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Homeland Security

The Testimony of
Mr. Samuel Bonasso
Acting Administrator, Research and Special Programs Administration, U.S. Department of Transportation

I would like to thank Chairman John McCain for the invitation to speak to the Committee today.

My name is Samuel Bonasso and I am Acting Administrator of the Research and Special Programs Administration (RSPA), of the U.S. Department of Transportation. Accompanying me today is Stacey Gerard, Associate Administrator for the Office of Pipeline Safety (OPS).

RSPA's Office of Pipeline Safety has been engaged in the past three years to rebuild the nation's pipeline safety program. Today, I will speak to the considerable challenges to this effort, many of which we have surmounted, others which remain ahead. I will also address our oversight of the pipelines of Kinder Morgan Energy Partners, LLP, operators of the pipeline that failed in Tucson. Finally, I will discuss the pipeline failure that threatened a community in Tucson and led to gasoline shortages in the Phoenix area.

The nation's pipelines are essential to our economy and our way of life and are a significant part of our nation's critical infrastructure. The 2.3 million miles of natural gas and hazardous liquid pipelines carry two-thirds of the energy consumed by our nation. As the people of Phoenix must understand, you cannot replace even an eight-inch pipeline with gasoline tank trucks. Moreover, there is no way to transport the enormous quantities of natural gas and hazardous liquids that is safer than pipelines.

We are working aggressively to make pipelines safer, to attain a fundamental goal: that is, to build public confidence in the safety of the nation's pipelines.

We are here today because that public confidence was shaken in Tucson in the early afternoon of July 30. As you know, the pipeline that ruptured sprayed thousands of gallons of gasoline on homes under construction -some only 40 feet away. Fortunately, no one died; no one was injured. Certainly lives were disrupted and property was badly damaged, and we understand the fear that this incident has left in its wake.

As many will learn today, pipeline safety is a very complex, technical matter. Much of the discussion we have heard in the weeks since the Tucson incident reflects confusion over what caused the failure of the pipeline and what might have been done differently to have prevented it from happening. I hope that the information presented by all witnesses today will bring clarity to the questions and concerns of the public.

Safety is the top priority of the U.S. Department of Transportation. Secretary Norman Mineta has given us a simple but profoundly important goal: to improve safety and save lives.

Safety is at the core of RSPA's mission. We are the Federal agency that regulates the movement of hazardous materials by all modes of transportation, including pipelines. RSPA also provides emergency support for transportation during emergencies. Also, across all modes of transportation, RSPA develops transportation technology and provides training for transportation professionals.

To be clear, our pipeline mission is safety - it does not encompass the regulation of energy supplies delivered by pipelines. While we consider the impacts safety activities can have on the supplies of natural gas or liquids delivered by pipeline, our sole focus is safety. That said, there is a direct correlation between pipeline safety and pipeline reliability; pipelines that fail do not deliver fuel.

Pipeline safety is more than inspecting pipelines: it involves regulation, technology, information, state government partnerships, damage prevention, communication, and public education. All of these elements have been strengthened in only a few years, thanks to the attention that the Congress, specifically your committee and the Administration have devoted to improving pipeline safety. We have significantly improved our overall ability to oversee and enforce pipeline safety.

The relatively new emphasis on pipeline safety has emerged from the confluence of a number of trends. Transmission pipelines were once found mostly in rural areas, away from population centers, people and activity. Until 1970, pipeline safety was not a Federal responsibility.

However, as suburban sprawl has expanded, pipelines that were once in rural areas now pass along the edges of communities, increasing the risk that pipeline accidents, as infrequent as they are, will have tragic consequences. The Tucson pipeline incident is a clear example of what can happen when communities encroach on pipeline rights-of-way. We have seen worse examples of encroachment, with buildings and communities built right over pipelines. There are no Federal laws that govern land use in the areas near pipelines.

