Segment 2 Of 2     Previous Hearing Segment(1)

SPEAKERS       CONTENTS       INSERTS    
 Page 11       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
REAUTHORIZATION OF THE NATURAL GAS AND HAZARDOUS LIQUIDS PIPELINE SAFETY PROGRAM

Tuesday, July 27, 1999
House of Representatives, Subcommittee on Economic Development, Public Buildings, Hazardous Materials and Pipeline Safety Program, Committee on Transportation and Infrastructure, Washington, D.C.

    The subcommittee met, pursuant to notice, at 11:03 a.m., in room 2253, Rayburn House Office Building, Hon. Bob Franks [chairman of the subcommittee] presiding.
    Mr. FRANKS. [presiding] Good morning. The subcommittee will now come to order. Today we are meeting to receive testimony on reauthorizing the National Gas and Hazardous Liquid Pipeline Safety Program, administered by the Research and Special Programs Administration, RSPA, of the Department of Transportation.
    Before we begin, I would like to ask unanimous consent that committee members who are not members of the subcommittee be permitted to sit with the subcommittee for this hearing. Without objection, so ordered.
    As I said, the purpose of today's hearing is to receive comments and review issues involved with reauthorizing the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act, the basis for the pipeline safety program, administered by RSPA.
    There are approximately 2 million miles of underground pipelines in the United States, made up of some 200,000 liquid pipelines and 300,000 miles of interstate natural gas transmission lines, which connect the 1.5-million-mile network, including gas gathering and distribution lines and storage facilities.
    These lines transport approximately 22 trillion cubic feet of gas per year, supplying 27 percent of the nation's energy and over 50 percent of the petroleum products consumed in America. The RSPA Office of Pipeline Safety has the responsibility of regulating the safe and environmentally sound operation of these pipelines. In addition, the pipeline facilities and operators.
 Page 12       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The scope and the regulatory framework includes the design, construction, inspection, testing, operation, and maintenance of pipeline systems, as well as response plans mandated by the Oil Pollution Act and grants to aid State pipeline safety programs.
    The Federal program works in partnership with the States to oversee the nation's pipeline network. States maintain jurisdiction over intrastate transmission and distribution pipelines, while OPS assumes regulatory and enforcement functions for interstate pipelines.
    This partnership has resulted in a uniform pipeline safety program. The program was last reauthorized in 1996 by the Accountable Pipeline Safety Act, which provided a number of significant changes to the law. Also changed the program focus from one of a prescriptive regulatory approach to a risk-based approach. Most notably, DOT was directed to employ risk-assessment techniques in the evaluation process of new regulatory proposals, which complemented the agency's own actions to incorporate risk assessment into its regulatory process.
    The act also established a pilot program allowing pipelines companies to develop company-specific risk-management plans to be approved by DOT that would meet or exceed the overall level of safety currently achieved under the existing regulatory framework or making best use of limited resources.
    Historically, the pipeline safety program has worked well. Transportation by pipeline remains one of the safest modes of transportation. However, it is not a perfect record. And the potential for loss of life and damage to the environment is extremely real, as we recently experience with the tragedy of the Olympic Pipeline rupture in Bellingham, Washington, as well as last night's explosion, which resulted in two fatalities in Kansas City.
    Efforts such as one-call notification systems to address outside-force damage, one of the leading causes of pipeline failures, go far toward improving the record. However, we must continue to strive for technological advancements, greater public awareness, and communication between the industry and the regulators to improve pipeline safety for the vitality of our communities as well as the environment.
 Page 13       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Today we will receive testimony from DOT, the administrator of RSPA, and the chairman of the National Transportation Safety Board; a representative of the States; as well as various industry representatives.
    And I am pleased, particularly, to have our distinguished colleague, Mr. Metcalf, to begin the hearing, who will then join us on the dais.
    At the outset, I want to express to Congressman Metcalf our heartfelt sympathy in the recent Bellingham incident. I am all too familiar, having represented Edison, New Jersey, with pipeline accidents that can devastate a community and that can have a profound effect on the public.
    And, Jack, I want to assure you now and pledge that this subcommittee will, in fact, hold a separate full hearing to specifically address the Bellingham incident and provide the proper attention and focus that that incident warrants.
    With that, I would like to know call upon the ranking member from West Virginia, Mr. Wise.
    Mr. WISE. Thank you, Mr. Chairman.
    I would like to open up, to thank Chairman Franks for convening today's hearing to examine issues related to pipeline safety and to consider the appropriate level of safety oversight of this vital mode of transportation.
    The last hearing this committee held on pipeline safety was only one year after the 1994 explosion in Edison, New Jersey. A single 1996 explosion in downtown San Juan, Puerto Rico, killed 33 people and injured at least 69 others. This year's hearing occurs in the wake of another spectacular and particularly tragic explosion, the one in Bellingham, Washington, that killed three young people.
    To Representative Metcalf, I want to thank you, and I know the chairman does for the information you have provided the subcommittee. The families in your district have borne a tragedy that no family should have to endure. And I hope that you will let them know and convey to them the seriousness of this subcommittee to see that those young people did not die in vain.
 Page 14       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    These incidents, just a few of thousands, remind us that we do have the responsibility to ensure the highest level of safety possible, recognizing the very real potential for catastrophic incidents.
    While we seek to minimize compliance burdens on pipeline operators and their customers, we cannot risk reducing safety and increasing exposure of the public and environment. We cannot roll back important public safety and environmental protections, simply in the name of economic efficiency.
    In the last six years, funding for the Federal Pipeline Safety Program has increased from less than $20 million per year to more than $35 million per year, enabling the Department of Transportation to improve the quality of its oversight.
    It has more inspectors, it has better data, and it has been more active. The one question we must answer as we gather information for the reauthorization bill is, are we satisfied with improvements to date, where does more need to be done.
    In addition, we need to learn how the 1996 amendments have affected the oversight program. Moreover, we must be alert to new threats to pipeline safety, as businesses and residences encroach up once-remote areas.
    Regions that had few residents when some pipelines were originally constructed are now more densely populated with accompanying economic activity. This economic development, while welcome in many ways, increases the likelihood that third parties might damage gas and oil pipelines that neighbors did not even realize existed.
    We must ensure that Federal safety oversight anticipates and responds to emerging issues before people are killed and injured.
    I thank today's witnesses in advance for their input into our deliberations and look forward to hearing their testimony.
    Thank you, Mr. Chairman.
 Page 15       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Thank you, Mr. Wise.
    Mr. Shows, any statement?
    Mr. SHOWS. No. I am glad to be here. Sorry I'm late.
    Mr. FRANKS. Thank you.
    I would now like to, again, welcome our colleague, Congressman Metcalf. Jack, we appreciate your participation this morning. We look forward to hearing your testimony.
TESTIMONY OF HON. JACK METCALF, A REPRESENTATIVE IN CONGRESS FROM WASHINGTON

    Mr. METCALF. Well thank you very much, Mr. Chairman and Mr. Wise. I appreciate the opportunity you have given me to testify and then to sit as a member of the subcommittee for this hearing. While I appreciate the subcommittee taking up this critical issue of pipeline safety, I regret the difficult circumstances which brought me here today.
    On June 10th of this year, a liquid gasoline pipeline owned by Olympic Pipeline Company in my district ruptured and spilled approximately 227,000 gallons of gasoline at Whatcom Falls Park, a 241-acre park in the city of Bellingham in my district.
    Gasoline was carried into Whatcom Creek, where it reportedly filled the creek to a depth of several additional feet. Roughly one hour after the leak was detected, the spilled fuel was ignited by two 10-year-old boys, Wade King and Stephen Tsiorvas, who were playing with bottle rockets at the creek.
    The resulting fireball raced down the length of the creek for a mile and a half, killing King, Tsiorvas, and an 18-year-old fly-fisherman named Liam Wood. Swaths as wide as 200 feet along the creek were burned within minutes. The explosion of June 10th caused millions of dollars in property damage and did immeasurable damage to the families of Wake King and Stephen Tsiorvas and Liam Wood.
 Page 16       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The cause of the accident is still under investigation, and I appreciate the regular updates provided me and my staff by the National Transportation Safety Board.
    The phrase ''out of sight, out of mind,'' as the chairman mentioned, certainly applies when pipelines are involved. These underground lines carry millions of gallons of gas through heavily populated communities and environmentally sensitive areas. Even so, there are very few people who possess a thorough knowledge of the industry. My staff and I have been in constant contact with industry, public-interest groups, local officials, Federal regulators, and concerned constituents since the explosion, looking for ways to prevent such a tragic accident from ever happening again.
    So far, our inquiries have yielded many questions, and I hope that some answers will come out of this hearing. My discussions regarding the Office of Pipeline Safety have the most troubling of all. During my review of NTSB materials, I found several safety recommendations made by the NTSB, which the Office of Pipeline Safety has not implemented to a satisfactory level.
    These recommendations cover such basic safety issues as periodic pipeline corrosion testing, updated leak-detection systems, public education campaigns, and employee safety qualifications.
    I intend the question the witnesses from OPS on these recommendations during this hearing and will be very interested to hear the answers.
    I am not here to heap blame on the pipeline industry. Clearly, petroleum products serve a vital role in the current and future economic developments of my district and the rest of the United States. And it is obviously in the best interests of pipeline operators to prevent leaks whenever possible.
    However, the industry must take responsibility to make safety a top priority, regardless of Federal regulation.
 Page 17       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Pipeline operators must train their employees on safety procedures and ensure that the employees are equipped to deal with any emergency. All lines must be adequately protected from corrosion. Control software must be up to date and functional.
    Preliminary data from the Bellingham suggests a SCADA system software malfunction. So I am particularly concerned about this issue. Safety valves must be fully operational and checked regularly.
    And NTSB data also points to a faulty valve as a potential contributing factor to the Bellingham explosion.
    Pipelines must be buried to a safe depth. I have been distressed to hear that in some areas of pipeline on farmland in Skagit County, which is just south of the Whatcom County area that we are talking about, in my district, are covered only to a depth of 14 inches. And I don't believe 14 inches is enough.
    Finally, property owners must be aware of any lines buried under their land. There are landowners up and down Washington State who were recently surprised to discover that an oil pipeline runs directly down the length of their property.
    Again, I appreciate the subcommittee's willingness to address this issue, and I am interested in the testimony of all the witnesses assembled today. As the legislation moves through this subcommittee and the full committee, I will continue to ensure that safety is our top priority.
    Thank you again, Mr. Chairman, for this opportunity. I am especially grateful to your commitment to hold a Bellingham-specific hearing after further details on the accident are made available.
    Mr. FRANKS. Congressman Metcalf, again, on behalf of not only myself but I know all members of the subcommittee, we want to express our deep sympathy and regrets, not only to the families involved but the entire community of Bellingham.
 Page 18       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    And, again, I want to restate my commitment to hold a full hearing on the Bellingham incident once we have more facts available to us.
    Mr. METCALF. OK. Thank you very much.
    Mr. FRANKS. Please come join us.
    I now would like to welcome the administrator of RSPA, Ms. Kelley Coyner, who is accompanied by the associate administrator for pipeline safety, Richard Felder.
    Good morning to both of you folks.
    Ms. COYNER. Good morning, Chairman.
    Mr. FELDER. Good morning, Mr. Chairman.
    Mr. FRANKS. We don't have the sophisticated five-minute time clock here. So——
    Ms. COYNER. Are you going to throw it at me when——
    [Laughter.]
    Mr. FRANKS. What we have actually done is borrow someone's kitchen timer. And we will set it five minutes. We will be flexible, but if the little ding you hear, it's not the ready meal, you are five minutes late.
    [Laughter.]
    Ms. COYNER. It's not the timeout for my 3-year-old?
    Mr. FRANKS. Exactly.
TESTIMONY OF KELLEY S. COYNER, ADMINISTRATOR, RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTION, ACCOMPANIED BY RICHARD B. FELDER, ASSOCIATE ADMINISTRATOR FOR PIPELINE SAFETY, RESEARCH AND SPECIAL PROGRAMS ADMINISTRATION, U.S DEPARTMENT OF TRANSPORTATION.

    Ms. COYNER. Don't worry, it's not this binder that I am reading from, it's this one.
 Page 19       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    [Laughter.]
    Thank you, Chairman Franks and Ranking Member Bob Wise for inviting me to appear before the subcommittee today. I am Kelley Coyner, the Administrator of the Research and Special Programs Administration at the U.S. Department of Transportation.
    I am joined today by Richard Felder, Associate Administrator for Pipeline Safety. I am pleased to represent Secretary Slater in discussing the department's oversight of the nation's pipeline system and the challenges we all face in keeping America's communities safe and livable.
    Over the past 30 years there has been a steady decline in the overall number of pipeline incidents. While the rate of decline has slowed in the past decade, it continues to move in the right direction. Also in decline is the number of oil pipeline spills to water.
    We are most concerned with the increasing number of fatalities, most of which occur in gas distribution systems. The tragic consequence of pipeline incidents such as Bellingham underscore the need for all of us to have unremitting attention to the impact of pipeline transportation on people's lives.
    I know all of you would agree that there is almost no loss that is unbearable than a loss of a child, and it steels us to continue our vigilant oversight of pipeline safety systems of all types.
    The number one threat to pipeline integrity is outside-force damage. Under Secretary Slater's leadership, we set a new goal of reducing pipeline incidents caused by outside-force damage by 25 percent over the next three years, five times higher than our previous goal.
    To do this, we are leaving no stone unturned. First, we established a team which developed a campaign to teach communities how to prevent damage to pipelines and underground facilities.
 Page 20       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Last month, Secretary Slater unveiled our national Dig Safely campaign. Based on pilot test results, the number of telephone calls increased to one-call centers, and this is one way we can continue to reduce excavation damage to pipelines and other underground facilities.
    In another initiative, 160 experts developed a compendium of best practices and damage prevention programs throughout the country. The report, called ''Common Ground,'' will help communities decide which solutions best fit their needs. The value of this report will be achieved only if the best practices are adopted.
    To this end, we will move forward with a new grant program, and we will work with each State to immediately assess over the next two months how the best practices can help improve their programs.
    Let me stress that we also have established regulatory and statutory requirements to promote widespread participation of all concerned parties in one-call system.
    We use the entire range of tools to protect our nation's pipelines from outside-force damage. From education and grants, to technology, to civil and, if we need to, criminal enforcement to reduce the threat of outside-force damage in rupturing pipelines.
    The second leading cause of pipeline failure is corrosion. Incidents in that area may be beginning to slightly decline. We are evaluating the best long-term corrosion control measures to determine if there are better means of reducing corrosion. We will make the regulations more effective by adopting the most modern practices.
    A third and most important area—and preventable cause of failure is human error. We recently concluded a negotiated rulemaking on a comprehensive rule for qualifying safety workers on pipelines. Operators will need a written qualification program that assesses the ability of each worker.
    We expect this rule to become final in the next several weeks.
 Page 21       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The fourth pipeline challenge is material defects. In gas distribution systems, we are most focused on the long-term performance of plastic pipe. The use of plastics in distribution systems has increased significantly in the last decade, and the incidents of failure has remained relatively low.
    Valid questions have been raised by the NTSB and others about the susceptibility of older pipe to brittle-like fractures. We have a research effort under way to analyze plastic pipe performance and the adequacy of our regulations in this area.
    And now I have to discuss what we are doing to protect the environment. Pipeline safety regulations, as you noted in your remarks, are currently comprehensive standards and tend to prevent releases of oil to the environment. Operators must inspect and test corrosion prevention systems, mainline valves, welding, and over-pressure protection devices. They must periodically patrol lines to check for evidence of leaks or encroachment and monitor operational data on pipeline pressure and product flow.
