaska. Cook Inletkeeper is a nonprofit, membership organization dedicated 
53

to protecting Alaska’s 47,000 square mile Cook Inlet watershed, and a member of the 

Waterkeeper Alliance of 150+ organizations headed by Bobby Kennedy, Jr. My 

background in pipeline safety includes membership since 1995 on the U.S. Department of 

Transportation’s Technical Hazardous Liquid Pipeline Safety Standards Committee 

which oversees the Pipeline and Hazardous Materials Safety Administration’s 

(PHMSA’s) oil pipeline activities and rule development, testifying before Congress in 

1999, 2002, 2004, and 2006 on pipeline safety, and researching and analyzing the 

performance of Cook Inlet’s 1000+ miles of pipeline infrastructure by pipeline operator 

and type.1

 I have worked on environmental and safety issues for over 20 years for two 

private consultants, the U.S. Environmental Protection Agency, Environmental Defense, 

and Cook Inletkeeper. 

Additionally, I am a part-time consultant for the Pipeline Safety Trust, located in 

Bellingham, Washington, and my testimony today reflects both Cook Inletkeeper and the 

Pipeline Safety Trust’s views. The Pipeline Safety Trust came into being after the 1999 

Olympic Pipe Line tragedy in Bellingham, Washington which left three young people 

dead, wiped out every living thing in a beautiful salmon stream, and caused millions of 

dollars of economic disruption to the region. After investigating this tragedy, the U.S. 

Department of Justice (DOJ) recognized the need for an independent organization which 

would provide informed comment and advice to both pipeline companies and 

government regulators and would provide the public with an independent clearinghouse 

of pipeline safety information. The federal trial court agreed with DOJ's recommendation 

and awarded the Pipeline Safety Trust $4 million that was used as an initial endowment 

for the long-term continuation of the Trust's mission. 

For more details on many of the issues discussed below, please see my U.S. House 

of Representatives testimony on March 16, 2006 before the Highway, Transit, and 

Pipelines Subcommittee of the Committee on Transportation and Infrastructure and on 

April 27, 2006 before the Subcommittee on Energy and Air Quality of the Committee on 

Energy and Commerce. 

The Discussion Draft 

The safety and environmental protection constituents I represent commend the 

committee staff from both parties for an excellent Discussion Draft which should – with a 

minor change – proceed toward swift passage at the committee level and in the U.S. 

House of Representatives. The organizations I represent are particularly supportive of 

the provisions in the Discussion Draft addressing Technical Assistance Grants, 

Enforcement and Enforcement Transparency, and Low-Stress Pipeline Regulation. I first 

will discuss these provisions, then will cover other provisions of the Discussion Draft, 

and last will address H.R. 5782 – the bill marked-up on July 19 in the Committee on 

Transportation and Infrastructure of the U.S. House of Representatives. 

Technical Assistance Grants. Section 2(i) of the Discussion Draft reauthorizes a 

provision of the Pipeline Safety Improvement Act of 2002 which has not been 

implemented to date and which is the number one priority of the safety and 

environmental protection communities. This provision, when implemented, will promote 

better technical and policy decisions, and will increase communication between diverse 

members of the public, governmental decision-makers, and members of the pipeline 

industry. These technical assistance grants will allow members of the public to hire 

independent experts to explain, analyze, and interpret technical data. 

The grants can be used to: 1) analyze operator-reported data on integrity 

management (e.g., to compare operations of similar pipelines), 2) interpret (for the 

public) operator studies on right-of-way selection and operational decisions, 3) assist 

 

1

 See Lurking Below: Oil and Gas Pipeline Problems in the Cook Inlet Watershed, 28 pp. plus 

appendices, 2002, and follow-up reports in 2003 and 2005. www.inletkeeper.org/pipelines.htm
54

community organizations and local governments to comment on regulations or industry 

standards in areas where they wouldn’t otherwise have the resources to do so, and 4) 

provide effective public input to government and industry in ways not now foreseeable. 

Examples of public organizations that could benefit from such grants include the 

Washington City and County Pipeline Safety Consortium and the Kentucky Pipeline 

Safety Advisory Committee, which each formed after major pipeline failures and include 

a broad spectrum of stakeholders interested in ways to avoid additional pipeline accidents 

in their states. Note that the 2002 statute requires that these grants not be used for 

lobbying or in direct support of litigation. 

