oversight

Pipeline Safety:Collecting Data and Sharing Information on Federally Unregulated Gathering Pipelines Could Help Enhance Safety

Published by the Government Accountability Office on 2012-03-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office

GAO          Report to Congressional Requesters




March 2012
             PIPELINE SAFETY

             Collecting Data and
             Sharing Information
             on Federally
             Unregulated Gathering
             Pipelines Could Help
             Enhance Safety




GAO-12-388
                                              March 2012

                                              PIPELINE SAFETY
                                              Collecting Data and Sharing Information on
                                              Federally Unregulated Gathering Pipelines Could
                                              Help Enhance Safety
Highlights of GAO-12-388, a report to
congressional requesters




Why GAO Did This Study                        What GAO Found
Pipelines are a relatively safe mode of       While the safety risks of onshore gathering pipelines that are not regulated by
transportation for hazardous liquid and       PHMSA are generally considered to be lower than for other types of pipelines,
natural gas and are regulated by the          PHMSA does not collect comprehensive data to identify the safety risks of
Department of Transportation’s (DOT)          unregulated gathering pipelines. In response to a GAO survey, state pipeline
Pipeline and Hazardous Materials              safety agencies cited construction quality, maintenance practices, unknown or
Safety Administration (PHMSA) and             uncertain locations, and limited or no information on pipeline integrity as among
state entities. Included in the nation’s      the highest risks for federally unregulated pipelines. Without data on these risk
pipeline network are an estimated             factors, pipeline safety officials are unable to assess and manage safety risks
200,000 or more miles of onshore
                                              associated with these pipelines. Furthermore, changes in pipeline operational
“gathering” pipelines, which transport
                                              environments cited in response to GAO’s survey and by industry officials could
products to processing facilities and
larger pipelines. (See figure.) Many of
                                              also increase safety risks for federally unregulated gathering pipelines.
these pipelines have not been subject         Specifically, land-use changes are resulting in development encroaching on
to federal regulation based on their          existing pipelines and the increased extraction of oil and natural gas from shale
generally rural location and low              deposits is resulting in the development of new gathering pipelines, some of
operating pressures. While incidents          which are larger in diameter and operate at higher pressure than older pipelines.
involving gathering pipelines regulated       PHMSA is considering collecting data on federally unregulated gathering
by PHMSA have resulted in millions of         pipelines, but the agency’s plans are preliminary, and the extent to which
dollars in property damage in recent          PHMSA will collect data sufficient to evaluate the potential safety risks
years, comparable statistics for              associated with these pipelines is uncertain.
federally unregulated gathering
pipelines are unknown. This report            A small number of state pipeline safety agencies GAO surveyed reported using at
identifies (1) the safety risks that exist,   least one of five practices that were most frequently cited to help ensure the safety
if any, with onshore hazardous liquid         of federally unregulated pipelines. These practices include (1) damage prevention
and natural gas gathering pipelines           programs, (2) considering areas of highest risk to target resources, (3) safety
that are not currently under PHMSA            inspections, (4) public outreach and communication, and (5) increased regulatory
regulation and (2) the practices states       attention on operators with prior spills or leaks. However, the sharing of information
use to help ensure the safety of these        among states on the safety practices used appears to be limited. Some state and
pipelines. GAO surveyed state pipeline        PHMSA officials GAO interviewed had limited awareness of safety practices used
safety agencies in all 50 states and the      by other states. Increased communication and information sharing about pipeline
District of Columbia; interviewed             safety practices could boost the use of such practices for unregulated pipelines.
officials at PHMSA, state pipeline            However, information targeted at gathering pipelines on PHMSA’s website,
safety agencies, pipeline companies,          including relevant safety practices and state activities, is limited.
and industry associations; and
analyzed data and regulations.
                                              Pipeline System
What GAO Recommends
DOT should (1) collect data on
federally unregulated hazardous liquid
and gas gathering pipelines and
(2) establish an online clearinghouse
or other resource for sharing
information on pipeline safety
practices. DOT provided technical
corrections on a draft of this report.

View GAO-12-388. For more information,
contact Susan A. Fleming at (202) 512-2834
or flemings@gao.gov.

                                                                                        United States Government Accountability Office
Contents


Letter                                                                                     1
               Background                                                                  2
               Limited Information on Safety Risks and Changing Operational
                 Environments Are Leading PHMSA to Consider Collecting Data               9
               States Could Benefit from Sharing Safety Practices                        19
               Conclusions                                                               28
               Recommendations for Executive Action                                      29
               Agency Comments                                                           30

Appendix I     Objectives, Scope, and Methodology                                        31



Appendix II    Summary Results, GAO Pipeline Safety Regulations Survey                   34



Appendix III   GAO Contact and Staff Acknowledgments                                     36



Table
               Table 1: PHMSA Class Designations for Gas Pipelines                         6


Figures
               Figure 1: Pipeline System                                                  4
               Figure 2: Interstate and Intrastate Agents for PHMSA                       8
               Figure 3: Excavation Damage                                               11
               Figure 4: Changing Land Use around Pipelines                              12
               Figure 5: Current and Prospective Shale Gas Regions                       14
               Figure 6: Number of Incidents for All Federally Regulated Pipeline
                        Systems, 2004 through 2010                                       17
               Figure 7: Total Property Damage for All Regulated Pipeline
                        Systems, 2004 through 2010                                       17
               Figure 8: Most Frequently Used Safety Practices by States for
                        Gathering Pipelines                                              20
               Figure 9: Pipeline Marker                                                 22
               Figure 10: Examples of Rural and Residential Gathering Pipeline
                        Operational Environments near Dallas-Fort Worth                  24
               Figure 11: Gathering Pipeline Construction Documentation in
                        Texas                                                            25


               Page i                                              GAO-12-388 Pipeline Safety
Abbreviations
ANPRM        Advanced Notice of Proposed Rulemaking
DOT          Department of Transportation
NAPSR        National Association of Pipeline Safety Representatives
PHMSA        Pipeline and Hazardous Materials Safety Administration
psi          pounds per square inch

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Page ii                                                         GAO-12-388 Pipeline Safety
United States Government Accountability Office
Washington, DC 20548




                                   March 22, 2012

                                   The Honorable John D. Rockefeller IV
                                   Chairman
                                   Committee on Commerce, Science,
                                     and Transportation
                                   United States Senate

                                   The Honorable Frank R. Lautenberg
                                   Chairman
                                   Subcommittee on Surface Transportation
                                     and Merchant Marine Infrastructure,
                                     Safety, and Security
                                   Committee on Commerce, Science, and Transportation
                                   United States Senate

                                   Pipelines are a relatively safe mode of transportation for hazardous liquid
                                   and natural gas. The nation’s network of more than 2.5 million miles of
                                   pipeline is largely regulated by the Department of Transportation’s (DOT)
                                   Pipeline and Hazardous Materials Safety Administration (PHMSA) and
                                   state entities. Part of this network consists of more than 200,000 miles
                                   (estimated) of onshore “gathering” pipelines, which transport hazardous
                                   liquid and natural gas products from wells to processing facilities and to
                                   larger transmission pipelines. Many of these gathering pipelines,
                                   however, have not been subject to PHMSA regulation because they are
                                   generally located away from population centers and operate at low
                                   pressures. 1 In recent years, incidents involving gathering pipelines
                                   regulated by PHMSA have resulted in millions of dollars in property
                                   damage. Comparable statistics for federally unregulated gathering
                                   pipelines are unknown because PHMSA does not collect such data.

                                   You requested that we review pipeline safety issues related to onshore
                                   gathering pipelines not regulated by PHMSA. To do so, we examined
                                   (1) the safety risks that exist, if any, with onshore hazardous liquid and
                                   natural gas gathering pipelines that are not currently under PHMSA




                                   1
                                    PHMSA has limited statutory authority to regulate such pipelines under 49 U.S.C.
                                   § 60101(b).




                                   Page 1                                                        GAO-12-388 Pipeline Safety
             regulation and (2) the practices states use to help ensure the safety of
             these federally unregulated onshore gathering pipelines.

