Pipeline Safety and Security: Improved Workforce Planning and
Communication Needed (26-AUG-02, GAO-02-785).
The Office of Pipeline Safety (OPS) is implementing a new
approach to overseeing the safety of a 2.2-million-mile network
of pipelines in the United States that transports potentially
dangerous materials, including hazardous liquids, such as oil and
natural gas. OPS has to complete several important steps to
implement its integrity management approach within an ambitious,
self-imposed schedule. The agency began applying this new
regulatory approach to hazardous liquid pipelines in 2000 by
issuing final rules requiring operators of these pipelines to
develop integrity management programs. While implementing its
integrity management approach, OPS must also perform ongoing
oversight duties, such as inspecting the construction of new
pipelines and investigating pipeline incidents. In addition to
meeting its ambitious schedule, OPS faces a number of other
challenges in implementing this new regulatory approach. These
challenges include (1) enforcing the integrity management
requirements consistently and effectively, (2) ensuring that
natural gas transmission pipeline operators use assessment
methods appropriately, (3) establishing an inspection interval
for natural gas transmission pipelines, (4) measuring and
reporting on the effectiveness of the approach, and (5)
developing and implementing an approach for overseeing pipeline
security. OPS's efforts to identify the resources and expertise
needed to implement its integrity management approach are
hampered by the lack of an up-to-date assessment of current and
future staffing and training needs and an examination of the
workforce's deployment across the organization--essential
elements of a "workforce plan."
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-02-785
ACCNO: A04636
TITLE: Pipeline Safety and Security: Improved Workforce Planning
and Communication Needed
DATE: 08/26/2002
SUBJECT: Hazardous substances
Pipeline operations
Regulatory agencies
Safety regulation
Safety standards
OPS Risk Management Demonstration
Program
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GAO-02-785
Report to the Ranking Minority Member, Committee on Energy and Commerce,
House of Representatives
United States General Accounting Office
GAO
August 2002 PIPELINE SAFETY AND SECURITY
Improved Workforce Planning and Communication Needed
GAO- 02- 785
Page i GAO- 02- 785 Pipeline Safety and Security Letter 1
Results in Brief 2 Background 4 OPS Has Set an Ambitious Schedule for
Implementing Integrity
Management 7 OPS Faces Additional Challenges in Implementing the Integrity
Management Approach 12 OPS*s Plan for Obtaining Resources and Expertise Is
Not Complete
or Adequately Communicated to State Partners 25 OPS Is Taking Action to
Improve Data Quality 29 Conclusions 32 Recommendations for Executive
Action 33 Agency Comments and Our Evaluation 33 Scope and Methodology 34
Appendix I Comments from the U. S. Department of Transportation 36
Tables
Table 1: Hazardous Liquid and Natural Gas Pipeline Mileage in the United
States 5 Table 2: OPS*s Data Quality Initiatives 31
Figure
Figure 1: Time Line for OPS*s Implementation of the Integrity Management
Approach 11
Abbreviations
DOT Department of Transportation OPS Office of Pipeline Safety RSPA
Research and Special Programs Administration Contents
Page 1 GAO- 02- 785 Pipeline Safety and Security
August 26, 2002 The Honorable John D. Dingell Ranking Minority Member
Committee on Energy and Commerce House of Representatives
Dear Mr. Dingell: The Office of Pipeline Safety (OPS), within the
Department of Transportation*s (DOT) Research and Special Programs
Administration (RSPA), is implementing a new approach to overseeing the
safety of a 2.2- million- mile network of pipelines in the United States
that transports potentially dangerous materials, including hazardous
liquids, such as oil, and natural gas. Traditionally, OPS has carried out
its oversight responsibility by issuing minimum safety standards and
enforcing them uniformly across all pipelines. To better focus on safety
risks that are unique to individual pipelines, OPS has been exploring a
risk- based approach to overseeing pipeline safety since the mid- 1990s
and is now implementing this approach. This initiative* termed *integrity
management** requires pipeline operators, in addition to meeting minimum
safety standards, to develop programs to assess, evaluate, and mitigate
any risks to pipeline segments where a leak or rupture could have
significant consequences, such as near highly populated areas. To address
security concerns after September 11, 2001, OPS advised pipeline operators
to consider potential terrorist threats to their pipelines in their
assessments of pipeline risks. In addition to the integrity management
initiative, OPS is implementing several actions to collect better data on
pipeline incidents in order to improve its oversight of the pipeline
industry and help evaluate the performance of the integrity management
approach.
You asked us to examine what OPS has done and plans to do to implement
this new approach, which differs significantly from OPS*s traditional
oversight activities. Accordingly, we examined OPS*s (1) steps to
implement the integrity management approach, (2) challenges in
implementing this approach, (3) plans for obtaining the resources and
expertise needed to oversee pipeline safety under integrity management,
and (4) major initiatives to improve the quality of its data on pipeline
incidents.
