Gas Pipeline Safety: Views on Proposed Legislation to Reauthorize Pipeline Safety Provisions
Published: 2006-08-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Pipeline Safety Improvement Act of 2002 established a risk-based program for gas transmission pipelines--termed integrity management--which requires pipeline operators to identify areas where the consequences of a pipeline incident would be the greatest, such as highly populated areas. Operators must assess pipelines in these areas for safety threats (such as corrosion), repair or replace defective segments, and reassess their pipelines at least every 7 years. Under the Pipeline and Hazardous Materials Safety Administration's (PHMSA) regulations, operators must reassess their pipelines for corrosion at least every 7 years and for all safety threats at least every 10, 15, or 20 years. State pipeline safety agencies that assist PHMSA are eligible to receive matching funds up to 50 percent of the cost of their pipeline safety programs. This statement is based on ongoing work for Congress and for others. It focuses on three areas germane to current legislative reauthorization proposals: (1) an overall assessment of the integrity management program, (2) the 7-year reassessment requirement, and (3) provisions to increase state pipeline safety grants. GAO contacted more than 50 pipeline operators and a broad range of stakeholders and surveyed state pipeline agencies. GAO also reviewed PHMSA and industry guidance and reviewed PHMSA pipeline performance data.
section_title: What GAO Found
paragraphs: While the gas integrity management program is still being implemented, early indications show that the program benefits pipeline safety. For example, the condition of transmission pipelines is improving as operators assess and repair their pipelines. As of December 31, 2005 (latest data available), 33 percent of the pipelines in highly populated or frequently used areas had been assessed and over 2,300 repairs had been completed. In addition, we estimate that up to 68 percent of the population that lives close to natural gas transmission pipelines is located in highly populated areas and is expected to receive additional protection as a result of improved pipeline safety. Furthermore, despite some uncertainty on the part of operators over the program's documentation requirements, operators, gas pipeline industry representatives, state pipeline officials, and safety advocate representatives all agree that the program enhances public safety, citing operators' improved knowledge of the threats to their pipelines as the primary benefit. Although periodic reassessments of pipeline threats are beneficial, the 7-year reassessment requirement appears to be conservative. Through December 2005, 76 percent of the operators (182 of 241) reporting baseline assessment activity to PHMSA reported that their pipelines were in good condition, requiring only minor repairs. Most of the problems found were concentrated in just 7 pipelines. These results are encouraging, since operators are required to assess their riskiest segments first and operators are required to repair defects, making them safer before reassessments begin toward the end of the decade. There have been no deaths or injuries from corrosion related pipeline incidents over the past 5-1/2 years. An alternative approach is to permit pipeline operators to reassess their pipeline segments at intervals based on technical data, risk factors, and engineering analyses. Such an approach is consistent with the overall philosophy of the 2002 act and would meet its safety objectives. Under this approach, operators could reassess their pipelines at intervals longer than 7 years only if operators can adequately demonstrate that corrosion will not become a threat within the chosen time intervals. Otherwise, the reassessment must occur more frequently. As a safeguard to ensure that operators have identified threats facing these pipeline segments and have determined appropriate reassessment intervals, PHMSA and state regulatory agencies are already conducting integrity management inspections of operators. They plan to inspect most operators' integrity management activities by 2009. The provision to increase the cap on pipeline safety grants to states appears reasonable given that states' workloads are expanding, but funding sources and oversight of states' expanded activities would need to be addressed in order to ensure that the increased grants are appropriately carried out. PHMSA has identified several potential funding sources, such as reprioritizing the agency's budget and increasing pipeline user fees. For oversight, PHMSA anticipates integrating states' expanded activities into the agency's current oversight approach that relies on annual reports from states and field evaluations.