             To identify safety risks that may be associated with gathering pipelines,
             we reviewed PHMSA safety regulations and analyzed data on pipelines
             regulated by PHMSA to understand the types of pipeline data currently
             collected, as well as to compare and analyze accident, injury, fatality, and
             other trends. We determined that these data were complete, reasonable,
             and sufficiently reliable for the purposes of this report. For both
             objectives, we developed and administered a survey to 52 pipeline safety
             agencies 2 in all 50 states and the District of Columbia to collect
             information on, among other things, onshore gathering pipelines, the
             perceived pipeline safety risks associated with those pipelines, and the
             safety practices used for those pipelines. We received a 100 percent
             response rate for this survey. We also interviewed officials at PHMSA,
             selected state pipeline safety agencies, pipeline companies, and industry
             associations. We conducted site visits to Dallas-Fort Worth, Denver, and
             Pittsburgh; we selected these locations based on geography, existing
             pipeline infrastructure, and other factors.

             We conducted this performance audit from February 2011 to March 2012
             in accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe that
             the evidence obtained provides a reasonable basis for our findings and
             conclusions based on our audit objectives.


             Pipelines transport roughly two-thirds of domestic energy supplies
Background   through approximately 2.5 million miles of pipelines throughout the United
             States. These pipelines carry hazardous liquids and natural gas from
             producing wells to end users (residences and businesses). Within this
             nationwide system, there are three main types of pipelines.




             2
              Two state pipeline safety officials from separate agencies in Arkansas that are
             responsible for overseeing pipeline safety in that state responded to our survey. Also,
             Alaska and Hawaii have chosen not to participate in pipeline arrangements with PHMSA.
             Therefore, a PHMSA official who conducts state pipeline safety inspections in these states
             responded to those states’ surveys.




             Page 2                                                         GAO-12-388 Pipeline Safety
•   Gathering pipelines. Gas gathering pipelines collect natural gas from
    production areas, while hazardous liquid gathering pipelines collect oil
    and other petroleum products. These pipelines then typically transport
    the products to processing facilities, which in turn refine and send the
    products to transmission pipelines. According to PHMSA officials,
    traditionally, gathering pipelines range in diameter from about 2 to 12
    inches and operate at pressures that range from about 5 to 800
    pounds per square inch (psi). These pipelines tend to be located in
    rural areas but can also be located in urban areas. PHMSA estimates
    there are 200,000 miles of gas gathering pipelines and 30,000 to
    40,000 miles of hazardous liquid gathering pipelines.

•   Transmission pipelines. Transmission pipelines carry hazardous liquid
    or natural gas, sometimes over hundreds of miles, to communities
    and large-volume users (e.g., factories). 3 For natural gas transmission
    pipelines, compression stations located periodically along the pipeline
    maintain product pressure. Similarly, pumping stations along
    hazardous liquid transmission pipelines maintain product flow.
    Transmission pipelines tend to have the largest diameters and
    pressures of any type of pipeline, generally ranging from 12 inches to
    42 inches in diameter and operating at pressures ranging from 400 to
    1440 psi. 4 PHMSA has estimated there are more than 400,000 miles
    of gas and hazardous liquid transmission pipelines.

•   Distribution pipelines. Gas distribution pipelines continue to transport
    natural gas to residential, commercial, and industrial customers,
    splitting off from transmission pipelines. These pipelines tend to be
    smaller, sometimes less than 1 inch in diameter, and operate at lower
    pressures—0.25 to 100 psi. 5 PHMSA has estimated there are roughly
    2 million miles of distribution pipelines, most of which are intrastate
    pipelines. There are no hazardous liquid distribution pipelines.


3
 For the purposes of this report, we use the term transmission pipeline to refer to both
hazardous liquid and natural gas pipelines carrying product over long distances to users.
4
 However, there are transmission pipelines smaller than 12 inches in diameter and other
pipelines that operate at pressures greater than 1440 psi. In addition, we have reported on
safety regulations for certain transmission pipelines that operate at lower stress. For more
information, see GAO, Safety Effects of Less Prescriptive Requirements for Low-Stress
Natural Gas Transmission Pipelines Are Uncertain, GAO-12-389R (Washington, D.C.:
Feb. 16, 2012).
5
 However, some distribution pipelines can be as large as 24 inches in diameter and
operate at higher pressures (i.e., over 350 psi).




Page 3                                                          GAO-12-388 Pipeline Safety
Figure 1: Pipeline System




                            In recent years, shale oil and gas exploration and related development has
                            led to the construction of new infrastructure, including gathering pipelines.
                            Shale oil and gas refers to product that is trapped within underground shale
                            formations; these fine-grain sedimentary rocks can be rich sources of oil
                            and natural gas. Over the past decade, improvements in drilling
                            technologies have allowed access to large volumes of shale oil and gas
                            deposits in several states that were previously uneconomical to access.

                            In terms of fatalities and injuries, pipelines are the safest mode for
                            transporting hazardous liquids and natural gas. From 2004 to 2010, there
                            was an average of about 16 fatalities per year for all incidents reported to
                            PHMSA. 6 In comparison, in 2009, over 3,000 fatalities resulted from
                            incidents involving large trucks carrying freight and about 700 additional
                            fatalities resulted from freight railroad incidents. Yet, pipelines face a
                            number of risks—such as corrosion and excavation damage—that can
                            damage the pipeline’s integrity and result in leaks and ruptures. A leak
                            generally occurs with a slow release of product over a small area. A
                            rupture involves the sometimes sudden development of a breach in the
                            pipeline, which may cause hazardous liquids to spill or gas to spark and



                            6
                             In its regulations, PHMSA refers to the release of natural gas from a pipeline as an
                            “incident” and a spill from a hazardous liquid pipeline as an “accident.” (49 CFR Part 195,
                            Subpart B). For simplicity, this report will refer to both as “incidents.” PHMSA tracks
                            summary level statistics for pipeline incidents that meet certain reporting criteria, such as
                            those incidents resulting in a fatality.




                            Page 4                                                            GAO-12-388 Pipeline Safety
ignite, resulting in an explosion. 7 Such an incident occurred in San Bruno,
California, on September 9, 2010, damaging or destroying over 100
homes and killing 8 people.

PHMSA administers the national regulatory program to ensure the safe
transportation of hazardous liquid and gas by pipeline. PHMSA carries out
its mission through regulation, 8 national consensus standards, research,
education, inspections, and enforcement when safety problems or
regulatory violations are found. The agency employs over 200 staff in its
pipeline safety program, about half of whom inspect hazardous liquid and
gas pipelines for compliance with safety regulations. Besides PHMSA, over
300 state inspectors also help oversee pipelines and ensure safety.

In general, PHMSA performs its oversight role using uniform, minimum
safety standards that all pipeline operators regulated by PHMSA must
meet, as well as a supplemental risk-based regulatory program termed
“integrity management” for pipelines in “high-consequence areas” where
an incident would have greater consequences for public safety or the
environment. The uniform, minimum safety standards include
specifications for the design, construction, testing, inspection, operation,
and maintenance of pipelines. For example, operators are required to
install and maintain pipeline markers to clearly show a pipeline’s right-of-
way. In addition, the risk-based integrity management programs for
hazardous liquid and natural gas transmission pipelines and natural gas
distribution pipelines require operators to systematically identify and
mitigate risks to pipeline segments located in high-consequence areas,
which are defined differently for three types of pipelines.

•   High-consequence areas for hazardous liquid pipelines include areas
    of highly populated areas, other populated areas, navigable
    waterways, and areas unusually sensitive to environmental damage.

•   High-consequence areas for natural gas transmission pipelines
    include highly populated or frequently used areas, such as parks.


7
 The risks and consequences posed by gas and hazardous liquids incidents also differ.
Gas tends to ignite more easily, resulting in more explosions. Hazardous liquids ignite less
easily, but can spill onto and pollute the environment.
8
 Part 191 (Gas Reporting), Part 192 (Gas), Part 193 (Liquid Natural Gas), Part 194 (Liquid
Facility Response Plans), and Part 195 (Hazardous Liquid) of Title 49 of the Code of
Federal Regulations.




