National Academy of Sciences. PHMSA s Evolving Approach to Oversight
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1 National Academy of Sciences Transportation Research Board Study of Pipeline Transportation of Diluted Bitumen PHMSA s Evolving Approach to Oversight Associate Administrator Jeff Wiese Senior Engineer Jeff Gilliam January 31,
2 Topics for Briefing Performance vs. Prescriptive Regulations Mr. Jeff Wiese PHMSA s Inspection Program Mr. Jeff Gilliam - 2 -
3 Overview We have been on a two decade search for the right mix of prescriptive and managementbased regulations. We believe we have made significant progress. But our thinking is still evolving
4 Observation: Major accidents almost always result in demands for broader and more prescriptive regulations. But just responding to the last accident is not the best regulatory strategy
5 Evolution of Our Approach Early 1990 s and Before Prescriptive regulations Check-list approach to inspection Enforcement straightforward Major Accidents in early 1990 s led to New Jersey Safety Summit in 1994 Congress authorized Risk Management Demonstration Program in
6 Evolution of Our Approach Risk Management Demo Program Results Mixed + Projects did lead to superior risk control measures + Fostered innovation including development of better inline inspection tools Lack of mature risk assessment and management systems Challenges for inspectors Bellingham, WA Accident
7 Evolution of Our Approach Integrity Management (IM) Regulations Hazardous Liquid 2000/2002 Gas Transmission 2004 Gas Distribution 2010 New prescriptive and management-based requirements Periodic integrity assessment and minimum repair criteria Process requirements for data integration, risk analysis, identifying additional preventive & mitigative measures, and program evaluation - 7 -
8 IM is not the Only Improvement Issued rules on corrosion, public awareness, control room management, and operator qualification Promoted development of new technologies through R&D Prepared our stakeholders including public, first responders, state pipeline safety agencies, etc. Waged a progressive campaign against excavation damage Developed a more risk-based inspection program - 8 -
9 Where Are We Now? Major accidents in 2010 NTSB investigations and recommendations New Congressional mandates from 2011 reauthorization Embarking on IMP 2.0 We believe that much progress has been made... But much improvement is still needed in the risk-based management systems being developed by industry
10 - 10 -
11 PHMSA Perspective We do not have the resources, and cannot be expected to define all important facility-specific risks and optimal risk control activities in a diverse industry. The burden of identifying facility-specific risks and implementing customized risk control activities must fall on the operator
12 PHMSA Perspective The best regulatory approach is a balanced combination of: Prescriptive regulations where clear and common risks can be identified and risk control activities are broadly applicable Management-based regulations that require operators to identify system-specific risks and customized risk control activities Other stakeholder engagement activities to expand and share the knowledge base We have been on a two decade search for the right balance
13 Recent Events Illustrate Weaknesses in Managing Risk Effective risk analysis might have prevented or mitigated recent high consequence accidents Weaknesses include inadequate: Knowledge of pipeline risk characteristics including recordkeeping Processes to analyze interactive threats Evaluation of ways to reduce or mitigate consequences Process to select risk control measures Lack of objective, systematic approach Much work remains to improve tools
14 Inspections Identify Weaknesses in Risk Analysis The current challenge is for industry to develop More rigorous quantitative risk analyses that addresses uncertainties and gaps in data A more investigative approach to risk analysis Use analysis to find problems, not just display what you already know A robust approach for risk control measures Technically sound, risk-based criteria Including pipe replacement
15 What does this mean for Diluted Bitumen Transport? We strongly support a rigorous analysis of the unique risks associated with dilbit transportation. Threats posed by this different commodity require thorough understanding. Risk controls for these threats must be robust
16 Major Challenges Both industry and PHMSA need to demonstrate that riskbased flexibility in the regulations is a viable regulatory strategy. Industry needs to make significant improvements in their risk assessments and the manner in which they use risk information to make safety-related decisions. We need to provide better guidance to industry on what constitutes an adequate risk management program
17 Conclusions There s still work to be done to create responsible riskbased safety programs that allow pipeline-specific flexibility while fully protecting public safety. Management-based regulations are a critical element of an effective multi-faceted regulatory model Management-based regulations are more difficult to inspect and enforce Without clear guidance, industry response to managementbased regulations will be uneven and disappointing Don t expect quick and easily demonstrable success