section_title: Letter
paragraphs: We appreciate the opportunity to assist the Subcommittee in its efforts to  reauthorize the Pipeline Safety Improvement Act of 2002, which  strengthened federal pipeline safety programs and enforcement, state  oversight of pipeline operators, and public education on pipeline safety.  This statement is based on the preliminary results of our ongoing work for  this Subcommittee and others on aspects of the integrity management  program for gas transmission pipelines established under the 2002 act. We  appeared before this subcommittee in April to discuss these topics. This  statement focuses on three areas that are related to the Subcommittee’s  July 20, 2006, draft bill; H.R. 5782, as introduced; and the administration’s  pipeline reauthorization, introduced as H.R. 5678. These three areas are  (1) an overall assessment of the integrity management program, (2) the 7- year reassessment requirement, and (3) provisions to increase state  pipeline safety grants.
Our work is based on our review of laws, regulations, pipeline  performance data, and other guidance from the federal regulator—the  Pipeline and Hazardous Materials Safety Administration (PHMSA)—as  well as discussions with a broad range of stakeholders, including industry  trade associations, pipeline safety advocate groups, state pipeline  agencies, pipeline inspection contractors, and consensus standards  organizations. We also reviewed industry consensus standards for  maximum reassessment intervals developed by the American Society of  Mechanical Engineers. In addition, we surveyed the 47 state pipeline  agencies responsible for inspecting intrastate gas transmission pipeline  operators on their plans for conducting inspections of operators’ integrity  management programs. We also contacted 52 pipeline operators. These  operators represent nearly 60 percent of the miles of pipeline assessed to  date. We relied on pipeline operators’ professional judgment in reporting  on the conditions that they found during their assessments of safety  threats. Because we used a non-probability method of selecting these  operators, we cannot project our findings nationwide. As part of our  work, we assessed the internal controls and the reliability of the data  elements needed for this engagement, and we determined that the data  elements were sufficiently reliable for our purposes. We performed our  work in accordance with generally accepted government auditing  standards from August 2005 to July 2006.
While the gas integrity management program is still being implemented,  early indications show that the program benefits pipeline safety, as  intended by Congress. First, the condition of transmission pipelines is  improving as operators complete their first round of pipeline assessments  and make repairs. For example, 33 percent of the identified pipelines in  highly populated or frequently used areas had been assessed and over  2,300 repairs had been completed as of December 31, 2005 (latest data  available). In addition, we estimate that up to 68 percent of the population  that lives close to natural gas transmission pipelines is located in highly  populated areas and is expected to receive additional protection as a  result of improved pipeline safety as operators complete their baseline  assessments by December 2012, as required. Furthermore, despite some  uncertainty on the part of operators over the program’s documentation  requirements, operators, gas pipeline industry representatives, state  pipeline officials, and safety advocate representatives all agree that the  program enhances public safety, citing operators’ improved knowledge of  the threats to their pipeline systems that stems from systematic  assessments as the primary benefit of the program.
Regarding the 7-year reassessment requirement, the draft Subcommittee  bill would require the Secretary of Transportation to submit a legislative  proposal after it receives our report on the subject. Our work, which is  nearing completion, concludes that periodic reassessments are beneficial,  but that the 7-year reassessment requirement appears to be conservative  based on a number of factors. Among these are results of the baseline  assessments conducted to date and the overall safety record of the gas  transmission industry. In this regard, through December 2005, 76 percent  of the operators (182 of 241) reporting baseline assessment activity  reported to PHMSA that their pipelines were in good condition and free of  major defects, requiring only minor repairs. Most of the 340 problems  found were concentrated in just 7 pipelines, although it is not known how  many of these problems were due to corrosion. (These assessments  reported by the 241 operators covered about 6,700 miles, or about one- third of the nationwide total to be assessed by 2012.) These results are  encouraging, since operators are required to assess their riskiest segments  first. Furthermore, since operators are required to repair these pipelines,  the overall safety and condition of the pipeline system should be improved  before reassessments begin toward the end of the decade. Regarding  safety, PHMSA data show corrosion incidents are relatively rare: over the  past 5-1/2 years (from January 2001 through early July 2006), there were 26  corrosion-related incidents over the 295,000-mile transmission system per  year, on average—none of which resulted in death or injury.