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 02- 785 Pipeline Safety and Security
OPS has to complete several important steps to implement its integrity
management approach within an ambitious, self- imposed schedule. The
agency began applying this new regulatory approach to hazardous liquid
pipelines in 2000 by issuing final rules requiring operators of these
pipelines to develop integrity management programs. OPS now plans to
finalize integrity management requirements for natural gas transmission
pipelines and to inspect the programs of more than 1,000 hazardous liquid
and natural gas transmission pipeline operators. Although OPS may take
until 2006 or later to complete these steps, the agency*s schedule for the
next 2 years is particularly challenging. For example, OPS plans to
issue proposed and final rules to establish requirements for integrity
management programs for natural gas transmission pipeline operators by
spring 2003, conduct comprehensive inspections* each of which takes
about 2
weeks* of the programs for over 200 hazardous liquid pipeline operators
from summer 2002 through fall 2004, and prepare to conduct comprehensive
inspections of the programs for about
830 natural gas transmission pipeline operators from summer 2004 to summer
2006.
While implementing its integrity management approach, OPS must also
perform ongoing oversight duties, such as inspecting the construction of
new pipelines and investigating pipeline incidents. Although OPS officials
believe that the agency can achieve this ambitious schedule with the
assistance of state pipeline safety inspectors, the schedule leaves little
margin for error if OPS is to meet its time frame. For example, agency
officials acknowledge that they have prepared protocols for comprehensive
inspections of hazardous liquid operators under a tight schedule in order
to start these inspections in summer 2002, as planned.
In addition to meeting its ambitious schedule, OPS faces a number of other
challenges in implementing this new regulatory approach. These challenges
include (1) enforcing the integrity management requirements consistently
and effectively, (2) ensuring that natural gas transmission pipeline
operators use assessment methods appropriately, (3) establishing an
inspection interval for natural gas transmission pipelines, (4) measuring
and reporting on the effectiveness of the approach, and (5) developing and
implementing an approach for overseeing pipeline security. OPS is pursuing
a variety of actions to address these challenges. For example, the agency
has developed detailed guidance for inspectors to use in reviewing
operators* integrity management programs to help ensure that enforcement
decisions will be consistent, is preparing a proposed integrity Results in
Brief
Page 3 GAO- 02- 785 Pipeline Safety and Security
management rule for natural gas transmission pipelines that will include
proposed requirements on assessment methods and inspection intervals for
these pipelines, and is developing protocols for reviewing operators*
security programs. However, although some hazardous liquid pipeline
operators have begun to implement their integrity management programs, OPS
has not yet established uniform performance measures for these programs.
OPS officials told us that they intend to establish such measures, which
would allow the agency to track the progress of these programs in
improving pipeline safety, by the end of 2002. OPS also needs to resolve
several issues related to its approach for overseeing pipeline security.
For example, OPS needs to determine how best to use its own and its state
partners* resources for carrying out this oversight because the agency
does not anticipate obtaining additional resources for this purpose.
OPS*s efforts to identify the resources and expertise needed to implement
its integrity management approach are hampered by the lack of an up-
todate assessment of current and future staffing and training needs and an
examination of the workforce*s deployment across the organization*
essential elements of a *workforce plan.* 1 Although OPS has estimated the
number of inspectors it needs to hire to implement its integrity
management approach and has developed a curriculum to train federal and
state inspectors, its resource estimates are outdated and cover only the
initial phases of implementation. In addition, OPS has not communicated
its intentions for involving its state partners in implementing the
integrity management approach. Although the agency believes it will need
to augment its own resources with those of states to effectively implement
integrity management, OPS officials have acknowledged that the agency*s
efforts to communicate with state partners have been limited. This limited
communication has left some states unsure of the roles they will play. OPS
is acting to resolve some of these issues, but a workforce plan* including
updated multiyear resource estimates* would help the agency better plan
for future resource needs. Furthermore, a strategy for communicating with
states would help OPS to effectively involve its state partners in the
implementation of the integrity management approach.
In the past, OPS has experienced a number of problems with the
completeness and accuracy of its data on pipeline incidents, which the
1 U. S. General Accounting Office, Human Capital: A Self- Assessment
Checklist for Agency Leaders, GAO/ OCG- 00- 14G (Washington, D. C.:
September 2000).
Page 4 GAO- 02- 785 Pipeline Safety and Security
agency uses in overseeing pipeline safety. For example, OPS*s incident
report forms used a limited number of cause categories** other* accounted
for about one- fourth of all pipeline incidents* and OPS did not have a
procedure for following up with operators to ensure that their incident
reports included any necessary revisions. OPS is implementing several
initiatives to improve the completeness and accuracy of its data, which,
if effectively implemented, should help the agency improve its oversight
of pipeline safety. For example, OPS has revised its incident report forms
to include more than 3 times as many cause categories, has assigned
inspectors to review forms and follow up with operators, and has proposed
to require an annual report from hazardous liquid operators. The agency
plans to have most of the initiatives implemented for 2002 data. OPS plans
to use the improved data to, among other things, help develop performance
measures for the integrity management approach, focus its oversight
efforts on the greatest risks to pipeline safety, and prioritize research
and development projects. According to some state and federal government
and industry officials, these initiatives address OPS*s underlying data
problems and will enable the agency to better understand the causes of
incidents and improve its oversight of pipeline safety.