    We require adherence to written operations and maintenance plans, and we have oil-spill planning requirements for each operator.
    To enhance our protection of those areas where a spill will cause irreparable harm, we are identifying those geographic areas which are most critical to provide supplemental protection beyond our existing requirements. Once we have identified these unusually environmentally sensitive areas, we can determine what additional protections would be effective.
    In the event the best prevention strategies fail, maintaining effective response plans and capabilities is critical to keeping our communities safe and livable. There are requirements for emergency preparedness in both our oil pollution program and pipeline safety program.
    And we have taken an active approach in working with companies to assess and plan for any problems that might be associated with so-called Y2K concerns. We recently published a Federal Register notice clarifying our compliance policy in that regard.
 Page 22       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    In conclusion, since the 1996 reauthorization, we have moved increasingly to a program that focuses on the greatest risk to pipeline integrity. We have taken some important steps to securing pipeline safety, and we are committed to eliminating death and injuries caused by pipeline failures.
    Thank you, and I would be pleased to answer any questions you may have.
    Mr. FRANKS. Thank you, Ms. Coyner.
    Let me start with somewhat of an open-ended but a question that might help frame some of my follow-ups. Do you support the reauthorization of the currently structured law or do you have specific suggestions for legislative changes to the committee?
    Ms. COYNER. Mr. Chairman, we were a little bit surprised that reauthorization came up at this point because as you know it is not up until next year. We believe it would be appropriate to extend the time period of the current act to ensure that we have adequately tested the provisions of that act.
    We have also, in the wake of the incident in Washington State, have had discussions with some of the Washington delegation about some provisions that they might like to see be included in that, and I think that is really a situation where we want to look carefully at the objectives of the act and make sure that we have addressed, either through the statue or through the program, any concerns that have come up from that incident or others.
    Mr. FRANKS. As I have had the staff look at the record of pipeline safety, there is a little bit of confusion, and I could use the opportunity to clear the record in that regard.
    Have incidents in the natural gas industry been on the rise or decline?
    Ms. COYNER. I am going to actually ask Mr. Felder to address that so that you can get a complete answer. They have been on the decline, but you need to take a look at some of the consequences as well, particularly in the area of local distribution systems and the fatalities that are incurred in that area.
 Page 23       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FELDER. Right. I think it is useful to break the jurisdiction down into three areas, hazardous liquid, which is basically a transmission operation, and there we have found the number of incidents has declined pretty significantly over 10-year period and somewhat more dramatically in the last couple of years.
    However, the amount of product spilled, for example in the last couple of years, has been somewhat steady and may have even slightly increased. But as the administrator has said, it is very important to take a look at the long- and short-term safety and environmental consequences of those incidents because occasionally those numbers will be skewed by, let's say, a spill on company property, which is easily collected and remediated versus something that might have a more public effect on people or the environment.
    On the gas side, probably the best record you see is in the transmission area, the number of incidents declining, the number of injuries and fatalities also holding or being reduced because they are very, very low numbers to begin with.
    Our greatest concern, really, has been, where they increased in the last year or really in the number of incidents, property damage, fatalities, in the gas distribution system. And of course there, we know that 80 percent of the injuries and fatalities are attributable to outside-force damage, and as the administrator has said, that is where we are trying to put the greatest emphasis and resources so that we can try and hit those numbers as hard as we can.
    Mr. FRANKS. Ms. Coyner, what Federal requirements do pipeline companies have in terms of interacting with the communities that they affect. I know you mention in your testimony that DOT has consistently sought community-based solutions. How do you go about involving local communities with issues that are specific to their area?
    Ms. COYNER. Each pipeline operator has a requirement to work with two groups of people along their pipeline right-of-way. The first are the people who actually reside there. And the second is the local officials, and particularly focusing on local officials on response issues.
 Page 24       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    That is an area that we are focusing on improving our interactions there. The ''Common Ground'' report had a number of suggestions about ways that we could work with the operators to improve the public education component of that requirement, some of those which we are taking a look at adopting in a regulatory context as well.
    Mr. FRANKS. What coordination, if any, goes on between the various utilities and industries and/or agencies that use or oversee underground facilities and their respective rights of way? Are the pipeline companies talking to the telecommunications industries? Does DOT work with the FCC or whatever other agencies are involved in overseeing underground activities?
    Ms. COYNER. There are two contexts that we have worked with those groups of individuals that are involved with underground facilities. The first is in the area of outside-force, same as generally. The common ground effort, the best practice, involved both the underground facility operator, the telecommunications, municipalities, and also those who work around those facilities, whether it is railroads or other contractors. And that is really a—I think it would really be watershed in terms of our effectiveness in dealing with the range of people who are involved in those facilities.
    But the second area that came to light as a result of an incident last summer in the Washington, D.C. area involving the separation of utilities in common areas with service lines coming in. And we have been working, along with NTSB, those who set the various codes for electrical utilities, for water utilities, for cable, as well as for pipeline, to work on having better standards to deal with the separation issue between those—and with the proliferation of fiber optics and cable lines, you have even more utilities going into brand new subdivisions. This is the case in one county.
    Mr. FRANKS. You discussed in your testimony your efforts to enhance environmental protection. Can you elaborate on the efforts to establish identification requirements for unusually sensitive areas which were mandated to be completed in 1994? Why have those taken so long?
 Page 25       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Ms. COYNER. We have found this to be an extremely difficult exercise in terms of the complexity of defining that. And an unusually environmentally sensitive area is somewhat more focused on critical habitat and other features that were defined in the 1996 act than what we find in some of the other statutes where it talks about environmentally sensitive areas.
    What we have done is we have worked with the other Federal agencies, the Environmental Protection Agency, U.S. Fish and Wildlife, NOAA, as well as with the Nature Conservancy, to put together a pilot effort in three States to see if the model that we have put together defining these unusually sensitive areas works.
    Our pilot tests will be completed at the end of this month, and we are hopeful that will allow us to lead to a standard at the end of the year.
    To give you an example of the complexity——
    Mr. FRANKS. Could you tell us which States are in your pilot?
    Ms. COYNER. Texas, Louisiana and, what's the third State?
    [An aside to Mr. Felder.]
    Mr. FELDER. California.
    Ms. COYNER. California.
    A good illustration of why this is so difficult, water intakes is an important issue in terms of extra protection. And in Texas alone, there are 10,000 different water sources that we are in the process of verifying. That said, we are looking at ways we can move forward in implementing this standard and bring the mitigation pieces in place in the course of the coming year.
    Mr. FRANKS. I have some other questions, but I am going to share my time. I am going to come back to some NTSB-related questions, and I will look forward to that.
 Page 26       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. Wise.
    Mr. WISE. Thank you, Mr. Chairman.
    When we hear about other forms of transportation, we also hear about aging pipelines. You refer to that in your opening remarks. I would be interested to hear, a) what the level of concern you have for those? Some of the pipelines in use today are 50 years of age or older. Many were constructed before present-day safety requirements were written. So, as I said, a) what level of concern you have. And also, what steps are being taken to compensate or to deal with the higher potential risk of failure within these aging pipelines?
    Ms. COYNER. Let me start by saying that it has been our experience that the age of the pipeline is not the leading indicator of its integrity. For example, we have had some tremendous corrosion problems on the Aleyeska line in Alaska that have resulted in replacement of large segments of a massively, relatively new pipeline.
    What we look at in terms of those kinds of concerns are really, what is the operating environment, including the population encroachments on that area.
    The issue that you raised about the current regulations was true, but construction design standards have changed. All those pipelines are subject to operating and maintenance requirements and new requirements that we might put in place. There are also requirements that we have in terms of retrofits on lines that have been put in.
    So, we are not as concerned about the age of the pipeline when we look at those issues.
    All pipelines in the context of the operations and maintenance have to take steps to monitor the integrity. There are a variety of things that we have them do to. For example, leak detection activities.
    It may be aerial inspections to let them know if there are leaks but also encroachments on the line. There may be other technologies that they are using. So, as I said, the age of it is not the primary indicator that we look at.
 Page 27       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. WISE. In several sections of your testimony, you discuss efforts of undertaking cooperatively with industry; indeed, the last reauthorization drives that process. The obvious question with these partnerships as you get more and more into these partnerships is the extent to which there is an arm's length relationship between regulator and regulated industry.
    And I wanted to ask what measures you have taken to ensure that the Office of Pipeline Safety relies on information from industry and also information from outside or objective sources?
    Ms. COYNER. I think the unusually sensitive areas project is a good example of where we have really focused on getting alternative data sources. We have worked closely with the American Petroleum Institute, but we have also worked with the Environmental Defense Fund, the Nature Conservancy, and with other Federal agencies in terms of data that we look at with that regard.
    A good pipeline program, I think, has to me several tests. First, it has to have good safety standards. Secondly, we have to have efforts to get people to comply with those standards in terms of training and education. For those who resist adhering to those standards or willfully ignoring them, there is a place for very strong enforcement activities.
    And we believe in using civil penalties, and now that we have some additional criminal enforcement penalties, we have brought actually the first ever criminal case in the excavation damage incident out in Minnesota.
    So I think you look at the entire picture. There is a place to work cooperatively with industry, but there it is also important that we balance that with other sources of data and a strong enforcement program.
    Mr. WISE. I am going to ask the chairman, if I could, and perhaps Mr. Metcalf, you referenced that you are going to come back and talk about the OPS relationship with NTSB. I was going to get into that, but I would be happy to defer if you are going to come back to that.
 Page 28       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Right.
    Mr. WISE. Then let me ask you, you reference in your opening remarks, as I did in mine, suburban sprawl and the problems that can cause. What initiative is the Office of Pipeline Safety undertaking to respond to residential encroachment on existing pipeline activity?
    Ms. COYNER. There are two broad categories of ways that we have focused on that. The first has to do with requiring the pipelines to attend to understanding what is along the pipeline. And so it changes the classification system, for example, in the case of the natural gas pipeline in terms of the type of operating pressures and other activities.
    The second is, the principal issue in population encroachment is dealing with damage that happens to the pipeline as a result of activities that occur there that weren't there before. And that is what the damage-prevention efforts, ranging from the national education campaign, the best practices effort, the new grants program, and also working at civil and criminal enforcement activities in the area.
    Mr. WISE. OK. Thank you.
    Mr. Chairman, I will yield back the balance of my time.
    Mr. FRANKS. Thank you, Mr. Wise.
    Mr. Metcalf.
    Mr. METCALF. Thank you, Mr. Chairman.
    I read the testimony of Mr. Jim Hall, Chairman of the NTSB, and in it he says, I believe it is your office, that has the lowest recommendation acceptance rate of any administration in the Department of Transportation. Would you agree with that? Or why would you believe that to be case, or is it the case?
    Ms. COYNER. If you look at the 30-year history of the agency, it is true that we have a very low acceptance rate. If you look over the past 10 years, we are closer to what the departmental norms are, but I don't think that is really the measure that any of us wants to make of the relationship with NTSB or common goals for safety. I think that it is common knowledge that we at the department realize that we needed to improve our relationship with NTSB.
 Page 29       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    During the course of the last year, Chairman Hall and I have worked very closely together to do a number of things. We have had joint training with their inspection investigation force, and we have taken a look at a number of recommendations that we have information in hand in.
    That said, we have somewhat different roles. The NTSB has the responsibility for investigating and determining the cause of an accident, and they also have the responsibility of making recommendations coming out of that.
    We share a common goal of having safe pipelines, but the responsibility for the pipeline safety program is to carry out the programmatic responsibilities, to take into account the information brought to light by the NTSB but as well from other sources.
    Mr. METCALF. What factors do you include in your cost-benefit analysis of the NTSB recommendations?
    Ms. COYNER. We actually don't do a cost-benefit analysis of a recommendation, but if we were looking at a regulatory action, we would of course do that.
    The factors that we take into account, we would of course be looking at the benefits achieved from that activity, which would include prevention of loss of life, protection of the environment, and property damage.
    An area that we have really struggled with is getting good information on how to factor in the damage to the environment, because it is not the same as what the property damage numbers are. And then, of course, the cost data would look at what the impacts were to the industry and localities to comply with that regulation.
    Mr. METCALF. OK. As I stated in my testimony, I have been reviewing the NTSB recommendations to your office since the accident in Bellingham. A few of them stand out to me as particularly troubling.
    In one of the recommendations, the NTSB urges your office to develop a rule on pipeline employee safety qualifications. I am encouraged to hear in your testimony that the rule is in the work, but why has it taken so long for the rule to be completed?
 Page 30       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Ms. COYNER. This is rule requirement that was in the 1992 act that was modified in 1996. And we began actually working toward a somewhat different focus than what we had had before. What we had looked at before was a narrow rule that would look at training and certification of a small group of folks.
    What we decided instead was that we need to look toward a rule that looked at whether or not safety workers were qualified because you can do all the training in the world and not be qualified to do a particular task. It was a complicated rule. We chose to go to a negotiated rule-making so that we could bring in the labor unions, National Fire Protection Association, the industry, and the State partners that we work with on the enforcement programs.
    And it is, I think, a good rule that will help us along a great ways, and we are looking forward to it being implemented in the next several weeks.
    Mr. METCALF. In another recommendation, the NTSB urges your office to require pipeline operators to periodically test their lines for corrosion and other anomalies. Your office has not followed this recommendation to the NTSB's satisfaction. Is there a reason why not?
    Ms. COYNER. I think that reflects two concerns, two recommendations that the NTSB has made, one with respect to hydrostatic testing and the other with respect to internal inspection devices, what we have come to know as smart pigs.
    The hydrostatic testing recommendation, we have concerns about that being something that is the required task in the sense that hydrostatic testing poses two particular problems. One is that it only tells you what is going on at the time you do the hydrostatic test, which is why we have a number of other requirements that require testing elsewhere, you know, observations between two weeks and 18 months.
    The other is that hydrostatic testing can actually weaken a line. And that is something that you want to balance the benefits and the risks from using hydrostatic testing.
 Page 31       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    In the case of internal inspection devices, the NTSB has recommended that we require them to be used on a periodic basis. In the past, our concern has been, this is an evolving technology, that in interpreting the results of that is an art and not a hard science.
    We feel like the technology, particularly in certain areas, has moved and that we would look at implementing the unusually sensitive area definition and we will be looking at some pigging requirement. With respect to that we are really targeting places that are at the highest risk.
    Mr. METCALF. OK. Last question is, the NTSB also recommends that OPS establish criteria for pipeline operators to conduct periodic tests to determine the appropriateness of the established maximum allowable operating pressures for the lines.
    Given that natural aging would seem to weaken even the best made pipelines, it seems to me that the maximum allowable pressure should be modified over time as the lines age. Has this recommendation been, or has this been done? Or why has the recommendation been carried out to the NTSB's satisfaction?
    Ms. COYNER. I think I have muddied the waters here a little bit. But, first part of the recommendation actually refers to hydrostatic testing, which I have addressed. But on operating pressures, which I know has been a concern, particularly in Washington State with respect to the Bellingham incident.
    Hydrostatic testing is not the only means by which either pipeline operators adjust operating pressure or we require them to adjust operating pressure. And I think that you should know that there is also a margin of safety built in any of the pressure requirements as well, regardless of the age of the pipeline.
    Mr. METCALF. Thank you. I have no more questions.
    Mr. FRANKS. Thank you.
    Mr. Shows.
 Page 32       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. SHOWS. I have nothing.
    Mr. FRANKS. Doctor Cooksey? No.
    Ms. Coyner, Congressman Metcalf touched on a whole host of issues that I wanted to get into, and I am going to avoid doing that and just concentrate on a couple that perhaps might need some elaboration.