The administration’s proposal would require the Secretary of  Transportation to issue regulations basing reassessment intervals on  technical data, risk factors, and engineering analyses. Based on our nearly  completed work, we think that this approach is reasonable and would  achieve the safety objectives of the 2002 act. It is also consistent with the  overall philosophy of the integrity management legislation passed by the  Congress in 2002. As discussed later in this statement, if PHMSA  incorporates existing industry consensus standards for corrosion into its  regulations, operators would be allowed to reassess their pipelines for  time-dependent threats at least every 10, 15, or 20 years only if the  operator can adequately demonstrate that corrosion will not become a  threat within the chosen time interval. If not, then the reassessment must  occur more frequently, perhaps at 7 or even fewer years. As a safeguard  for ensuring that operators have identified threats facing pipeline  segments and have determined appropriate reassessment intervals,  PHMSA and state regulatory agencies are already conducting inspections.  They plan to inspect most operators’ integrity management activities by  2009.
The provision in the Subcommittee’s draft bill to increase the cap on  pipeline safety grants to states from 50 percent to 80 percent of the cost of  their expanded pipeline safety programs appears reasonable given that  states’ workload is increasing to, among other activities, enforce integrity  management requirements and damage prevention programs. However, if  Congress approves this provision, two areas would need to be addressed  to ensure that the increased grants are appropriately carried out: the  source of funding for the increased grant amounts and oversight of the  expanded state pipeline safety activities. According to PHMSA, the agency  has identified funding options—including reprioritizing the agency’s  budget to channel funds from other activities (such as research) and  increasing user fees charged to pipeline companies —but has not  developed a specific plan for how to provide additional funds to states.  PHMSA currently oversees state pipeline safety activities through annual  reports from the states and field evaluations. According to PHMSA  officials, expanded state pipeline safety agency activities would be  included in PHMSA’s oversight approach.
subsections: section_title: Background
paragraphs: The United States has a 295,000-mile network of natural gas transmission  pipelines that are owned and operated by approximately 900 operators.  These pipelines are important to the nation because they transport nearly  all the natural gas used, which provides about a quarter of the nation’s  energy supply. Gas transmission pipelines typically move gas products  over long distances from sources to communities and are primarily  interstate. They generally deliver natural gas to local distribution pipelines,  which distribute the gas to commercial and residential end-users. Local  distribution companies may also operate small portions of transmission  pipelines.
PHMSA administers the national regulatory program to ensure the safe  transportation of natural gas and hazardous liquid by pipeline. In general,  PHMSA retains full responsibility for inspecting and enforcing regulations  on interstate pipelines, but it has arrangements with 48 states, the District  of Columbia, and Puerto Rico to assist with overseeing intrastate  pipelines. These states are currently authorized to receive reimbursement  of up to 50 percent of the costs of their pipeline safety programs from  PHMSA.
Traditionally, PHMSA has carried out its oversight role using minimum  safety standards that were uniformly applied to all pipelines based on the  “class location” of the pipeline. A pipeline’s class location—based on  factors such as population within 660 feet of the pipeline—determines the  applicable standards such as the thickness of the pipe required and the  pressure at which it can operate. The Pipeline Safety Improvement Act of  2002 modified PHMSA’s traditional oversight approach by supplementing  the minimum standards with a risk-based program for gas transmission  pipelines. This program—termed “integrity management”—requires gas  transmission pipeline operators to assess and mitigate safety threats, such  as leaks or ruptures due to incorrect operation or corrosion, to pipeline  segments that are located in highly populated or frequently used areas,  such as parks. Specifically, operators are required to perform baseline  assessments on half of the pipeline mileage located in these areas by  December 2007, and the remainder by December 2012. Those pipeline  segments potentially facing the greatest risks of failure from leaks or  ruptures are to be assessed first. As of December 2005 (latest data  available), 447 gas pipeline operators reported to PHMSA that about  20,000 miles of their pipelines (about 7 percent of all gas transmission  pipeline miles) lie in highly populated or frequently used areas. Individual  operators reported that they have as many as about 1,600 miles and as few  as 0.02 miles of pipeline in these areas.
