The Testimony of
The Honorable Janet Napolitano
Governor, State of Arizona
Members of the Committee, thank you for inviting me here today to testify about pipeline safety and reliability. I commend this Committee for its attention to this important issue and in particular would like to thank Senator McCain for his leadership, including his pivotal role in the recent passage of the Pipeline Safety Improvement Act of 2002.
Arizona has learned a lot about this subject since July 30, 2003, when the Kinder Morgan pipeline from Tucson to Phoenix ruptured. That rupture, which splashed over 10,000 gallons of gasoline on five newly-constructed homes, exposed not only our state's vulnerability arising from its reliance on just two pipelines to supply gasoline for 5 million people, but also some serious weaknesses in the federal government's investigations and enforcement of pipeline safety.
My testimony today will focus on this latter issue. In my investigations to date into the cause of the rupture and its effects on this state, I have been perhaps most disturbed by the recent discovery that state regulators, acting on behalf of the federal Office of Pipeline Safety, discovered and reported numerous instances of general corrosion problems on Kinder Morgan's East Line, but OPS took no effective action to address them.
As you may know, OPS contracts with certain state bodies, including the Arizona Corporation Commission, for inspections of the portions of interstate pipelines that run within the particular state. In the case of Kinder Morgan's East Line, the Corporation Commission inspected it no fewer than six times between 1996 and 2003. In every one of those inspections, the Corporation Commission reported concerns about general corrosion along the line, including specific concerns about Kinder Morgan's failure to take adequate preventative measures.
In one October 2001 violation report, the inspector warned that "this pipeline has been in service for fifty years and has known coating problems." The inspector went on to say that lack of maintenance could ultimately result in "pipeline failure, resulting in a loss of product, possibly injury, loss of life, and severe damage to property and the environment."
Unfortunately, although OPS contracts out its investigative authority, it gives the Corporation Commission virtually no enforcement authority. As a result, despite its findings and recommendations for fines and corrective action, the Corporation Commission was powerless to effectively correct the situation.
The problem was exacerbated by the fact that OPS brought only two enforcement actions in response to the Corporation Commission's reports and never sought a penalty of greater than $40,000 against a multi-million dollar carrier. This, coupled with the fact that Kinder Morgan had not inspected the portion of the line where the rupture occurred since 1996-despite the pipeline's age, contributed to the pipeline's ultimate failure.
Kinder Morgan has asserted that the July 30 rupture was caused by "stress corrosion cracking" as opposed to the "general corrosion" reported each year by the Corporation Commission. Nevertheless, I can't help but think that, at a minimum, more aggressive enforcement by OPS would have fostered a more vigilant pipeline safety assessment by Kinder Morgan that could have averted the July 30 rupture.
We must have more effective pipeline safety enforcement. If states are to be given investigative authority over the portions of interstate lines that cross their jurisdiction, they must also be given both the authority and resources necessary to enforce their findings and recommendations.
Here in Arizona, we are willing to bear the responsibility of enforcing pipeline safety, but we need the federal funding and authority to do so effectively. I urge this Committee to reform the federal pipeline safety laws in a manner that delegates both investigative and enforcement authority to states that are willing to undertake it, and fully funds their ability to do so effectively.
And while we're on the subject of reform, I offer another thought: Does it still make sense to house the Office of Pipeline Safety within the Department of Transportation? Today, critical energy infrastructure is a homeland security concern. Disruptions like the July 30 rupture can bring our economy to a standstill. But more importantly, given the volume of fuel that flows through these lines, such ruptures pose significant risks to the safety of our citizens and environment.
At a minimum, state and federal homeland security officials must be much more knowledgeable about pipeline routes, security procedures and threats. Operators of these lines should know how to reach relevant homeland security personnel 24 hours a day and should be required to report all ruptures and known threats immediately. By way of example, on August 8, 2003, when Kinder Morgan decided to shut down the East Line completely, it notified only our state's Corporation Commission and our Department of Weights and Measures. They did not notify my office or the Office of Homeland Security. I have since given Kinder Morgan numbers where they can reach my staff and the state's Director of Homeland Security on a 24-hour basis.
Ultimately, I believe Congress should strongly consider moving OPS to the federal Department of Homeland Security so that pipeline safety issues can be assessed at the outset from a public safety perspective.
Finally, I'd like to address some actions that Arizona is taking on this issue. In the aftermath of the Kinder Morgan rupture, I have appointed a Task Force, led by former Tosco executive Robert Lavinia, to review the July 30 rupture, recommend measures to prevent such occurrences in the future, and address Arizona's vulnerability to similar supply disruptions. I look forward to receiving the Lavinia Group's report and would be pleased to make it available to this Committee upon its completion.
Arizona was lucky no one was injured by the July 30 rupture. Nevertheless, the rupture justifiably alarmed a number of homeowners who live near the pipeline or send their kids to schools on the pipeline's right of way. In several instances, these homeowners never knew their property abutted the pipeline. For this reason, I have also asked our Real Estate Commissioner to investigate whether developers of property near the pipeline have given adequate notice to purchasers of the location of the pipeline.
Given the growth of communities throughout the country since the date many active pipelines were first installed, I would urge this Committee to undertake similar reviews of the requirements for, and enforcement of, notification requirements to owners and new buyers of property located near pipelines.
Lastly, the Arizona Department of Environmental Quality has issued a notice of violation to Kinder Morgan arising out of the July 30 rupture, including the proposed assessment of the maximum civil environmental penalty allowed by Arizona law. The Department's investigation of the July 30 rupture is continuing and will proceed until the Department is satisfied that Kinder Morgan is in full compliance with the state's environmental laws.
Again, we have learned a lot about this subject since July 30. I have promised the people of Arizona that I would do all I can to help prevent a repeat of what happened here this summer. I am grateful that this Committee has taken up this issue and for the opportunity to share with you my ideas for what the federal government can do to improve pipeline safety.
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