Agency Update: PHMSA

2008 Western Regional

Gas Conference

Tempe, AZ

August 26, 2008

Suggested Topics PHMSA – Who’s on 1st, What’s on 2nd• How business is to be done

° PHMSA, NAPSR, NARUC, industry• Energy Picture

° Natural Gas – bridge to cleaner options° Construction boom & problems° Speculation in gas markets?

Regulatory update° DIMP

Comments Received PPDC

Federal Incident Notifications• Terrorist Threat• Intergovernmental Initiatives w/NTSB, DHS, DOE

Discussion Topics for Today

• A Fair Bit on OPS & PHMSA° Who’s on First, What’s on Second

° Goals and Objectives

• Some Stage Setting Comments° Including Some Comments on Energy

• A Macro View of Safety Data° Specific Comments on Role of Data and

Particularly Incident Notification/Reporting

• Quick Survey of Regulatory and Non-Regulatory Initiatives° Emphasis on DIMP

Setting the Stage

• Introductions - PHMSA Leadership° Carl Johnson - Administrator

° Krista Edwards – Deputy Administrator

° Stacey Gerard – Chief Safety Officer

° Jeff Wiese – Associate Administrator

° Bill Gute – Deputy Associate Administrator

° Chris Hoidal – Western Region Director

° 4 Other Regional Directors: S, C, E, and SW

Setting the Stage

• Introductions - PHMSA Directors° RichardSanders–TrainingandQualification

° RogerLittle–DataandInformationTechnology

° ZachBarrett–StatePrograms

° AlanMayberry–Engineering&EmergencySupport

° SteveFischer–ProgramDevelopment

° JoyKadnar–PerformanceandEvaluation

° RodDyck–Enforcement

° JohnGale–RegulatoryProgram

° StanKastanas–DrugandAlcoholPrevention

PHMSA’s Strategic Goals

• Safety (focused on preventing high consequence events)° ProtectingPeopleandtheirCommunitiesbyReducingRiskfromHazardous

MaterialsTransportation–IncludingThroughPipelines

• Environmental Stewardship° ProtectingtheNaturalEnvironmentbyReducingtheRiskofHarmtothe

EnvironmentDuetoTransportationofHazardousMaterials

• Reliability° MaintainandImprovetheReliabilityofSystemsthatDeliverEnergyProducts

andOtherHazardousMaterials

• Global Connectivity° FacilitatingaGlobalTransportationSystemthatPromotesEconomicGrowth

andDevelopment

• Preparedness and Response° ReduceConsequencesofAccidentsWeCan’tPrevent

Our Pipeline Safety Objectives

• ImprovetheOverallIntegrityandReliabilityoftheEnergyPipelineSystemandReduceSystemRisk

• Engage,Lead,andHelpStrengthentheCapabilitiesofOthersWhoShareinAchievingourGoals

• AnticipateFutureNeedsforTransportingEnergyProducts

• EarnstheRespectofOurStakeholdersandthePublic–asaModelSafetyAgency

Setting the Stage

• PHMSA’s General Approach° FocusHeavilyonPerformance

Not Solely on Compliance° DrivePerformanceThroughAttentionto

Pipeline Process People

° Advance“Risk-FocusedandDataDriven” Risk Identification is KEY First Step Need Operator’s Help if All Are to Improve

° Usean“Enterprise”Approach° StrivetobeEngagedandCommunicative° CreateaNucleusforBuildingPartnerships

Setting the Stage

• Current Events and Worries° Heavily Driven by Accidents

Daily by excavation damage» IncreasinglyinsharedROW’s» Constructionboomisworrisome

Periodically, but notably, by corrosion failures» E.g.,Alaska,Louisiana

° Increasingly Driven by Supply Issues° Congressional Attention Keeps us Busy

PIPES Act Mandates Hearings Audits and Recommendations

° Need for Aggressive Workforce Planning and Recruitment

° Safety Culture is Eroding Due to Inattention

Big Picture

43 42 40 38

0102030405060708090

100

Serious Pipeline IncidentsInvolving Death or Injury (1998-2007)

Targets 2006-2009 Actual + 2007 Projected

Proj

ecte

d

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

43 42 40 38

0102030405060708090

100

Serious Pipeline IncidentsInvolving Death or Injury (1998-2007)

Targets 2006-2009 Actual + 2007 Projected

Proj

ecte

d

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

Big Picture

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4Ch

ange

from

198

8 (In

dex =

1)

Pipeline Safety: Context Measures

U.S. population

Energy consumption

Pipeline ton-miles

Serious Pipeline Incidents

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Chan

ge fr

om 1

988

(Inde

x = 1

)

Pipeline Safety: Context Measures

U.S. population

Energy consumption

Pipeline ton-miles

Serious Pipeline Incidents

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

Big Picture

010

20

30

40

50

60

70

80

Serious Pipeline Incidents by Sector (1998-2007)

Hazardous Liquid

Gas Transmission

Gas Distribution

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

010

20

30

40

50

60

70

80

Serious Pipeline Incidents by Sector (1998-2007)

Hazardous Liquid

Gas Transmission

Gas Distribution

Source: DOT/PHMSA Incident Data, as of Dec. 21, 2007

Current Initiatives

• Optional and Required Studies° Corrosionsynthesisreport

° MechanicalDamagesynthesisreport

° CrossBorderstudy

• Regulatory – Recent and Forthcoming° 80%SMYS/MAOP

° DIMP(**)

° ControlRoomManagement

° GasIM7-yearreassessmentinterval(?)