Page 5                                                          GAO-12-388 Pipeline Safety
•      Most natural gas distribution pipelines would generally be considered
       to be in high-consequence areas, as defined under the transmission
       pipelines regulations, since they are typically located in highly
       populated areas.

PHMSA regulates hazardous liquid and natural gas gathering pipelines—
using uniform, minimum standards—based on their proximity to populated
and environmentally sensitive areas. For natural gas gathering pipelines, 9
PHMSA uses class locations—the same classification system used for
natural gas transmission and distribution pipelines. (See table 1.) Under
this system, PHMSA generally regulates onshore natural gas gathering
pipelines in Class 2, 3, or 4 locations. For hazardous liquid gathering
pipelines, PHMSA regulates those pipelines in incorporated and
unincorporated cities, towns, and villages; pipeline segments that cross a
waterway currently used for commercial navigation; and certain rural
gathering pipelines within one-quarter mile of environmentally sensitive
areas. This includes high-consequence areas, as defined for the
hazardous liquid integrity management program. High-consequence
areas can also be in Class 1, 2, 3, or 4 locations, which can entail
different reporting requirements. For example, gathering pipeline
operators in high-consequence areas that are in Class 1 locations are not
required to report data on pipeline-related incidents, including fatality,
injury, and property damage information.

Table 1: PHMSA Class Designations for Gas Pipelines

    Class
    designation          Location features
    Class 1              An offshore area or any location with 10 or fewer buildings intended for
                         human occupancy within 220 yards of the centerline of the pipeline.
    Class 2              Any location with more than 10 but fewer than 46 buildings intended for
                         human occupancy within 220 yards of the centerline of the pipeline.
    Class 3              Any location with more than 46 buildings intended for human occupancy
                         within 220 yards of a pipeline, or an area where the pipeline lies within
                         100 yards of either a building or a small, well-defined outside area (such
                         as a playground) that is occupied by 20 or more persons at least 5 days
                         a week for 10 weeks in any 12-month period.
    Class 4              Any location where unit buildings with four or more stories above ground
                         are prevalent.
Source: 49 C.F.R. § 192.5.




9
 49 C.F.R. §192.5.




Page 6                                                                  GAO-12-388 Pipeline Safety
Under the current regulatory system, PHMSA does not regulate most
gathering pipelines in the United States based on their location. For
example, out of the more than 200,000 estimated miles of natural gas
gathering pipelines, PHMSA regulates roughly 20,000 miles. Similarly, of
the 30,000 to 40,000 estimated miles of hazardous liquid gathering
pipelines, PHMSA regulates about 4,000 miles. 10 However, according to
PHMSA officials, the agency has the authority to collect data on all onshore
hazardous liquid and gas gathering pipelines, 11 even though it generally
does not regulate gas gathering pipelines in Class 1 locations or hazardous
liquid gathering pipelines not located in high-consequence areas.

Generally, PHMSA retains full responsibility for inspecting and enforcing
regulations on interstate pipelines. However, states may be authorized to
conduct inspections for interstate pipelines, as well as inspections and
associated enforcement for intrastate pipelines. States can also
promulgate regulations for intrastate pipelines, including gathering
pipelines. PHMSA has arrangements with 48 states, the District of
Columbia, and Puerto Rico to assist with overseeing interstate, intrastate,
or both interstate and intrastate pipelines. These arrangements, in which
states act as “agents” for PHMSA, can cover hazardous liquid pipelines
only, gas pipelines only, or both (see fig. 2). State pipeline safety offices
are allowed to issue regulations supplementing or extending federal
regulations, but these state regulations must be at least as stringent as
the minimum federal regulations. If a state wants to issue regulations that
apply to pipelines that PHMSA does not regulate, such as unregulated
gathering pipelines, it must do so under its own (state) authority.




 According to PHMSA officials, Alaska, California, Louisiana, and Oklahoma have the
10

majority of federally unregulated gathering pipeline mileage in the United States.
11
  49 U.S.C. §60102(b).This report refers to gathering pipelines that are not regulated by
PHMSA but that PHMSA is not prohibited by law from regulating. Nonregulated gathering
pipelines are typically unregulated Class 1 pipelines found in rural locations where there
are no or low populations.




Page 7                                                          GAO-12-388 Pipeline Safety
Figure 2: Interstate and Intrastate Agents for PHMSA




                                         Page 8        GAO-12-388 Pipeline Safety
Limited Information
on Safety Risks and
Changing Operational
Environments Are
Leading PHMSA to
Consider Collecting
Data

Limited Information    While gathering pipelines generally pose lower safety risks than other
                       types of pipelines, PHMSA does not collect comprehensive data on safety
                       risks associated with gathering pipelines. In response to GAO’s survey,
                       state pipeline safety agencies cited construction quality, maintenance
                       practices, unknown or uncertain locations, and limited or no information
                       on current pipeline integrity as safety risks for federally unregulated
                       gathering pipelines. 12 Operators of unregulated gathering pipelines are
                       not required by federal law to report information on such risk factors.
                       Consequently, federal and state pipeline safety officials do not know the
                       extent to which individual operators collect such information and use it to
                       monitor the safety of their pipelines. In our survey of 52 state agencies,
                       39 agencies—10 monitoring hazardous liquid and 29 monitoring natural
                       gas—responded that they had onshore gathering pipelines that PHMSA
                       does not regulate located in their state. (See app. II for a summary of our
                       survey results.) For these 39 agencies, four of the five top responses
                       cited the following risk factors for onshore unregulated gathering pipelines
                       as among the highest public safety risks.

                       •    Construction quality. Eighteen state agencies reported that the quality
                            of installation procedures and construction materials is a moderate or
                            high safety risk for unregulated gathering pipelines. The construction
                            phase of pipeline installation is critical to ensure the long-term integrity
                            of the pipeline because the installation methods and materials used in
                            pipeline construction affect the pipeline’s resistance to deterioration
                            over time. For example, one inspection requirement for regulated



                        Risk is defined by PHMSA as the combination of the likelihood and the consequence of
                       12

                       a specified hazard being realized.




                       Page 9                                                      GAO-12-388 Pipeline Safety
      pipelines is that they may not be installed unless they have been
      visually inspected at the site of installation to ensure that they are not
      damaged in a manner that could impair their strength or reduce their
      serviceability. 13 This requirement does not currently apply to
      unregulated gathering pipelines.

•     Maintenance practices. Sixteen state agencies reported that the
      extent to which pipeline operators maintain their pipelines is a
      moderate or high safety risk for unregulated gathering pipelines.
      According to agency officials, after a pipeline is installed and
      operational, periodic maintenance—such as inspecting and testing
      equipment—is important to prevent leaks and ruptures and could
      extend the operating life of a pipeline. Furthermore, preventive
      measures and repairs conducted on unregulated gathering pipelines,
      as well as a record of such activities, could provide useful information
      on the safety and history of a given gathering pipeline.

•     Location. Sixteen state agencies reported that the unknown or
      uncertain location of unregulated gathering pipelines presents a
      moderate or high safety risk. Although individual operators may know
      the locations of unregulated pipelines, state and local safety agencies
      may not know or may be uncertain about the locations and mileage of
      unregulated pipeline infrastructure in their communities. This
      information is particularly useful for “Call Before You Dig” programs
      operated by states and localities. If unregulated gathering pipelines
      are unmarked and program officials do not know the location of the
      pipelines, businesses and citizens may damage a pipeline during
      excavation, which could result in an incident—including fatalities,
      injuries, or damage to property or the environment—as well as the
      shutting down of the pipeline for repair.

•     Pipeline integrity. Sixteen state agencies reported that not knowing or
      having limited knowledge about the integrity—the current condition—
      of unregulated gathering pipelines is a moderate or high safety risk.
      Factors that affect the integrity of all pipelines—such as excavation
      damage and corrosion—also affect gathering pipelines. For example,
      excavation damage to a pipeline from nearby digging activities (see
      fig. 3) is the leading cause of pipeline incidents and, as previously
      noted, the uncertain location of unregulated gathering pipelines may



13
    49 C.F.R. §195.206 (Hazardous Liquid) and 49 C.F.R. §192.307 (Gas).