    Apart from our interaction with the NTSB concerning incidents and their subsequent recommendations, describe for us what levels of contact you have with the NTSB.
    Ms. COYNER. One of the things that we have done is to look at places where our efforts to bring together the best technology and best practices would be fruitful endeavors. I participated in a symposium that Chairman Hall had on incident recorders. In the pipeline industry, that would be the computerized system to supervise the control and data acquisition systems that we do use as an incident recorder, much in the way a black box is used in an aviation incident. Recently Chairman Hall and I co-sponsored a damage prevention symposium, which was the second, actually.
    We have done a few things that have been a little bit divergent in recent months that I think have been important to the pipeline safety program. The first was that we asked the head of the hazardous materials program and pipeline safety effort at NTSB to come in and talk to us about how we might work together, better our investigations, and generally. And we basically do a stand-down where all of our inspection force across the country.
    The second is, on this issue that I talked about a little bit before, about the separation of utilities. We asked the NTSB to join us. In the meeting, we continued to work with them. I think that, you know, these are areas where there are more opportunities for us to cooperate together, for us to do joint training so that we are both at this state of the art and state of the practice.
    I want to underscore that I see this as first steps in strengthening our relationship with the NTSB and that we will continue to be vigilant in strengthening that relationship.
 Page 33       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. As you look at the opportunities to strengthen that relationship, we are looking at the opportunity of reauthorization. Are there any legislative changes that would be helpful or important, that would allow OPS better address recommendations from NTSB.
    Ms. COYNER. I think the responsibility is with us now to work better with them, to look at the insights that are gained from those recommendations, and the best programmatic choices. We have had some discussions in recent weeks about the inclusion or provision in the bill regarding posting our responses to recommendations on our web site, making them publicly available. We have already taken those steps because we felt like we had the ability to do that and be responsive to Congressional concerns about that.
    But I think the bottom line is that the buck stops here in terms of working with the NTSB and that we understand that and don't feel we need additional legislative authority to move further in that direction.
    Mr. FRANKS. Are you telling us that it is the case that now OPS responds by posting on a web site your response to all NTSB recommendations concerning incidents?
    Ms. COYNER. I do.
    Mr. FELDER. Yes.
    Mr. FRANKS. Within what time frame generally does that response——
    Ms. COYNER. This is a very new initiative. I believe that we are current on recommendations, responding to recommendations. But the typical process is that we respond to recommendations when we have a series of staff discussions. As you know, they are weighted in a variety of ways. So it is not a fixed process. And there are times when the NTSB has taken a recommendation, was closed, and we changed what we were doing, and they have re-rated it.
    We see this as an ongoing and dynamic discussion. There had been an issue about the timeliness of our response, and we believe that we are current now, and certainly will continue to work with the chairman and with the staff to make sure that we stay current.
 Page 34       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Mr. Wise.
    Mr. WISE. Thank you, Mr. Chairman. I believe that my questions about your office's relationship with the NTSB have already been dealt with. I want to come back to an original one because maybe I was drifting or something, but what is the administration's position on reauthorization? I didn't quite get that.
    Ms. COYNER. The administration's position is that there is nothing that is compelling requiring an early reauthorization. If you see fit to go forward with the reauthorization, I think our preference would be for a fairly clean bill, that we do a straight two-year reauthorization. We recognize that members have a variety of concerns, and we will of course work with them in addressing them, either through the legislation or through the program.
    Is that clear?
    Mr. WISE. Yes. Even better.
    Ms. COYNER. OK.
    Mr. WISE. So the administration supports two, if it is clean, if you are going to get into other areas, you would just as soon hold off?
    Ms. COYNER. Well, the administration doesn't believe that it is timely to reauthorize. That is our bottom line. We feel like there is a need to let some of the provisions in the bill, the act that was passed in 1996, play out so that we understand those fully.
    That's our bottom-line position on reauthorization.
    Mr. WISE. That is pretty clear. OK. That's it for me.
    Mr. FRANKS. Mr. Metcalf. Doctor Cooksey.
    Mr. COOKSEY. Thank you, Mr. Chairman.
    The largest gas field of the United States was at the place where I live now, and we had a lot of gas pipelines in the area, and that was in the 1920's and 1930's, even before I was born.
 Page 35       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    But when great gas fields were developed in the marshes and off the continental shelf in the 1950's and 1960's, they really just put pipelines up to my area and connected them to keep all of those people up north warm. We are glad to sell you our gas.
    But it is a problem that is worrisome. It does require some oversight. I have to say that I feel, that generally speaking, the pipeline companies have been responsible. Most of the times that problems occur because someone is digging in the ground and they just ignore the fact that a pipeline is there, when there is usually adequate reason to believe it is there.
    The companies do a good job of patrolling. In my younger days, I used to fly with a company that was doing pipeline patrol, maybe pipeline patrol from my district all the way to Boston.
    They do fly over these pipelines frequently, and they look for brown spots in the grass and bubbles in the water, where pipelines go under water. They identify these problems.
    I would remind the audience here that gas is the cleanest form of energy; it is the safest form of energy, and we do need to be diligent and have good pipelines. And I think what the pipeline industry wants is reasonable oversight and their participation. I think they have been reasonable, and I think they have been fair.
    But we still have to be concerned about the people that could be injured by some of these problems.
    Thank you, Mr. Chairman.
    Mr. FRANKS. Seeing no further questions——
    Ms. COYNER. Mr. Chairman, if I might touch on one more thing with respect to the Bellingham incident. I think one of the things that has also been an important aspect of this incident is that for the first time the Office of Pipeline Safety has worked with NTSB Family Affairs Office.
 Page 36       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    That office, as you know, was established primarily in the wake of TWA 800, but it, I think, nothing makes right what happened, but I think it is an indication of a difference in the activities involving and being interacting with the family members that had victims.
    I have had several conversations with the King family that the NTSB has participated in, and I just wanted to underscore that we share your sense of deep concern for the community that has been impacted in Bellingham and want to continue to work with you on how best to support those families in addressing their concerns as we move forward.
    Mr. FRANKS. Ms. Coyner, thank you very much for joining us this morning.
    I want to welcome now our next panel, who consists of the chairman of the National Transportation Board, the honorable James Hall. He will be accompanied by the director of the Office of Pipelines and Hazardous Materials Safety, Bob Chipkevich, and the director of the Office of Safety Recommendations, Barry Sweedler, both from the NTST.
    [Pause while witnesses take seats.]
    Chairman Hall, welcome. Thank you for joining us this morning.
TESTIMONY OF JAMES E. HALL, CHAIRMAN, NATIONAL TRANSPORTATION SAFETY BOARD, ACCOMPANIED BY BOB CHIPKEVICH, DIRECTOR, OFFICE OF PIPELINE AND HAZARDOUS MATERIALS SAFETY, AND BARRY SWEEDLER, DIRECTOR, OFFICE OF SAFETY RECOMMENDATIONS, NATIONAL TRANSPORTATION SAFETY BOARD

    Mr. HALL. Thank you very much, Mr. Chairman, Congressman Wise, Congressman Metcalf, Congressman Cooksey. My opening statement, excuse me, may take a minute or two past five minutes, but I think that the information is important and it will be accompanied by some presentation material. And I believe the members have been provided copies of that.
 Page 37       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Please know you are under no constraint.
    Mr. HALL. Thank you.
    Mr. Chairman, I want to thank you and this committee for the opportunity for the National Transportation Safety Board to comment on pipeline safety issues and the performance of the Research and Special Programs Administration's Office of Pipeline Safety. And let me say at the outset, there has been a change of attitude under the leadership of the current administrator.
    But we are dealing with a very serious accident that occurred recently in Washington, and my experience from five years with the Board, that the few times that any attention gets paid to this very important subject is when we have an event such as Edison, New Jersey or such an event as occurred in Washington.
    Therefore, I think it is most appropriate that the committee is taking time to look closely at this important safety issue.
    Mr. Chairman, RSPA should play a crucial role in pipeline safety because they are the Federal regulators in this area. In their mission statement, they say it is their mission to protect the American people and the environment.
    They have failed in that mission. They have failed primarily because they have failed to respond aggressively over a historic period to Safety Board pipeline recommendations.
    At 68.9 percent, RSPA has the lowest acceptance rate of any modal administration in the Department of Transportation. That statistic represents RSPA's failure to take measures which I believe would prevent future accidents, save lives, and, most importantly, fulfill their stated mission to the American people.
    There are too many examples of this regulatory inaction. I believe the accidents that I will discuss today could have been prevented or their consequences reduced if our recommendations had been accepted.
 Page 38       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The most recent example was the pipeline rupture in Bellingham on June 10th, 1999. It released approximately 250,000 gallons of gasoline. The gasoline flowed into Whatcom Creek, which as Congressman Metcalf pointed out, runs through a recreational area in that community.
    The gas then ignited, resulting in three deaths and substantial property and environmental damage. Although our investigation is in its early stages, the long-standing safety issues, which I will discuss today, appear to be relevant to the Bellingham accident, based on our early investigation that have previously been addressed in other NTSB accident investigations.
    The first issue I would like to talk about, talk to the committee about is pipeline integrity. In 1987, as a result of investigations into three pipeline accidents, the Safety Board recommended that RSPA require pipeline operators to periodically determine the adequacy of their pipelines to operate by performing inspections or tests capable of identifying corrosion, mechanical damage, or other time-dependent defects that could be detrimental to the safe operation of pipelines.
    Nine years later, in 1996, nearly a million gallons of fuel oil were released into the Reedy River near Fork Shoals, South Carolina, where a corroded section of pipe ruptured. That same year, almost 500,000 gallons of gasoline were released into marshland and the Blind River near Gramercy, Louisiana, where a damaged section of pipeline ruptured.
    In the Bellingham accident, our investigators found indications of previous external damage that may have weakened the pipeline near the rupture. Yet 12 years after our initial recommendation, rule regulations requiring pipeline operators to perform periodic inspections or tests to locate and assess whether the type of damage that was found in the accidents I just mentioned exist on other pipelines.
    The second area I want to focus on is lack of training for pipeline personnel. In 1987, after several accidents in which inadequate training of pipeline personnel was an issue, the Safety Board recommended that RSPA require operators to develop training procedures for their employees. Because of RSPA's inaction over the intervening years, inadequate training continues to be a factor in pipeline accidents.
 Page 39       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Three 1996 accidents provide ample evidence of the problem. In the Fork Shoals, South Carolina, accident mentioned earlier, the controller mistakenly shut down a pump station, failed to recognize his mistake, and continued to operate the pipeline and pump fuel oil through the ruptured section of the pipe.
    In the Gramercy, Louisiana, accident, the Safety Board found that the pipeline company's control center displayed alarms consistent with the pipeline failure; however, the controller did not associate the alarms with the possible leak until an hour after the rupture. During this time, he continued to pump gasoline through a ruptured section of the pipeline.
    In San Juan, Puerto Rico, a pipeline accident resulted in 33 fatalities and 69 injuries. Our investigation determined that the gas company's employees were not property trained to survey, pinpoint, or test for pipeline leaks and failed to locate a reported leak before the explosion occurred.
    Earlier that year, Mr. Chairman, the Office of Pipeline Safety awarded the Puerto Rico Public Service Commission safety program a rating of 97, the highest possible rating for its compliance program.
    Following the San Juan accident, in January 1998, the Safety Board recommended that RSPA complete a final rule in employee qualification, training, and testing within one year.
    I think you have heard the history of how long that rulemaking has been in process.
    That October, RSPA published a notice of proposed rulemaking to require pipeline operators to develop a written qualification program for individuals operating pipelines. However, the notice for rulemaking fails to establish any training requirements; rather, it allows companies to evaluate performance using methods such as oral examinations and on-the-job observations.
 Page 40       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    We are currently awaiting RSPA's final rule.
    In the Bellingham accident, preliminary indications are that the pipeline controllers continued to operate the pipeline after it ruptured. We are in the process of determining what the circumstances were and how the controllers were trained to recognize and handle emergency conditions.
    However, we do know that there is still no mandatory training requirements. This is unacceptable.
    No segment of the transportation system should have untrained personnel operating safety-sensitive equipment which places themselves and others at risk.
    The third issue I want to address is the one that the OPS first identified some 29 years ago, the need for rapid shutdown of failed pipelines in order to limit the release of product following a pipeline rupture. The increased use of automatic and remotely controlled valves to reduce the consequences of pipeline failures was discussed in a 1970 NTSB study, which was titled ''Effects of Delay in Shutting Down Failed Pipeline Systems and Methods of Providing Rapid Shutdown.''
    Since that time there have been a number of other accidents which highlight the need to reduce the release of hazardous gases or liquids. In 1986, in Mounds View, Minnesota, gasoline spewed from a pipeline and flowed down the city street before it ignited and seriously burned three people, two of whom later died.
    The Safety Board found that the pipeline operator could not promptly stop the release of gasoline, which greatly contributed to he magnitude of the loss suffered by that community.
    In 1994, in Edison, New Jersey, a high-pressure, natural gas pipeline exploded. A massive fire ensued, which then ignited several buildings roofs in an apartment complex, which housed numerous families, near playgrounds, and other amenities.
 Page 41       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The Safety Board again found that the inability of the pipeline operator to promptly stop the flow of natural gas contributed to the devastation. The following year, the Safety Board recommended that RSPA expedite requirements for rapid shutdown in failed pipeline segments on high pressure pipelines and in environmentally sensitive areas.
    RSPA continues to study potential technological applications to rapidly shut down pipelines; however, it still does not require these systems.
    Despite RSPA's inaction, several of the more progressive pipeline companies have voluntarily installed shutoff valves. Following the Bellingham, Washington, accident, RSPA ordered the pipeline company to install an automatic check valve just downstream of the rupture location so that the volume of product released would be limited in the event of a future pipeline rupture in that area.
    A case of too little, too late.
    Finally, there is one area in which RSPA has responded to Congressional action, excavation damage prevention. As you know, Mr. Chairman, as has been discussed previously, excavation damage is the leading cause of pipeline accidents, and excavation damage prevention is on the Safety Board's most wanted list.
    Just last month, at the initiative of this Congress, RSPA and the NTSB had a joint symposium on excavation damage, and a report will be sent to Congress on the best practices for preventing damage to underground facilities. That symposium was funded by special appropriation from the previous Congress.
    However, RSPA still has real work to do in order to reduce the number of excavation-damage accidents.
    At Bellingham, our investigators found several indicators of external damage in the vicinity of the rupture. We are seeing more and more of this, Mr. Chairman. I was recently in Atlanta, Georgia, where we had a problem with a pipeline that had a solid waste disposal over it.
 Page 42       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Here we have again a situation where we have an intermingling of different types of pipes. That is a problem, and I appreciate the Administrator's initiative in providing leadership in trying to be sure we address that issue, because it is continuing more and more as we see the growth in our communities.
    The pipe from Bellingham is now in our laboratory and we are closely examining it to determine what part excavation damage may have played in the rupture.
    Mr. Chairman, let me close by saying that the current RSPA Administrator, Kelley Coyner, has promised to be more proactive, and she is working to improve the responsiveness to our pipeline safety recommendations.
    However, the current dismal record has continued far too long and needs to be addressed immediately. More aggressive action is going to have to be taken if we are going to protect public safety and our environment in the future.
    Mr. Chairman, that concludes my testimony. We would glad to try to respond to any of the questions the committee may have.
    Mr. Chipkevich is the head of our Office of Pipeline Safety and Hazardous Materials. He is an accident investigator. Mr. Sweedler was in that office at the time the 1970 study was prepared. He is a long-time Federal employee, knowledgeable in this area, and now heads our Office of Safety Recommendations and Accomplishments.