The Chairman of the Federal Reserve Board noted earlier this year that domestic natural gas supplies are not expected to keep up with increases in demand and that the nation will have to rely on increased imports of natural gas. This demand, combined with the expansion of our cities and suburban areas requires expansion of the pipeline infrastructure, although the increased construction activity can lead to pipeline accidents, as backhoes and other equipment dig into the ground, and the pipelines. The economic boom of the nineties brought greater risk of construction equipment striking pipelines. While the damage to pipelines by construction equipment often results in instant and deadly consequences, it is not always so. Damage to pipelines from construction may remain undetected and leave the potential for a future rupture.

Our national appetite for energy has increased, and will continue to do so. There will be more pipelines.

Increased demands for energy, along with a consolidation of the pipeline industry and increased competition over the past decade are putting more strain on the pipeline infrastructure. For example: changes in patterns of energy consumption of natural gas have led to decreased pipeline down-time for the natural gas industry. Operators once had six months a year of pipeline off-peak time to repair and maintain pipelines and to refill storage capacity. Today, electric power requirements for natural gas have reduced down-time to a maximum of two months a year. Gas operators must balance the need to fill up gas storage with time for testing and repair. Increased inspections and testing of pipelines will take more pipelines out of service and could impact the delivery of energy.

Congressional reauthorizations of the pipeline safety program in the late eighties and nineties provided this very small agency with many complex tasks. Further, the Oil Pollution Act of 1990 provided new environmental responsibilities and in 1998, the One Call Notification Act added damage prevention tasks that extended RSPA's sphere of influence to the entire community of underground utilities. While RSPA successfully completed the mandates of the latter two statutes in a timely manner, a backlog of mandates from the reauthorizations of 1988 and 1992 had built up.

In March 2002, RSPA made a commitment to clean up our record. By May 2002, our actions led to the NTSB removing the Office of Pipeline Safety from its "Most Wanted List of Safety Recommendations," for the first time in a dozen years. Today we have reduced the backlog by 63%. As a result of recent emphasis on the need to improve pipeline safety, RSPA's Office of Pipeline Safety (OPS) has expanded. In 1994, the OPS consisted of 70 employees, including 28 inspectors; our budget was $17 million. Today, OPS has 143 employees, with 85 inspectors and a budget of $63 million. For 2004, we requested to increase the inspectors to 109 and a budget of $67 million. Moreover, our partnerships with States, such as our agreement with the Arizona Corporation Commission, expand our capabilities by hundreds of inspectors. In current day terms, we have better resources to address our responsibilities, and appreciate the Congress allocating increased funding.

In addition to completing the mandates and recommendations of the past, RSPA is addressing the many new requirements and responsibilities of the Pipeline Safety Improvement Act of 2002 (PSIA) enacted almost 10 months ago. We moved aggressively to respond to all the regulatory requirements: We completed operator qualification standards and expect to meet the statutory deadline for completing inspections. We defined alternative mitigation measures when operators cannot complete repairs in time with regulatory requirements. We presented a gas Integrity Management proposed rule to the technical advisory committee in May, have acted on their recommendations, and we expect to publish the final rule on schedule. We assisted operators with meeting public education requirements by providing workshops on a newly developed consensus standard and an approach to self-assessment. We enforced the mapping requirement and achieved 98 percent compliance within 6 weeks of the statutory deadline. As to longer term program development requirements, we have begun all of the major studies and plans: We are meeting with operators on our plan to implement the controller study. We drafted the required memorandum on research roles and a five year plan, including the comments of many experts we consulted. We continue to implement the damage prevention requirements associated with the one-call provisions and have a new cooperative agreement with the Common Ground Alliance. We petitioned the Federal Communications Commission to establish 3-Digit dialing and the FCC is moving to the required rulemaking. We continue to work with the Council on Environmental Quality to improve the coordination of permits needed to repair pipelines in accordance with our new Integrity Management standards, and We have appointed an ombudsman as required by law. The rupture of the pipeline in Tucson was all the more dangerous because development had encroached so close to the pipeline right of way that houses were only about 40 feet away. One of the most significant aspects of the new law is the requirement to study land use practices, zoning ordinances and preservation of environmental resources.