Although OPS has efforts under way to address several challenges it faces
in implementing its new regulatory approach, the lack of a workforce plan
and strategy for communicating with its state partners puts it at risk of
not being able to overcome these challenges and effectively implement this
approach on schedule. Therefore, we are recommending that OPS prepare a
workforce plan that includes updated current and future resource estimates
and develop a strategy for clearly communicating with its state partners
about the role that they will play in implementing the integrity
management approach. In commenting on a draft of this report, DOT
officials noted that OPS recognizes the need for workforce planning and
improved communication with the states, as we recommended. They also
provided information on the agency*s current and planned efforts in these
areas. DOT*s comments are reprinted in appendix I.
Pipelines transport about 65 percent of the crude oil and refined oil
products and nearly all of the natural gas in the United States. Table 1
shows the three primary types of pipelines that form a 2.2- million- mile
network across the nation. Background
Page 5 GAO- 02- 785 Pipeline Safety and Security
Table 1: Hazardous Liquid and Natural Gas Pipeline Mileage in the United
States Type of pipeline Description
Approximate miles in the United States (thousands)
Hazardous liquid Transports crude oil to refineries and refined oil
products, such as gasoline, to product terminals
159 Natural gas transmission Transports natural gas over long
distances from sources to communities
325 a Natural gas distribution Transports natural gas throughout
the communities to consumers 1,850 a This mileage figure includes onshore
and offshore transmission pipelines as well as some gathering
lines, which collect natural gas from producing wells and carry the
product to a natural gas transmission pipeline.
Source: OPS data.
Pipelines are inherently safer than other modes of freight transportation
for hazardous liquids and natural gas. Although an average of about 24
fatalities resulted from pipeline incidents each year from 1989 through
2000, this number is relatively low compared with the number of fatalities
from other forms of freight transportation. On average, about 66 people
die each year in barge incidents, about 590 in railroad incidents, and
about 5,100 in truck incidents. Despite the relative safety of pipelines,
pipeline incidents can have tragic consequences, as evidenced by the
pipeline ruptures in Bellingham, Wash. (1999), and Carlsbad, N. Mex.
(2000). These incidents, which caused 15 fatalities, highlight the
importance of pipeline safety.
OPS develops, issues, and enforces regulations to ensure the safe
transportation of hazardous liquids and natural gas by pipeline. In fiscal
year 2002, OPS employed about 135 people, over half of whom were pipeline
inspectors. In addition, state agencies have roles in pipeline safety. In
general, OPS retains full responsibility for inspecting and enforcing
regulations on interstate pipelines but certifies states to perform these
functions for intrastate pipelines. 2 Certified states are allowed to
impose safety requirements for intrastate pipelines that are stricter than
the federal regulations. In 2002, 48 state agencies, the District of
Columbia, and Puerto Rico were certified for intrastate natural gas
pipeline inspections, and 13 state agencies were certified for intrastate
hazardous liquid pipeline inspections. OPS also uses some states to help
inspect
2 See 49 U. S. C. 60105.
Page 6 GAO- 02- 785 Pipeline Safety and Security
interstate pipelines. These states, or *interstate agents,* inspect
segments of interstate pipelines within their boundaries. However, OPS
handles any enforcement actions identified through inspections conducted
by these interstate agents. In 2002, 11 states were acting as interstate
agents* 2 states for hazardous liquid pipelines, 5 states for natural gas
pipelines, and 4 states for both types of pipelines. In total, there are
about 400 state pipeline safety inspectors trained to assist OPS in
overseeing pipeline safety within their states.
OPS has traditionally carried out its oversight responsibility by
establishing minimum standards in its regulations and enforcing them
uniformly across pipelines. 3 However, this uniform regulatory approach
does not account for differences in the risks faced by individual
pipelines. For example, pipelines located in the Pacific Northwest states
are susceptible to damage from geologic hazards, such as landslides, but
OPS*s uniform, minimum regulations do not address this risk.
Recognizing that pipeline operators face different risks depending on such
factors as location and the products they carry, OPS began exploring the
concept of a risk- based approach to pipeline safety in the mid- 1990s. In
1996, the Accountable Pipeline Safety and Partnership Act included
provisions for DOT to establish a demonstration program to test a
riskbased approach. 4 As a result, OPS established the Risk Management
Demonstration Program, which went beyond the agency*s traditional
regulatory approach by allowing individual companies to identify and focus
on the unique risks to their pipelines. Partly on the basis of OPS*s
experience with the demonstration program, the agency moved forward with a
new regulatory approach* termed integrity management* to supplement
uniform, minimum regulations. In a May 2000 report, we recognized the
potential benefits of a risk- based approach to pipeline safety; however,
we expressed concern that OPS did not have performance measures in place
to demonstrate the effectiveness of the Risk Management Demonstration
Program or the resulting integrity management approach. 5
3 See 49 C. F. R. pts. 190- 199 (2002). 4 P. L. No. 104- 304, 110 Stat.
3793 (1996). 5 U. S. General Accounting Office, Pipeline Safety: The
Office of Pipeline Safety Is Changing How It Oversees the Pipeline
Industry, GAO/ RCED- 00- 128 (Washington, D. C.: May 15, 2000).