The 2002 act also requires that operators reassess these pipeline segments  for safety threats at least every 7 years. Under flexibility provided by the  act, PHMSA requires that operators reassess these pipeline segments for  corrosion damage at least every 7 years in its implementing regulations,  because corrosion is the most frequent cause of failures that can occur  over time. (See fig. 1.) PHMSA’s regulations also incorporated, as  mandatory, voluntary industry consensus standards on maximum  reassessment intervals into these regulations for other types of safety  threats. The industry standards require that operators reassess gas  pipelines at least every 10, 15, or 20 years for all safety threats depending  primarily on the condition of the pipelines and the pressure under which  they operate. If conditions warrant, reassessments must occur more  frequently. In addition, operators must perform prevention and mitigation  activities—such as monitoring their pipelines for excavation or corrosion  damage—on a continuing basis.
section_title: Gas Integrity Management Program Benefits Pipeline Safety
paragraphs: Operators are making good progress in assessing and repairing their  pipelines, thereby improving the safety of their pipeline systems. As of  December 2005, operators had assessed about 6,700 miles of their 20,000  miles—or about 33 percent—of pipelines located in highly populated or  frequently used areas. This progress indicates that they are well on their  way to meeting the requirement to conduct baseline assessments on 50  percent of their pipelines in these areas by December 2007. In addition to  assessing their pipelines, operators are also making progress in fulfilling  the requirement to repair problems found on their pipelines in highly  populated or frequently used areas. In the 2 years that operators have  reported the results of integrity management, they have completed 340  repairs that were immediately required and another 1,981 scheduled  repairs in highly populated or frequently used areas. While it is not  possible to determine how many of these needed repairs would have been  identified without integrity management, it is clear that the requirement to  routinely assess pipelines enables operators to identify problems that may  otherwise go undetected. Furthermore, the benefits of integrity  management expand beyond highly populated or frequently used areas  because a large number of operators are using internal inspection tools to  assess their pipelines. These tools must be inserted and removed from the  pipelines at designated locations that often run through other areas.  Consequently, operators reported having assessed about 44,000 miles of  pipelines located outside highly populated or frequently used areas,  representing about 15 percent of all gas transmission pipelines. While  operators are not required to report to PHMSA the results of these  expanded assessments, operators we spoke with said that they plan to  make necessary repairs identified through the assessments regardless of  where they are identified.
We estimate that the integrity management program should offer  additional safety benefits over the minimum safety standards for up to 68  percent of the population living close to gas transmission pipelines. This  estimate corresponds with PHMSA’s estimate of two-thirds of the  population.
A number of representatives from pipeline industry organizations, state  pipeline agencies, safety advocate groups, and operators that we  contacted agree that integrity management benefits public safety because  it requires all operators to systematically assess their pipelines to gain a  comprehensive knowledge about the risks to their pipeline systems. Other  benefits cited by operators include improved communications within their  companies and more strategic resource allocation.
While the operators we contacted generally believe integrity management  is beneficial, the program is not without its costs. For example, over half  of the operators we spoke with said that they have hired additional staff or  contractors as a result of the integrity management requirements. In  addition, 19 of the operators we contacted (37 percent) were concerned  about the level of documentation needed to support their gas integrity  management programs. PHMSA requires operators to develop an integrity  management program and provides a broad framework for the elements  that should be included in the program. The regulations provide operators  the flexibility to develop their programs to best suit their companies’  needs, but each operator must develop and document specific policies and  procedures to demonstrate its commitment to compliance with and  implementation of the integrity management program. Operators may use  existing policies and procedures if they meet the requirements of integrity  management. In addition, an operator must document any decisions made  related to integrity management to demonstrate that it understands the  threats to their pipelines and is systematically managing their pipelines for  these threats. While the operators we contacted generally agreed with the  need to document their policies and procedures, some said that the  detailed documentation required for every decision is very time consuming  and does not contribute to the safety of pipeline operations. In addition, a  few operators expressed concern that they will not know if they have  sufficient documentation until their programs have been inspected. Initial  inspections of operators by PHMSA and state pipeline agencies have  confirmed that some operators are experiencing difficulty with  documentation but are generally doing well with assessments and repairs.  According to PHMSA and state officials, as operators continue to develop  and implement their integrity management programs and as they are  provided feedback during inspections, the documentation issues identified  during these initial inspections should be resolved.