18 PHMSA s Inspection Program Regional Responsibility Integrated Inspections Frequency of Inspections Inspection Process Types of Corrections Reporting Requirements Accident / Incident Management
19 Regional Responsibility Inspections Accident Response and Investigations Interagency Cooperation Public / Stakeholder Outreach
20 Evolving Inspection Process PHMSA is moving to Integrated Inspections Data Driven Risk Informed Approach The new approach allows the agency to focus limited resources more affectively Conduct Risk Focused inspections
21 We are Moving to an Inspection Process that Integrates: Standard Inspections Operations and Maintenance (O&M) Manual Reviews Operator Qualifications (OQ) Inspections Integrity Management (IM) Inspections
22 Frequency of inspections Frequency dictated first by code requirements, along with relative risk determinations, priorities and resources available Detailed plans and inspection schedules coordinated amongst and ultimately decided by each region To the extent practicable, work together amongst regions to conduct inter-region and team inspections to maximize resources. Also often invite states, particularly for any systems that might be dual jurisdiction. Ultimately state decision on if/how this is done based on requirements in their specific state
23 General process Collection of any pertinent information in advance. All applicable forms, procedures, etc. Other Info/background of operator in advance: Pertinent information about operator and unit to be inspected Summary of previous inspections (if any) Compliance History Any recent accident reports Annual Reports In some cases, information/procedures from operator might be provided in advance. In most cases, conducted onsite where all the information is available and accessible for review depending on where drill down is needed
24 Process cont d A kickoff meeting is typically held with the operator to explain what the inspector will be doing during the week, what is expected of the operator, and to lay out a tentative agenda for the week. Usually the first one to two days will be spent going through the operator s procedures and records, using the inspection form as a guide. The operator will have been asked by the inspector well in advance of this meeting to gather and organize the pertinent records and procedures to save time, using the inspection form questions as a guide. Compliance issues from prior inspections and recent safety incidents will also be covered by the inspector during this initial meeting, in an attempt to finalize these issues
25 Process cont d The records and procedure questions usually require meetings with various operations personnel, including those from corrosion control, SCADA, and training areas. Operating personnel may be coming and going to other meetings as different subjects are covered. In some cases data and answers available immediately when questions raised. In other cases, operator may need to come back with more info later. The inspector usually uses this initial meeting time with the operator to decide what sites to visit in the field, any past problem sites to visit, and plan how the field trip will proceed for the remainder of the week
26 Process cont d A short wrap-up session is held at the end of the inspection to summarize the week s activities, to mention any possible compliance issues, and to list information that the operator has agreed to furnish the inspector. The inspector must report on all compliance issues, even those that may have been resolved during the inspection. Inspection report, including any compliance issues, written up and sent through region director and to HQ for processing and determination of any enforcement actions In cases of compliance issues, variety of actions possible including warning letters, letters of concern, notices of probable violation, notices of amendment
27 Type of corrections frequently made Minor corrections needed, such as modifications/changes to procedures for clarification. Sometimes these can either be done on the spot, addressed prior to the inspector leaving, or if additional internal company review/approval needed, provided to the inspector after the inspection or at the next inspection In cases of more significant compliance issues, variety of actions possible including notices of probable violation, compliance orders (safety orders and/or corrective action orders) Process allows for hearings and appeal for any enforcement action
28 Reporting Requirements By Inspector: Inspection report, including any compliance issues, written up by inspector and sent through region director and to HQ for processing and determination of any enforcement actions By Operator: Operator has additional, ongoing and regular reporting requirements through: Annual reports Accident/incident reports Notification of certain changes to their system or surrounding environment(s) that could impact the system (i.e. changes in class location (for gas) or whether not in a high consequence area (HCA)) Any other reporting requirements based on compliance actions, special permits, etc