 The language of Section 2(i) of the Discussion Draft ensures that there will be at 

least three demonstration grants not exceeding $25,000 “for the purpose of demonstrating 

and evaluating the utility of grants under this section” and ensures broad dissemination of 

the grant’s technical findings. Both organizations I represent are confident that there will 

be widespread support for continuing these grants, which is why these organizations are 

not concerned that there likely will be only three demonstration grants with a maximum 

value of $25,000 – as compared to the $50,000 allowed in the 2002 statute and an 

unspecified number of grants – during this reauthorization period. 

Enforcement and Enforcement Transparency. Both of the organizations I represent 

support the provisions in the Discussion Draft granting PHMSA additional enforcement 

authorities – Section 2(e) covering Safety Orders and Section 2(f) covering Integrity 

Program Enforcement. 

 The Enforcement Transparency provision, Section 2(j) of the Discussion Draft, is a 

strong step forward. To date, PHMSA has not provided timely information to the public, 

state and local government, or industry on its enforcement activities. To ensure greater 

trust in this nation’s pipeline safety programs, it is important for stakeholders to be aware 

of the enforcement activities taking place by having the federal government post the 

enforcement documents it issues (e.g., orders and letters) and any applicable industry 

responses to those documents. Enforcement transparency begins when enforcement 

actions are first proposed, continues with regular updates for each stage of the process as 

developments occur, and ends when cases are closed. Our organizations ask that the 

subcommittee make the following minor wording change (or equivalent) to Section 

2(j)(1)(a) of the Discussion Draft to make it clear the intent of this section: 

(a) IN GENERAL.—Not later than 12 months after the date of enactment of this 

section, the Secretary shall begin to provide a monthly summary to the public of all 

gas and hazardous liquid pipeline enforcement actions taken by the Secretary or the 

Pipeline and Hazardous Materials Safety Administration, from the time 

enforcement actions are proposed until enforcement actions are finalized. 

Each summary shall include information on the operator involved in the 

enforcement activity, the type of violation that necessitated the enforcement 

activity, the penalty or penalties proposed, any changes in status since the 

previous summary, the final assessment amount of each penalty, and the reasons 

for a reduction in the proposed penalty, if appropriate. 

Low-Stress Pipeline Regulation. The organizations I represent support regulating 

low-stress pipelines to prevent releases to the environment such as this winter’s release of 

approximately 200,000 gallons of crude oil from a BP low-stress transmission pipeline on 

the North Slope of Alaska. Regulation of low-stress pipelines should be based on the 

data compiled by PHMSA and others, and regulatory definitions and thresholds should 

not be set by Congress. Both organizations support the language of Section 2(k) of the 

Discussion Draft, which gives PHMSA the discretion it needs to develop a technicallysound rule (which H.R. 5782 does not do). 

Other Provisions of the Discussion Draft. The organizations I represent support the 

following provisions of the Discussion Draft: 
55

• One Call Civil Enforcement (Section 2(a)), 

• State Damage Prevention Programs (Section 2(b)), 

• State Pipeline Safety Grants (Section 2(c)), 

• Damage Prevention Technology Development (Section 2(d)), 

• Seven Year Reinspection (Section 2(h)), since this section incorporates the 

findings of the upcoming Comptroller General report into policy-making as our 

organizations testified previously should be done, 

• Cost Reimbursements, covering Design Reviews (Section 2(k)), 

• Direct Line Sales (Section 2(l)), and 

• The Four-Year Reauthorization period (Section 3). 

H.R. 5782 

In areas where H.R. 5782 differs from the Discussion Draft, the organizations I 

represent provide the following comments: 

 On Section 2 covering damage prevention and state damage prevention 

programs, based on our contacts with state pipeline safety regulators, both organizations 

prefer the language in the Discussion Draft to the language in H.R. 5782. Most notably, 

in section (b) of both draft bills, the Discussion Draft language “encouraging and 

promoting the establishment of a [state] program designed to prevent damage” (emphasis 

added) is far superior to H.R. 5782’s language, i.e., the state “has agreed to take actions 

toward establishing a program designed to prevent damage” (emphasis added), because 

the former allow allows federal funding to continue prior to passage of state legislation. 

On Section 3 covering the distribution integrity management program rulemaking 

issues, both organizations support the one year rulemaking deadline and accept the 

language contained in Section 2(e) on standards for Distribution Integrity Management 

Programs. 

On Section 4 covering pipeline control management, both organizations support the 

Section 4(a) language requiring standards to reduce the risks associated with human 

factors, including fatigue. 