Page 7 GAO- 02- 785 Pipeline Safety and Security
The integrity management approach requires individual pipeline operators
to develop programs to systematically identify and address risks to the
segments of their pipelines that could affect *high consequence areas*
where a leak or rupture would have the greatest impact, including highly
populated or environmentally sensitive areas. 6 OPS designed the integrity
management approach to achieve greater safety by allowing individual
operators flexibility in tailoring their programs to the characteristics
of their pipelines. This flexibility is reflected in performance- based
requirements, which allow operators to determine the most appropriate
processes and technologies to use in their integrity management programs,
subject to OPS*s review. For example, operators may use a variety of
techniques for assessing pipeline integrity and analyzing these results
and other available information about the conditions of their pipelines.
In addition, OPS*s integrity management program requirements include
prescribed elements that provide some consistency among integrity
management programs. For example, OPS requires all hazardous liquid
pipeline operators to conduct a baseline assessment of the integrity of
all pipeline segments that could affect high consequence areas,
periodically reassess the integrity of these pipeline segments, take
prompt action to address any anomalies found during the assessments that
threaten the integrity of the pipeline, and develop measures of the
program*s effectiveness. After September 11, 2001, OPS advised pipeline
operators also to consider potential terrorist threats to their pipelines
in their assessments of pipeline integrity. 7
OPS has to complete several important steps to implement its integrity
management approach under an ambitious self- imposed schedule, including
finalizing requirements for integrity management programs and inspecting
the programs of more than 1,000 hazardous liquid and natural gas
transmission pipeline operators. Although it may take OPS until 2006 or
later to complete these steps, the agency*s schedule for the next 2 years
is particularly challenging.
6 For hazardous liquid pipelines, a *high consequence area* is defined as
a populated area, an area unusually sensitive to environmental damage, or
a commercially navigable waterway. See 49 C. F. R. 195.450 (2002). For
natural gas transmission pipelines, OPS has developed a definition that
focuses on populated or frequented areas. See 67 Fed. Reg. 1108, 1114
(Jan. 9, 2002).
7 See 67 Fed. Reg. 2136, 2137 (Jan. 16, 2002). OPS Has Set an
Ambitious Schedule for Implementing Integrity Management
Page 8 GAO- 02- 785 Pipeline Safety and Security
To finalize the requirements for integrity management programs, OPS plans
to issue proposed and final rules establishing these requirements for
natural gas transmission pipeline operators by spring 2003. 8 The agency
has already issued separate rules establishing requirements for hazardous
liquid pipelines. 9 OPS is issuing separate rules for the different types
of pipeline operators because of differences in the products carried by
their pipelines, the types of risks faced, and the configuration of the
pipelines. For example, hazardous liquid pipelines are more subject to
metal fatigue, which can increase the risk of pipeline failure, than gas
pipelines because they experience a greater number of pressure cycles.
However, hazardous liquid pipelines also tend to be more uniform in size
than natural gas pipelines, which makes it easier for them to accommodate
internal inspection devices to detect corrosion. These differences have
implications for the requirements for integrity management programs, such
as the types of assessment methods that operators can use to identify
risks to their pipelines and the appropriate intervals between required
safety assessments.
OPS chose to issue the rule for operators of large hazardous liquid
pipelines (those with 500 or more miles of pipeline) first because it
needed more information on how integrity management principles should be
applied to smaller hazardous liquid pipelines and natural gas transmission
pipelines. Consequently, OPS issued requirements for operators of large
hazardous liquid pipelines in December 2000 and similar requirements for
operators of small hazardous liquid pipelines (those with less than 500
miles of pipeline) in January 2002. OPS anticipates issuing a proposed
rule for operators of gas transmission pipelines by the end of summer 2002
and a final rule in spring 2003.
In addition to completing the requirements, OPS needs to inspect the
integrity management programs developed by more than 1,000 individual
operators of hazardous liquid pipelines and natural gas transmission
pipelines. OPS has developed and begun to implement the following four
8 OPS is considering issuing requirements for integrity management
programs for operators of natural gas distribution pipelines after the
agency completes the rulemaking process for natural gas transmission
pipelines.
9 The final rule for OPS*s integrity management program for large
hazardous liquid pipeline operators was published in December 2000. See 65
Fed. Reg. 75378 (Dec. 1, 2000) (to be codified at 49 C. F. R. pt. 195).
The final rule for small hazardous liquid pipeline operators was published
in January 2002. See 67 Fed. Reg. 2136 (Jan. 16, 2002).
Page 9 GAO- 02- 785 Pipeline Safety and Security
phased approach for reviewing and monitoring the programs for 65 operators
of large hazardous liquid pipelines.