    His primary job is to follow up through the Board on our recommendations, and he can speak at the appropriate time to the current status of NTSB recommendations that have been issued to RSPA.
    Mr. FRANKS. Chairman Hall, thank you very much for your testimony. I think we all found it very enlightening and somewhat provocative. Let me ask you, if you can, to describe for me the process of communication that takes place subsequent to the issuance of a recommendation. What ongoing pattern of contact do you tend to have with OPS?
 Page 43       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. HALL. Where our involvement begins is with the event.
    We have an accident or a serious incident. So I would ask Mr. Chipkevich if he would briefly outline how we respond, who responds with us, and give a brief overview of how we conduct an investigation. That is how our involvement begins.
    Mr. CHIPKEVICH. Thank you, Mr. Chairman.
    From the beginning of an accident investigation, we do identify and invite parties to participate in the investigation that have technical knowledge and information to assist in gathering a correct and accurate factual record. That will include inviting the Office of Pipeline Safety to participate in the investigation throughout to help document the on-scene information necessary to look at applicable regulations that might be in effect.
    We also provide each of the parties, including the Office of Pipeline Safety, every opportunity to submit proposed conclusions, recommended probable cause, what they believe caused an accident, as well as proposed recommendations in areas that the Board should be considering to look at for either in industry or in the regulatory environment.
    Once the Board adopts a draft report prepared by staff and reviewed by the board, and recommendations are issued by the Board, follow-up is made with the agency that receives the recommendations.
    Specifically, over the last year and a half, Office of Pipeline Safety staff and NTSB staff have met on a periodic basis. We try to meet on about a six-month period to discuss the status of some of the recommendations and what is happening.
    Mr. HALL. Mr. Chairman, basically, OPS has the opportunity to participate as a party to any pipeline investigation that we conduct. If there is a public hearing as a result of an investigation, they also have an opportunity to participate as a party. As part of our investigative process, if they want to provide any information for the Board's consideration, they also have that opportunity.
 Page 44       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    What I have tried to do is as chairman of the agency is periodically sit down with whoever the current Administrator is to review our outstanding safety recommendations and concerns and make ourselves available for any dialogue that might be required.
    Mr. FRANKS. Mr. Chairman, let me ask a couple of questions in follow-up to Mr. Chipkevich. Does OPS take advantage of the opportunity to participate in the investigations conducted by NTSB? Is there a pattern of conduct that they will participate with you at the outset?
    Mr. CHIPKEVICH. Yes, sir. The last several investigations that we have conducted, OPS has participated, and has had investigators on-scene working with our investigator-in-charge and working with the groups.
    Mr. FRANKS. So they are part and parcel of the investigatory process?
    Mr. CHIPKEVICH. Yes, sir.
    Mr. FRANKS. You talk about every six months of follow-up with the agency to review the status of recommendations that have been issued prior to that point by NTSB. That six-month visit incorporates what?
    Mr. CHIPKEVICH. Because many recommendations are old, we initiated a process of having meetings with the OPS staff to talk about what is happening on some of the recommendations. If, in fact, a rule-making is being done, what type of research, how the Office of Pipeline Safety is looking at some of the recommendations.
    Mr. HALL. Mr. Chairman, just so the committee is fully aware, there is a statutory requirement that the modal agencies of the Department of Transportation to respond within 90 days to the Board's initial recommendations. There will usually be continuing correspondence.
    One of our problems with RSPA has been getting compliance with that statutory obligation.
 Page 45       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. I find that troubling, Chairman.
    Let's talk for a moment about the proposed rules for operator qualifications. I understand from your testimony that the proposal does not meet the standards established by your recommendation. Could you elaborate on why it doesn't satisfy it and why the NTSB's recommendations would provide a more optimum level of safety?
    Mr. HALL. We will provide for the record our comments on that rulemaking. We have the opportunity to provide comments on all the rulemaking, and I will ask Mr. Chipkevich if he would review the comments we submitted on that particular rulemaking.
    [Information follows:]

    [insert here]

    Mr. CHIPKEVICH. Thank you, Mr. Chairman. The rulemaking does establish qualifications for people operating pipelines, but bases that on the operator evaluating either through watching the person on the job or interviews of their operation of the pipeline, which is a normal daily task or function.
    What we deem necessary is that there in fact be required training programs; to identify specific training necessary if the person can do a task that is required of them; that there be written tests to be sure that the person understands how to do those tasks, and very clearly understands it. And then, periodically, be retrained.
    These are issues we clearly identified in our San Juan accident investigation.
    Mr. HALL. Mr. Chairman, I must disagree respectfully with the Administrator's statement that you can do all the training in the world and not be qualified. Training is an important part of a program. That may be a true statement in few exceptions, but I doubt if any of us want to use a public transportation system where there has been no training for the operator.
 Page 46       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    We now have in the aviation industry not just training programs, but have recurrent programs that are required for safety-sensitive positions. That has been a Board position, not just in this particular mode, but in all of the modes of transportation, that there should be training and recurrent training for individuals that are in safety-sensitive positions.
    Mr. FRANKS. Mr. Chairman, let me follow up if I can on this training issue. And correct me if I am off base here, but is it important that there be a national uniform training program for all pipeline operators, or is it acceptable to have a variety of programs with each one certified by RSPA as attaining the kinds of standards that you have alluded to in your recommendations?
    Mr. HALL. What you have described, Mr. Chairman, is exactly what is done for railroad locomotive engineers. So there is certainly flexibility there. What we want to do is be sure that the individuals are trained, and that the training program meets certain minimum qualifications. But there is certainly room for flexibility and how that is accomplished.
    Mr. FRANKS. Thank you.
    Mr. Wise.
    Mr. WISE. Thank you. Mr. Chairman, I think you heard the gist of my last exchange with the administrator on what's the administration's position on reauthorization, and if there is a going to be a reauthorization, the they want a two-year clean one. Are there specific recommendations you would make as far as reauthorization goes?
    We have been talking about the recommendations that NTSB has made to the agency for implementation through a rulemaking or otherwise, what about in statute?
    Mr. HALL. Well, Mr. Chairman, I mean, excuse me, Congressman Wise——
    Mr. WISE. I used to be. You can call me that. It is all right.
 Page 47       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    [Laughter.]
    Mr. HALL. I don't know that our Board is in a position to comment on that. I would be glad to provide information from the Board after this hearing. It's not something I have thought about, to be honest with you.
    Mr. WISE. Well, I guess one area that I was interested in is, you and your agency have expressed frustration over RSPA's response to you in the past. I don't know what more can be done statutorily to build a relationship, but if you have some ideas on that I would be glad——
    Mr. HALL. I will certainly look at that. I would hope the committee would understand that this is a frustration I think I can document and record.     I have never seen the devastation any worse than the one in Edison, New Jersey. I have been consistently concerned. This failure has not been just with the NTSB. It has also been with requests that the Congress has made in terms of RSPA being responsive to requests that the Congress has made.
    So I will think about that. I will try to think about that and be helpful.
    They are the ones that define their mission. They are paid by the taxpayers, and it is their responsibility to do their job.
    Now, in this case, of course, they are not just paid by the taxpayers, and They are also paid by the industry, which I have expressed also gives me some concern.
    Mr. WISE. Why don't you go ahead and expand on that a little bit if you would.
    Mr. HALL. I don't understand why they are funded not just directly with appropriated funds. I know it is a mix of fees from the industry as well.
    Mr. WISE. Your recommendations, are they—I think most would agree that most in the pipeline industry are responsible, operate a, operate well, have a good safety record. There are some bad actors that pop up, and some problems that pop up.
 Page 48       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Your recommendations, are they based, are they directed at the so-called bad actors or are they directed at the industry as a whole, those that are acting responsibly——
    Mr. HALL. Our recommendations are aimed at preventing a recurrence of that accident in the future. The purpose of an NTSB investigation is not to find fault or blame, it is to go in with the parties, which include the Office of Pipeline Safety, look at a particularly tragic event, attempt to learn from it, and then say what can we do together to take steps so that something like this will not occur again in the future.
    Mr. Sweedler might want to expand because he has been with the Board 30 years.
    Mr. SWEEDLER. Just to give you an example, Congressman Wise. In the pipeline area more than 1,100 recommendations have been made over our 30-year history, but only about 350 have gone to the Department of Transportation's Office of Pipeline Safety. Most of our recommendations in the pipeline area go to the companies that have been involved in these accidents, and also to the industry at large.
    In general, most of the companies have been quite responsive. In fact, we have made more than 25 recommendations on the training issue where we ask companies to correct and expand their training programs, and they have all been accepted and acted upon, which gives you an idea that sometimes the industry and the company is much more responsive than RSPA.
    Also, in the rapid shutdown area, as the chairman mentioned in his opening comments.
    Mr. HALL. But Congressman, I always try to be very responsible in my comments, but these are reasons that I want to express myself as ably as I can. These events that we are talking about are usually tragic; someone has lost their life, there has been serious environmental damage, or something horrible has occurred, whether it be to a pipeline or in a general aviation accident or in a railroad accident.
 Page 49       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    But the Board's experience has been the eyes and ears of the American people at that event, and trying to ensure the people of the country that we have done everything to prevent an event like that from occurring again.
    It's an important mission. It is a difficult mission. But it is a frustrating mission when you feel that the recommendations that you are making, that are designed to address these situations, are not being handled in a responsible fashion.
    Mr. WISE. Thank you, Mr. Chairman.
    Mr. FRANKS. Mr. Metcalf.
    Mr. METCALF. Thank you, Mr. Chairman. And my first question—I have five questions. The first one, we have received information that OPS has the lowest acceptance rate of any of your recommendations of any administration in the Department of Transportation. In your opinion, is that accurate, and, if so, what makes OPS so much less likely to follow the recommendations.
    Mr. HALL. I am going to ask Mr. Sweedler to respond to that, but if I could, Congressman Metcalf, could I ask you a question, sir?
    Mr. METCALF. Surely.
    Mr. HALL. Did our folks perform well up there, and have the men and women kept you informed, because I didn't have a chance to get up there, and I apologize, other events overtook me. I wanted to be sure that our investigators represented themselves properly with the citizens in your community.
    Mr. METCALF. They contacted me immediately. I went later to view the site, looked at it. And I felt that they gave us the full information as quickly as could be expected.
    Mr. HALL. Thank you, sir.
    Mr. SWEEDLER. Congressman Metcalf, we believe our statistics are pretty compelling. I will agree with the administrator that in recent years their acceptance rate is much closer to the overall rate of other administrations; however, some of these long-standing issues, such as training, rapid shutdown of failed pipelines, and integrity questions, go back beyond the five or 10-year period. Those are very, very important recommendations and need to be acted upon promptly.
 Page 50       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. METCALF. OK. Do you agree that OPS's lack of adequate response to your recommendations require Congressional action? Is this something that we are faulty in not following through on. Is there something we can do? Or is this in the administration somehow?
    Mr. HALL. Congressman, the training issue is something that Congress asked for in 1992 and again in 1996. Here it is 1999 and I think the original accidents were in 1987. We issued 87 recommendations. I don't know what transpired. I assume the NTSB Chairman during that period might have raised the issue, which resulted in Congressional attention in 1992 and again in 1996.
    Now, 12 years later, we still have a rule which the Board has registered concerns about. I have written the Secretary personally on two different occasions to express my concerns on this matter.
    And I must say to you, Congressman, that I have been pleased with the current Administrator's attempt to weigh in and try to address some of these concerns. But I would not be completing my responsibilities to this Committee if I just wanted to come in and talk about the last two or three months of cooperation—or six months of cooperation—with this type of history in the relationship.
    Mr. METCALF. OK. Thank you. Do you have any preliminary data on the excavated piece of pipe from the Bellingham incident? Any preliminary idea of——
    Mr. HALL. That is the responsibility of Mr. Chipkevich, the investigator in charge, so I will have him respond.
    Mr. CHIPKEVICH. Thank you, Congressman. The pipe has arrived at our laboratory, and it is being examined. Although there is certainly a lot of work to do, there is evidence of external damage on the pipe, which we will be evaluating and documenting.
    We have also brought to our laboratory a valve from the pipeline system that we intend to examine and test extensively.
 Page 51       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. METCALF. Thank you. I feared that question would be a little premature, but I wanted to ask it I anyway. Thank you.
    Do you believe that the industry reporting requirements for pipeline that is damaged and so forth are adequate to protect the American public. In other words, do industry reporting requirements need to be tuned up? Is that a problem?
    Mr. HALL. Mr. Chairman, I need to express myself personally, and I don't know that the Board has studied this. I don't think, personally, they are adequate, and I think many times we find the industry low-balling an incident to avoid our investigations and appropriate attention on the incident.
    It is clear, as pointed out by the organization itself, that data is something that we need to do a much better job on. You might be familiar with work that was funded after Edison and done by the New Jersey Institute of Technology looking at the databases and the information available.
    This study reviewed problems with errors in the current pipeline incident reporting system. There were some corrections that were identified, and the committee may want to have staff become familiar with some of that work and the status of that work, which was funded in direct response to the Edison, New Jersey, accident.
    Mr. METCALF. Thank you. Do you believe it might be a good idea to require thicker pipeline in urban areas? Or this perfectly adequate, and anytime a thing like this happens where it is damaged, you know, it isn't the fault of the pipe?
    Mr. HALL. I would like to have the two gentlemen that are experts in that area comment. I would like to say that those are questions that need to be addressed because urban sprawl is taking over pipe that has been there for many years. Some States do a good job. However, there are some States and communities where there is a failure for any type of adequate local planning. We have had, unfortunately, a number of situations where individuals found out for the first time there was a pipe in their neighborhood when there was an event that occurs with it.
 Page 52       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. CHIPKEVICH. Certainly the thickness of the pipe wall is related to the operating pressure under which a pipeline should be operated, and needs to be considered.
    I think, more importantly, is evaluating and determining the condition of that pipe wall, having periodic inspections and tests that can in fact identify if there is any wall thinning, areas of corrosion, external damage—things of this nature that are time dependent and can cause the pipeline to fail at a later time.
    I am aware of some pipeline operators that do, in fact, use a thicker-walled pipe through some populated areas.
    Mr. METCALF. OK. Well thank you very much.
    Mr. FRANKS. Doctor Cooksey.
    Mr. COOKSEY. Thank you, Mr. Chairman. Mr. Hall, you indicated that your three big problems are inadequate RSPA oversight regulation and regulatory inaction, inadequate training by pipeline operators, and then there is a need for rapid shutdown of pipeline after rupture of pipelines.
    How many fatalities occurred in 1997 and 1998 or whatever your most recent year in that you have data on?
    Mr. HALL. We can supply that for the record, but Congressman, it is very few. We don't obviously—we respond to events, not on the basis of how many people have been previously killed.
    Mr. COOKSEY. I understand that, but to just give me a figure—do you have that information.
    Mr. HALL. Thirty?
    Mr. COOKSEY. Ballpark.
    Mr. SWEEDLER. Less than a hundred.
 Page 53       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. COOKSEY. Well, does RSPA have that——
    Mr. SWEEDLER. Thirty, 40, 20? Low.
    Mr. FELDER. [from off microphone in the audience] It is 10 or less every year.
    Mr. COOKSEY. OK. Those 10 people that died. They have family members. That is 10 too many, I agree.
    In injuries, I am sure, there are a couple hundred injuries. I am just guessing. I have no idea.
    Mr. HALL. I assume that is in the ballpark.
    Mr. COOKSEY. OK. Let me ask you this. Are you an engineer by training, or what have you——
    Mr. HALL. No, sir. Unfortunately, I am an attorney.
    Mr. COOKSEY. Is Mr. Chipkevich an engineer.