Page 10                                                       GAO-12-388 Pipeline Safety
                           increase the potential for such damage. Furthermore, corrosion can
                           occur on the inside and outside of metal pipelines and is not easily
                           identified without appropriate pipeline assessments. From 2004
                           through 2010, corrosion was reported as the cause of about 60
                           percent—or nine incidents—of regulated gas gathering pipeline
                           incidents. Generally, pipeline experts we spoke with said limited
                           information on the integrity of unregulated gathering pipelines
                           prevents analysis to assess the internal and external condition of
                           these pipelines.

                       Figure 3: Excavation Damage




Changing Operational   According to responses to our survey and interviews with industry officials
Environments           and representatives, land-use changes and the increased extraction of oil
                       and natural gas from shale deposits are two changes in the operating
                       environments that could increase the safety risks for unregulated
                       gathering pipelines.

                       •   Land-use changes. The fifth top response reported by state pipeline
                           safety agencies we surveyed was that increased urbanization has
                           caused rural areas to become more densely populated and, in some
                           cases, developments have encroached on existing pipeline rights-of-


                       Page 11                                             GAO-12-388 Pipeline Safety
    way. (See fig. 4.) Nineteen state agencies reported land-use changes
    as a moderate or high risk for federally unregulated gathering
    pipelines. Federal and state pipeline safety officials we spoke with are
    concerned about the safety and proximity of people who work and live
    near pipeline rights-of-way. For example, one state official stated that
    although a new housing or business development can change a
    location’s designation from Class 1 to a higher class that would then
    fall under PHMSA’s jurisdiction, the operator may not be aware of the
    development and therefore would not monitor and apply more
    stringent regulations along that pipeline.

Figure 4: Changing Land Use around Pipelines




•   Increased extraction of oil and gas from shale deposits. According to
    pipeline industry officials and representatives we interviewed, the
    increased extraction of oil and natural gas from shale deposits poses
    an increased risk to the public, partly because of the development of
    new and larger gathering pipeline infrastructure. Deposits of oil and
    natural gas have become increasingly important energy sources in the
    United States over the past decade (see fig. 5). According to the U.S.
    Energy Information Administration, shale gas accounted for 16
    percent of the total domestic natural gas supply in 2009 and is
    projected to increase to approximately 47 percent by 2035. This
    extraction has led to drilling and production in regions of the country
    that have previously seen little or no such activity. As a result of this
    ongoing activity, as well as future growth projections, state and federal
    safety officials we interviewed identified new gathering pipelines
    related to shale development as a potential public safety risk. The risk



Page 12                                               GAO-12-388 Pipeline Safety
     is primarily due to the characteristics and quantity of pipeline
     infrastructure required to support this new production. Specifically,
     some of these new gathering pipelines have larger diameters and
     operate at higher pressures that are equivalent to traditional
     transmission pipelines, but without the regulatory requirements. 14 For
     instance, an October 2010 report 15 on pipeline issues and concerns in
     Fort Worth stated that some gathering pipelines were as large as 24
     inches in diameter with maximum allowable operating pressures
     similar to those for transmission pipelines. Those gathering pipelines
     were currently exempt from federal integrity management rules, which
     require some form of pipeline integrity assessment at least once every
     7 years, and clearly define how and when problems found during
     these assessments are to be reported and repaired.




 49 C.F.R. § 195.452 (Hazardous Materials) & 49 C.F.R. Part 192 Subpart O (Gas).
14


 Accufacts Inc. and Pipeline Safety Trust, The State of Natural Gas Pipelines in Fort
15

Worth, a special report prepared at the request of the Fort Worth League of
Neighborhoods, Fort Worth, October 2010.




Page 13                                                        GAO-12-388 Pipeline Safety
Figure 5: Current and Prospective Shale Gas Regions




                                       Note: This map depicts shale gas regions, where shale gas is known or thought to exist, but does not
                                       indicate where extraction is actually occurring.




PHMSA Is Considering                   PHMSA officials stated that they are considering collecting data on
Collecting Data                        federally unregulated onshore gathering pipelines to better understand
                                       and evaluate the safety risks posed by these pipelines. Although PHMSA
                                       has the legal authority to collect data on unregulated gathering pipelines,
                                       the agency is not required and has not yet exercised its authority to do so.
                                       PHMSA officials reported that, instead of collecting such data, the agency
                                       was focusing on the development of integrity management requirements


                                       Page 14                                                               GAO-12-388 Pipeline Safety
and improved data collection for higher-risk transmission and distribution
pipelines. However, PHMSA officials reported that there is value in having
data for unregulated pipelines similar to what is currently collected on
regulated pipelines, such as pipeline characteristics and reportable
information on incidents—including the location, cause, and
consequences of these incidents.

In addition, PHMSA issued Advanced Notices of Proposed Rulemakings
(ANPRM) for onshore hazardous liquid and gas pipelines in October 2010
and August 2011, respectively. 16 For these proposed rulemakings,
PHMSA has sought comment on, among other things, whether to extend
regulation or other requirements to currently federally unregulated
gathering pipelines. Concerning potential data collection, the ANPRMs
sought comment on whether to require the submission of annual,
incident, and safety-related condition reports on federally unregulated
gathering pipelines, as well as on whether to establish a new, risk-based
regime of safety requirements for large-diameter, high-pressure gas
gathering pipelines, including those pipelines in rural locations. 17 While
the ANPRMs did not seek comment on exactly what new data to collect,
PHMSA officials reported that the information would likely be similar to
what is currently collected on regulated gathering pipelines and that they
plan to issue final rules in late 2012. In the event that reporting
requirements are adopted, PHMSA officials stated that gathering pipeline
data would likely be collected on a state-by-state basis, which could later
be expanded to the national level. However, PHMSA’s plans for collecting
data are preliminary, and the extent to which PHMSA will collect data
sufficient to evaluate the potential safety risks associated with these
pipelines is uncertain.

Currently, PHMSA collects annual, incident, and safety-related condition
data on regulated pipelines. The specific types of safety-related data
collected for regulated pipelines include the operator, pipeline system
description, mileage by class location, diameter size, operating pressure,
incident location, number of injuries and fatalities, property damage, and



 75 Fed. Reg. 63774 (Oct. 18, 2010) and 76 Fed. Reg. 53086 (Aug. 25, 2011).
16


17
  PHMSA granted extensions to the comment period for both of these ANPRMs (see 76
Fed. Reg. 303 (Jan. 4, 2011) and 76 Fed. Reg. 70953 (Nov. 16, 2011)). The ANPRM
related to hazardous liquids closed for comment in February 2011 and the ANPRM for gas
in January 2012.




Page 15                                                     GAO-12-388 Pipeline Safety
assessments conducted. These data help federal and state safety
officials and pipeline operators increase the safety of these pipelines by
better identifying and quantifying safety risks, as well as by implementing
mitigation strategies, and addressing potential regulatory needs. It is for
these same reasons that PHMSA, state, and some industry officials
reported that collecting similar data for unregulated gathering pipelines
would be beneficial. PHMSA officials also reported that in the event the
agency started collecting data on unregulated onshore gathering
pipelines, their current data reporting system could accommodate such a
collection and not require large changes for regulators or operators. On
the other hand, a few operators and industry groups we met with
expressed concerns over the burden that new data reporting would
represent. Before any potential data collection reporting requirements
could be enacted, PHMSA and the Office of Management and Budget
would review and evaluate the value of such information and associated
burdens on industry. PHMSA officials said that while many operators
should already have information on their gathering pipelines readily
available, it would still be important to communicate with operators and
take steps to minimize burdens in collecting new gathering pipeline data.