Phase 1: From January through April, 2002, OPS conducted *quick hit*
inspections of each operator*s identification of pipeline segments that
could affect high consequence areas to determine if the operator had
correctly identified these segments. OPS also reviewed documents
describing how each operator intends to implement all elements of an
integrity management program to determine whether the operator was making
satisfactory progress in developing a program.
Phase 2: From August 2002 through November 2004, OPS plans to conduct
*comprehensive* inspections of each operator*s more fully developed
integrity management program, including each operator*s plans for
conducting an initial assessment of the safety of its pipelines. OPS
estimates that each inspection will require about 2 weeks.
Phase 3: After completing phase 2, OPS plans to monitor operators*
progress on their programs through periodic inspections. OPS anticipates
that each operator will be inspected at least once every 2 years.
Phase 4: Concurrently with the other phases, OPS plans to review and
respond to notifications from operators of changes in their programs. 10
For example, an operator is required to notify OPS if it cannot repair any
anomaly that affects the integrity of the pipeline within the time frame
specified in the rule. 11
OPS is conducting and planning a variety of activities aimed at carrying
out these four phases, including developing inspection protocols and
providing training to federal and state inspectors on conducting the
inspections. OPS anticipates using a similar phased approach to review and
monitor the programs for operators of small hazardous liquid and natural
gas transmission pipelines. 12
10 OPS plans to review all notifications received from operators and to
respond in a timely manner to those in which it finds the proposed
approach unacceptable. 11 OPS requires operators to prioritize repairs in
three categories: repair immediately, repair within 60 days, or repair
within 6 months. See 49 C. F. R. 195.452( h)( 4)( 2002). 12 However, the
agency may combine the inspections in phases 1 and 2 for these pipelines
if the agency determines that it would be more efficient and equally
effective to have one inspection.
Page 10 GAO- 02- 785 Pipeline Safety and Security
According to OPS officials, OPS*s schedule for implementing the integrity
management approach is ambitious and presents a significant challenge. For
the 65 operators of large hazardous liquid pipelines, OPS plans to conduct
all of the comprehensive inspections within 4 years of issuing the final
rule requiring integrity management programs for these operators. If OPS
issues the final rule for integrity management programs for natural gas
transmission pipelines in spring 2003, as it anticipates, and follows a
similar schedule for conducting comprehensive inspections, then the agency
will not complete inspections of these pipelines before spring 2006.
However, because there are about 60 more interstate natural gas
transmission pipeline operators than hazardous liquid operators that OPS
will need to inspect, it may take the agency longer to complete these
inspections. During this time frame, OPS also has to perform ongoing
oversight activities, such as conducting standard inspections,
investigating incidents, and inspecting pipeline construction. 13 Figure 1
shows a time line for the steps that OPS must complete to implement
integrity management for large and small hazardous liquid pipelines and
gas transmission pipelines.
13 OPS*s standard inspections verify whether pipeline operators are in
compliance with minimum safety standards. They include *unit inspections*
of an individual operating unit of a company*s pipeline system as well as
*systemwide inspections* of all of a company*s related operating units.
Page 11 GAO- 02- 785 Pipeline Safety and Security
Figure 1: Time Line for OPS*s Implementation of the Integrity Management
Approach
a This time frame assumes that OPS will issue the final rule for integrity
management programs for natural gas transmission pipelines in spring 2003
and will follow a schedule for conducting inspections of small hazardous
liquid and gas transmission operators similar to the inspections for large
hazardous liquid operators.
Source: GAO analysis of information provided by OPS.
Page 12 GAO- 02- 785 Pipeline Safety and Security
According to OPS officials, the agency is implementing integrity
management under an ambitious time frame because it wants to emphasize to
operators the importance of evaluating and improving the safety of their
pipelines. In addition, OPS*s integrity management approach fulfills some
long- standing congressional mandates and recommendations of the National
Transportation Safety Board (the Safety Board), and the agency wants to
address concerns about the amount of time it has taken to fulfill these
mandates and recommendations. 14 Although the schedule is ambitious, OPS
officials believe the agency can meet its time frame by hiring additional
federal inspectors, using contractor support, and relying on state
pipeline safety inspectors to conduct integrity management inspections for
intrastate pipelines. However, as shown in figure 1, the next 2 years
leave little margin for error if OPS is to follow its schedule. For
example, agency officials acknowledge that they have prepared protocols
and guidance for comprehensive inspections under a tight time frame in
order to meet their target date for starting these inspections.
In addition to meeting its ambitious schedule, OPS faces a number of other
challenges in implementing its integrity management approach. Some
challenges* such as enforcing the requirements for integrity management
programs consistently and effectively, and measuring and reporting on the
effectiveness of the integrity management approach* are more urgent for
hazardous liquid pipeline operators because they have begun implementing
their programs. Other challenges* such as ensuring that operators use
pipeline safety assessment methods appropriately and establishing an
inspection interval* have been addressed in OPS*s requirements for
integrity management programs for hazardous liquid pipelines and must now
be resolved for natural gas transmission pipelines before OPS can issue a
final rule for these pipelines. In addition, since September 11, 2001, OPS
faces the challenge of developing an approach to overseeing pipeline
security, including how to incorporate security into its integrity
management and standard inspections of pipeline operators.