Another concern raised by 33 (65 percent) of the operators is the  requirement to reassess their pipelines for corrosion problems at least  every 7 years. This issue is discussed in the following section.
section_title: The 7-year Reassessment Requirement Appears to be Conservative
paragraphs: Periodic reassessments of pipeline threats are beneficial because threats— such as the corrosive nature of the gas being transported—can change  over time. However, the findings from baseline assessments conducted to  date and the generally safe condition of gas transmission pipelines leads  us to conclude that the 7-year requirement appears to be conservative.  Through December 2005 (latest data available), 76 percent of the  operators (182 of 241) reporting baseline assessment activity to PHMSA  told the agency that their pipelines were in good condition, free of major  defects, and requiring only minor repairs. (See fig. 2.) The remaining 59  operators found 340 problems requiring immediate repairs. About 60  percent of these problems occurred in seven operators’ pipelines. Since  PHMSA does not require that operators tell it the nature of the problems  found, we do not know how many, if any, were due to corrosion. These  assessments covered about 6,700 miles, or about one-third of the  nationwide total to be assessed.
It is encouraging that the majority of operators nationwide reported that  they found few or no problems requiring immediate repairs, because  operators are supposed to assess pipeline segments facing the greatest  risk of failure from leaks or ruptures first, as required by the 2002 act. In  addition, since operators are required to identify and repair significant  problems, the overall safety and condition of the pipeline system should  be enhanced before reassessments begin toward the end of the decade.
Regarding the industry’s overall safety record, over the past 5-1/2 years  (from January 2001 through early July 2006), there were 143 corrosion- related incidents over the 295,000-mile transmission system (26 per year,  on average)—none of which resulted in death or injury. Over the past 10- 1/2 years, 12 people have died and 3 have been injured in two corrosion- related incidents. Neither of these incidents occurred in a highly  populated or frequently used area.
About 80 percent of the 52 operators that we contacted prefer that  reassessment intervals be based on the condition and characteristics of  the pipeline segment rather than on a prescriptive standard. About half of  these operators (28) expressed a preference for the industry consensus  standard developed by the American Society of Mechanical Engineers  (ASME B31.8S-2004) for setting reassessment intervals for time-dependent  threats because it incorporates a risk-based approach (for pipeline failure)  and is based on science and engineering knowledge. This standard sets  reassessment intervals at a maximum of 10 years for high-stress pipeline  segments, 15 years for medium-stress segments, and 20 years for low- stress segments. Maximum reassessment intervals, such as those in the  industry consensus standard, incorporate such risk concepts as built-in  safety factors (e.g., wall stress, test pressure, or predicted failure),  conditions, and potential consequences of a pipeline incident on a  segment-by-segment basis. The maximum intervals of 10, 15, and 20 years  are based on worst-case corrosion growth rates.
Industry consensus standards allow for maximum reassessment intervals  for time-dependent threats of 10, 15, or 20 years only if the operator can  adequately demonstrate that corrosion will not become a threat within the  chosen time interval. If not, then the reassessment must occur sooner,  perhaps at 7 or even 5 or fewer years. Furthermore, according to industry  consensus standards, it typically takes longer than the 10, 15, or 20 years  specified in the standard for corrosion problems to result in a leak or  rupture.
The industry consensus standards were developed in 2001 and updated in  2004 based on, among other things, the experience and expertise of  engineers, contractors, operators, local distribution companies, and  pipeline manufacturers; more than 20 technical studies conducted by the  Gas Technology Institute, ranging from pipeline design factors to natural  gas pipeline risk management; and other industry consensus standards  including the National Association of Corrosion Engineers standards, on  topics such as corrosion. Contributors have been practicing aspects of  risk-based assessments successfully for over 10 years. The ASME standard  serves as a foundation for nearly every section of PHMSA’s integrity  management regulations. The ASME standard was reviewed by the  American National Standards Institute. The Institute found that the  standard was developed in an environment of openness, balance,  consensus, and due process and therefore approved it as an American  National Standard.