On Section 5 covering low-stress pipelines, both organizations believe the language 

contained in H.R. 5782 unnecessarily and inappropriately limits PHMSA’s technical 

discretion in low-stress pipeline rulemaking. This language limits regulation of 

currently-unregulated low-stress pipelines to certain locations (despite the need for at 

least corrosion prevention for all currently-unregulated low-stress pipelines) and sets the 

minimum diameter for PHMSA-regulated low-stress pipelines. Such language intrudes 

upon PHMSA’s ability to regulate pipelines based on technical data. As discussed above, 

the language in the Discussion Draft on low-stress pipelines provides PHMSA with 

needed discretion for its regulatory decisions. 

On Section 6 covering appropriations, as noted above, both organizations support a 

four-year reauthorization period. 

On Section 7 covering standards to implement National Transportation Safety Board 

(NTSB) recommendations, both organizations support inclusion of the three mandates to 

PHMSA to develop new regulatory standards (NTSB recommendations P-05-1, 2, and 3). 

In addition, both organizations support – and have been working to ensure that – PHMSA 

implements NTSB recommendation P-05-5 which would require “computer-based leak 

detection systems on all lines unless engineering analysis determines that such a system 

is not necessary.” This important recommendation should not be ignored by Congress 

and PHMSA. 

Last, disappointingly, H.R. 5782 does not address Technical Assistance Grants and 

Enforcement and Enforcement Transparency, which are high priorities for safety and 

environmental protection organizations. 
56

Thank you very much for your interest in pipeline safety and environmental 

protection. Please feel free to contact me or Carl Weimer of the Pipeline Safety Trust at 

any time with your questions or comments. 

 MR. HALL. Thank you very much. 

 All right. That concludes their opening statements. 

 Mr. Mohn, can you explain the process operators undergo when 

applying industry science and risk-based best practices to their own 

monitoring of their pipelines for reassessment intervals, both before the 

7-year requirement and after the 7-year requirement? 

 MR. MOHN. I would be happy to. 

 In fact, there is a framework that was developed in a consensus 

standard following the 2002 Act in the regulatory framework put in place 

by OPS that is our guide in doing so. That guide broadly defines threats 

to our pipeline anywhere from internal to external corrosion to 

metallurgy issues to damage from third parties and forces us to go 

through an analysis, making an assessment of how we are going to 

mitigate each one of those threats. Then, as we look at all of our 

thousands of miles of pipelines, we develop a relative risk ranking, if you 

will, as to those pipelines that have the greatest probability of a failure 

and then apply appropriate mitigative measures. For external corrosion, 

we will use and do extensively use, smart pigs to assess metal loss and 

then remediate any unacceptable wall loss, again, in a very prescriptive 

process that is defined in the consensus standard we call B-31-8. It is an 

ANSI standard. 

 The way we would conduct the analysis if we didn’t have the 7-year 

prescriptive standard, will again be guided by whatever standard is put in 

place by PHMSA. I would expect, again, a similar rigorous, risk-based 

process where we assess each threat and determine what the mitigated 

measures are and the timeframe within which we would apply those 

mitigative measures. 

 I would just note that we have said many times in our testimony, and 

you heard Admiral Barrett say again today, that there are some pipes 

that, because of specific circumstances, that we do assess more 

frequently. We have some pipes today that we assess every 3 years, 

some pipes we assess every 5 years in applying the current B-31-8 

standards. 

 MR. HALL. Mr. Jibson, how do utilities respond when notified of 

damage to pipelines? And how prompt is that response? And how does 

mandating utility notification of pipeline damage help ensure better 

pipeline safety, if it does? 

 MR. JIBSON. Yes. First of all, the first question in regards to your 

question-- 

 MR. HALL. How do you respond? 
57

 MR. JIBSON. Okay. On the response, we have right now a system 

where we have 24/7 dispatching, emergency numbers that are posted on 

all of our pipelines and available. That information comes into us. We 

immediately have people who respond to those emergencies, and we get 

out on them. Different States have different requirements. In our 

particular State, we have a requirement where we respond within 1 hour 

of that emergency call. Now that is what we consider actually getting to 

the site and taking care of the immediate danger. We also have 

relationships with our local authorities, the emergency response groups, 

who know where to call and immediately take care of some of the initial 

dangers of having the public in a safe situation so that we can go in and 

then rectify the problem and take care of that immediately. 

 Enhanced procedures, as we talked about with the 9-1-1 call, we 

believe that will only enhance our ability to respond to safety issues. The 

9-1-1 call is very imperative, especially if there would be substance 

escaping from the pipeline. In the cases where there is not an actual 

release of the substance from the pipeline, we feel like the 9-1-1 call may 

not be necessary, but it does not alleviate the need for the call to come 

into the operator. And any enhanced enforcement or enhanced 

provisions that would facilitate us getting the calls sooner and more 

directly would certainly help us in the safety issue. 