    Mr. CHIPKEVICH. My background is in transportation and logistics. Most of my staff are either mechanical and petroleum engineers, as well as chemical engineers. Yes, sir.
    Mr. HALL. Mr. Sweedler is an engineer.
    Mr. COOKSEY. What kind of engineer?
    Mr. SWEEDLER. Mechanical engineer, sir.
    Mr. COOKSEY. Good, great. Somebody that has had some scientific training.
    I personally feel that this is an area we need to look at. It is important to the entire country that these are becoming increasingly significant problems as these pipelines age and is something that needs to be addressed. And I would support whatever can be done.
    I will tell you this. I have been in this almost three years now, though, and I am a little bit skeptical of the approach that is often given. I feel as if like there are too many lawyers and, with all due respect to you, Mr. Hall, and not enough engineers. I am a physician (by education and training) we are seekers of solutions to problems, as are engineers, Mr. Sweedler, and I am glad to know that there is an engineer here.
 Page 54       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I would encourage the NTSB to hire some more engineers, and then we can really get to the bottom of this problem. I just feel like lawyers are always here and don't always offer solutions.
    Mr. HALL. Congressman, could I briefly explain to you our structure.
    Mr. COOKSEY. Sure.
    Mr. HALL. The board was created in the 1930's in the aviation area, as a result of high-profile accidents involving Knute Rockne and a member with the U.S. Senate, with the purpose of doing independent accident investigations. In order to accomplish that, sir, I can probably give you some assurance, I do not do the investigation.
    We have on our staff engineers and technical people who go out and are trained in investigative skills to do the investigation. Because of the high-profile nature of many of the things that we are addressed with, Congress in 1967 authorized that there be five Presidentially appointed and individually Congressionally confirmed members.
    We have a highway engineer as one of our Board members; we have an aviator as one of our Board members; we have an aviation mechanic as one of our Board members.
    Our investigators respond, and then in a party situation, with the assistance of any engineers that the company or OPS want to bring or the local utilities, whoever are parties to the investigation, the investigation is structured. A factual report is agreed to by the parties, it is then analyzed by our professional staff at the NTSB.
    When we have a product with a factual portion, which is created by a third-party system, and an analysis portion——
    Mr. COOKSEY. Party? You mean the parties to the accident?
    Mr. HALL. Right, and I could send you a copy—don't you have a copy of the Edison report?
 Page 55       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. COOKSEY. Yes.
    Mr. HALL. We will leave you, sir, a copy of this report on Edison, New Jersey, which occurred in Mr. Franks' district.
    Once that report is completed, it is then presented for review by the Board. At that time, any of the parties to the investigation can provide their own independent analysis for the Board's consideration.
    Only then all five Board members vote, and Board recommendations are issued. This is not a process, sir, that is unscientific in its basis. What I am, of course, is the Chairman of the agency as the spokesperson for the board.
    But the product of the board is completed through the party system and by men and women with the technical ability to conduct a particular investigation in this area.
    Mr. COOKSEY. That is reassuring. It is just that I feel we have a responsibility as elected representatives and you as appointed representatives to make sure that we have safe pipelines, safe neighborhoods, and safe rural-areas where these pipelines are. And, of course, whatever method of transportation, whether you are transporting a product, a petroleum product, or transporting lives. And we have a responsibility, and I know you have a challenge.
    Mr. HALL. I just don't want to come off to you as somebody up here yelling fire in the theater. My brother is a former CEO of Ashland Oil Company and the former president of API. And I have been to Louisiana and looked at all the pipe that is in your State, both offshore and those inland.
    My concern is that we have a process that seems to be being ignored.
    Mr. COOKSEY. Yes.
    Mr. HALL. At the Congressional level and the recommendations of the Board. That is why I am concerned. I am coming across too hot, I apologize, but the fact is that is how I feel about it. I understand that overall the record is very good and I understand that there are very few deaths and injuries in this area. But even those could, I think, have been addressed if our recommendations had been given more attention over the period of time, which includes not just this Administrator's——
 Page 56       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. COOKSEY. I would much rather you come across hot here, in this committee hearing, and let's find the solution, address the problems, and make sure that companies have an ongoing plan to address the problems that have the fire, the heat of an actual fire, a real fire in real life and a real injury and a real burn. Because I don't want that happen in my, anywhere in this nation or in my State, which has a lot of pipelines and not in my district. It is really something that we all have a responsibility to watch.
    I want to make sure that we use the proper approach, use a reasonable approach, and even an aggressive approach. And get some more engineers; they are seekers of solutions.
    Mr. HALL. If I could get more funds out of Congress, I will hire more engineers.
    [Laughter.]
    Mr. COOKSEY. I am really not sure of engineers. Unfortunately, one of my daughters is ruining the family name: She has one more year of law school to go.
    Mr. HALL. Thank you, sir, for letting me explain that to you.
    Mr. COOKSEY. Sure. Thank you.
    Mr. FRANKS. Mr. Chairman, in response to Mr. Wise and question that he asked, I want to follow up and then I want to get into one other area. I want to give you an opportunity to elaborate on a concern that you had begun to express concerning perhaps the independence of RSPA, and OPS specifically, due to the fact that they are funded, at least in part, by fees collected from the companies that are subject to their regulatory framework.
    Mr. HALL. Mr. Chairman, I think that Doctor Cooksey is entirely correct. Everyone is represented in Washington, D.C., sometimes but the American people. And when a tragedy occurs, I think it is very important that Congress have in place, both at the regulatory level and at the Safety Board, people that are independent of that process.
 Page 57       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    We must be able to assure that the Government is looking out after the interest that they are paying the Government to take care of.
    It is extremely important, I think, that we all do everything we can to maintain the credibility of our Government in the glare of this 24-hour media society that we have to deal with. I don't want to imply that there is anything wrong with the funding, other than I think it sets the wrong appearance.
    I think the regulatory responsibility is a public responsibility. Most of these agencies are utilities. We deal with many pipeline companies that are creations of the gasoline industry. It is very hard to find out that they are not listed companies, but are companies that are wholly owned subsidiaries of petroleum companies.
    I think the regulatory function is just as important as it is in any of the other modes of transportation. I am in disagreement with, I believe, my administration on this, because OMB is trying to force on NTSB some sort of fee system, and I don't think that that is correct.
    I think that there are certain functions of the Government that the American people should fund, because they need to be sure that they are reporting only to the American people.
    Mr. FRANKS. I appreciate your sensitivity to both the appearance and the reality of a conflict or a potential conflict, but I want to be clear here. You are speaking with a philosophical objection to this mode of funding.
    Mr. HALL. That is correct, sir.
    Mr. FRANKS. You have, do you have any reason to believe or any evidence within your span of control that would indicate to you that the mission undertaken by RSPA and OPS are not independent or that the process is lacking truth and integrity?
    Mr. HALL. No, sir. I am concerned about the appearance, and that was what——
 Page 58       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Are there any other modes of transportation in which safety programs are paid in whole or in part by the affected mode of transportation?
    Mr. HALL. I have not researched it, but I am not aware of any. There may be, but let me check on that and get back to you on that, sir, so I am clear on the record.
    [Information follows:]

    [Insert here]

    Mr. FRANKS. I thank you. I want to get to your report card over here, the recommendations to RSPA with unacceptable response. And I need to better understand what the continuum of unacceptability is. Obviously, the least acceptable response from my perspective would be if they say nothing at all. There is no action being undertaken to review in depth the recommendation that NTSB has made and that they are just turning a deaf ear and a blind eye to the problem and your recommendation and simply never respond to it.
    I have a 2-year-old girl at home, and sometimes her mother and I tell her to do things. And sometimes she does them, and a lot of times she doesn't. Sometimes when she doesn't do them, there is a reason, and sometimes, in fact, a good reason.
    So I need to understand this bar graph here that shows this terrible rate of acceptance as per other agencies within DOT.
    If they haven't accepted the recommendation in whole, is that an unacceptable response?
    Mr. HALL. Mr. Sweedler has that responsibility in our agency. Let me have him explain the process, which, of course, is all documented by correspondence back and forth between the agencies. On any of these, we would be glad that for the record.
 Page 59       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. SWEEDLER. Mr. Chairman, I will try to be brief, but we have a very aggressive and formal follow-up process. Obviously, the situation that you have described, where the agency says we disagree, we are not going to do it. That is easy. It is where the agency comes back to us with sometimes information that could really not cover the issue that we are trying to get at.
    What we do in our recommendations is identify a safety problem. Our solution is just one suggestion. There are many other ways. In fact, we have a category that says alternate action: The agency comes back and says we recognize the problem but we don't like your solution, we will solve it another way.
    So we close it as acceptable. It is when the agency gives us a lot of, well, I guess I could characterize it sometimes as double talk. They are trying to say that they are doing something, but after an analysis we find that sometimes they are really not doing something, and the problem still exists.
    Now, I think one perfect example, as in the Edison case, is rapid shutdown. We have been talking about this since 1970. We are all familiar with the case, but it took two and a half hours to close that pipeline. Workers had to be sent to a valve to try to close the valve manually. Because the pressure was low, they didn't have the power assist of the motor that runs on the pressure. It would have taken 700 revolutions to close that valve. And they had to abandon it and go to the next valve.
    Those are the real-world situations when our recommendations are not followed. But we are very tenacious about that. When we say something is unacceptable, we write back, it is in the record, your answer is unacceptable and we give them a chance to respond to us and come back to us. Sometimes that goes on for years, but we do not give up. Sometimes, because of frustration, we just close it unacceptable and then we issue a new recommendation, as we have done in some of these important issues.
 Page 60       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Let's use operator training and automatic shutoff valves as an example here. Let me make certain that to your knowledge there is no new state of the art technology, no new facts that have recently come upon the scene which would complicate RSPA's regulatory function or cause them to revisit some conclusions they may have drawn earlier in light of new factual data.
    Mr. SWEEDLER. There is always new data coming on. We never try to make the recommendations that you can't use——
    Mr. FRANKS. There is always new data, but data that would enhance the ability of a regulatory agency to issue a more competent recommendation or rule.
    Mr. SWEEDLER. But there has to be a cutoff. In 1970 we asked this. So I went back and re-read the 1970 study, and some of the conclusions are still valid today. You can study it to a point that you don't do anything. Eventually you have to take some action.
    Mr. HALL. And just as an example, Mr. Chairman, would be runway incursions in the aviation industry. There is technology now that we are trying to get the FAA to put in place to cut down on the excessive rate of runway incursions.
    But will new technology be developed in five to 10 years that make that technology outmoded? Probably yes. But should we leave who makes the decision whether we are willing to take the risk in regard to not putting the current technology in to provide safety awaiting this new technology. Those obviously are not easy decisions.
    But many times, as we saw in Bellingham with the after-effect earlier, when we saw after the Reedy River, a Colonial pipeline, to its credit, has new leadership, a new safety program. I went down to Atlanta; I sat down with the new CEO of Colonial; I spent an afternoon with him, going over the whole program and the whole positive response that they have come up with as a result of the lessons they learned in the Reedy River accident.
 Page 61       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    My concern is that what happens in Reedy River today could happen in the State of Washington tomorrow. And those experiences need to be shared and that information needs to be put into the regulatory framework because the responsible companies, Mr. Chairman, are usually taking steps to do what we have already asked them to do. We have almost a 90 percent response from the companies in regard to our recommendations after specific accidents.
    Mr. FRANKS. Thank you, Chairman.
    Mr. Wise.
    Mr. WISE. Thank you, Mr. Chairman. Actually, I want to follow up. The question was asked by—the question was asked, how many incidents were there in, say, 1998, and I am happy to report that our crack subcommittee counsel, who I must assure the gentleman from Louisiana, she is not a counsel actually, she is an economist, which I know makes everybody feel better, but she does an excellent job.
    I, of course, is one of the dreaded profession you mention. You see solutions and we see settlements. It often works out the same.
    [Laughter.]
    But at any rate, the response in response to, in 1998, in 386 pipeline incidents, of which there were 18 fatalities and 75 injuries, contrasted with, I believe, something like 42,000 highway fatalities that year.
    Also, it is fun batting cleanup, isn't it?
    It does appear there may be at least one other grant dealing with where industry supports some of the operations of a function in the hazardous materials program. There is a program of grants to States that responds to planning and training. It is not actually the oversight but involves planning and train. Every transporter pays a certain fee for those, about $10 million a year.
    And of course, I think it also brings up the question of, I know in our State, and I believe this is true in other States, our Public Service Commission at least partly is supported by fees paid by industry.
 Page 62       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I guess the question I had, which goes, follows up actually on something Mr. Metcalf was pursuing, we know, Mr. Chairman, in your statement, and I understand, my Chairman, that we are going to have a hearing on Bellingham. But I did just note something that concerned me.
    In your opening statement, you, or in your opening lines, you noted that the, in your investigation and the board's investigation of Bellingham, that the company had declined to—well, actually your words—declined to be interviewed by board investigators. You did mention that you had gotten data from the company.
    I guess my question to you is, is the company not working with you in the investigation of this tragic accident?
    Mr. BECAUSE . Because it is an active investigation, Congressman, I would like Mr. Chipkevich to respond.
    Mr. CHIPKEVICH. Congressman, it has been a difficult investigation from the standpoint of gathering some of the information. There were individuals that worked for the pipeline operator that declined to be interviewed. When we issued subpoenas, the individuals pled Fifth Amendment protection and declined to be interviewed.
    Data from the computer system on how the pipeline is operated will be a part of our investigation. We did get a hard printout of data, and we also got a magnetic tape of the data from the SCADA system so our laboratory personnel will be able to extract data on how the pipeline was being operated.
    Mr. WISE. Can you, without getting into—well, you tell me whether you can get into it or not. How would you characterize the progress of this investigation compared to others, where you have tragedy, where you have fatalities involved. Is this a more difficult one? Par for the course because it involves liability? How would you compare this?
    Mr. CHIPKEVICH. In this case, it has been more difficult because we have been unable to interview some of the witnesses.
 Page 63       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. HALL. And it is difficult. I think we left our investigators on-scene for about 30 days, because there was a fire, and it was dangerous and difficult to get the piece of pipe we needed to get.
    But we ended up leaving our investigators on-scene for about a month, which is longer than we would normally do.
    Mr. WISE. It seems to me, am I wrong to characterize this as saying that you are having to go and dig for some of the evidence and to extrapolate from the physical evidence more than you would if you were getting the cooperation of written, I mean spoken, verbal testimony?
    Mr. HALL. I don't think that my general counsel, who is not with me today, would characterize that at this point.
    Mr. WISE. All right.
    Mr. HALL. We may later, but I would not want to choose to do that at this point.
    Mr. WISE. Then, let me ask you, do you have a target date for when your investigation will be complete?
    Mr. CHIPKEVICH. No, sir. As a matter of fact, I have asked the team to have a work planning meeting, which is part of the normal process. I have asked them to identify additional work that needs to be done, additional documentation that needs to be gathered, to look at the type of tests and examinations that we need to do, in particular in conjunction with the testing of the valve, to look at the data from the system, et cetera.
    So I don't have a projected date at this time.
    Mr. WISE. But if this subcommittee wants to conduct a hearing, are you going to be able to come before it and present what you have?
    Mr. HALL. We always cooperate, sir, with all Congressional requests. And we would just have to give you the status of the information that we had at that time. But, certainly we would cooperate, and whether we would have the work completed at that time I do not know. I leave that to the engineers.
 Page 64       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. WISE. Well given the attitude present on the subcommittee right now, I guess I will too.
    [Laughter.]
    Anyway, thank you very much, Mr. Chairman.
    Mr. FRANKS. Seeing no further questions, Mr. Chairman, gentlemen, thank you very much.