In conjunction with the Federal Energy Regulatory Commission, we have asked the Transportation Research Board of the National Academy of Sciences to begin a study to address issues of encroachment and maintenance on pipeline rights-of-way. Our goal is to identify promising approaches for local government for managing land use near pipeline rights-of-way - guidelines on what development is compatible with pipelines, and what development to avoid. The study we have commissioned brings together all key stakeholders - including representatives from local government, developers, pipeline companies, environmental groups and others.

RSPA and our Office of Pipeline Safety are working diligently to improve pipeline safety, as societal and economic changes make the challenge more complex.

To manage the risks inherent in pipeline transportation, we have been building a new, more comprehensive and informed approach to pipeline safety. Ours is a multi-phase strategy which leaves no stone unturned in identifying and addressing pipeline risks. Our efforts are consistent with legislation you proposed in 1999 and the Pipeline Safety Improvement Act of 2002. We believe this approach is working.

Comparing the last five years to the previous five years, hazardous liquid incidents have decreased by 28 percent. Two years ago, the volume of oil spilled decreased by 33 percent from a ten-year average. Last year, saw a 57 percent decrease.

Excavation accidents have decreased over the past ten years by 59 percent, even while housing starts, which bring construction risk near pipelines, were on the rise. Over the past three years, we have built a more comprehensive approach to identifying and managing the risks that pipeline operators face and that pipelines pose to communities. Basing our efforts on the solid foundation of pipeline regulation:

We revitalized our approach to oversight of compliance by operators and Integrity Management efforts. We required better data about pipelines, the world they traverse and consequences in the event of a pipeline failure. We raised the standards for safety in the testing and repair of pipelines, corrosion control, operator qualification, public education and damage prevention, both through promulgation of regulations and adoption of national consensus standards.

In three years: We finalized 14 regulations We incorporated about 30 new national consensus standards in our regulations (and will shortly be finalizing six more regulations); these join 80 national consensus standards embodied in our regulations. We started a research program to improve technology for the detection, diagnosis and remediation of safety problems; o RSPA awarded more than $7.8 million for approximately 36 research projects. o The General Accounting Office recently gave a favorable review of our approach to research program management. Central to RSPA's more comprehensive safety strategy is a more systemic management of risk: Integrity Management. In past regulatory and oversight practices, we prescribed specific measures for specific modes of pipeline failure. Today, we add another level of protection by requiring operators to address every way a pipeline could fail using the best tools and practices that apply.

In our enforcement orders, we require operators to provide a plan of response that we evaluate for adequacy. In Integrity Management planning, we require operators to set priorities based on the consequences of failure. Operators must identify areas along their pipelines where consequences of a failure would be severe. In these areas, they must provide even further protection.

Under Integrity Management, pipeline operators must make better use of new and existing information on pipeline operation, history, and potential failure. Higher standards for testing and repair are key components for Integrity Management.

Integrity Management provides a sound scientific and technical basis for strengthening the pipeline system segment by segment, where people and important environmental resources cohabit with pipelines.

Overseeing and enforcing Integrity Management poses a challenge to regulators to develop a much better understanding of the condition of a pipeline and the technologies and tools that are best suited to address conditions that may be unique to a pipeline system.

Our new regulations have both prescriptive and performance aspects, so Federal and state regulators will need detailed training and inspection protocols. GAO gave RSPA a favorable review for our preparation to oversee the Integrity Management Program.

Integrity Management is a concept that has evolved as the Office of Pipeline Safety has revamped enforcement policy over the past 13 years (1990- 2003), through three major phases. Each phase corresponded with major program developments and built upon the lessons learned of the previous years. From 1990 -1995, OPS focused on standard inspections that addressed compliance with the then prescriptive pipeline safety regulations. From 1995-2000, risk management principles were incorporated in the regulatory programs; oversight relied on more informal written communication about safety improvements.

Following the Bellingham, Washington and Carlsbad, New Mexico accidents in 1999 and 2000, OPS returned to more traditional and formal enforcement tools, such as corrective action orders. Our current focus is system-wide improvement, evolving from risk management principles and emergence of new Integrity Management standards. OPS now makes heavier use of large fines as appropriate. Average penalties since 2000 were ten times higher than the previous ten years. For example, within 100 days of the liquid Integrity Management regulation becoming effective, OPS inspected all 66 major interstate operators for compliance with the initial regulatory requirements. We took enforcement actions on approximately 80% of the operators. Of these, Kinder Morgan was one in which OPS took a more serious enforcement action.