 MR. HALL. My time is up. 

 The Chair recognizes Mr. Boucher. 

 MR. BOUCHER. Well, thank you, Mr. Chairman. And I want to 

thank each of our witnesses for being here today. This is a hearing 

where I think we have had reflected on both panels a very broad 

consensus, that the discussion draft moves in the right direction and 

should be moved forward from this subcommittee for further legislative 

consideration. And, Mr. Chairman, I would very much hope that we 

could do that early in the month of September. 

 Let me just ask a couple of questions focused on the discussion draft, 

and this would be for each of you. 

 One of the major subjects we are addressing is excavation damage 

prevention. Would you agree that the provisions in the discussion draft 

would effectively discourage that damage by setting in place a program 

that would be designed to prevent it? So this can be a very short answer, 

hopefully, because I do have some follow-ups for each of you with 

regards to the effectiveness of our excavation damage prevention 

measures. 

 MR. JIBSON. I think I could answer very quickly that yes, we 

certainly agree that the bill would enhance that. I think we would just 

rely on experience with what has taken place in Virginia, Minnesota, 

Georgia, Tennessee, and others who have enhanced programs. The 
58

numbers don’t lie. It has proven to be a very effective program, and I 

think that we would see that throughout the United States. 

 MR. BOUCHER. All right. 

 Mr. Mohn? 

 MR. MOHN. I would simply say yes, I agree with Mr. Jibson. 

 MR. BOUCHER. All right. Thank you. 

 Mr. Felt? 

 MR. FELT. We strongly support the provisions. Thank you. 

 MR. BOUCHER. Thank you. 

 Ms. Epstein? 

 MS. EPSTEIN. Yes. 

 MR. BOUCHER. Excellent. You are all terrific witnesses. 

 We have heard a recommendation from the representative of 

NARUC this afternoon that a modification be made in the discussion 

draft to the rather firm tie between grants that would be to the benefit of 

the States and the presence in those States of the excavation damage 

prevention safety guidelines, this nine-point program. And the draft 

basically says you have to have the guidelines in place before the grants 

can be provided. The representative from NARUC said, well, it may 

take some time for us to get our State legislative bodies to give us the 

statutory authority necessary in order to be able to implement the ninepoint program, and therefore, once we have demonstrated that we are 

really trying hard, maybe we should get the grant. My initial response to 

that, although I didn’t say this to our representative when he was here, 

but I will say it now, is that it seems to me that we ought to keep this 

firm tie in place and require that the program actually be implemented 

before the money is provided. Let that be an incentive. And perhaps the 

award of this money could be used as leverage by the regulatory agency 

in order to get the State legislature to grant the authority to implement 

the rules much more quickly. 

 So you have heard what he said. You have heard what I have had to 

say. What do you think? 

 MR. MOHN. I would be glad to go first. 

 We all use performance incentives with our children and in our 

businesses that are financially based. The production of results and the 

award of those financial incentives should follow in that order. So I 

personally believe, and I think generally if you look at the way our 

company and most of our interstate companies administer those 

programs, once results are produced, the reward or the acknowledgement 

of that and the award of the grant in this case should be made. 

 MR. BOUCHER. So you would agree with me? 

 MR. MOHN. Yes. 

 MR. BOUCHER. Thank you. 
59

 Mr. Jibson? 

 MR. JIBSON. Very quickly, I believe that the success of any program 

is inherent on the participation and support of all of the stakeholders 

involved. The nine-point program involves many stakeholders, and I 

think that I would agree with Mr. Mohn that the incentives are certainly 

there to have the components in place at the time of receiving the 

funding, but maybe there is some middle ground, and I will take maybe a 

middle-road position here, because I believe that we do need some 

funding to assist in getting the nine points going and get those in place in 

many States. 

 MR. BOUCHER. Well, now there is other funding that flows that 

could be used for that purpose. 

 MR. JIBSON. Right. And maybe that is that middle area. Maybe that 

could be channeled that way and this be specific for-- 

 MR. BOUCHER. That could be done at the discretion of the State, if 

they choose to do so. 

 MR. JIBSON. Right. I agree the incentive is there, but I also agree 

that some States will need that supportive funding from some 

mechanism. 

 MR. BOUCHER. All right. All right. That is a carefully calibrated 

statement. 

 Mr. Felt? 

 MR. FELT. Sir, I guess I am not familiar with all of the intricacies 

that the 50 States have to deal with, and I might defer to your judgment 

on that aspect of it. But I would say that anything we can do to get the 

damage prevention programs installed at the highest level as soon as 

possible benefits any operator and the public, in general, I would 

wholeheartedly support that. 