OPS is taking a variety of actions to address these challenges as
hazardous liquid pipeline operators are implementing their individual
programs.
14 For example, OPS is issuing its integrity management rules partially in
response to a 1987 Safety Board recommendation that the agency require
pipeline operators to periodically inspect pipelines. See U. S. General
Accounting Office, Pipeline Safety: Progress Made, but Significant
Requirements and Recommendations Not Yet Complete, GAO- 01- 1075
(Washington, D. C.: Sept. 28, 2001). OPS Faces Additional
Challenges in Implementing the Integrity Management Approach
Page 13 GAO- 02- 785 Pipeline Safety and Security
However, in attempting to meet its ambitious schedule for implementing the
integrity management approach for hazardous liquid pipeline operators, OPS
has not yet required these operators to adopt standardized measures for
monitoring the performance of their programs or to provide the agency with
the results of such measures. Agency officials told us that they intend to
establish such requirements by the end of 2002 and are considering ways to
report performance measurement data to local officials. OPS also needs to
resolve several issues related to its approach for overseeing pipeline
security. For example, OPS will need to determine how best to use its
existing resources, as well as those of its state partners, for carrying
out security oversight because the agency does not anticipate obtaining
additional resources for this purpose.
In implementing its integrity management approach, OPS faces the challenge
of enforcing compliance with the program*s flexible requirements
consistently and effectively* a much more difficult task than enforcing
compliance with uniform minimum safety standards, as OPS has traditionally
done. According to representatives of the pipeline industry, environmental
organizations, and states, inspectors will face difficulties in judging
the adequacy of complex integrity management processes that will vary from
company to company. For example, under the integrity management rules,
operators must analyze risks for each pipeline segment that could affect
high consequence areas in order to identify actions needed to enhance
public safety or environmental protection. Operators may choose from a
range of actions, such as improving leak detection systems or installing
shut- off valves to limit the amount of product released during a leak or
rupture, but they must implement those actions they have identified as
necessary. It will be challenging for inspectors to determine the adequacy
of operators* risk analyses because, although the rule specifies some risk
factors that operators should consider, it allows them to choose from a
wide variety of methods for conducting risk analyses. Furthermore, because
inspections will be conducted by five regional offices and 48 state
partners, it will be challenging for OPS to ensure that inspectors make
consistent judgments nationwide.
OPS officials have told us that their main goal in implementing the
integrity management rules is to develop a nationally consistent approach
for inspecting operators* integrity management programs. The agency is
taking a number of steps aimed at ensuring consistency, including
Enforcing the Integrity
Management Requirements Consistently and Effectively
Page 14 GAO- 02- 785 Pipeline Safety and Security
completing a set of detailed inspection protocols and guidance designed
to provide clear criteria to inspectors for evaluating the adequacy of
operators* actions and making enforcement decisions; putting together
inspection teams of staff from multiple regions, including
its most experienced inspectors, as well as external experts and state
representatives; and requiring all OPS and state inspectors who will
conduct integrity
management inspections to complete a set of relevant training courses.
According to OPS officials, the development and use of detailed protocols
and guidance for conducting integrity management inspections are their
most important means for ensuring the consistency of inspectors* decisions
during these inspections. OPS has developed an initial set of protocols
and guidance for the comprehensive inspections of operators of large
hazardous liquid pipelines. The agency plans to pilot test the use of
these protocols in its first five comprehensive inspections, which are
scheduled for August through October, 2002. The agency intends to make
necessary adjustments to the protocols and guidance on the basis of this
pilot testing and to revise them periodically afterward on the basis of
further experience with its inspections.
OPS, according to some environmental organization representatives, may
face particular difficulties in enforcing its integrity management rules
because operators may disagree with enforcement actions pertaining to
flexible requirements in the rules. 15 OPS officials told us that they
intend to vigorously enforce the integrity management rules, levying fines
for serious violations, to ensure that operators comply with the
requirements. After conducting 40 quick hit inspections of hazardous
liquid pipeline operators, the agency has decided to take enforcement
actions in 36 cases. OPS anticipates that about half of these actions will
be notices of amendment and the other half will be notices of probable
violation. Notices of amendment cite inadequate operator procedures and
require operators to make needed improvements. Notices of probable
violation generally contain a proposed compliance order requiring
companies to take action to correct the violations found and may propose
fines.
15 In response to concerns that we and others raised, OPS began an effort
in 2000 to strengthen the enforcement of all its rules, including
increasing the use of fines. See U. S. General Accounting Office, GAO/
RCED- 00- 128 and Pipeline Safety: Status of Improving Oversight of the
Pipeline Industry, GAO- 02- 517T (Washington, D. C.: Mar. 19, 2002).
Page 15 GAO- 02- 785 Pipeline Safety and Security
According to OPS officials, the agency anticipates that many operators
will question integrity management enforcement actions, but it has
prepared for this challenge by increasing its enforcement staff. It also
plans to establish a new Enforcement Office, which will formulate
enforcement policies and review enforcement actions to ensure consistency,
and it plans to provide more training on enforcement issues for inspector
and enforcement staff. OPS officials have stressed that they have been
under tight time frames in developing an inspection and enforcement
approach for large hazardous liquid pipelines and that this approach will
evolve over time, as the agency implements the approach for small liquid
and gas transmission pipelines.