OPS inspected Kinder Morgan in mid-January 2002. On May 2, 2002, we issued a Warning Letter and Notice of Amendment about deficiencies in their identification of High Consequence Areas. We received a response from the company within one month, in June 2002 that was satisfactory. In February 2003, we followed through with a site visit to the company, and in April conducted two weeks of comprehensive Integrity Management inspection. We conducted further follow-through Integrity Management review in June 2003. We issued a final order on the Notice of Amendment in August 2003. These actions were ongoing at the same time as OPS addressed enforcement in a separate matter with Kinder Morgan. When we are concerned about the potential for hazardous conditions discovered by tests or following pipeline accidents, we use formal and enforceable Corrective Action Orders (CAOs). Through CAOs, we can compel operators to reduce operating pressure in order to prevent additional failure, to determine the cause of an accident, to assess where similar conditions exist across the pipeline system and to develop and implement a plan for remediation. These actions often cost pipeline operators many million of dollars in assessment, testing, repair and replacement expenses. Since the Carlsbad accident in August 2000, we have issued 29 CAOs as compared to 21 in the prior 11 years, a 500 percent increase in the use of a formal enforcement tool. As another point of comparison, in 1996, a standard inspection took an inspector two and half to three days to perform. Today, a comprehensive inspection takes a team of four OPS staff and two contract experts two weeks each to execute, in addition to weeks of prior preparations and weeks of follow-on analysis - a twenty-fold increase in the resources applied. Extensive resources go into training our inspectors and provide the information support systems needed to track inspection and enforcement. For Integrity Management inspections, our enforcement tracking system, readily available through the internet to and state regulators, captures all relevant information on an operator and our oversight process, critical to gauging progress during future inspections. A significant influence on our enforcement program has been the necessary focus on pipeline security that emerged quickly after the terrorist attacks of 9/11. We assessed the readiness of the most critical pipeline systems to withstand attack, prioritized the criticality of the individual pipeline systems, and then worked with industry and state agencies to develop security standards. We have developed a system that enables pipeline operators to increase their security in synchronization with the Homeland Security Advisory System. We executed our security measures jointly with the Department of Homeland Security. To more thoroughly understand and address pipeline integrity issues and regional concerns, we improved partnerships with state and local agencies. Through increased training, information technology, communications, and policy collaboration, we have strengthened our partnership with state pipelines safety agencies. They share oversight responsibilities with us and inspect over 90 percent of the pipeline infrastructure. By way of example, the Arizona Corporation Commission (ACC) has been in the pipeline safety program since 1983. ACC became an interstate agent in 1987, taking responsibility for inspecting interstate gas pipelines and interstate hazardous liquid lines in 1988. Our distribution of state grant funds is based on performance and Arizona has consistently received the highest possible rating - 100 percent. The ACC has always been in the forefront of pipeline safety policymaking, participating in the Local Distribution Company Risk Assessment Feasibility team, the System Integrity Inspection Program (the sole state participant) and as faculty to our training programs. RSPA added to this already good pipeline safety corps the more than 900 members of the Common Ground Alliance (CGA), a voluntary damage prevention organization we initiated in 1999. With our state partners and the CGA, we share responsibility for preventing damage to pipelines and other utilities by advocating and adopting practices of the Common Ground Report, required by the Transportation Equity Act. This alliance provides the synergy of common safety actions in the "underground" by other utilities, railroads, insurance companies, public works and other municipal organizations. Through a new program with the National Association of State Fire Marshals, we add the capability of first responders to the ranks of allies helping us with damage prevention and community education. We are also working to establish a partnership with the Council of Energy Resource Tribes to foster safety and environmental protection on Tribal Lands, as well as improved communications between each of the tribes, OPS, the National Association of Pipeline Safety Representatives and the pipeline industry. This effort will help to identify high consequence areas on Tribal Lands and provide pipeline emergency response and inspection awareness training.