 MR. BOUCHER. Thank you. That is very diplomatic, also. 

 Ms. Epstein? 

 MS. EPSTEIN. I have communicated with several of those States on 

this exact question, and actually, I think they have made a persuasive 

case to me, and these are some very dedicated pipeline safety officials, 

that the language in the discussion draft, which was discussed with these 

State officials, where it talks about encouraging and promoting the 

establishment of a State program, is far superior to the language in H.R. 

5782 where the State has already agreed to take actions, for the reasons 

that we heard today that why delay and, as you said, there could be some 

way of providing some of the funding. And the States have agreed that it 

is something to strive towards, but things sometimes happen slower at 

the legislative level and at the appropriations level as well than they can 

always hope for. 
60

 MR. BOUCHER. Right. So the financial reward should follow the 

complete performance? 

 MS. EPSTEIN. That is right. 

 MR. BOUCHER. Thank you. 

 Those are all of the questions I have, Mr. Chairman. 

 I want to thank these witnesses. And again, I would hope that we 

could move to markup at the earliest possible time. 

 MR. HALL. You liked these witnesses, didn’t you? 

 MR. BOUCHER. I did. I thought they were great. 

 MR. HALL. You like witnesses that agree with you, don’t you, Mr. 

Boucher? 

 MR. BOUCHER. I vastly prefer those, yes. 

 MR. HALL. Well, they did a good job. 

 MR. BOUCHER. They did. 

 MR. HALL. The Chair recognizes Mr. Sullivan. 

 MR. SULLIVAN. Thank you, Mr. Chairman. 

 This is for Mr. Felt from Tulsa. This is our other West Point guy 

right here. 

 You state in your testimony that your industry supports the lowstress transmission deadline required in the base text. How has your 

industry been engaged on the issue since the BP incident and at the 

public meeting PHMSA had to discuss the rule? 

 MR. FELT. I am not sure what our involvement was at the public 

meeting, but I do know that the industry, as a whole, has got a team of 

people working together to try to come up with a provision that will be 

fair to the industry and also be fair to the Government and to the public. 

So we have got an active team that is working with the Government on 

that. 

 MR. SULLIVAN. Okay. And one more question. 

 Your testimony raised some concern with the safety orders language 

in the discussion draft and the scope that it is intended to cover. Can you 

further explain what type of new authorities, if any, you think would be 

appropriate? And do you think a rulemaking process would help address 

some of these concerns? Would a consent-based process be more 

appropriate here? 

 MR. FELT. I am not sure what you mean by the consent-based 

process, sir. 

 MR. SULLIVAN. Which one do you think would be better? 

 MR. FELT. I guess we feel like we could work with the DOT in the 

language that they need to get the tools that they need in place. When 

Mr. Barrett testified, he talked about it being focused on safety, and we 

agree with that. We thought that maybe the language that was in there 

opened it a little bit too broadly. I am not opposed to the order, so if they 
61

feel that that is necessary, I mean, it is already in there. We just want to 

make sure that the boundaries are clear and that the protections are in 

place. And so our industry is having discussions with PHMSA on 

working out the differences that we can both support. So I think we are 

on our way to getting there. 

 MR. SULLIVAN. Okay. Well, thank you very much. 

 MR. HALL. Mr. Shimkus, the Chair recognizes you for 5 minutes. 

 MR. SHIMKUS. Mr. Chairman, I don’t have any questions at this 

time. 

 MR. HALL. Well, you might submit them later. 

 All right. Do you have any second questions? You got such good 

answers before, you don’t want to ruin your record now. 

 MR. BOUCHER. No. 

 MR. HALL. Well, you have been a really good panel and a very 

informative group, and we thank you. And thank you for the time it 

took. 

 And don’t have any dismay over the fact that there are so many 

empty chairs here. This is probably the last day we will be here for the 

next 4 or 5 weeks, and there is a lot to do, and they are doing things. But 

each one of them has someone here that is better for them to hear it than 

it is for us, because they do most of the work. It will also be submitted to 

everybody, copies of your testimony. It is not wasted on empty chairs, 

and we want to really thank you for it. 

 All right. Is there anything further for the good of the committee? If 

not, we are adjourned. 

 [Whereupon, at 1:45 p.m., the subcommittee was adjourned.] 
62

SUBMISSION FOR THE RECORD OF KATHERINE SIGGERUD, DIRECTOR, PHYSICAL 

INFRASTRUCTURE ISSUES, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE
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