Oil and natural gas are found in a variety of geologic formations distributed across the country, such as shale and tight sandstone. Shale plays—sets of discovered or undiscovered oil and natural gas accumulations or prospects that exhibit similar geological characteristics—are located within basins, which are large-scale geological depressions, often hundreds of miles across, that also may contain other oil and gas resources. Figure 1 shows the location of shale plays and basins in the contiguous 48 states. Shale plays can contain oil, natural gas, or both. In addition, a shale gas play may contain “dry” or “wet” natural gas. Dry natural gas is a mixture of hydrocarbon compounds that exists as a gas both underground in the reservoir and during production under standard temperature and pressure conditions. Wet natural gas contains natural gas liquids, or the portion of the hydrocarbon resource that exists as a gas when in natural underground reservoir conditions but that is liquid at surface conditions. The natural gas liquids are typically propane, butane, and ethane and are separated from the produced natural gas at the surface. Operators may then sell the natural gas liquids, which may give wet shale gas plays an economic advantage over dry gas plays. According to a 2014 EIA publication, operators moved away from the development of shale plays that are primarily dry gas in favor of developing plays with higher concentrations of crude oil and natural gas liquids such as the Eagle Ford in Texas, because given natural gas prices at that time, crude oil and natural gas liquids were more valuable products. Another advantage of liquid petroleum and natural gas liquids is that they can be transported more easily through different modes of transportation than dry natural gas, which is transported almost entirely by pipelines to markets and consumers. In recent years, domestic onshore production of oil and gas has been steadily rising. For example, from 2007 through 2012, annual production from shale and tight sandstone formations increased more than sixfold for oil and approximately fivefold for gas (see fig. 2). Horizontal drilling and hydraulic fracturing have advanced significantly over the last decade and are largely credited with spurring the boom in oil and gas production in the United States. Oil: Average domestic crude oil production from shale and tight sandstone formations in 2012 has increased more than sixfold compared with average production in 2007, from 0.34 million barrels per day in 2007 to 2.25 million barrels per day in 2012. To put this into context, according to EIA data, the United States consumed an average of more than 18 million barrels of petroleum products per day in 2012. According to EIA officials, oil from shale and tight sandstone formations accounts for 31 percent of total U.S. production. According to EIA, increased production in 2012 and 2013 was the largest annual increase since the beginning of U.S. commercial crude oil production in 1859. Much of the increase in crude oil production has been from shale formations, such as the Bakken in North Dakota, the Eagle Ford in Texas, and the Niobrara in Colorado. According to EIA officials, U.S. production of crude oil is expected to continue to increase—by 48 percent from 2012 to 2019—and will remain above the 2012 level through 2040. Natural Gas: Domestic natural gas production in 2012 has increased about fivefold compared with production in 2007, from less than 2 trillion cubic feet in 2007 to more than 10 trillion cubic feet in 2012. To put this into context, annual domestic consumption of natural gas was just over 25 trillion cubic feet in 2012, according to EIA data. In September 2012, we found that, assuming current consumption levels without consideration of a specific market price for future gas supplies, the amount of domestic technically recoverable shale gas could provide enough natural gas to supply the nation for the next 14 to 100 years. Much of the increase in natural gas has been from shale formations, such as the Barnett, Fayetteville, Haynesville, and Marcellus formations. Multiple modes of transportation, including pipeline, rail, highways, and waterways, connect oil and gas production infrastructure (such as wells and processing plants) in shale areas to customers, which include refineries, industrial users, and individual consumers. Additionally, when products switch modes of transportation, oil-loading terminals, sometimes referred to as “transload” terminals, transfer the product from one mode to another, such as when crude oil is transferred from a truck or gathering pipeline to a train. Responsibility for maintaining these modes vary: pipelines and rail are generally privately owned, while highways and waterways are generally public. Figure 3 illustrates how various transportation modes work together to bring oil and gas from production areas to users. Approximately 2.5 million miles of pipelines transport roughly two-thirds of domestic energy supplies throughout the United States. These pipelines carry natural gas and hazardous liquids, including crude oil and natural gas liquids from production areas to end users, such as residences and businesses. Gathering pipelines collect produced oil and gas from their source and transport these products to processing facilities and transmission