Some benefits of collecting such pipeline data can be seen through
additional analysis of currently collected data. For example, PHMSA’s
data on regulated pipelines indicate that more onshore reportable
incidents, as well as total property damage, occur on transmission and
distribution pipelines, than on regulated gathering pipelines (see figs. 6
and 7). Although the number of reportable incidents for regulated gas
gathering pipelines is lower than for other regulated pipelines, the value of
total property damage increased in the past few years. In 2010, these
reportable incidents accounted for, on average, about $1.8 million in
property damage per incident.




Page 16                                               GAO-12-388 Pipeline Safety
Figure 6: Number of Incidents for All Federally Regulated Pipeline Systems, 2004
through 2010




Note: Regulated hazardous liquid data is not collected, segregated, and reported to PHMSA by type
of pipeline (i.e., gathering and transmission). Also, there are no hazardous liquid distribution pipeline
systems. Therefore, incident data for regulated hazardous liquid transmission and gathering pipelines
is combined.



Figure 7: Total Property Damage for All Regulated Pipeline Systems, 2004 through
2010




Note: Regulated hazardous liquid data is not collected, segregated, and reported to PHMSA by type
of pipeline (i.e., gathering and transmission). Also, there are no hazardous liquid distribution pipeline
systems. Therefore, property damage data for regulated hazardous liquid transmission and gathering
pipelines is combined.


Another benefit of collecting annual, incident, and safety-related condition
pipeline data is an increased ability to assess and manage risks. We have
previously reported on the importance of assessing and managing risks,




Page 17                                                                   GAO-12-388 Pipeline Safety
including quantifying those risks using data. 18 Data are instrumental in
quantifying risks and can reduce uncertainty in assumptions and policy
judgments (e.g., safety threats and the likelihood that they will be
realized). 19 PHMSA officials reported that collecting data could help to
determine the safety risks associated with federally unregulated gathering
pipelines, such as tracking injuries, fatalities, and property damage for
new gathering pipelines associated with shale development, and whether
current safety regulations are appropriate. Related to whether current
regulations are appropriate, Congress recently mandated that DOT
review the sufficiency of existing federal and state laws and regulations to
ensure the safety of hazardous liquid and gas gathering pipelines. 20 Two
industry associations reported that such data collection could help better
ensure that federal pipeline programs are appropriately targeted at
mitigating safety risks, cost-effective, and not unnecessarily broad in
scope. Quantitatively assessing risks could also allow for a ranking and
prioritizing of safety risks facing gathering pipelines in a manner that is
currently not possible.

Besides PHMSA, states may collect data on unregulated gathering
pipelines, but the scope and nature of this data collection can vary.
Although the federal government is responsible for setting minimum
pipeline safety standards, states can adopt additional or stricter safety
standards for intrastate pipeline facilities and transportation—including
standards for data collection. For example, Texas’s state regulation
further defined that the state’s safety jurisdiction for onshore gas
gathering pipelines begins after the first point of measurement—where
the product is first measured to determine the volume being extracted
from the well—and is based on population, which is stricter than the




 GAO, Risk Management: Strengthening the Use of Risk Management Principles in
18

Homeland Security, GAO-08-904T (Washington, D.C.: June 25, 2008).
 GAO, Homeland Security: DHS Risk-Based Grant Methodology Is Reasonable, But
19

Current Version’s Measure of Vulnerability is Limited, GAO-08-852 (Washington, D.C.:
June 27, 2008)
20
 Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90,
§21, 125 Stat. 1904, 1917 (2011).




Page 18                                                       GAO-12-388 Pipeline Safety
                       federal standard. 21 Our survey revealed that only 3 of the 39 state
                       agencies reported that they collect and analyze comprehensive pipeline
                       spill and release data on federally unregulated pipelines. Such
                       information can be used to help reduce future incidents. Additionally, the
                       National Association of Pipeline Safety Representatives (NAPSR)
                       recently conducted a nationwide survey 22 to determine which state
                       requirements match or exceed federal pipeline safety requirements. The
                       survey reported that neither states nor the District of Columbia collected
                       comprehensive data on federally unregulated gathering pipelines, as is
                       required for federally regulated pipelines.


                       State pipeline safety agencies reported using five safety practices most
States Could Benefit   frequently to help ensure the safety of onshore hazardous liquid and gas
from Sharing Safety    gathering pipelines not regulated by PHMSA, according to our survey of
                       state agencies 23 (see fig. 8). Several of these practices are designed to
Practices              counter previously discussed safety risks; for example, implementing
                       damage prevention programs can lower the risks of excavation damage. 24
                       Although these practices were cited most frequently, one-third or less of
                       the state pipeline safety agencies with unregulated gathering pipelines
                       use any one of these practices. For instance, 13 of the 39 state pipeline
                       safety agencies with unregulated gathering pipelines in their state
                       reported using the most frequently cited safety practice—damage



                       21
                         Texas Administrative Code, Title 16, Part 1, Chapter 8 Subchapter A, Rule Section 8.5.
                       Although the federal government is responsible for setting minimum pipeline safety
                       standards, Texas, and other certified states, can adopt additional or more stringent safety
                       standards for intrastate pipeline facilities and intrastate pipeline transportation. (49 U.S.C.
                       §60104(c)). However, any intrastate safety standards adopted by Texas and other
                       certified states must be compatible with the federal standards.
                       22
                         National Association of Pipeline Safety Representatives and the National Association of
                       Regulatory Utility Commissioners, Compendium of State Pipeline Safety Requirements &
                       Initiatives Providing Increased Public Safety Levels compared to Code of Federal
                       Regulations, 1st Edition 2011 (Sept. 30, 2011).
                        These practices refer to state pipeline safety practices that are more stringent than
                       23

                       PHMSA’s regulatory requirements and to central activities, programs, or other policies that
                       can help ensure the safety of various onshore pipelines. We recognize that in some states
                       a practice may be part of the state’s regulations, while in other states, such practices are
                       separate from regulations.
                       24
                         When we discuss safety practices, we refer to those safety practices that state agencies
                       described as being relevant for helping ensure the safety of gathering pipelines. Some of
                       these same practices may also be applied to other types of pipelines.




                       Page 19                                                            GAO-12-388 Pipeline Safety
prevention programs. Additionally, some of the state agencies that
reported using safety practices also responded that, overall, they had
promulgated safety requirements for onshore gathering pipelines that
were more stringent than those provided by PHMSA.

Figure 8: Most Frequently Used Safety Practices by States for Gathering Pipelines




•    Damage prevention programs. Thirteen state agencies 25 reported that
     they implement and enforce a damage prevention program as a
     practice to help ensure pipeline safety. Damage prevention programs
     can help mitigate risks and increase safety through a number of
     activities. For example, damage prevention programs can help reduce
     the risk of excavation damage by encouraging citizens and other
     parties to collect information to help identify pipeline locations before
     digging begins. Damage prevention programs can also include



 When discussing the number of state agencies that reported using a given safety
25

practice, these 13 agencies are a subset of the 39 state agencies that reported having
unregulated gathering pipelines.




Page 20                                                        GAO-12-388 Pipeline Safety
     marking the rights-of-way for pipelines—including gathering
     pipelines—above ground to further reduce the likelihood of excavation
     damage (see fig. 9). States have developed or participated in damage
     prevention programs to help reduce instances of excavation damage,
     including damage to gathering pipelines. For example, Colorado has
     participated in the national One-Call program to reduce excavation
     damage. One-Call programs enable citizens and organizations to call
     an 811 number to notify utilities, pipeline operators, and others about
     the location and nature of planned digging. Utility, pipeline, or other
     organization members can then mark where underground pipelines
     run before any digging begins. Colorado pipeline safety officials
     reported that some calls related to the marking of regulated and
     unregulated gathering pipelines. As to the effectiveness of One-Call
     programs, the Common Ground Alliance has reported that, in 2010,
     when an excavator notified a call center before digging, damage
     occurred less than 1 percent of the time. 26




26
  Common Ground Alliance, DIRT Annual Report for 2010 (Alexandria, VA, 2011). The
Common Ground Alliance is an association dedicated to ensuring public safety,
environmental protection, and the integrity of services by promoting effective damage
prevention practices.