• Non-Regulatory Emphasis° ExcavationDamagePrevention(**)

Regulatory Update

• Distribution Integrity Management° StatusandUpcomingOutreach

Public Website Web-casts of Key Rule Elements – includes AGA** Support for State Seminars Supplement by Attending Other Stakeholders’

Meetings as Necessary

° CommentCoordination° SpecialTopic:EFV’s° PavingtheWay

NAPSR, GPTC Guidance and other supporting standards, Operator/Industry Efforts, data improvement efforts, etc.

° ThreeIssues:inspectionintervals,PTP,data

What Principles Underlie DIMP?

• DIMP requires operators to better understand and mitigate system risks° Know your systems

° Identify the threats

° Rank risks

° Mitigate the risks

• NPRM does not stipulate specific assessment or mitigation actions,

• In combination with the GPTC Guidance – NPRM provides direction to operators and allows the regulator to investigate internal operator risk management practices

NPRM Structure

• Requires risk-based written IM program including the seven elements

• Requires appropriate mitigation measures, including leak management and enhanced damage prevention

• Requires installation of EFVs• Requirements are high-level, performance-

based - Guidance needed for implementation details

Master Meter and LPG Operators

• Smallest operators; truly different• Already treated differently in 192, particularly for

documentation/reporting• Systems cover compact geographic areas and are

relatively less complex• Excavation damage is often under the operator’s

direct control -----------------------

• Not required to evaluate risk or report results• “Checklist” IM program described in Appendix F

Required Elements

Element “Commercial” Operators

Master Meter / LPG

WrittenProgram Required Simple(checklist)

Knowsystem Relevantfactors Location/material

Identifythreats Thoroughanalysis Checklistapproach

Analyzerisk Required Notrequired

Mitigaterisk Required Required

PerformanceMeasures 7plusthreat-specific Leaksbycause

Review/reviseasneeded

Required Required

ReportPerfMeasures 4measures Notrequired

Guidance

• Needed for a high-level performance rule

• GPTC has developed draft guidance° Several GPTC members here today

• APGA is developing more-specific guidance for small operators

Additional Issues

• Allowing alternate time intervals for certain requirements currently in Part 192

• Plastic Pipe failure reporting

• Consideration of compression coupling failures in the threat analysis

• DIMP programs to include a Prevention Through People (PTP) component

Alternate Time Intervals

• Part 192 includes requirements for some actions at set intervals

• Better risk understanding may tell us that some things should be done less often; some more

• Operators will be able to use their risk analyses to seek regulator approval of alternate intervals for current requirements

Plastic Pipe Failure Reporting

• Each operator must report information on each material failure of plastic pipe (including fittings, couplings, valves and joints) no later than 90 days after failure.

• This information must include, location of the failure, nominal pipe size, material type, nature of failure including any contribution of local pipeline environment, pipe manufacturer, lot number and date of manufacture, and other information that can be found in markings on the failed pipe

Reporting Plastic Pipe Failures

• Operators must report plastic pipe failures in 90 days

• Intended to develop information available to all operators

• PHMSA will be discussing needs with industry groups including PPDC – this week in D.C.

• Need to extend to other materials?

Integrity Management Program

Haz. Liquid IMP

Gas Transmission IMP

Prevention Through People“P T P”

Operator Qualification

Control RoomManagement

DamagePrevention

PublicAwareness

Human FactorNTSB Issues

Drug &Alcohol

Processes (QA/QC)

How?

Pipeline System

Gas Distribution IMP

What is affected?

Prevention (Performance) Through People

DIMP Webcast• Webcast Outline (4.3 hours)

1. Introduction2. BaselineandGoals3. ExecutiveSummary4. SystemDescription(Paul Preketes)5. AGFandDIGIT,EarlierRiskDataAnalysis,

PHMSAReporttoCongressonDIMP,Phase1–Organization(Sue Fleck)&Findings,DevelopingRulesGuide

6. RuleContent(majorityofminutes)7. PHMSAandStatePerspective8. GPTCGuidanceandRelationtoNPRM9. SmallOperators10. ImprovementsPanel(Sue Fleck)11. Q&APanel12. NextSteps

Damage Prevention

• Managing the Risks of Excavation Damage° State Damage Prevention Assistance Program

Gap Analysis Guidance Document

State Damage Prevention Program Grant

Getting Started

° Position on Federal Enforcement

° Common Ground Alliance & Regional Partners

° Technology Improvements to One-Call Process

° One-Call Center Board Leadership

° Pipelines and Informed Planning Alliance

° Mechanical Damage Study

° EDP Technology Development / Deployment

The End

• For more information on PHMSAFor more information on PHMSA° http://www.phmsa.dot.gov

• For more information on Pipeline SafetyFor more information on Pipeline Safety° http://ops.dot.gov

• Thanks for your time & enjoy the week!Thanks for your time & enjoy the week!