Agency Update: PHMSA

2009 Western Regional

Gas Conference

Tempe, AZ

August 25, 2009

Great Conference Line-Up

• Regulatory Updates° DIMP, CRM, MAOP, Environmental

• Focus on Critically Important Issues° Emergency Response

° Damage Prevention

° Operator Qualification

° New Technology Deployment

° Research

° Improved Land Use Planning Near Pipelines

Discussion Topics for Today

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

• Some Stage Setting Comments° Including Some Comments on Energy° A Perspective on Reauthorization

• 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° Emphasis on Damage Prevention

Setting the Stage

• Introductions - PHMSA Leadership° Cynthia Quarterman – Administrator (nom.)

° Vacant – Deputy Administrator

° Vacant – Chief Counsel

° Cindy Douglass – Chief Safety Officer

° Jeff Wiese – Associate Administrator

° Vacant – Deputy Associate Administrator(s)

° Chris Hoidal – Western Region Director

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

Setting the Stage

• PHMSA Directors° Zach Barrett – State Programs° Rod Dyck – Enforcement° Steve Fischer – Program Development° John Gale – Regulatory Program° Joy Kadnar – Performance and Evaluation° Blaine Keener – National Field Coordinator

Stan Kastanas – Drug and Alcohol Prevention

° Roger Little – Data and Information Technology° Alan Mayberry – Engineering & Emergency Support° Richard Sanders – Training and Qualification

Our Pipeline Safety Objectives

• Improve the Overall Integrity and Reliability of the Energy Pipeline System and Reduce System Risk

° P = R/S + CO + BCA

• Engage, Lead, and Help Strengthen the Capabilities of Others Who Share in Achieving our Goals

• Anticipate Future Needs for Transporting Energy Products

• Earns the Respect of Our Stakeholders and the Public – as a Model Safety Agency

Setting the Stage

• PHMSA’s General Approach° Focus Heavily on Performance

Not Solely on Compliance° Drive Performance Through Attention to

Pipeline Process People

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

° Use an “Enterprise” Approach° Strive to be Engaged and Communicative° Create a Nucleus for Building Partnerships

Setting the Stage

• Current Events and Worries° Heavily Driven by Accidents

Daily by excavation damage» Increasingly in shared ROW’s» Construction boom is worrisome

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

Pipeline Safety Reauthorization

• Quadrennial Check-Up

• Basic Ingredient Checklist° Execution of Last Mandates

E.g., DIMP, CRM, Reporting, Damage Prevention, Community Assistance, Increases in State Funding

° Responsiveness to Outside Auditors/Reviewers NTSB, DOT’s IG, GAO

» E.g., DIMP, CRM, Reporting

° Stakeholder Temperature Check AGA, AOPL, APGA, API, INGAA, NAPSR, NARUC

° The Unexpected, High Profile Event

° Concerns About Critical Infrastructure Vulnerabilities

° Consensus Needs to Fill Gaps

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10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1

Date of Incident

Pipeline Incidents Involving Death or Injury (Cumulative - YTD vs. Last Year)

FY2008

FY 2009

Target = 38

Data as of July 1, 2009

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10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1

Date of Incident

Pipeline Incidents Involving Death or Injury (Cumulative - YTD vs. Last Year)

FY2008

FY 2009

Target = 38

Data as of July 1, 2009

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60

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Pipeline Incidents Involving Death/Injury

By Sector, 1988-2008 (projected

Hazardous Liquid (9%)

Gas Transmission (13%)

Gas Distribution (78%)

Source: DOT/PHMSA Incident Data as of Jan. 5, 2009

43 42 40 38

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1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 (p)

Pipeline Incidents Involving Death or Major Injury (1988-2009

PHMSA Incident data, as of Aug. 28, 2008

Trendline (-10% every 3 years)

Targets43 42 40 38

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1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 (p)

Pipeline Incidents Involving Death or Major Injury (1988-2009

PHMSA Incident data, as of Aug. 28, 2008

Trendline (-10% every 3 years)

Targets

The long term trend Where we are now

With 8 months of data so far, we are already at 95% of the target (36 year-to-date vs. 29 last year); there is also one incident reported for June so far. All three sectors (liquid, transmission, and distribution) are higher. Achieving our goal will be a major challenge.

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Pipeline Safety: Context Measures

U.S. population

Energy consumption

Pipeline Mileage

All Pipeline ton-miles

Incidents w/death or injury

Data and Projections: Census Bureau, Energy Information Administration, BTS ton-mile estimates, PHMSA Incident and Annual Report Data, as of Jan. 5, 2009

Over the past 20 years, gas distribution systems have accounted for 78% of pipeline incidents involving death or injury; gas transmission systems accounted for 13%, and hazardous liquid systems accounted for 9%.