    OK, next we will hear from a panel representing State interests, the vice chairman of the Kentucky Public Service Commission, the honorable Edward Holmes, representing the National Association of Regulatory Utility Commissioners and the National Association of Pipeline Safety Representatives.
    Mr. Holmes, welcome
TESTIMONY OF EDWARD J. HOLMES, VICE CHAIRMAN, KENTUCKY PUBLIC SERVICE COMMISSION, REPRESENTING THE NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS AND THE NATIONAL ASSOCIATION OF PIPELINE SAFETY REPRESENTATIVES, ACCOMPANIED BY WILLIAM H. BOWKER, DIRECTOR, DIVISION OF ENGINEERING, KENTUCKY PUBLIC SERVICE COMMISSION

    Mr. HOLMES. Thank you, Mr. Chairman. I didn't mean for everyone to leave the room, but I will be more than happy to proceed.
    I want to thank you for the opportunity to participate in today's hearing on reauthorization of the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act. My name is Edward Holmes. I am vice chairman of the Kentucky Public Service Commission, and I serve as chair of the committee on gas for the National Association of Regulatory Utility Commissioners, more commonly known as NARUC.
    I also have with me Bill Bowker, director of Division of Engineering for the Kentucky Public Service Commission as well.
 Page 65       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I am pleased to be here today, representing NARUC, a non-profit organization representing all the States public utility commissioners. What we are here to talk about today, we have been a strong supporter of the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act. This critical legislation establishing for the first time a set of national standards to be used by the natural gas and hazardous liquid industries in the design, construction, testing, operating, and maintaining its transmission distribution facilities.
    As an alternative to Federal monitoring and enforcing of the program, the United States Department of Transportation, Research and Special Programs Administration, Office of Pipeline Safety, offered to join with an interested State in a Federal-State partnership through which the appropriate agency would undertake monitoring and enforcement responsibilities through annual certification agreements.
    A grant-in-aid program was created by these acts, providing up to 50 percent financial support to those States accepting that responsibility. State programs are then audited an evaluated on an annual basis by field representatives of the Office of Pipeline Safety.
    The funds that the act provides allows States to make that commitment without unreasonably burdening their own customers, and it has contributed greatly to an improved public safety.
    The requirement that each State provide at least 50 percent of its own monies to fund the program assured that a reasonable perspective and partner was built into the funding process and made each State a stakeholder in the process.
    As State utility regulators, we are charged by State statute with requiring that local gas distribution companies provide safe and adequate service at just and reasonable rates. We share with fellow regulators and the gas industry the responsibility to provide reasonable, safe, and adequate service at those reasonable rates that I discussed earlier.
 Page 66       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The cost of pipeline safety is significant. The gas industry has inherited over a period of some 150 years an infrastructure that is comprised of plastic, steel, ductile iron, and cast iron mains, which in many cases needs to be refurbished or even replaced.
    The standardization of performance standards by the Office of Pipeline Safety ensures that pipelines facing these varying conditions and service requirements are uniformly monitored and inspected and maintained.
    In our view, customers or residents should take comfort in knowing that gas delivery systems are safe and efficient. The vast majority of pipelines safety inspections are performed by the States under partnership agreements with OPS, as I stated earlier. In exchange for this data, which substantially reduces Federal obligations in this area, grants are authorized to reimburse States for up to 50 percent of their program expenditures.
    The grants funds are now distributed through performance-based allocation process, which a State's grant is reduced if Federal performance standards are not met. As a result, the States share responsibility with the Congress and the administration to assure that adequate funds are available to assure a safe gas pipeline industry while keeping in mind that the cost of that safety is born by ratepayers and taxpayers.
    In reauthorizing these acts, Congress should continue the Federal and State funding sharing philosophy that is now in place, and States should reasonably expect to bear their fair share of the burden. We strongly recommend that the States be assured of their full 50 percent share of inspection costs. The States should not have to continue carrying more than the 50 percent share that we have done in the absence of adequate Federal funding.
    While the act requires the Federal Government to ensure pipeline safety throughout the United States, State pipeline safety personnel represent more than 90 percent of the workforce. Individuals conduct the daily inspection activities for more than 10,000 gas operators and 250 hazardous liquid operators nationwide to ensure the safe transportation of product to customers.
 Page 67       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The States are clearly at the frontlines in protecting consumers and the environment because of their excellent relationship with respect to pipeline operators, and we request the 50 percent funding continue.
    Moreover, the financial burden on the States is growing. State pipeline safety responsibilities have continued to increase due to new mandates. Grant fund dollars have not kept pace with the demands. These new responsibilities include inspections to determine operator compliance with drug and alcohol guidelines, guidelines for State adoption one-call damage prevention program, master-metered systems, offshore pipelines in State waters, gathering lines, liquefied natural gas storage, and ever-increasing construction activities as operators expand their service areas.
    On October 27th, 1998, operator qualification programs were also added to the list of mandates that we are required to enforce this year if finalized. This new rule will require States to perform more in-depth inspections without additional funding.
    OPS requested $13.5 million to fund base programs for 1999, only to have OMB cut that funding to $13 million. Funding has been made available to risk management feasibility studies for $500,000 and for the one-call damage prevention program of a million dollars.
    We agree that risk management plays a key role in future operator long-term planning, and one-call has prevented underground damage, but such programs should not escalate to the point that the base or core pipeline safety programs could be jeopardized.
    Now, in our written statements for the subcommittee's review, we included charts which show data, showing the amounts requested by State for their gas and liquid programs provided by the Department of Transportation and other relevant costs from 1990 to 1997.
    A quick review of the States' program costs indicates continued increases, in some cases as much as 18 to 20 percent increase for carrying out additional inspection of the pipeline facilities with limited funding. In addition to these specific responsibilities, in 1996 there were 13 percent more intrastate gas mains and 5 percent more local gas services as compared with 1990.
 Page 68       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Federal funding is not providing adequate resources to meet the needs of the States' actual costs. Therefore, a reduction of State programs, or even their maintenance at existing levels, could threaten the infrastructure of the nation's pipeline safety.
    In conclusion, I would again express our strong support to reauthorization of the Natural Pipeline Safety Act and Hazardous Liquid Pipeline Safety Act. Through these important statutes, Congress has established a workable system to bring State and Federal agencies together to protect the public.
    While these laws may benefit from minor refinements for clarity and ease of interpretation, we see no need for substantial revisions at this time.
    Thank you for your time and attention.
    Mr. FRANKS. Mr. Holmes, thank you very much.
    In your written testimony, you stipulate that the enabling legislation for pipeline safety may benefit from some minor refinements. Could you elaborate on what refinements you might have in mind in terms of fine tuning this for reauthorization?
    Mr. HOLMES. Yes. I'll be glad to. Then I will ask Mr. Bowken to as well. Some refinements could be great efficiency. Pilot programs that we're undergoing, digital mapping, requirements for digital mapping of the location of pipelines. Those types of refinements we see as possibly enhancing, or making the program more efficient. The post working relationship with the Federal agencies and the States would also ensure that efficiency. So minor refinements would continue to ensure a successful program.
    Mr. BOWKEN. Mr. Chairman, I certainly agree with what Chairman Holmes has said. The acts are quite comprehensive in that they cover the design, the operation, the maintenance, repair, replacement of these pipelines. There may be places in the act, in the regulations that follow on the act that could be more efficient or bring improvements. I don't have any specific recommendations beyond what Chairman Holmes has said. Definitely something, I think, along the lines of improved mapping, so we know where pipelines are and how they arrive in relation to environmental and public facilities. This of course is beginning with a program that OPS has started on the national pipeline mapping system. Kentucky is participating in that.
 Page 69       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Do you support the national standards for construction, maintenance and operation with pipelines? Are States now in effect entirely precluded from imposing additional standards on intrastate or interstate pipelines?
    Mr. HOLMES. We do support the national standards. I don't believe States are precluded, especially from the intrastate perspective.
    Mr. BOWKEN. I agree. The States, according to their own legislative process of course have the ability to add or have additional regulations on the intrastate pipelines. Most States do not have an agreement with OPS to regulate interstate pipelines. A State can of course have an agreement and inspect these pipelines, but then OPS still is responsible for the enforcement act. So I'm not sure where a State's jurisdiction of those interstates could be expanded. I doubt that.
    But as far as intrastate, in Kentucky, for example, we have several regulations that are in addition to the Federal regulation.
    Mr. FRANKS. Thank you.
    Mr. Wise?
    Mr. WISE. Thank you.
    Chairman Holmes, in your statement, you seem generally pleased with the Federal-State partnership in pipeline transportation oversight, except I might add for the grant levels, a point well noted. Nobody likes OMB around here.
    [Laughter.]
    Would you discuss your experience and that of your State colleagues with the Risk Management Demonstration Project, how you feel that's going?
    Mr. HOLMES. The Risk Management Demonstration Project has been quite successful. As I understand the program, we have been able to identify those areas that have significant risk and address or divert our resources and inspections to those areas. So the Risk Management Program from the State's perspective and from Kentucky has proven to be quite successful. I think it's borne out by the statistics that show the low number of incidences that have occurred.
 Page 70       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. WISE. From the State perspective, do you see significant threats to pipeline transportation safety? Is there a particular one that you would single out?
    Mr. HOLMES. OK. Could you repeat that again?
    Mr. WISE. And maybe there is no State perspective on this. I'm not sure. From the State perspective, do you see—what would you say are the most significant threats to pipeline transportation safety?
    Mr. HOLMES. The most significant threats would obviously be funding. That's the most significant issue that we have before us. The issue of outside force damage is another major concern that we have. I would turn to my colleague if he has some other additional ones.
    Mr. BOWKEN. I think as has been pointed out, that third party damage is the major threat. In States, it seems that within the States, the intrastate pipelines, their local distribution companies, and the others that we do regulate from a safety standpoint, it's by far the largest number of incidents will come from third party damage or probably the second largest is improper installation of appliances within.
    Mr. HOLMES. We don't inspect the appliances.
    Mr. WISE. Well, I appreciate greatly your participation. Thank you. Let's say you have delivered the message well on the grant program, which is very important, because we're asking the States to undertake a function. The question is whether it is going to be adequate——
    Mr. HOLMES. It's a very critical concern of ours with the State.
    Mr. COOKSEY. [presiding] Could you elaborate on the last comment on improper installation?
    Mr. BOWKEN. There are in recent years, there have been a number of instances of fire, what have you, of natural gas, which have apparently been caused by—well one, in Kentucky just a few months ago by the homeowners improperly installing his gas range. Not problems of leaks in the transmission system, but problems beyond the meter within the home of improper installation or maintenance of appliances. Sometimes appliances don't function properly, and you'll have problems with that. But more of an inside the home, a homeowner kind of problem than within the transmission system itself.
 Page 71       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. COOKSEY. Can these cause a problem approximate to the home, the pipeline—can the explosion in the home get back to the major pipeline?
    Mr. BOWKEN. I'm sure that varies very much by incident, but I would say as a matter of general statement, no, I don't think there is a connection there. That's generally if it doesn't do damage to the other home service lines or anything like that, that's generally not a problem. If that's what you mean by if there's not—of course there may be damage from the fact that house blew up or burned up or something like that, but as far as damaging the transmission system, that's not very likely.
    Mr. HOLMES. In our efforts on inspection from the meter to the pipeline itself.
    Mr. COOKSEY. I see.
    Mr. METCALF. No questions at this time.
    Mr. COOKSEY. I have no questions or comments. I appreciate your coming. We're ready for the next panel.
    Mr. Holmes, I do thank you for your participation and being here today. You two are quite a distance from Kentucky.
    Our final panel consists of representatives of the pipeline industry. First, Mr. Steven Ball, senior vice president and general manager for Williams Energy Services, representing the Association of Oil Pipe Lines and the American Petroleum Institute; Mr. John Zurcher, Manager of pipeline safety for Columbia Gas Transmission Corporation, representing the Interstate Natural Gas Association of America; and Mr. Willard Carey, Regulatory Leader-Federal for Public Service Electric and Gas Company, representing the American Gas Association.
    Good afternoon, gentlemen. Good having you here.
    Mr. Ball, would you like to lead off?
TESTIMONY OF STEVEN BALL, SENIOR VICE PRESIDENT AND GENERAL MANAGER, WILLIAMS ENERGY SERVICES, REPRESENTING THE ASSOCIATION OF OIL PIPE LINES AND THE AMERICAN PETROLEUM INSTITUTE; WILLARD S. CAREY, REGULATORY LEADER-FEDERAL, PUBLIC SERVICE ELECTRIC AND GAS COMPANY, REPRESENTING THE AMERICAN GAS ASSOCIATION; AND JOHN S. ZURCHER, MANAGER, PIPELINE SAFETY, COLUMBIA GAS TRANSMISSION CORPORATION, REPRESENTING THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA
 Page 72       PREV PAGE       TOP OF DOC    Segment 2 Of 2  

    Mr. BALL. Thank you, Congressman.
    I am Steve Ball, senior vice president and general manager of Williams Energy Group. I guess it's favorable to say that I am also an engineer. So I am glad to be here. We own and operate within my company, 30,000 miles of pipelines in the United States. Other subsidiaries in our company include the Williams Gas System. We also have natural gas lines. I listened to some of the conversation. We also have about 32,000 miles of fiber optic communications as well. So we are very interested in the topic today. I am appearing before this subcommittee on behalf of the Association of Oil Pipe Lines and the American Petroleum Institute.
    I want to thank you, Mr. Chairman and members of this subcommittee, for the opportunity to talk briefly about our industry and the reauthorization of the Pipeline Safety Act. I have submitted a much more detailed written statement for your reference.
    Those of us in the pipeline industry believe that any discussion of the regulatory environment in which we operate or might be asked to operate should be keyed to two important considerations. The first of which is the central role pipelines play in our Nation's economy, and therefore, our American way of life. The second is the safety record of the industry, a record which we in the industry and you in the public feel is outstanding. Regulation, in our mind, provides minimum standards. It's our employees' integrity, their passion, coupled with our company's core values and beliefs, that put operational excellence at the top of our priorities. The zero tolerance is the target. We continually strive to attain that goal. I can assure Congressman Wise that we are never satisfied. There is always room for more work to be done.
    Pipelines carrying petroleum products are essential to the economy and to the way Americans go about their daily lives. Pipelines exist in all 50 States. They traverse over 200,000 miles. In 1997, pipelines carried nearly two-thirds or 64.4 percent of all crude oil and refined products transported in this country as measured in ton-miles. So as you can see, when we say our role in the Nation's economy is central, it is by no means an exaggeration.
 Page 73       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    It is interesting to note, moreover, that we perform that role in an efficient and economical way. We only employ 16,000 people, but we can transport a gallon of gasoline across the country for two cents a gallon, a fraction of what it costs the U.S. Postal Service to send a 33 cent letter the same distance.
    Obviously, efficiency and productivity are important, but they cannot be achieved at the expense of either safety or the environment. The facts show that we perform our role and operate our businesses in ways that protect both public safety and our natural surroundings.
    As I point out in my written statement, a breach in pipeline integrity is unacceptable. A pipeline accident can cause injury or death and significant disruption to surrounding areas. For the company involved, that threatens its ability to control, for an unknown period of time, its very existence. We do our very best to avoid incidents, and would do so under any regulatory regime.
    However, as we have known from recent and tragic experience, incidents can be costly in human, environmental, and in financial terms. In addition to the sorrow we feel for the victims of the disaster in Bellingham, our concerns for the environmental consequences of that incident, our attention like yours, has been riveted on the events of June 10. Like you and the people of that community and region, we too want to know what happened to cause the leak and the explosion that followed. Like you, and those you represent, we want to know what can be done to prevent future calamities of that type and scope.