We have energized our efforts to reach the public with messages about how citizens can protect themselves and the pipelines. Working with the pipeline industry and state agencies, we created a new public education standard for operators to acquaint citizens and public officials with the essential safety information and to make informed decisions about living safety with and minimizing damage to pipelines. This year alone, we have solicited public involvement in 15 public meetings addressing Integrity Management, operator qualification, public education, research, and mapping.

The mapping of the nation's pipelines has been a major endeavor of the Office of Pipeline Safety for several years. While submission of data by operators for the National Pipeline Mapping System (NPMS) had been voluntary, the PSIA made it mandatory. The NPMS, a multi-layered Geographic Information System (GIS), contains information about the pipelines as well as the locations of populated areas and unusually sensitive areas, such as sources of municipal drinking water. OPS collected these data over a period of years and created a unique national database. OPS launched the NPMS on the World Wide Web in April of 2001, offering a sophisticated resource to enable Federal, state, and local officials industry and others to understand the extent of the pipeline infrastructure and its relationship to environments.

The terrorist attacks of 9/11 made clear that access to this database, which contains information that could facilitate terrorists' plans, could no longer be completely available to the public.

We have now restructured the NPMS to make the information again available to officials with a need to know. Today, Federal, state and local officials can register to have access to pipeline data within their realm of responsibility. The public may also use a tool on the NPMS to obtain information on operators with pipelines in their vicinity. By searching within a county or Zip code, an individual is provided with contact information for the pipeline operator, so that information may be obtained, for example, on the proximity of a pipeline to a community. The NPMS is at http://www.npms.rspa.dot.gov/ I will now discuss our enforcement of the pipelines of Kinder Morgan Energy Partners, LLP, operators of the pipeline that failed in Tucson.

Kinder Morgan's 10,000 miles of pipelines transport more than two million barrels per day of gasoline and other petroleum products. We inspect Kinder Morgan's facilities on a rotational basis usually in a three-year cycle. The Arizona Corporation Commission and the California State Fire Marshall, our hazardous liquid interstate agents, assist in our inspection of Kinder Morgan's vast hazardous liquid pipeline infrastructure. OPS records show that Kinder Morgan has managed its hazardous liquid pipeline infrastructure as well as other companies with similar pipeline mileage. Besides Corrective Action Orders in 2001 and 2003, OPS has issued five enforcement letters to Kinder Morgan since 1996. Most of the problems on Kinder Morgan's hazardous liquid pipeline facilities in Arizona have been due to external corrosion. The 2001 Corrective Action Order directed Kinder Morgan to manage the external corrosion on the 6-inch Phoenix to Tucson refined products pipeline. The 2003 Corrective Action Order, issued following the July 30 accident, addressed stress corrosion cracking (SCC) on the Tucson to Phoenix refined products pipeline.

There has been much public discussion and often-misleading speculation about corrosion following the July 30 accident. This has contributed to some concluding that external corrosion found on the pipeline was responsible for the rupture. It was not. Based on metallurgical analysis, the cause of the rupture was stress corrosion cracking. SCC on pipelines is a lesser-known phenomenon that is vastly different from galvanic corrosion and rarely found to cause failure in hazardous liquid pipelines. There have been only five reported SCC failures on hazardous liquid pipelines since 1985.

Galvanic corrosion, also known as pitting corrosion or general corrosion, is very easily distinguished from SCC. In galvanic corrosion there is metal loss in the form of small pits, much like rust. Traditional corrosion is very easily controlled with the application of cathodic protection, which applies electric current to the pipeline surface. Today, technologies enable discovery of pipeline sections that are not adequately protected, and our statistics have shown a gradual decrease in pitting corrosion. Most pipeline companies are now also using in-line inspection devices to assess the integrity of their pipelines to understand the nature of the resident and long-term corrosion threats on the infrastructure. Over the last decade, in-line inspection devices have proven their ability to recognize and measure pitting corrosion on the inside and outside surfaces of pipelines. Thus, it is now very easy to discover, control and manage general corrosion.. SCC, also known as environmentally assisted cracking, is a relatively new phenomenon. Instead of pits, SCC manifests itself as cracks that are minute in length and depth. Over time, individual cracks coalesce with other cracks and become longer. The rate of growth of these cracks is very slow; in the neighborhood of one one-hundred-thousandth (1x10-6) of an inch per year.