pipelines. Transmission pipelines then transport these products longer distances to users such as residences and businesses. Distribution pipelines transport natural gas to consumers for use and are not within the scope of this report. Characteristics of gathering and transmission pipelines are described in table 1. The U.S. rail network consists of about 200,000 miles of track, which runs mostly through rural areas. The railroad industry is dominated by the seven largest railroads, known as Class I railroads, which collectively accounted for more than 90 percent of annual railroad-freight revenues in 2012. Smaller regional and short-line railroads transport freight shorter distances and can help connect customers in areas not served by the larger railroads. The railroads’ national association, the Association of American Railroads (AAR), represents the interests of the industry and works with railroads and other stakeholders to develop industry standards. Crude oil travels by rail in tank cars, commonly DOT-111 tank cars, which are generally owned by shippers or third parties. The DOT- 111 is a DOT-specification tank car, meaning it must be built to conform to standards specified in DOT regulation. It is a non-pressurized car that is used to transport a variety of liquid products, including hazardous, flammable materials like crude oil. Terminals, referred to as transload facilities, transfer crude oil from other transportation modes (typically trucks or gathering pipelines) to tank cars for transport by train. In addition to pipeline and rail, other modes, including barge and truck may transport oil and gas products. For example, barges may transport oil over longer distances on major waterways, such as the Mississippi River, while trucks typically transport oil over short distances to transload facilities. While this report provides a closer look at transportation infrastructure and safety impacts of shale oil and natural gas development on pipeline and rail nationwide, we also discuss highway infrastructure and safety impacts in the four selected states we examined (see app. II for a summary of highway-related impacts). DOT is responsible for ensuring the safe transportation of people and goods through regulations, oversight, inspections, and other efforts, sometimes in partnership with states. Within DOT, PHMSA’s Office of Pipeline Safety oversees the safety of pipelines through regulation and an inspection program, which includes over 100 PHMSA inspectors, and also collects information about the location of pipelines. PHMSA also has arrangements with states, which collectively have over 300 inspectors, to assist with overseeing interstate pipelines, intrastate pipelines, or both. PHMSA’s current pipeline regulations cover all hazardous liquid (including crude oil) and natural gas transmission pipelines. In addition to minimum safety standards that all transmission pipeline operators must meet, PHMSA employs a risk-based approach to transmission pipeline regulation and requires operators to systematically identify and mitigate risks in “high-consequence areas,” which include populated and environmentally sensitive areas. PHMSA also applies this risk-based approach to gathering pipelines and regulates gathering pipelines in non- rural areas, resulting in regulation of approximately 10 percent of the nation’s gathering pipelines. Generally, PHMSA retains full responsibility for inspecting interstate pipelines for compliance with its regulations and taking enforcement actions when needed. However, states may be authorized to conduct inspections of interstate pipelines, as well as inspections and associated enforcement for intrastate pipelines. States can also promulgate regulations for intrastate pipelines, including gathering pipelines, even if these pipelines are not covered by PHMSA’s federal safety requirements. PHMSA, through its Office of Hazardous Materials Safety, also regulates shippers and railroads transporting hazardous materials like crude oil by rail and other modes. A memorandum of agreement details how PHMSA works with the other DOT modal agencies to address hazardous- material transportation safety. DOT’s other modal administrations have responsibility for safety of their respective modes, such as the Federal Railroad Administration (FRA), which oversees rail safety. FRA enforces its own and PHMSA’s safety regulations through inspections by FRA officials and state partners in some states. PHMSA also has hazardous materials inspectors who enforce requirements for hazardous material packaging for transportation. Additionally, PHMSA’s regulations include emergency response planning requirements for pipelines and the transportation of crude oil by rail. Specifically, regulations require operators of transmission pipelines and urban gathering pipelines to prepare emergency response plans and coordinate them with emergency responders. Railroads that transport crude oil in tanks larger than 42,000 gallons are required to develop comprehensive oil-spill response plans with additional requirements for contingency planning, ensuring response resources by contract or other means, and training. Railroads are required to submit comprehensive plans to FRA for review. Otherwise, railroads are required to develop basic response plans, for which there are fewer requirements.