Page 21                                                       GAO-12-388 Pipeline Safety
Figure 9: Pipeline Marker




•   Considering areas of highest risk. Ten state agencies reported they
    consider the areas of highest risk to effectively target resources as a
    safety practice. This approach can help address risks, such as
    corrosion and a lack of periodic maintenance, by directing oversight to
    those pipelines that could have the most serious consequences in the
    event of an incident. 27 In addition, considering the areas of highest
    risk could help address potential safety risks from new gathering
    pipeline infrastructure associated with shale development. For
    example, considering risk factors associated with larger pipelines,
    operating pressures, and location could help determine the actual
    risks posed by these new pipelines. Indeed, some of PHMSA’s more
    recent pipeline safety regulations addressing integrity management
    and high-consequence areas account for risk factors to help


27
  While data are helpful for assessing risks, PHMSA and state agency officials mentioned
using other information sources to qualitatively assess risks, such as guidance and
protocols and general pipeline traits like location.




Page 22                                                       GAO-12-388 Pipeline Safety
     determine which regulations might apply to a particular pipeline. 28
     Industry officials reported that it is more effective to target higher-risk
     areas than to allocate resources across all areas. Officials with the
     Texas Oil and Gas Association added that the risk of a pipeline
     incident in a heavily populated area warrants more attention than the
     risk of a similar incident in a sparsely populated area. This practice
     also acknowledges that gathering pipelines run through a wide variety
     of environments with varying risk levels (see fig. 10). Some states are
     overseeing pipelines based on identified safety risks. For example,
     safety compliance and enforcement staff at the Texas Railroad
     Commission 29 reported that inspecting pipeline systems based on
     identified risks allows the state to inspect some pipelines less
     frequently, such as pipelines made from newer and safer materials,
     have advanced monitoring technology, or are located away from
     populations—like some rural gathering pipelines. Using these risk-
     based safety evaluations also enables Texas Railroad Commission
     inspectors to concentrate on higher-risk pipeline systems.




28
  PHMSA’s integrity management program for transmission pipelines already requires
operators to systematically manage risks to their pipelines in areas where an accident
could have the highest consequences. In our past work on pipeline safety, we have
supported the use of risk-based methodologies for PHMSA’s regulation of the pipeline
industry. See GAO, Natural Gas Pipeline Safety: Risk-Based Standards Should Allow
Operators to Better Tailor Reassessments to Pipeline Threats, GAO-06-945 (Washington,
D.C.: Sept. 8, 2006).
 Formed in 1891, the Texas Railroad Commission regulates the safety of intrastate
29

natural gas pipelines and hazardous liquids pipelines in Texas. Commission staff conduct
safety inspections of pipeline operators, issue compliance guidance, and enforce rules for
Texas’s pipeline excavation damage prevention program.




Page 23                                                        GAO-12-388 Pipeline Safety
Figure 10: Examples of Rural and Residential Gathering Pipeline Operational Environments near Dallas-Fort Worth




                                        •   Safety inspections. Nine state agencies reported they conduct
                                            recurring, scheduled, or unscheduled safety inspections of hazardous
                                            liquid and gas operators as another safety practice. NAPSR officials
                                            reported that safety inspections can be regularly scheduled
                                            inspections, during which inspectors check system components,
                                            specialized inspections (i.e., integrity management) aimed at higher-
                                            risk areas, or random checks. These inspections can also help



                                        Page 24                                                  GAO-12-388 Pipeline Safety
    address risks related to the installation and construction quality of a
    pipeline by ensuring that the pipeline is structurally sound and shows
    no evidence of questionable materials or other problems, such as
    corrosion and excavation damage. PHMSA has recommended that
    state pipeline safety agencies perform periodic surprise inspections
    on new pipeline construction to determine whether operators are
    complying with construction requirements. Inspectors with the Texas
    Railroad Commission, in addition to sampling on-site pipeline facilities
    in the field, also review pipeline operators’ records and documentation
    on selected pipeline systems for compliance with federal and state
    pipeline safety regulations. These risk-based safety evaluations have
    included the construction of gathering pipelines related to shale
    development and pipelines not regulated by PHMSA. Such
    evaluations also help ensure that operators maintain an up-to-date
    and consistent document records system for installation, operations,
    and emergency response (see fig. 11).

Figure 11: Gathering Pipeline Construction Documentation in Texas




Page 25                                                 GAO-12-388 Pipeline Safety
•   Public outreach and communication. Seven state agencies reported
    they engage in outreach or other communication with communities and
    citizens to boost awareness and knowledge of pipeline safety practices
    they use. The Common Ground Alliance has reported on the
    importance of outreach, including the use of structured education
    programs, targeted mailings, and paid advertising. These and other
    outreach methods can also underscore the importance of other safety
    practices, such as damage prevention and One-Call programs. These
    outreach efforts can involve a number of methods and include
    educating and engaging the public. In Colorado, Damage Prevention
    Councils have hosted monthly meetings and participated in local
    community events—such as educational seminars, parades, and trade
    shows—to help educate citizens on pipeline safety. Another Colorado
    entity active in damage prevention is the Colorado Pipeline Association,
    which comprises pipeline operators dedicated to promoting pipeline
    safety by providing information for excavators, state residents,
    businesses, emergency responders, and public officials. In one
    community, according to a PHMSA official, citizens viewed state safety
    officials as an objective and neutral party that provided information and
    perspectives on the planned construction of gathering pipelines. In
    tandem with private operators, the state officials were able to answer
    citizen questions and address concerns.

•   Enforcement. Six state agencies reported a safety practice of
    establishing a system of escalated enforcement to enhance and
    increase regulatory attention on operators that have experienced
    incidents. A pipeline expert we interviewed said that promoting an
    effective enforcement program was necessary to help ensure pipeline
    safety. A system of escalated enforcement can enhance and increase
    regulatory attention on pipeline operators with safety violations. One
    state pipeline safety official reported that making such attention public
    can bring additional pressure on and provide incentives for a company
    to maintain and operate its infrastructure safely. One PHMSA official
    reported that although many states do not have an enforcement
    program as elaborate as PHMSA, states with stronger enforcement
    programs have more of an impact on the operators to increase safety.
    Pipeline operators may have procedures and established contacts
    with local enforcement personnel in order to act appropriately to halt
    dangerous excavation activities that may damage pipelines and
    potentially cause an immediate threat to life or property. Regarding
    federally unregulated gathering pipelines, one Colorado official
    reported that because gathering pipeline companies operate pipelines
    and conduct excavation work, they would be subject to any necessary
    enforcement due to safety violations.


Page 26                                               GAO-12-388 Pipeline Safety
However, sharing of information among states on the safety practices they
use for unregulated gathering pipelines appears to be limited. Some state
and PHMSA officials we interviewed had limited awareness of what other
states were doing to help ensure the safety of gathering pipelines not
regulated by PHMSA. For example, pipeline safety officials we interviewed
had limited awareness of other state programs—sometimes even for an
adjacent state—even if those programs were intended to address common
risks, such as reducing excavation damage and corrosion. PHMSA officials
were likewise unable to report on the safety practices that many states use
or on states’ regulations that were more stringent than federal
requirements. PHMSA’s website holds a wealth of information on various
pipeline safety topics, including recent pipeline forums and industry
research, incident investigations, and other information. However,
information targeted at gathering pipelines, including relevant safety
practices and state activities, is limited. 30 In addition, all related information
could be grouped to decrease time spent searching and scanning.
Currently, there is no central PHMSA web page or resource for gathering
pipelines, regulated or unregulated—possibly due, in part, to the lower
safety risks that regulated gathering pipelines have posed to people and
property when compared with other pipelines, like transmission pipelines.
PHMSA officials said that its website also focuses on pipelines that
PHMSA regulates but excludes most gathering pipelines. PHMSA has
considered the development of a website to help facilitate sharing
information among states. While this project is still in the planning stages
and not targeted at gathering pipelines, it could be a resource to share
program and safety practices among states and PHMSA.