29 Accident Management Operator Responsibilities Regulator Responsibilities
30 Questions Thank you!
31 Back-up and Supporting Slides
32 Standard Inspections Standard inspections examine an operator's records and equipment to ensure the operator is complying with applicable regulations. Inspectors check a number of both current and historical operating records and parameters as well, including whether the pipeline's maximum pressure is within safe limits. They also examine emergency procedures to determine if operators are prepared to respond promptly and effectively if an abnormal condition or pipeline failure occurs
33 Standard Inspections Cont d In addition to inspecting operator records, procedures and data, inspectors make field visits to physically examine critical pipeline equipment and observe operator personnel implementing required procedures and tests. For example, on standard inspections, inspectors typically observe operator personnel: Taking measurements to assure corrosion control equipment is performing effectively; Testing pipeline valves to ensure they will operate in the event of an emergency; and Checking the settings on instruments and equipment designed to protect against events that could overpressure the pipeline
34 Standard Inspections Cont d During field inspections, inspectors will also observe pipeline ROW markers to ensure the pipeline is adequately marked to make excavators and others aware of its presence. OPS currently conducts standard inspections on every pipeline every two to three years. Pipelines that are believed to present higher potential for risk are often inspected more frequently. Standard inspections are usually completed within a single week
35 Additional Details on Standard Inspections (also ties into others) Gas Transmission Operators Gas Distribution Operators (Primarily by States) Liquid Pipeline Operators Liquefied Natural Gas (LNG) Facilities Breakout Tanks Gas Storage Fields Construction Gathering
36 Operations and Maintenance Manual Reviews Operators required to have manual with established procedures dictating how O&M activities are to be performed. Some important procedures reviewed include: Procedures for the proper construction, repair, testing, and maintenance of pipelines. This includes methods for repairing or replacing pipe, welding, valve maintenance, and testing and maintenance of overpressure protection devices. Procedures to prevent damage to an operator's pipeline due to excavation activities, including right-of-way maintenance, maintaining line markers, participation in One-Call programs, and periodic surveillance of the pipeline right-of-way. Procedures that minimize hazards from an emergency
37 Operator Qualification (OQ) Inspections Operators required to prepare and follow an OQ program. OQ programs must: Identify each operator employee or employee of a contractor hired by the operator, who performs certain safety-sensitive operations or maintenance activities on the pipeline system Identify the specific tasks that each individual performs Ensure each individual is tested to be certain they have the necessary knowledge, skills and abilities to perform each task, and recognize and react to emergencies that may arise while performing those tasks
38 OQ inspections cont d An operator must document the process by which it achieves these objectives. OPS and state agencies perform inspections to review OQ program documentation, including the lists of individuals and tasks they are qualified to perform, records of tests, and other actions required by the plan. Inspections also include observation of personnel performing selected tasks, and discussions with qualified individuals and supervisors to assure that the plan is being implemented effectively. A structured set of inspection protocols has been developed for inspectors to follow in performing OQ inspections
39 Integrity Management IM is both a set of regulations and an overall regulatory approach to improve pipeline operators ability to identify and mitigate the risks to their pipeline systems Objectives of IM Accelerate and improve the quality of integrity assessments conducted on pipelines in areas with the highest potential for adverse consequences (High Consequence Areas HCAs); Promote a more rigorous, integrated, and systematic management of pipeline integrity and risk by operators; Strengthen government s role in the oversight of pipeline operator integrity plans and programs; and Increase the public s confidence in the safe operation of the nation s pipeline network
40 Integrity Management (IM) cont d Risk Assessment Identifying threats to individual pipelines like Corrosion? Excavators? Metal fatigue? Landslides? Where will the threats do the most harm? High Consequence Areas (HCAs) prioritize investments Integrity Assessment Checking the health of a buried pipeline. (Most pipelines are easily assessed or piggable ) Preventative and Mitigative Measures Protecting against threats and minimizing consequences when pipelines are damaged. Strong basis for continuous improvement and rationalized investment
41 Status of IMPs Hazardous Liquid nearly through 2 assessments Natural Gas Transmission through 1 st cycle in 2012 Distribution Systems compliance began August
42 How to inspect: What is the process when PHMSA inspects Publically available forms and inspection criteria General inspection, annual report and incident forms Other websites with more detailed guidance at end of presentation Additional training provided to federal and state inspectors at PHMSA s TQ facility in OKC All must conform to ethics guidelines. DOT s ethics website: PHMSA specific training and guidance in line with DOT