While the mechanical engineering standards are voluntary for the industry,  PHMSA incorporated them as mandatory in its gas transmission integrity  management regulations. The mechanical engineering society’s standard  for setting reassessment intervals is not the only industry consensus  standard in PHMSA’s integrity management regulations. The regulations  incorporate other industry consensus standards for assessing corrosion  threats and for determining temporary reductions in operating pressure. In  addition, it is federal policy to encourage the use of industry consensus  standards: Congress expressed a preference for technical standards  developed by consensus bodies over agency-unique standards in the  National Technology Transfer and Advancement Act of 1995. The Office of  Management and Budget’s Circular A-119 provides guidance to federal  agencies on the use of voluntary consensus standards, including the  attributes that define such standards.
Of the 52 operators we contacted, 44 had undertaken baseline  assessments, and 23 of these have calculated their own reassessment  intervals. Twenty of these 23 operators indicated that, based on the  conditions they identified during their baseline assessments, they would  reassess their pipelines at maximum intervals of 10, 15, or 20 years—as  allowed by industry consensus standards—if the 7-year reassessment  requirement were not in place. The remaining three operators told us that  they would reassess their pipelines at intervals shorter than the industry  consensus standards but longer than 7 years because of the condition of  their pipelines. These results add weight to our assessment that the 7-year  requirement appears to be conservative for most pipelines.
subsections: section_title: Safeguards Exist if an Alternative Standard for Corrosion Reassessments is Allowed
paragraphs: PHMSA and the state pipeline agencies plan to inspect all operators’  compliance with integrity management reassessment requirements, among  other things, to ensure that operators continually and appropriately assess  the conditions of their pipeline segments in highly populated or frequently  used areas. These inspections should serve as a check as to whether  operators have identified threats facing these pipeline segments and  determined appropriate reassessment intervals. PHMSA and states have  begun inspections and expect to complete most of the first round of  inspections no later than 2009. As of June 2006, PHMSA has completed 20  of about 100 inspections and, as of January 2006, states have begun or  completed about 117 of about 670 inspections. Initial results from these  inspections show that operators are doing well in assessing their pipelines  and making repairs, but, as discussed earlier, some need to better  document their programs. Based on the initial inspection results to date,  PHMSA and states did not find many issues that warranted enforcement  actions.
Finally, it is important to note that, in addition to periodic reassessments,  operators must perform prevention and mitigation activities on a  continuing basis. PHMSA regulations require that all operators of  pipelines, including those outside highly populated or frequently used  areas, patrol their pipelines for excavation and other damage, survey for  leakage, maintain valves, ensure that corrosion-preventing protections are  working properly, and take other prevention and mitigation measures.  (Attachment I summarizes results of our work to date on the expected  availability of resources for pipeline reassessments and the likely impact  of assessment activity (including reassessments) on the nation’s natural  gas supply. We will discuss these topics in more detail in when we report  on the 7-year reassessment requirement this fall.)
section_title: Increasing State Funding Appears Reasonable, but Funding Sources and Oversight Plans Would Need To Be Addressed
paragraphs: The Subcommittee’s draft bill proposes to increase the matching funds  that PHMSA provides to states for pipeline safety program activities from  a maximum of 50 percent to a maximum of 80 percent of a state’s pipeline  safety program costs. The increased funding would offset states’ increased  workload, such as activities related to gas transmission integrity  management and other provisions in the 2002 act. All three legislative  proposals also contain provisions, such as damage prevention programs,  that could increase states’ workloads. Furthermore, state pipeline safety  activities would increase if PHMSA implements its planned integrity  management program for distribution pipelines. Our recent survey to state  pipeline safety agencies about their integrity management oversight  programs showed that 39 of 47 state agencies are experiencing challenges  in staffing, which could require increased funding. For example, two state  officials told us that state agencies are losing trained inspectors because  the state salaries are typically lower than what operators pay. PHMSA  proposes to implement the increased funding in 5 percent increments over  a 6-year period starting in fiscal year 2008.