Increased communication and information sharing about pipeline safety
practices could boost the use of those practices in states with unregulated
gathering pipelines. As previously discussed, even the safety practice that
our survey respondents reported using most frequently—implementing a
damage prevention program—was used by just 13 of the 39 responding
state pipeline safety agencies with unregulated gathering pipelines in their


30
  Websites that are limited tend to be less usable. Usable websites—that is, those that are
planned and designed to collect data on what users need and include various user-
centered design methods, among other things—ensure that needed information is
available and clearly displayed. These standards are based on guidance posted on the
U.S. Department of Health and Human Services’ websites, http://www.usability.gov, a
source for information on usability and user-centered design. It provides guidance and
tools on how to make websites and other communication systems more usable and
useful.




Page 27                                                         GAO-12-388 Pipeline Safety
              state. The other four safety practices cited are reportedly used even less.
              Improved information sharing among states and PHMSA could help
              spread information on how these safety practices—which are also used
              for regulated pipelines–-could be applied to unregulated gathering
              pipelines, thereby benefiting other states with unregulated gathering
              pipelines. We have previously reported on the value of organizations
              reporting and sharing safety information as part of encouraging a wider
              safety culture. 31 Safety culture can include organizational awareness of
              safety and open communication. The benefits of a strong safety culture
              have widespread applicability, including in other transportation areas—
              such as aviation and transit. PHMSA could serve to facilitate feedback
              and evaluate safety information related to unregulated gathering pipelines
              in states. By collecting information on safety practices and other
              information relevant to unregulated gathering pipelines, PHMSA could
              increase the potential for identifying systemic issues, disseminating
              lessons learned, and improving pipeline safety across the country.
              PHMSA officials reported that, in the past, similar online and educational
              efforts in other areas have resulted in increasing education and
              information sharing among state pipeline safety officials.


              While the safety risks of federally unregulated, onshore hazardous liquid
Conclusions   and gas gathering pipelines are generally considered to be lower than
              other types of pipelines, PHMSA is currently not able to determine the
              performance and safety of these gathering pipelines because it does not
              collect the necessary pipeline operator data. The agency is considering
              options to collect such information, which could facilitate quantitatively
              assessing the safety risks posed by unregulated gathering pipelines.
              Furthermore, these data would be critical in helping PHMSA to evaluate
              the sufficiency of safety regulations for gathering pipelines as required by
              the congressional mandate or that increasing shale development across
              the country might necessitate. Making data-driven, evidence-based
              decisions about the risks of federally unregulated gathering pipelines is
              especially important in a time of limited resources.

              The absence of an information-sharing resource focused on federally
              unregulated gathering pipelines means that both states and PHMSA


               GAO, Rail Transit: FTA Programs Are Helping Address Transit Agencies’ Safety
              31

              Challenges, but Improved Performance Goals and Measures Could Better Focus Efforts,
              GAO-11-199 (Washington, D.C.: Jan. 31, 2011).




              Page 28                                                    GAO-12-388 Pipeline Safety
                      could miss opportunities to share lessons learned and successful
                      practices for helping to ensure pipeline safety. Sharing such lessons and
                      related safety reporting can help support a safety culture and increase
                      state officials’ awareness of possible safety practices or strategies that
                      they can use to enhance pipeline safety. Lessons learned can also help
                      states avoid the mistakes of others. Additionally, increased information
                      sharing through such a resource would help PHMSA become more aware
                      of state pipeline safety practices and initiatives—which in turn would
                      assist PHMSA in sharing and supporting these safety practices, as well
                      as in considering what state efforts may have applicability for federal
                      programs, regulation, and guidance.


                      To enhance the safety of unregulated onshore hazardous liquid and gas
Recommendations for   gathering pipelines, we recommend that the Secretary of Transportation
Executive Action      direct the PHMSA Administrator to take the following two actions:

                      •   Collect data from operators of federally unregulated onshore
                          hazardous liquid and gas gathering pipelines, subsequent to an
                          analysis of the benefits and industry burdens associated with such
                          data collection. Data collected should be comparable to what PHMSA
                          collects annually from operators of regulated gathering pipelines (e.g.,
                          fatalities, injuries, property damage, location, mileage, size, operating
                          pressure, maintenance history, and the causes of incidents and
                          consequences).

                      •   Establish an online clearinghouse or other resource for states to share
                          information on practices that can help ensure the safety of federally
                          unregulated onshore hazardous liquid and gas gathering pipelines.
                          This resource could include updates on related PHMSA and industry
                          initiatives, guidance, related PHMSA rulemakings, and other
                          information collected or shared by states.




                      Page 29                                               GAO-12-388 Pipeline Safety
                  We provided the Department of Transportation with a draft of this report
Agency Comments   for review and comment. The department provided technical corrections,
                  which we incorporated as appropriate.


                  We are sending copies of this report to interested congressional
                  committees and the Secretary of Transportation. In addition, the report is
                  available at no charge on the GAO website at http://www.gao.gov.

                  If you or your staff have any questions about this report, please contact
                  me at (202) 512-2834 or flemings@gao.gov. Contact points for our
                  Offices of Congressional Relations and Public Affairs may be found on
                  the last page of this report. GAO staff who made major contributions to
                  this report are listed in appendix III.




                  Susan A. Fleming
                  Director
                  Physical Infrastructure Issues




                  Page 30                                              GAO-12-388 Pipeline Safety
Appendix I: Objectives, Scope, and
              Appendix I: Objectives, Scope, and
              Methodology



Methodology

              The objectives of our review were to determine (1) the safety risks that
              exist, if any, with onshore hazardous liquid and natural gas gathering
              pipelines that are not currently under the Pipeline and Hazardous
              Materials Safety Administration (PHMSA) regulation and (2) the practices
              states are using to help ensure the safety of unregulated onshore
              gathering pipelines. To address our objectives, we reviewed PHMSA and
              other federal agency regulations, as well as available safety data on
              regulated pipelines. We also interviewed officials at PHMSA, state
              pipeline safety agencies, pipeline companies and other industry
              stakeholders, and related associations. We obtained data on pipelines
              regulated by PHMSA to understand the types of pipeline data currently
              collected, as well as to compare and analyze accident, injury, fatality, and
              other trends. We reviewed the data and conducted follow-up work as
              necessary to determine that the data were complete, reasonable, and
              sufficiently reliable for the purposes of this report. We also conducted site
              visits—selecting locations based on geography, pipeline infrastructure,
              and other factors—to interview pipeline officials and representatives in
              Denver, Pittsburgh, and Dallas-Fort Worth. We later identified an initial list
              of safety risks and safety practices through information collection and
              document review processes.

              To determine what safety risks may be associated with federally
              unregulated gathering pipelines—in addition to reviewing federal agency
              regulations, regulated pipeline safety data, and conducting various
              interviews—and because of the lack of historical and nationwide data, we
              developed and administered a web-based survey to state pipeline safety
              agencies in all 50 states and the District of Columbia. 1 Our survey was
              intended to collect information otherwise not available from PHMSA,
              states, industry, or other sources on safety risks associated with onshore,
              federally unregulated hazardous liquid and gas gathering pipelines and
              related safety practices to help address those risks and ensure safety.
              We used the survey to identify which states had unregulated, onshore
              gathering pipelines and what perceived pipeline safety risks were
              associated with those pipelines. To identify safety practices states are
              using, we reviewed industry documents and conducted interviews with
              public and private experts and officials. Then, as part of our survey of
              state pipeline safety agencies, we asked officials to identify the practices


              1
               Alaska and Hawaii have chosen not to participate in pipeline arrangements with PHMSA.
              Therefore, a PHMSA official who conducts state pipeline safety inspections in these states
              responded to those states’ surveys.




              Page 31                                                        GAO-12-388 Pipeline Safety
Appendix I: Objectives, Scope, and
Methodology




they used to ensure the safety of onshore, federally unregulated
hazardous liquid and gas gathering pipelines. From our survey results, we
identified the most frequently cited safety practices, including additional
state programs, activities, and other practices.

To develop the survey questions, we conducted initial interviews with
state officials and other pipeline safety stakeholders to identify safety
issues regarding unregulated gathering pipelines. We also reviewed key
literature to ascertain pipeline safety practices and other issues. We
consulted with PHMSA officials and reviewed PHMSA documentation to
identify the proper terminology for use in the survey.