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10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1

Date of Incident

Pipeline Incidents Caused by Excavation or Corrosion (Cumulative - YTD vs. Last Year)

FY 2008

FY 2009

Target = 141

Data as of July 1, 2009

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10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1

Date of Incident

Pipeline Incidents Caused by Excavation or Corrosion (Cumulative - YTD vs. Last Year)

FY 2008

FY 2009

Target = 141

Data as of July 1, 2009

130119 112

99 10794

80

31 38 5044

50 66

46

34

6442

3237 40

29

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2002 2003 2004 2005 2006 2007 2008(p) 2009

Pipeline Incidents Caused by Corrosion or Excavation (2002-2009)

Gas Distribution

Gas Transmission

Haz Liquid

PHMSA Incident data, as of Aug. 28, 2008

130119 112

99 10794

80

31 38 5044

50 66

46

34

6442

3237 40

29

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2002 2003 2004 2005 2006 2007 2008(p) 2009

Pipeline Incidents Caused by Corrosion or Excavation (2002-2009)

Gas Distribution

Gas Transmission

Haz Liquid

PHMSA Incident data, as of Aug. 28, 2008

The long term trend Where we are now

We beat our target by a large margin last year (145 vs. 204), and are on track to meet a much more ambitious target in FY 2009, with 103 incidents year-to-date (vs. 108 at the same time last year).

Corrosion and excavation incidents have declined generally in all three pipeline sectors – both corrosion and excavation-related incidents reached a seven-year low in 2008.

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2002 2003 2004 2005 2006 2007 2008

Hazardous Liquid Pipeline Incidentsw/Corrosion or Excavation as the Primary Cause

Corrosion Excavation

PHMSA Incident Data as of Jan. 5, 2009

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120

2002 2003 2004 2005 2006 2007 2008

Gas Transmission Pipeline Incidentsw/Corrosion or Excavation as the Primary Cause

Corrosion Excavation

PHMSA Incident Data as of Jan. 5, 2009

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20

40

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100

120

2002 2003 2004 2005 2006 2007 2008

Gas Distribution Pipeline Incidents w/Corrosion or Excavation as the Primary Cause

Corrosion Excavation

PHMSA Incident Data as of Jan. 5, 2009

Current Initiatives

• Optional and Required Studies° Corrosion synthesis report

° Mechanical Damage synthesis report

° Cross Border study

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

° DIMP (**)

° Control Room Management

° Gas IM 7-year reassessment interval (?)

• Non-Regulatory Emphasis° Excavation Damage Prevention (**)

Regulatory Update

• Distribution Integrity Management

° Status and Outreach Public Website

Web-casts of Key Rule Elements – next slide

Support for State Seminars

Supplement by Attending Other Stakeholders’ Meetings as Necessary

Workshops to follow final rule

° Special Topic: EFV’s

° Paving the Way NAPSR, GPTC Guidance and other supporting

standards, Operator/Industry Efforts, data improvement efforts, etc.

DIMP Webcast• Webcast Outline (4.3 hours)

1. Introduction2. Baseline and Goals3. Executive Summary4. System Description (Paul Preketes)5. AGF and DIGIT, Earlier Risk Data Analysis,

PHMSA Report to Congress on DIMP, Phase 1 – Organization (Sue Fleck) & Findings, Developing Rules Guide

6. Rule Content (majority of minutes)7. PHMSA and State Perspective8. GPTC Guidance and Relation to NPRM9. Small Operators10. Improvements Panel (Sue Fleck)11. Q&A Panel12. Next Steps

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

Required Elements

Element “Commercial” Operators

Master Meter / LPG

Written Program Required Simple (checklist)

Know system Relevant factors Location/material

Identify threats Thorough analysis Checklist approach

Analyze risk Required Not required

Mitigate risk Required Required

Performance Measures 7 plus threat-specific Leaks by cause

Review/revise as needed

Required Required

Report Perf Measures 4 measures Not required

Guidance

• Needed for a high-level performance rule

• GPTC has developed draft guidance° Several GPTC members and Chair 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

• Prevention Through People (PTP) component

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

Keeping Me Up At Night

• Loss Of Lifecycle Quality Control° Pipe, Process, and People

• Malignant Effects of Economic Downturn° Hesitancy to Investigate, Improve, and Act

• Inadequate Workforce Planning

• The Unexpected° Can Defend If All Responsible Actions Taken

Upcoming Events – Last Slide!

• Casings Workshop

• Distribution Construction Workshop

• Data Summit

• DIMP Implementation Workshop(s)

• Public Awareness Program Workshop

• Reauthorization of the Pipeline Safety Program: Hearings, Audits, Posturing

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 weather!Thanks for your time & enjoy the weather!