SCC is caused by the union of three factors: stress regime, pipeline metallurgy and coating, and environment. Thus, SCC is cracking induced from the combined influence of tensile stress and a corrosive medium. In the pipeline industry, SCC first revealed itself in natural gas pipelines. In Canada, for example, the ratio of failures on natural gas pipelines versus failures on hazardous liquid pipelines is 4:1. The failures in hazardous liquid pipelines can be more random and more catastrophic because of the phenomenon known as cycling, pressure surges that cause cracks to grow.

Currently, there are no tools or mechanisms available to confidently identify the susceptibility of pipeline sections to SCC. Science has not yet discovered the boundary conditions, or the intersection, at which the three factors interact to cause SCC. Questions have been raised about inspections of the six-inch pipeline now operated by Kinder Morgan. This pipeline has not ruptured, and is now being used to supplement the delivery of gasoline to Phoenix. Kinder Morgan started operating the six-inch Santa Fe Pacific Pipeline refined products pipeline that extends from Phoenix to Tucson in 1998.

The ACC conducted inspections in 1996 and 1997. After another inspection in 1998, OPS directed Kinder Morgan to conduct a close-interval survey on about 30 miles of pipeline. Because of persistent external corrosion problems, in 1999 Kinder Morgan launched an in-line inspection tool to understand the extent of external galvanic corrosion on the pipeline. In 2000 as a result of this inspection, Kinder Morgan decreased the operating pressure to about one-half of regular pressure.

In 2001, Kinder Morgan also repaired about 52 locations and replaced about one-half mile of pipeline where the corrosion was extensive. During the repair and replacement process, OPS conducted inspections to review data from the internal inspection to assure that repairs were taking place at all the sites of major corrosion. We determined that Kinder Morgan was taking proper action. Following this remedial work, ACC's standard inspection revealed that this Kinder Morgan pipeline needed continued monitoring for galvanic corrosion. Immediately thereafter, OPS issued Kinder Morgan a Corrective Action Order (CPF No. 4-2001-5010H) to address the long-term integrity of the six-inch refined products pipeline. The hearing on this CAO was conducted in August 2001 and the Order was amended in March 2003. The delay in amending the Order never compromised public and environmental safety because the immediate threats on the six-inch pipeline were remedied by the close-interval survey and the repairs before the Order was issued. As well, the standards that Kinder Morgan used to repair the pitting anomalies exceeded requirements in the regulations at that time and subsequent regulations now in effect. OPS's interest was in the long-term health of the pipeline and our strategy was to maintain Kinder Morgan's attention on this facility. We intentionally keep orders open to continuously evaluate pipeline conditions until we are satisfied that the pipeline does not merit special attention. Regarding the Kinder Morgan refined products pipelines extending from Tucson to Phoenix (the pipeline that ruptured): we have revised the August 6, 2003 Corrective Action Order. We are now directing Kinder Morgan to conduct systemic tests on the extent of SCC on the 8-inch and 12-inch pipeline using the most current knowledge and evaluation techniques. We are also broadening this evaluation include the six-inch pipeline, to ensure that SCC has not migrated on to the six-inch pipeline in areas where it shares the same subsurface environment as the 8/12-inch pipeline. We have issued an industry-wide advisory on this matter. We will be conducting a public workshop on these techniques in December to assure broad dissemination and discussion of these issues. The RSPA effort to rebuild the pipeline safety program is well under way and the results of our strategy are evident in data and organizational improvements in the companies we regulate. Through expanded partnerships with state and local officials, we expect to strengthen the effectiveness of our safety and prevention efforts. We have requested additional resources to help enable us to execute our strategy and we are appreciative of the priority that Congress has placed on pipeline safety.

RSPA continues to have the strongest possible commitment to addressing outstanding mandates and recommendations to us, and we believe that the record of our recent performance should serve as an indication of our resolve to improve the safety, reliability, and public confidence in our nation's essential pipeline infrastructure. ##



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