The survey was pretested with potential respondents from state pipeline
safety agencies, as well as with the Congressional Research Service and
National Association of Pipeline Safety Representatives. 2 We did this to
ensure that (1) the questions were clear and unambiguous, (2) the terms
we used were precise, (3) the survey did not place an undue burden on
the agency officials completing it, and (4) the survey was independent
and unbiased. In addition, the survey was reviewed by an internal,
independent survey expert. We took steps in survey design, data
collection, and analysis to minimize nonsampling errors. For example, we
worked with PHMSA officials to identify the appropriate survey
respondents—state pipeline safety agencies. To minimize measurement
error that might occur from respondents interpreting our questions
differently from our intended purpose, we extensively pretested the
survey and followed up with nonresponding units and with units whose
responses violated certain validity checks. We identified only two cases
where the respondents had slightly varied responses from our intended
question, although the majority understood our questions as intended.
Finally, to eliminate data-processing errors, we independently verified the
computer program that generated the survey results. Our results are not
subject to sampling error because we administered our survey to all 50
state pipeline safety agencies and the District of Columbia.

The survey was conducted using self-administered electronic
questionnaires posted on the World Wide Web. We sent e-mail
notifications to 52 agencies responding to our survey. We also e-mailed


2
 The National Association of Pipeline Safety Representatives is a national association
representing the state pipeline safety inspectors in the contiguous United States, as well
as the District of Columbia and Puerto Rico.




Page 32                                                          GAO-12-388 Pipeline Safety
Appendix I: Objectives, Scope, and
Methodology




each potential respondent a unique password and username to ensure
that only members of the target population could participate in the survey.
To encourage respondents to complete the survey, we sent an e-mail
reminder to each nonrespondent about 2 weeks after our initial e-mail
message. The survey data were collected from July through September
2011. We received responses from all 50 states and the District of
Columbia, for an overall response rate of 100 percent. This “collective
perspective” obtained from each of the agencies helps to mitigate
individual respondent bias by aggregating information across the range of
different viewpoints. For purposes of characterizing the results of our
survey, we identified specific meanings for the words we used to quantify
the results, as follows: “a few” means between 1 percent and 24 percent
of respondents, “some” means between 25 percent and 44 percent of
respondents, “about half” means between 45 percent and 55 percent of
respondents, “a majority” means between 56 percent and 74 percent of
respondents, “most” means between 75 percent and 94 percent of
respondents, and “nearly all” means 95 percent or more of respondents.
This report contains the central results from the survey (see app. II).

We conducted this performance audit from February 2011 to March 2012
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.




Page 33                                              GAO-12-388 Pipeline Safety
Appendix II: Summary Results, GAO Pipeline
                                                Appendix II: Summary Results, GAO Pipeline
                                                Safety Regulations Survey



Safety Regulations Survey


General Pipeline Safety Regulation Survey Questions                                                         Hazardous Liquid          Natural Gas
YES RESPONSES                                                                                                        Frequency         Frequency
Does your state have any onshore gathering pipelines outside of high consequence areas that                                    10                29
PHMSA does not regulate?
Does your agency collect any data for onshore gathering pipelines that PHMSA does not                                           4                 7
regulate?
Does your state have safety requirements for onshore gathering pipelines that are more                                          1                 7
stringent than those provided by PHMSA?
Subpopulation Total                                                                                                            18                52
How great a safety risk, if at all, are the following factors for onshore hazardous liquid
and gas gathering pipelines in your state that PHMSA does not regulate?                                     Hazardous Liquid          Natural Gas
MODERATE AND HIGH SAFETY RISK RESPONSES                                                                              Frequency         Frequency
A. Limited or no annual reporting data (similar to PHMSA’s) available on these pipelines (e.g.,                                 1                 9
mileage, leaks)
B. Limited or no incident data available on these pipelines (e.g., spills, releases)                                            2                11
                                                                   a
C. Limited or no information on the integrity of these pipelines                                                                2                13
D. Unknown or uncertain locations of pipelines                                                                                  3                13
                                                              b
E. Location of these pipelines in high consequence areas                                                                        4                15
                                                              a
F. Limited or no inspections conducted on these pipelines                                                                       3                13
G. Limited or no information on the pipe size                                                                                   2                 7
                                                      a
H. Limited or no information on operating pressure                                                                              3                13
I. Installation/construction quality                                                                                            3                15
J. Periodic maintenance not conducted on these pipelines                                                                        3                13
K. Quality of product (sour or non-sour, corrosive, abrasive, etc.)                                                             3                11
L. Limited information on reporting damages                                                                                     2                 9
M. Other (Please specify)                                                                                                       1                 1
Subpopulation Total                                                                                                            10                29
                                                a
                                                 This response category was combined to represent an overall category of “Limited or no information
                                                of the pipeline integrity.”
                                                b
                                                 A survey follow up found that the majority of respondents also understood the question as it was
                                                intended to mean Class 1 unregulated gathering pipelines previously located in rural areas that may
                                                have transitioned to be located in either (Class 2, 3 or 4) high consequence areas due to changing
                                                land use.




                                                Page 34                                                                GAO-12-388 Pipeline Safety
                                              Appendix II: Summary Results, GAO Pipeline
                                              Safety Regulations Survey




Does your agency use any of the following practices to
ensure onshore hazardous liquid and gas pipeline safety
in your state?                                                         Hazardous Liquid               Natural Gas
                                                                   Regulated       Unregulated   Regulated      Unregulated
                                                                    Pipelines        Gathering    Pipelines       Gathering
YES RESPONSES                                                     Frequency          Frequency   Frequency        Frequency
A. Considering the areas of highest risk to effectively target             14                3          47                 7
resources
B. Collecting and analyzing comprehensive pipeline spill/                   6                1          27                 2
release data on various types of pipelines
C. Standardizing spill/ release data collection in order to                 5                1          22                 2
better assess trends or common causes of spills/ releases so
that prevention measures can be targeted and evaluated to
reduce future incidents
D. Engaging in outreach or other communication with                        10                3          37                 4
communities and citizens to boost awareness or knowledge
of pipelines, including their locations
E. Coordinating with operators to understand new                           11                2          34                 2
technologies, including computer software, pipeline inspection
devices, and other tools to report on pipelines
F. Using existing or emerging technologies to reduce the time               8                1          21                 3
required to detect pipeline leaks
G. Working to increase construction quality to ensure a long               11                2          40                 3
life for pipeline infrastructure
H. Prioritizing the replacement or repair of aging or otherwise             9                1          37                 2
limited infrastructure
I. Conducting recurring, scheduled or unscheduled safety                   14                3          47                 6
inspections of operators
J. Establishing a system of escalated enforcement to                       11                2          29                 4
enhance and increase regulatory attention on operators that
have spills/ releases
K. Developing standards or other bench marks to measure                     7                2          28                 2
and evaluate performance in encouraging safety
L. Monitoring implementation of corrective or preventive                   13                0          40                 4
measures to evaluate their impact or effectiveness
M. Using existing integrity management practices for PHMSA                  8                2          15                 2
unregulated lines
N. Implementing and enforcing a damage prevention program                  13                3          38                10
O. Other (Please specify)                                                   0                1           7                 2
Subpopulation Total                                                        18               10          52                29
                                              Source: GAO.




                                              Page 35                                               GAO-12-388 Pipeline Safety
Appendix III: GAO Contact and Staff
                  Appendix III: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Susan A. Fleming, (202) 512-2834 or flemings@gao.gov
GAO Contact
                  In addition to the contact named above, other key contributors to this
Staff             report were Sara Vermillion (Assistant Director), Matt Cail (Analyst-in-
Acknowledgments   Charge), Aisha Cabrer, David Hooper, Stuart Kaufman, Josh Ormond,
                  Jerome Sandau, Jeremy Sebest, Rebecca Shea, Don Watson, and
                  Adam Yu.




(541077)
                  Page 36                                              GAO-12-388 Pipeline Safety
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