Because the methods typically used for assessing the integrity of
hazardous liquid pipelines are either not currently suitable for a large
portion of natural gas pipelines or would interrupt the supply of gas to
customers, OPS faces the challenge of ensuring that natural gas
transmission pipeline operators use alternative assessment methods
appropriately. Integrity management programs for hazardous liquid pipeline
companies allow the use of two primary assessment methods: (1) internal
inspection devices, or *smart pigs,* that run inside the pipeline to
detect anomalies, such as corrosion, metal loss, or damage to the
pipeline, and (2) hydrostatic testing, a process of draining the pipeline,
filling it with water, and increasing the pressure of the water to test
the strength of the pipeline. Both methods have limited applications for
testing natural gas transmission pipelines. Specifically, one industry
association estimates that smart pigs cannot move through about half of
gas transmission pipeline mileage because of such pipeline features as
variations in diameter, sharp bends, and valves that do not fully open.
Hydrostatic testing, which interrupts the supply of natural gas to
consumers for up to 3 weeks per test, may leave communities without an
energy source because natural gas transmission pipelines have minimal
storage facilities. 16 Although integrity management programs for
hazardous liquid pipeline operators allow the use of alternative safety
assessment methods, they also specify that any other method must provide
an equivalent level of
16 For assessments using smart pigs, the flow of gas generally has to be
reduced by about 30 percent for 1 day. Ensuring That Natural Gas
Pipeline Operators Use Assessment Methods Appropriately
Page 16 GAO- 02- 785 Pipeline Safety and Security
protection and that operators must notify OPS before conducting the
assessment. 17
As an alternative to smart pigs and hydrostatic testing, OPS is
considering allowing gas transmission pipeline operators to use a method
called *direct assessment* to assess the integrity of their pipelines.
Direct assessment consists of four steps:
Preassessment. The pipeline operator analyzes information about the
physical characteristics of the pipeline* such as the coating material,
soil moisture, and past leaks* to determine whether direct assessment is
appropriate, what threats are likely to be present and significant, where
these threats are likely to occur, and what tools should be used to
inspect the areas of the ground above the pipeline where the threats are
likely to occur.
Indirect inspections. The operator uses one or more inspection tools to
examine the pipeline through the soil in areas identified during the
preassessment. For example, to identify corrosion on the exterior surface
of a pipeline, an operator walks over the areas of the pipeline holding a
tool that takes readings through the soil to assess the condition of the
pipeline*s surface. Separate passes over the pipeline with two or more
different types of tools are generally required to get an accurate
assessment.
Direct examinations. Using the results of the aboveground examination,
the operator digs holes at intervals along the pipeline to examine
suspected problem areas. After the holes have been dug, the pipeline can
be examined visually and with diagnostic equipment, such as tools that
measure the thickness of the pipe, to determine whether the operator needs
to repair the pipeline or take other corrective action. For safety
reasons, the pressure of the natural gas within the pipeline is generally
reduced by about 25 percent during this step.
Postassessment. The operator integrates and analyzes the information
gathered during the three previous steps to determine whether additional
excavations are necessary and how often pipeline segments should be
reassessed.
17 See 49 C. F. R. 195. 452( j)( 5)( 2002).
Page 17 GAO- 02- 785 Pipeline Safety and Security
Like other assessment methods, direct assessment has some limitations. For
example, direct assessment has been proven reliable in detecting only one
threat to the integrity of pipelines* external corrosion* while smart pigs
can identify a wide range of threats to the integrity of pipelines, such
as external corrosion, internal corrosion, and metal loss from external
damage. 18 State pipeline safety officials and some natural gas pipeline
company representatives we spoke with are concerned about the limitations
of direct assessment and believe that its use should be closely monitored.
For example, the Texas Railroad Commission*s pipeline safety section
requires intrastate pipeline operators to obtain approval from the office
if they plan to use direct assessment to assess the safety of their
pipelines. 19 To obtain approval, the operators must present evidence at a
hearing that this method is a valid choice for the circumstances of the
pipeline and receive approval from the commission.
OPS officials explained that the agency has ongoing research activities
focused on advancing the state of the art of direct assessment technology.
Agency officials expect to issue a proposed rule by the end of this summer
for integrity management requirements for natural gas transmission
pipeline operators, which will address how direct assessment should be
treated as an assessment method.