43 Equipment required for inspections All applicable forms, procedures, etc. Hardcopies and/or electronic Previously conducted with primarily hardcopies, but transitioning to more electronic tools/media including use of laptops, hand held smart phone and inspection assistant programs where data can be downloaded before and uploaded later. Personal Protective Equipment (PPE) if needed Cameras for additional documentation, measurement tools, etc
44 How are drills organized, how often, who is involved? Conducted in accordance with Emergency Plans and Public Awareness Requirements ( 194 Appendix A Guidelines for the Preparation of Response Plans) Exactly how differs from operator to operator, community to community In order to comply with the regulatory requirements specified in the hazardous liquid regulations under 49 CFR (i) and API 1162, pipeline operators are required to conduct periodic Public Awareness Program (PAP) effectiveness evaluations no more than four years apart following the effective date of program implementation
45 Accident Management Company Emergency plans (more in (e) Emergency plans) The manual required by paragraph (a) of this section must include procedures for the following to provide safety when an emergency condition occurs: (1) Receiving, identifying, and classifying notices of events which need immediate response by the operator or notice to fire, police, or other appropriate public officials and communicating this information to appropriate operator personnel for corrective action
46 Accident Management Company (2) Prompt and effective responses to a notice of each type emergency, including fire or explosion occurring near or directly involving a pipeline facility, accidental release of hazardous liquid or carbon dioxide from a pipeline facility, operational failure causing a hazardous condition, and natural disaster affecting pipeline facilities. (3) Having personnel, equipment, instruments, tools, and material available as needed at the scene of an emergency. (4) Taking necessary action, such as emergency shutdown or pressure reduction, to minimize the volume of hazardous liquid or carbon dioxide that is released from any section of a pipeline system in the event of a failure
47 Accident Management Company (5) Control of released hazardous liquid or carbon dioxide at an accident scene to minimize the hazards, including possible intentional ignition in the cases of flammable highly volatile liquid. (6) Minimization of public exposure to injury and probability of accidental ignition by assisting with evacuation of residents and assisting with halting traffic on roads and railroads in the affected area, or taking other appropriate action. (7) Notifying fire, police, and other appropriate public officials of hazardous liquid or carbon dioxide pipeline emergencies and coordinating with them preplanned and actual responses during all emergency, including additional precautions necessary for an emergency involving a pipeline system transporting a highly volatile liquid
48 Accident Management Company (8) In the case of failure of a pipeline system transporting a highly volatile liquid, use of appropriate instruments to assess the extent and coverage of the vapor cloud and determine the hazardous areas. (9) Providing for a post accident review of employee activities to determine whether the procedures were affective in each emergency and taking corrective action where deficiencies are found. (10) Actions required to be taken by a controller during an emergency, in accordance with
49 Incident Management - Regulator PHMSA Regions and HQ monitor incidents/telephonics reported to National Response Center Depending on nature of the incident and jurisdiction PHMSA may follow-up via phone or to operator (if PHMSA jurisdiction) or through State (if State jurisdiction) If warranted/requested PHMSA will conduct onsite investigation
50 Incident management Who does what? For more significant incidents, incident command center set-up Who does what depends, but coordinated through emergency response personnel, etc From federal/regulatory side depends on who has lead jurisdiction, who is leading investigation (i.e. if others like National Transportation Safety Board (NTSB), ATF, OSHA, etc onsite)
51 Incident Management How does PHMSA communicate with media If PHMSA lead jurisdictional authority, coordinated through PHMSA s Public Affairs group If other agency lead authority, defer to other agency
52 PHMSA/NASFM Initiatives The Partnership for Excellence in Pipeline Safety is a firstof-its-kind program that develops and facilitates pipeline accident-response training and public education programs to help spread the word on pipeline safety across America. The Partnership set a goal of zero pipeline incidents
53 Cathodic Protection and Corrosion Control Part 195 Subpart H covers Requirements for Corrosion Control for the protection of metallic pipelines from external, internal, and atmospheric corrosion Multiple sections requiring General requirements following installation Type of protective coating(s) and CP system Monitoring Protecting against interferences currents Remedial measures Direct Assessment Corrosion Control Records
54 Some Useful Links PHMSA OPS Website: Electronic Code of Federal Regulations: Stakeholder Communications: Pipeline Safety Guidance Advisory Bulletins, Low Strength Pipe Guidelines, MAOP Rule FAQs: Pipeline Construction Website: PHMSA Standards and Rulemaking: PHMSA Inspection: ment.htm PHMSA Enforcement:
55 More Information, FAQs, etc Liquid IMP: Gas IMP: DIMP: CRM: All subject to change based on new information
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