Chairman Petri and Members of the Committee, I am pleased to represent the National Transportation Safety Board before you today to discuss pipeline safety issues.

Pipelines carry more hazardous materials in the United States than any other form of transportation. Nearly 200,000 miles of hazardous liquid pipelines deliver approximately 14.4 billion barrels of petroleum products annually, and more than 21 trillion cubic feet of natural gas are delivered through nearly 2 million miles of pipe. Since its creation in 1967, the Safety Board has issued 257 pipeline safety recommendations to the Research and Special Programs Administration (RSPA).

RSPA's pipeline recommendation acceptance rate, 69.6 percent, is the lowest of all modal administrations, and for many years, the Safety Board has been critical of RSPA's delay in providing needed pipeline safety improvements. We are encouraged, however, with recent
RSPA action, particularly in the areas of pipeline integrity, data collection, and excavation damage protection.

PIPELINE INTEGRITY

The continued operation of pipelines with discoverable integrity problems has been a recurring issue in Safety Board investigations. The Safety Board first issued a pipeline integrity recommendation in 1987, as a result of investigations into three pipeline accidents - two in Kentucky and one in Minnesota. The Safety Board recommended that RSPA require periodic inspections or tests of pipelines to identify corrosion, mechanical damage, or other time dependent defects that may be detrimental to the continued safe operation of the pipelines. We also recommended that RSPA establish criteria for use in determining the frequency for performing inspections and tests.

In this regard, final rules -- Pipeline Integrity Management in High Consequence Areas -- were recently published that will require integrity assessments for liquid pipelines in high consequence areas. The new rules will require operators to assess the integrity of pipelines using in-line inspection tools, pressure tests, or other technologies that are demonstrated to provide equivalent results. According to the rule, a pipeline operator must prioritize pipeline segments for baseline and continual assessments and determine schedules for those assessments, based on all risk factors that reflect risk conditions. These factors must include results of previous assessments, defects that could be found and their growth rates; pipe size, material, manufacturing information, coating type and condition, and seam type; leak, repair, and cathodic protection history; product transported; operating stress level; activities in the area; local environmental factors; geo-technical hazards; and physical support of the segment. It is our understanding that Office of Pipeline Safety (OPS) is in the process of drafting integrity assessment rules that will apply to gas transmission pipelines.

Mr. Chairman, the Safety Board has provided favorable comments to much of this rule. It is unfortunate, however, that it has taken 15 years following the issuance of our 1987 safety recommendation for RSPA to act.

As a result of Safety Board investigations, the Safety Board has also advocated the increased use of valve automation to reduce the consequences of pipeline failures. The OPS' integrity management rules will also require operators to evaluate the benefits of valve automation in pipeline systems. According to this rule, operators must consider the swiftness of leak detection and shutdown capabilities, the type of commodity carried, the rate of potential leakage, the volume that can be released, topography or pipeline profile, the potential for ignition, proximity to power sources, location of nearest response personnel, specific terrain between the pipeline segment and the affected area, and the benefits expected by reducing the spill size.

Risk management principles, if properly applied, can be powerful tools to identify the risks to pipeline integrity and should lead operators to take action to mitigate those risks. Quantifying inputs into various risk management models, however, can be difficult and subjective. In a competitive environment, it may not be economically feasible for a pipeline operator to conduct assessment and mitigation activities to prevent a possible, but not inevitable, future pipeline failure. To ensure that the new rules for risk-based integrity management programs are effectively employed throughout the pipeline industry, it is imperative that RSPA establish an effective evaluation program and aggressively examine and monitor operators' pipeline integrity programs. An effective program will require significant, qualified personnel and intense attention from OPS. We note that the Administration's budget provides RSPA with resources for additional pipeline personnel that should be helpful in establishing and maintaining an effective program.