    It's important to point out, as others have done so previously, that as we meet today we don't yet know what happened to precipitate the release and subsequent explosion along Whatcom Creek. Let there be no doubt in the minds of the members of this committee or anyone else, that we are anxious as anyone to know answers to the many troubling questions that have grown out of this tragedy, and our industry will provide whatever assistance we can to help you find those answers, I assure you.
 Page 74       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The Bellingham disaster does not represent anything close to the norm in our industry. It should not precipitate drastic changes in public policy. Bellingham notwithstanding, oil pipelines are safe and are getting safer. Oil transport truck related deaths are 87 times that of pipelines. Trucks are 35 times more likely to have fires and explosions, or result in twice as many injuries. Our industry's record over the past three decades shows marked improvement, as you can see in the exhibit to my right. Since 1969, the number of the spills has decreased by 40 percent, and the volume spilled has decreased by 60 percent.
    We want to be trusting partners in the communities in which we operate. As technology has advanced and management has strengthened its commitment to safety and environmental protection, we are closer than ever before to achieving our goal of zero tolerance. It's important to note as well that Congress passed, with the help of this Committee, the one-call damage prevention legislation. This measure, which is being implemented by the Office of Pipeline Safety, addresses the single biggest cause of pipeline accidents, damage by outside force, specifically excavators.
    As you consider the issues before you today, I urge members of this committee to keep these facts in mind. I urge you too to recognize the success of the public and private partnership represented by the Office of Pipeline Safety, and to continue it at further funding levels for the next four years.
    Finally, the Office of Pipeline Safety's Risk Management Demonstration Program is successful. It promises safety and environmental results exceeding those available from existing regulations. Congress should find a way to allow risk management to be more broadly adopted in the Office of Pipeline Safety Program.
    Again, Mr. Chairman, I thank the committee for the opportunity to discuss these important issues. I will be happy to answer your questions.
    Mr. FRANKS. [presiding] Thank you.
 Page 75       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. Carey?
    Mr. CAREY. Good afternoon, Mr. Chairman and members of the subcommittee.
    My name is Willard Carey. I am the regulatory leader Federal, for Public Service Electric and Gas Company headquartered in Newark, New Jersey. I thank you for this opportunity to appear before this subcommittee in regard to reauthorization of the pipeline safety statute.
    Public Service Electric and Gas Company is a combination utility in New Jersey that provides approximately 1.9 million electric customers and 1.5 million natural gas customers. We serve about 70 percent of the New Jersey population. I am also here this afternoon representing member companies of the American Gas Association. AGA represents 189 local distribution companies that deliver natural gas to almost 60 million homes and businesses in all 50 States. LDCs comprise that segment of the natural gas industry that delivers the natural gas to the homes and the businesses. We are at the end of the line, stretching from the producing fields through the inter and intrastate pipeline system, to the natural gas burner tip. We are, to the general public, the faces of the natural gas industry. The delivery of safe, reliable service at a reasonable cost to our customers is paramount to maintaining and growing our business. It is in our own best interest to operate safely and with excellence.
    Although each State utility commission has primary regulatory authority over the local distribution companies, Federal pipeline safety regulations impact our operations. States adopt the Federal safety rules as minimum requirements in order to qualify for grants up to 50 percent of their pipeline safety enforcement costs from the Department of Transportation's Office of Pipeline Safety each year. This system has provided a level of consistency from State to State. While this has worked well, LDCs do not stand still. We are always interested in finding better ways to provide safe, reliable service to our customers.
 Page 76       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    In New Jersey, we currently enjoy an excellent working relationship with the Bureau of Pipeline Safety, which is part of our Board of Public Utilities. I would like to thank our BPU president, Herb Tate, for the leadership that he has shown in this area.
    The natural gas utilities industry's record is exemplary. With an estimated 1.5 million miles of distribution lines nationwide, and serving 60 million customers, our accident rate is consistently very low. Our number one safety concern continues to be unintentional strikes by excavators, what we call third party damage. Unintentional dig-ins by third parties are the number one cause of accidents on natural gas pipelines. Call before you dig, or a one-call program, is our principal tool in our damage prevention program in combating this problem.
    DOT has recognized the importance of damage prevention and initiated two major and significant projects. First, OPS formed the Damage Prevention Quality Action Team that developed and is now implementing the Dig Safely Campaign. Through legislation last year, Congress directed DOT to form the One Call System Study or Common Ground group to identify the best practices within the One-Call industry. I had the distinct honor of serving on both of these initiatives. On June 30, 1999, the Dig Safely Campaign and the One-Call Best Practices were formally presented to the DOT Secretary Rodney Slater at a public meeting. We thank you for recognizing the importance of strengthening damage prevention efforts, and we thank DOT for moving expeditiously in this area.
    I would like to address the reauthorization for the 106th Congress. The current authorization for the Federal pipeline safety programs expire September 2000. We appreciate the early attention that reauthorization is receiving from this Congress, and look forward to working with you in a bipartisan and expeditious fashion to reauthorize the program. The American Gas Association and Public Service Electric and Gas Company respectfully urge Congress to reauthorize the current pipeline safety statute without major modifications. This will allow the initiatives created by the 1996 reauthorization to continue to unfold. We believe that they are working well. We would prefer the normal authorization cycle of four more years, but we could live with a two-year reauthorization if Congress so desires.
 Page 77       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The last reauthorization modified the Federal pipeline safety program by applying flexible and non-prescriptive risk assessment and cost/benefit analyses requirements for new rules. The legislation also authorized the development of voluntary risk management demonstration projects to allow companies and regulators to explore better ways to provide safety for their individual systems. Both of these new initiatives are underway and are progressing. Rules are being issued and DOE is steadily working through its backlog of rulemakings.
    Lastly, we believe the funding level approved for Fiscal Year 2000 should be sufficient to carry the program forward through the next authorization cycle. The level should be increased only to account for inflation.
     Funding for OPS safety programs comes from user fees assessed on transmission pipelines. A portion of the fees assessed on natural gas interstate transmission lines is passed through to the LDCs. This in turn is passed onto the consumer. Congress should therefore ensure that the funding level for OPS is both adequate and proper.
    During the negotiations for the 1996 law, the natural gas industry agreed that OPS needed funding to develop guidelines and protocols for the new initiatives. OPS also needed to be able to clear its backlog of pending regulations and provide adequate inspectors in the field. We believe OPS is well on the way to accomplishing these objectives. We urge that the funding remain at the Fiscal Year 2000 level for the next four years.
    If Congress decides to increase the authorization, the additional funds should come from OPS' reserves. This reserve contains previously collected but as yet unused pipeline safety user fees. It seems appropriate that these monies be used for OPS activities until drawn down. On a related issue, the Federal one-call law passed by the last Congress called for $6 million total to be provided out of general revenues to fund and implement the State grant program.
    As one-call programs help protect not only natural gas and liquid pipelines, but telecommunication carriers, water, sewer, and steam lines, buried electricity, cable TV, phone lines, excavators and the public, it is reasonable that funding for the Federal grant program come from general revenues. There is a concern within our industry that Congress will take the monies from pipeline safety user fees instead. We believe this to be counter to the intention of the law. Furthermore, we already have a portion of user fees committed to education about damage prevention to pipelines. As the authorizing committee, we ask your help to ensure that the appropriators follow your directions when funding the one-call grants program.
 Page 78       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I would like to also address the operator qualification issue that mentioned earlier. We, as Public Service Electric and Gas and the American Gas Association, totally support what we developed through negotiated rulemaking between all of the stakeholders. We developed a program where we as the operators must identify all of the tasks. We must identify who performs them. And we must ensure that the people are qualified to do them.
    If you use the example of a pipeline welder, he works all day long welding. He knows what he is doing. We do not believe that you have to stop and send him into a classroom to train him in what he can do. Many times you will find that when you evaluate him and he isn't doing the job properly, it isn't a training issue, it may be a personnel issue. It may be a failure to do his job properly. You don't send him into retrain for that. So we support the operator qualification program and we do look forward to having it released shortly, because we believe it will be effective. Many people worked on it to make it effective.
    In conclusion, I would like to state that Congress should retain the provisions of the 1996 pipeline safety law and extend the risk management demonstration program. The processes created by Congress in 1996 are working. We ask that they be allowed to continue. OPS has not been hampered by the new requirements of the 1996 law. In fact, the knowledge and expertise of OPS inspectors and personnel have been increased to the benefit of the public safety. Continuation of these programs will bring about a greater knowledge and understanding for all parties, leading to better rules and programs in the future. Initiatives such as these represent a real reinventing of government, by allowing innovative processes to improve public safety, as well as providing a systemic change in the way industry is regulated.
    I appreciate the opportunity to appear before you today, and I look forward to answering any questions that you may have. Thank you.
    Mr. FRANKS. Thank you.
    Mr. Zurcher?
 Page 79       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. ZURCHER. Thank you Mr. Chairman and members of the subcommittee.
    I am John Zurcher. I am manager of pipeline safety for Columbia Gas Transmission. I am speaking today on behalf of Columbia Gas and the Interstate Natural Gas Association of America, where I sit as chairman of the Pipeline Safety Committee for that body.
    Columbia Gas is a wholly-owned subsidiary of Columbia Energy Group, based on Herndon, Virginia. We are one of the Nation's leading energy services companies. The Interstate Natural Gas Association of America is a trade association that represents virtually all the interstate natural gas transmission pipeline companies in the U.S. as well as comparable companies in Canada and Mexico.
    I want to thank you for having this hearing on the reauthorization of the Accountable Pipeline Safety and Partnership Act. INGAA believes that the act is working very well, and supports a full four-year reauthorization of this act. The Act requires that new safety regulations undergo a risk assessment and cost/benefit analysis prior to final approval. It also establishes a risk management demonstration program. We believe these new risk-based approaches represent the right combination of efforts to enhance safety and protect the public and the environment.
    Pipeline safety is a top priority among INGAA members. Aside from being in our own best interest, it is our responsibility to assure our customers, our employees, our shareholders, and all citizens, that we operate a safe pipeline system. Natural gas pipelines are the safest method of delivering the energy of our Nation's needs. Year after year, the statistics released by NTSB on transportation-related fatalities demonstrate this fact. In my written testimony, there is a chart that shows what a very fine record we do have.
    INGAA does, however, continue to support and seek ways to assure that our systems become even safer. For example, after the natural gas incident in Edison, New Jersey in 1994, the INGAA board of directors took decisive measures to review our safety management procedures. The significance of this incident, which resulted from third party damage, caused our board to pursue any and all additional measures and procedures that could be available to improve our safety efforts.
 Page 80       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    An INGAA board task force developed an aggressive plan with seven priority initiatives. These included the passage of legislation to encourage States to improve their underground facility damage protection program. Third party damage is the leading cause of pipeline accidents, and is responsible for approximately 40 percent of the natural gas pipeline transmission accidents. With your help, we were very successful.
    The 105th Congress passed the Comprehensive One-Call Notification provisions of the Transportation Equity Act for the 21st Century. This legislation encourages States to increase participation in one-call programs, or call-before-you-dig programs, by all contractors and all under ground facility operators. It also directed the Department of Transportation to assemble a list of one-call best practices that then can be disseminated to the States. I want to thank this committee for the work that helped pass that piece of legislation.
    INGAA and its member companies have worked to implement the goals of the legislation. We participated in both the Damage Prevention Quality Action Team and the best practices review called for in the One-Call legislation. That task force, now called Common Ground, has just issued a report that concludes that communication among all parties is critical. We are working with other underground facility and contractor organizations, as well as DOT, to pursue continuation of these efforts through a private non-profit organization. This organization would represent all the parties concerned about third party damage, not just natural gas and liquid pipelines.
    INGAA has developed a coordinated research program that prioritized developments of products and procedures to assist our continuing efforts to provide safer and more reliable service. We have worked with the Gas Research Institute and the Pipeline Research Committee International to reassess the capabilities and limitations of internal inspection devices, such as smart pigs, and also of automatic and remotely operated shutoff valves. For example, as a result of our findings, we worked with the Office of Pipeline Safety to fund research to improve sensors and analysis systems for tools that detect mechanical damage to pipelines.
 Page 81       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    We have developed materials to improve our public education and emergency preparedness efforts in order to elicit the public's support in preventing accidents and minimizing the consequences of those accidents. This INGAA board action plan that I have detailed, and its effect on the culture of both the industry and OPS, have resulted in improvement in our safety record during a period of unprecedented growth.
    Finally, the INGAA Foundation, composed of interstate natural gas pipelines and our pipeline suppliers is holding its second annual Pipeline Safety Summit in Washington, D.C. this September. This conference will focus on construction and permitting issues that impact safety. We will also discuss potential ways to mitigate the impact of encroachment threats to our pipelines, and we would invite you to participate.
    During the debate on the reauthorization of the Pipeline Safety Act in 1996, the Department of Transportation's Office of Pipeline Safety joined with industry in exploring ways in which resources, public and private, could be used most effectively to enhance public safety. We agree that a risk-based approach to regulation is the key. Together, government and industry worked with Congress for the passage of the Accountable Pipeline Safety and Partnership Act of 1996.
    This act does have two important elements. First, with few exceptions, new safety regulations are to undergo a risk assessment cost/benefit analysis prior to approval. It is important to note that not all new regulations though are required to go through this analysis. If a rule is the subject to a negotiated rulemaking or it's a consensus rule or an adoption of industry standards, those enacted with the consent of standing advisory boards within OPS, they do not have to go through this process. As the Joint OPS Stakeholder Workgroup has been seeking agreement on a collaborative framework for these cost/benefit analyses, a report was issued on April 12 of this year. All rulemakings since 1996 have been issued under one of these alternative procedures.
 Page 82       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    The other important element of the 1996 reauthorization is the Risk Management Demonstration Project. That is not to be confused with risk assessment cost/benefit analysis. Under the Risk Management Demonstration Project, pipelines can volunteer to work with OPS to create an alternative compliance program, subject of course to OPS approval, which would tailor each pipeline's efforts to address the specific risks along its system. This will permit the pipeline to target its resources in the most effective manner based on the potential safety risk to its system.
    To date, the Department has approved five risk management projects. Another seven are at various stages in the process. One of the pending proposals is one for Columbia Gas Transmission.
    In summary, INGAA supports the full four-year reauthorization of the Accountable Pipeline Safety and Partnership Act. We support risk assessment, cost/benefit review for new regulations, and we would like to see it continue. We also believe that extension of the risk demonstration program should assist in our continuing efforts to improve our safety record. It also will help OPS representatives to better understand the operation of the pipeline infrastructures and its implications for pipeline safety. We also believe the current level of pipeline safety user fee is sufficient to continue a sound safety program at OPS.
    I would like to thank you, Mr. Chairman, for allowing me to testify today.
    Mr. FRANKS. I thank all the members of the panel.
    Mr. Ball, if I might ask you a couple quick questions. You mentioned several initiatives undertaken by the industry to improve or enhance the industry's safety record. What kind of response are you receiving from members of the industry to those initiatives, and how does the industry or the association for that matter, promote compliance with those initiatives? Who assesses whether or not a particular company is in compliance?
    Mr. BALL. Let me take the first one. Listening to Mr. Carey speak, probably an example of the best cooperative initiative between private and public is this document, Common Ground. The team that had been put together which essentially took all stakeholders, whether it was the public excavator, railroads, telecommunications, pipelines, gas, liquids, et cetera. Put them all in a room and tried to develop consensus rulemaking was a very difficult task.