We believe that the proposed increase in state grants to offset expanded  state activities appears reasonable, provided that appropriate funding  sources are identified and that the activities are included in PHMSA’s  oversight of state pipeline safety programs. According to PHMSA, the  agency has several options for increasing funding for state grants, but has  not developed a specific plan for how to provide additional funds. One  option is for PHMSA to reprioritize its budget to channel additional funds  from other activities, such as research, to states. Another option may be to  increase user fees that are charged to pipeline companies. User fee  assessments in fiscal year 2006 were about $150 per pipeline mile for  natural gas transmission operators and about $76 per pipeline mile for  hazardous liquid pipelines. All of these options involve tradeoffs among  PHMSA’s pipeline safety oversight activities or could result in increased  fees from the pipeline industry. Therefore, the effects of these options  would need to be carefully analyzed in order to find a balanced solution.
According to PHMSA, the agency plans to monitor increased state pipeline  safety activities through its current oversight approach, which consists of  reviewing annual reports from states and field evaluations of state  activities. States are required to submit documentation annually about  their pipeline safety program activities for the previous year, including  information on the state’s pipeline operators, inspections conducted, and  enforcement of pipeline regulations. States are also required to submit a  description of all ongoing and planned activities and an estimate of the  total expenses for the next calendar year. PHMSA validates the  information submitted by each state and attends at least one state  inspection during field evaluations. As state pipeline safety activities  expand, PHMSA would need to determine the best approach for including  the new activities in its oversight of state pipeline safety programs.
section_title: Concluding Observations
paragraphs: The overall integrity management framework laid out in the Pipeline  Safety Improvement Act is improving the safety of gas transmission  pipelines. We have not identified issues that bring into question the basic  framework of integrity management. Overall, we believe that PHMSA has  done a good job in implementing the act. While we expect to make several  recommendations to PHMSA when we complete our work, they will be  aimed at incremental improvements, rather than major restructuring.  Finally, regarding the 7-year reassessment requirement, our preliminary  view is that these reassessment intervals should be based on technical  data, risk factors, and engineering analyses rather than a prescribed term.  We expect to make a recommendation to the Congress that the 2002 act be  amended along these lines when we report on this issue. We expect to  report to this Subcommittee and to other committees both on PHMSA’s  implementation of integrity management and the 7-year reassessment  requirement in September.
section_title: GAO Contact and Staff Acknowledgements
paragraphs: For further information on this statement, please contact Katherine  Siggerud at (202) 512-2834 or siggerudk@gao.gov. Individuals making key  contributions to this statement were Jennifer Clayborne, Anne Dilger, Seth  Dykes, Maria Edelstein, Heather Frevert, Bert Japikse, Timothy Guinane,  Matthew LaTour, James Ratzenberger, and Sara Vermillion.
section_title: Appendix: Availability of Resources to Conduct Reassessments and Possible Impacts on the Nation’s Natural Gas Supply
paragraphs: This appendix summarizes results of our work to date on the expected  availability of resources for pipeline reassessments and the likely impact  of assessment activity (including reassessments) on the nation’s natural  gas supply.
subsections: section_title: Impact of Periodic Reassessments on Natural Gas Supply May be Less than Foreseen
paragraphs: As the Pipeline Safety Improvement Act of 2002 was being considered,  INGAA analyzed the possible impact of requiring assessments and periodic  reassessments and found that significant disruptions in the natural gas  supply and considerable price increases could occur. A more moderate  impact was predicted in three subsequent analyses—two reviews of the  INGAA study performed for PHMSA by the John A. Volpe National  Transportation Systems Center and by the Department of Energy during  the congressional debate over the pipeline bill, and a post-act PHMSA  evaluation of its implementing regulations. A waiver provision was  included in the 2002 act after INGAA’s study was completed; this may  serve as a safety valve if it appears that the natural gas supply may be  disrupted. Finally, of the 44 natural gas pipeline operators that we  contacted that had begun baseline assessments, 26 operators (59 percent)  indicated that their assessments and repairs did not require them to  shutdown their pipelines or reduce their operating pressure. Sixteen (36  percent) reported minor disruptions in their gas supply because they  temporarily shut down pipelines and reduced operating pressure to  conduct assessments or repairs. They told us that they used alternate gas  sources, such as liquefied natural gas, to sustain their customers’ gas  supply. The remaining two operators told us that they were not able to  meet all their customers’ needs, but the customers were able to obtain  natural gas from other sources.
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