In addition, the principles of risk management assign highest priorities to locations subject to the greatest damage or consequences. As a result, a risk-based integrity management program will direct priority resources to those areas. Pipeline integrity management programs must ensure that pipelines located outside high consequence areas are also adequately assessed and maintained. The Safety Board is concerned that this was not addressed in the final rule.

Another pipeline integrity issue, corrosion, is a leading cause of hazardous liquid pipeline accidents. In 1987, the Safety Board recommended that requirements for corrosion protection include criteria against which liquid pipeline operators can evaluate the adequacy of cathodic protection systems. As recently as 1998, as a result of its investigation of a hazardous liquid pipeline accident in 1996 near Lively, Texas, the Safety Board urged RSPA to require hazardous liquid pipeline operators to determine the condition of pipeline coating when pipe is exposed and again asked them to include criteria against which the adequacy of cathodic protection systems can be evaluated. On December 27, 2001, OPS issued a final rule that we believe will improve the effectiveness of corrosion protection requirements for hazardous liquid pipelines, and addresses other issues included in our recommendations.

DATA COLLECTION

As a result of Safety Board investigations, we have for some time been critical of RSPA's collection of accident data. We have found its data collection to be inadequate for trend analyses and pipeline operator performance evaluations. On May 8, 2001, OPS issued new accident reporting requirements for gas transmission pipelines. Additionally, on January 8, 2002, OPS issued new accident reporting requirements for hazardous liquid pipelines.

The new reporting requirements include information that the Safety Board believes will assist with operator evaluation and trend analyses. We understand that OPS is now working on improving accident reporting requirements for gas distribution systems, and is implementing quality control procedures to improve the accuracy of accident data reports.

EXCAVATION DAMAGE

Excavation damage remains a leading cause of pipeline accidents, and as a result of NTSB accident investigations we have over the years issued numerous safety recommendations regarding this issue. We are aware that OPS is funding research in the following areas:

• Improved pipeline location technologies,
• Improved inspection technologies to find pipe defects,
• Real time monitoring to detect mechanical damage and leaks,
• Improved trenchless technologies to avoid potential damage to underground facilities, and
• Technologies to increase the security of pipelines.

Excavation damage prevention is an item on the Board's "Most Wanted" list of safety issues, and we are hopeful that the on-going research, which addresses many Safety Board recommendations, will lead to increased excavation prevention safety.


QUALIFICATION AND TRAINING REQUIREMENTS

Mr. Chairman, we mentioned previously, we are encouraged by much of the work that RSPA has undertaken. However, the Board believes insufficient progress has been made in the qualification and training requirements for personnel operating pipelines.

Following the 1987 Kentucky and Minnesota accidents, the Safety Board recommended that OPS require operators to develop training and testing programs to qualify employees. Following a 1996 accident in San Juan, Puerto Rico, the Safety Board asked RSPA to complete its rulemaking on operator qualification, training, and testing standards. The Safety Board also asked RSPA to require operators to test employees on safety procedures they are expected to follow and to demonstrate that they can correctly perform the work.

In January 1999, the Safety Board commented on OPS' rulemaking regarding operator qualifications. Our comments noted that the proposed rules failed to adequately address qualification requirements or include requirements for training and testing. The final rule, issued in April 2001, allows individuals to be evaluated by written or oral examinations, observation during on-the-job performance, or work history. The rule allows individuals to be evaluated solely by their work history only until October 28, 2002, and operators will not be required to re-evaluate each individual using additional criteria until the next scheduled evaluation. In addition, the rule allows operators to determine what the interval time should be between evaluations. It is conceivable that a pipeline employee may continue to perform indefinitely safety-related tasks based solely on work history.

Following the issuance in April 2001 of the final rule on operator qualifications, the Safety Board closed its recommendations as unacceptable response. We believe a qualification rule should require that pipeline employees be trained and tested to assess the success of the training, and that periodic retraining should be provided.

Mr. Chairman, that completes my statement and I will be happy to respond to any questions you may have.