 Page 83       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Sitting here and listening to the NTSB issues with the Office of Pipeline Safety, it appears that incidences which the NTSB investigates and comes up with recommendations for that specific incident, the problem that is occurring that I think has been successfully overcome through the Common Ground, is how do you take that specific site, the site-specific incident, and apply it nationwide? And how do you do that where there's so many differences in operating policies and practices and commodities and environments, et cetera, et cetera? It really does take an involvement of all stakeholders, public participation, State, and Federal, as well.
    In terms of the enforcement part of the question, speaking from the industry and me personally, I would say it was 1970's and 1980's where you were really focused on what that regulation said, because many times the regulation was all-important, and, as opposed to in the 1980's and 1990's, it was the right thing to do. Often times when you finish that risk-based analysis of what the right thing is to do, you take a step back and you look, and you benchmark it against what the regulation says. More often than not, you have come to a conclusion that is above and beyond the regulation. That is how I characterize our industry today, and that's what I mean in my comments in terms of regulations are a minimum standard.
    Probably the most aggressively pursued initiative within the industry right now is involving risk management, and how do you prioritize your risks, and how do you allocate capital or expense dollars as risks. What has far exceeded any regulation that's out there today is the management and the process of management of change in identifying and eliminating risks in our operating environment.
    Mr. FRANKS. Thank you.
    Are there standards or qualifications for operators or other employees with safety related responsibilities outside of what is required by Federal regulation that the companies opt to impose upon themselves within the hazards of the pipeline industry?
    Mr. BALL. Yes, sir. I don't know if this is a proper term, but I grew up I guess a child of the Mounds View, MN accident. Before Mounds View in 1986, there was an environment that is much like a command and control environment in the industry. Many of those techniques imposed rightly or wrongly, came out of World War II and that was the way you did it. You just told people how to do it, and that was it.
 Page 84       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    From about the mid–1980's forward, you found companies with a new attitude in terms of let's find ways to improve beyond what the regulations say. One of the recommendations that came out of Mounds View, I remember very clearly NTSB sitting here, was for training programs. We talked about valves. We talked about hydrostatic testing, et cetera, et cetera. I know this is a long answer to the question, but at that time, the industry undertook a training program. In fact, it was invented within the pipeline industry. In fact, our company had a lead role in developing computer-based training. There was no standard that was set out there. There was no regulation that said you had to do it. But there was an identified need in terms of developing the competencies and the employees of the company, fundamental issues, just as how do you handle gasoline. What are the differences between natural gas, propane gasoline, what are their natural characteristics? Then you moved more into specific issues in terms of hydraulics, how do pipes operate, how do you handle at normal conditions.
    Many of those things were developed without regulation. It was just the right thing to do, and there was a need to educate the employees, and probably equally important, to document that. So yes, the answer is it was pretty much an initiative that was undertaken by the pipeline industry itself and is prevalent throughout the industry today.
    Mr. FRANKS. Thank you.
    Mr. Carey, according to testimony from the DOT, there is an increase in the number of fatalities in the pipeline industry, most of which occur in gas distribution systems. Can you provide some insight into that trend?
    Mr. CAREY. I cannot give insight into the trend offhand today. I can get you that information. But I have seen the opposite as we have been tracking the data, that I over the years have seen a reduction in it.
    I can say from what we did with the DAMQUAT, when we ran the trial programs in Virginia, Tennessee and Georgia, with that we were able to increase the use of one-call by 15 percent, reduce the damages by 10 percent, which is the opposite trend of what they were saying. So I can see in what we have been doing through these new initiatives that we are seeing very vast improvement in the safety record.
 Page 85       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. You testified that the States adopt Federal safety rules as a minimum requirement. What, if any, additional areas of safety regulations do the States engage in?
    Mr. CAREY. Within New Jersey, which I have personal knowledge of, they have training of the procedures that you would follow. They have addressed trying to minimize the number of master meter operators that are out there. That is where an owner of a building has their own underground gas distribution system. We have found that many times they don't maintain them that well. So we have seen changes there.
    They have additional requirements for testing of meters to ensure accuracy. Also they have followed up very firmly with respect to ensure that as the additional procedures that we put in place voluntarily, as Mr. Ball discussed, we are actually using them, and that we could get a file of non-compliance if we do not. So it's a very aggressive follow-up above and beyond the 192 code.
    Mr. FRANKS. Mr. Zurcher, with the natural gas pipeline industry being a very mature industry, many of its pipelines dating back to the 1920's, what does the industry do to monitor those older lines? What tests are involved with tracking the integrity of those facilities?
    Mr. ZURCHER. I think first and foremost there is a long list of items that we monitor on a continual basis, surveys, equipment maintenance practices, along with some of the newer technologies that we have employed these days, we have a very good handle on what the pipeline infrastructure looks like. We do spend an awful lot of time assessing the true integrity of the pipeline system.
    With some of the new technologies, like the smart digging technology, we have in the last couple years gone from the mode of trial of this new technology to one where it's really embraced. We believe there is a lot of potential. Earlier this afternoon some of the other folks testified about hydrostatic testing. In certain instances, that is still a very viable way to take care of pipeline integrity issues.
 Page 86       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Also though, I think the most important thing is we have got a really dedicated workforce, a large number of people that are monitoring the pipeline continually, 24 hours a day. In our case, there's 2,400 employees at Columbia Gas Transmission, of which about 1,800 are in the field. They live with that pipeline everyday, and they know exactly as far as possible how that pipeline is going to perform in the future.
    Mr. FRANKS. Mr. Wise.
    Mr. WISE. Actually, let me echo the testimony there. As one who lives on the Columbia Gas pipeline, you do maintain them very well. That was long before we ever got there. We live in a rural area, which used to be a gathering area for my storage dump. My observation is that that is absolutely the case.
    Let me ask this question. Actually I think Mr. Carey may have answered it, but to you, Mr. Ball, Mr. Zurcher, your testimony reads that you want a four-year authorization. I think the administration is saying two. My guess is that when push comes to shove, it's probably going to be down to two. Is that something you can live with?
    Mr. ZURCHER. Yes.
    Mr. BALL. Yes, sir.
    Mr. WISE. A terse yes, let the record show.
    The second question I have is in terms of the funding on industry user charges. The funding level made in your statements you feel is probably about right, the representative of NARUC is concerned because he feels the program is under-funded because it's not reimbursing States at the 50 percent level. Is that something then that this subcommittee ought to look at increasing the authorization level to a level adequate, to encourage the strong State programs through matching grants?
    Mr. ZURCHER. I'll take that, Mr. Wise. The natural gas transmission industry, we're very confident in OPS' ability to manage money. We feel that the 50 percent allocation of the States is appropriate. We would not like to see the budget increased nor the allocation increase above the 50 percent level.
 Page 87       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I think their point about not receiving full 50 percent funds is probably one that should be looked at. I don't know that we would disagree with that at all. As far as additional funds, as far as we are concerned, the program is adequate.
    Mr. CAREY. I would add to that that as I touched on in my testimony, it was our understanding that when they initially went forward with the additional grants for the best practices, one call was that it would come out of the general funds. That has since been switched around, where I am afraid it will come out of the users fees.
    In talking with the other regulators that we work with proactively, there is serious concern that their existing programs can be undercut by the allocation of these funds to other programs that was never intended by OPS or DOT or RSPA. So that's some of the concerns that I had mentioned as to the use and where the funds come from. It should be from the general reserves rather than the user fees.
    Mr. BALL. I agree with their comments. Nothing more to add.
    Mr. WISE. Thank you, gentlemen.
    Mr. FRANKS. Mr. Metcalf?
    Mr. METCALF. Thank you, Mr. Chairman.
    Do you believe, and any of you can comment on this, that the OPS does an adequate job of regulating your industry?
    Mr. ZURCHER. I would be happy to take that, Congressman. One of the items we submitted in our written testimony is a chart that shows how our reportable pipeline incidents have gone down. The number of fatalities is actually on the decrease. When you are talking gas transmission though, we have had eight in the past 10 years. So it's a very good number. But the number of injuries is also declining.
    I think if you'll look at that chart, sir, you will see that it is declining at a much more rapid rate since we have entered into some partnership arrangements with OPS. I think the point I would like to make is the sharing of information, the sharing and having of a common goal to improve pipeline safety is having a very substantial effect on the pipeline safety program.
 Page 88       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. METCALF. OK.
    Mr. CAREY. I have seen that in my time with the current administration, in that they have reached out to us, and not just giving us prescriptive rulemaking, but they have included us in the first go-around with the Damage Prevention Quality Action Team. They asked us to come up with solutions. They did that with the Common Ground. We had over 160 people participating with over $500,000 in expenses, coming up with 132 results that we as stakeholders came up with. It wasn't just mandated.
    I am also involved with the Gas Piping Technology Committee, where they have active participation in coming up with guidelines to regulations. OSP is part of that. So I see, just as John does, if we keep partnering, working together for one common approach. That's what I hope we can continue.
    Mr. METCALF. OK.
    Mr. BALL. I do want to add something, I guess additional to add. The attitude within OPS has changed markedly with the current administration. They have moved the organization from command and control into one of participation in rulemaking, to where it's a continuous educational process for all parties involved.
    The one comment that I want to add here that is beyond the Office of Pipeline Safety's control, and this is something that I would urge the committee to investigate. It gets to the issue of damage control. But there's only one State in the United States that has set a mandatory setback easement requirement. What I'm talking about here is getting more stakeholders involved in protecting the pipelines.
    We can set regulations. We can set any number of initiatives to try to protect pipelines. But unless the cities and the communities in which we live in fully participate, fully engage, when you go to meet with them for emergency response training, they actually show up. There are many communities that don't. But they are an active stakeholder in the process of protecting the pipelines.
 Page 89       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    I think there's a lot of things there that can help in terms of keeping from the construction process, when we design new buildings or neighborhoods, et cetera, that there are some issues there that somehow need to be addressed, and I think would help the Office of Pipeline Safety. So I think that's something new, that hasn't really been addressed here, but there are some States that are kind of stepping out, trying to look at that. But that is an area for investigation.
    Mr. METCALF. OK. Are there any NTSB recommendations which haven't been implemented that you think should be implemented? Or have they basically been?
    Mr. ZURCHER. Congressman, I would say there are not any that are pending that OPS has not addressed that we feel should be implemented.
    I would like to make one observation. If you look at the number of reportable incidents for pipelines, the number is very small. When you compare that to aviation or the marine industries and so forth, their numbers are significantly larger. NTSB recommendations often times are based on a significant number of like-incidents. We do not tend to have that in the pipeline industry. We have a very small number. I think the Office of Pipeline Safety does a very excellent job of wading through the recommendations, trying to address them as much as possible. But furthermore, adding some other constituencies, stakeholder benefits at the way they assess them, and to not enact new regulations that are reactionary in some ways to just a couple of incidents.
    Mr. METCALF. OK. Are there any NTSB—I think you answered this question in that one, but I'll ask it anyway. Are there any NTSB recommendations with which you would take issue?
    Mr. ZURCHER. Sir, I cannot think of any off the top of my head that we would take issue. If you would like, we could look over all of those and respond back to you.
 Page 90       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. METCALF. I haven't heard anything about this particular thing. It seems to me this would be one of the biggest pressures on pipeline companies to do it right than almost anything else. Does your liability insurance carriers keep a close watch on your operations and safety and so forth?
    Mr. CAREY. I would say definitely, because we interact through my company, Public Service Electric Gas Company, very closely. They also participate on the national committees. The insurance industry was on Common Ground and DAMQUAT.
    Mr. METCALF. It would seem to me that they would be taking a major role in watching out. It will cost them money if things go wrong.
    Mr. BALL. They definitely do, in the well industry as well. Hartford Steam Boiler, Lloyds of London, are right along side our risk management people. They basically canvass the entire system. There are random checks. There are some that are routine. But they are actively engaged in the process.
    Mr. METCALF. OK. I have no further questions, Mr. Chairman.
    Mr. FRANKS. Mr. Zurcher, let me follow up on just one point of clarification. When I asked whether or not there were outstanding rules and regulations at OPS, I considered out that you would recommend that they did not. The reality is that we have had pending at OPS regulations concerning operator training and automatic or remote shutoff of valves. Are you indicating that OPS should not move forward in those two instances?
    Mr. ZURCHER. Sir, the operator qualification, we are very much on board with that.
    Mr. FRANKS. On board with what OPS is to be doing?
    Mr. ZURCHER. Yes, sir. With the new regulation that they will issue in the next couple weeks, we do agree with that. We have no objections to that one at all. We worked with them very closely to come up with a piece of regulation that all stakeholders could buy into. It was truly a consensus, a consensus type arrangement.
 Page 91       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Other than that, automatic control valves for the transmission industry, natural gas transmission industry, we had sponsored many studies and many research efforts. In our mind, a requirement for those types of devices across the Nation is not appropriate. There are times and places where they do add benefit, but as far as a national system-wide application or requirement to add remote or automatic valves, we could not justify it. Our studies and research shows that it is not a benefit.
    There are exceptions, sir. For instance, in West Virginia with a lot of long wall mining that takes place, we will install those types of devices in case that pipeline slips after the ground subsides after the mining. Those are some very specific instances for utilization of that equipment. There are other areas of the country where we have installed those types of devices, and have had some success with them. But there are parts of the country where we have installed the devices and they have not worked at all. We are constantly faced with the issue of inadvertent closures, and do we lose a community and fail to provide them natural gas, or do we put these in just in case there is an incident. Like I say, our studies have shown that for all cases, it is not appropriate to mandate it across the system. But as part of a risk assessment process, we do install them in certain circumstances.
    Mr. FRANKS. Let me follow up. The NTSB apparently has a different view of operator training than OPS may. You would object to elements of the NTSB recommendations as they relate to operator training?
    Mr. CAREY. As I said earlier, yes, I would, because as I said, training doesn't necessarily automatically have to be done. We were concerned about the qualification of the employee. So we can guarantee that he is qualified, knows his job. We have the procedures in place. If the person needs training, then train him. We already have that in place with our company. We have all the modules made, but we don't necessarily retrain a person each year in something that they are expert at doing.
 Page 92       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    Mr. FRANKS. Mr. Wise?
    Mr. WISE. The chairman asked my question. Let me follow-up. The purpose of a regulation is not to necessarily get the companies that are acting best and have the highest standards. It is to try and set a floor. So my question is then why would a training regulation, such as what NTSB is saying, it doesn't sound like it would affect you. That you are already doing this.
    Mr. CAREY. I think so. But my main point is that it is an operator qualification rule, not an operator training rule. Let's get our people qualified and ensure that they are qualified.
    Mr. WISE. You are saying set a standard. I happen to agree that I think the more we move away from command and control in every situation, and instead set a standard and tell people to get there the best way they can, assuming it doesn't compromise.
    Mr. CAREY. Get out of my way and let me get there.
    Mr. WISE. So it is fair to say that that has been the difference in this particular situation between what NTSB is saying and what OPS is saying on the ''training versus qualification?''
    Mr. ZURCHER. Yes, sir. I think the idea of qualification is more appropriate to the fundamental desire to have a qualified workforce. Periodic requalification is something that we have addressed. It is included in the regulations. But the actual act of training may or may not be appropriate.
    Mr. WISE. You mean having someone simply sit in a classroom or participate in an exercise for the sake of saying you did it.
    Mr. ZURCHER. Yes, sir.
    Mr. WISE. OK. Thank you.
    Mr. FRANKS. Seeing no further questions, let me thank this panel as well as the others here today. We appreciate your attendance. We'll use it as we move forward in the reauthorization process. Thank you for today's hearing.
 Page 93       PREV PAGE       TOP OF DOC    Segment 2 Of 2  
    [Whereupon, at 2:06 p.m., the subcommittee was adjourned.]