Establishing an appropriate interval between the safety inspections that
operators are required to make of gas pipelines is likely to be a complex
and controversial challenge for OPS because the agency must strike a
balance between the existing industry standards, which allow intervals of
up to 20 years, and shorter intervals. Although the appropriate interval
for individual pipelines could vary with their circumstances, OPS is
including a maximum interval in the requirements for integrity management
programs to ensure that all operators conduct their inspections within a
reasonable time frame. For hazardous liquid pipelines, OPS requires
18 External corrosion is the only threat for which industry standards for
the application of direct assessment have been developed. 19 Texas has
implemented an integrity management program for intrastate pipeline
operators. It is the only state with an intrastate integrity management
program. Establishing an Inspection
Interval for Gas Pipelines
Page 18 GAO- 02- 785 Pipeline Safety and Security
inspections at least once every 5 years. 20 For natural gas transmission
pipelines, longer intervals could be justified for several reasons:
Pressure fluctuations, which can weaken a pipeline, are less frequent.
Thicker pipeline walls or operation at lower pressure is already required
in
high consequence areas 21 under the existing uniform requirements.
Internal corrosion is less likely because natural gas contains a minimal
amount of moisture. Fewer storage facilities exist, therefore,
interrupting the flow of gas to
conduct inspections of the pipeline would have a greater impact on
customers.
Because of these differences, the industry standards for natural gas
pipeline integrity management programs (published by the American Society
of Mechanical Engineers) allow maximum inspection intervals from 5 years
to 20 years, depending on the type of assessment method and test
procedures used and the operating pressure of the pipeline. 22 For higher
pressures, the maximum interval is 5 years for less stringent methods and
procedures (e. g., using direct assessment and excavating a sample of
potential problem areas) or 10 years for more stringent methods and
procedures (e. g., using direct assessment and excavating all problem
areas). For lower pressures, the maximum interval is 20 years using any
type of assessment method and the most stringent test procedures.
According to some pipeline industry and environmental group
representatives, the maximum inspection interval for natural gas
transmission pipelines should be limited to between 5 and 10 years to
allow for a *worst- case* scenario. However, industry representatives
noted that longer inspection intervals could be justified more for natural
gas pipelines than for hazardous liquid pipelines, given the differences
in their characteristics. For example, they cited the greater possibility
of damage
20 Variance from the 5- year interval is allowed in two limited
situations, provided the operator provides notification and justification
to OPS. These situations are when there is an engineering basis for a
longer period and when the best technology needed to assess the segment is
temporarily unavailable. See 49 C. F. R. 195.452( j)( 4) (2002).
21 In a notice of proposed rulemaking, OPS proposed a definition of high
consequence areas for natural gas transmission pipelines that is based on
populated and frequented areas. See 67 Fed. Reg. 1108, 1114 (Jan. 9,
2002).
22 These standards, which provide guidance to natural gas operators on how
to implement integrity management programs, were developed by a task force
that included representatives from the natural gas pipeline industry, OPS,
and the Safety Board.
Page 19 GAO- 02- 785 Pipeline Safety and Security
to liquid pipelines from pressure fluctuations and internal corrosion and
noted that external corrosion can threaten both types of pipelines. One
natural gas transmission pipeline operator told us that it would take 12
years for a worst possible case of external corrosion to damage a pipeline
enough to cause a failure. According to this operator, a 10- year
inspection interval would allow time for pipeline operators to detect and
repair such a worst case before it resulted in an incident.
OPS is trying to achieve a balance between these arguments as it prepares
the proposed rule on integrity management for gas transmission pipelines.
For the proposed rule, OPS is considering a maximum inspection interval of
5 or more years for pipelines assessed by direct assessment and 10 years
for pipelines inspected by smart pigs or hydrostatically tested. For
pipelines that operate at lower pressure, OPS is considering allowing
inspection intervals that are longer than 10 years.
OPS faces the challenge of establishing performance measures to determine
the overall effectiveness of the integrity management approach and monitor
the progress of individual operators* programs. Such performance measures
would assist in determining the impact of the integrity management
approach on pipeline safety and identifying needed improvements. OPS
officials told us that the agency has identified some performance measures
for integrity management, intends to require operators to report the
results of these measures to the agency, and is considering ways to report
performance measurement information to local officials and the public.
According to OPS officials, the agency has developed measures of the
overall effectiveness of the integrity management approach on the basis of
its data on pipeline leak and rupture incidents and will start publicly
reporting these measures by early 2003. 23 Some recent improvements in
OPS*s incident data, such as new requirements for operators to report on
whether incidents occurred in high consequence areas, should allow OPS to
use these data to measure the overall performance of the integrity
management approach in reducing incidents in these areas. 24 (OPS*s
efforts to improve these data are discussed later in this report.) For
example, the
23 According to OPS officials, these measures will be included in DOT*s
budget proposal and performance plan for fiscal year 2004. 24 These
incident data are accessible to the public through OPS*s Web site.
Measuring and Reporting
on the Effectiveness of the Integrity Management Approach
Page 20 GAO- 02- 785 Pipeline Safety and Security
agency intends to measure the effectiveness of integrity management by
tracking reductions in the number of significant pipeline incidents and in
the volume of oil spilled in high consequence areas. However, because
operators of large hazardous liquid pipelines did not begin implementing
their integrity management programs until 2002 and other types of pipeline
operators will not begin implementing their programs until subsequent
years, it will be some time before OPS can analyze trends and determine
the impact of the integrity management approach on safety.
OPS also intends to develop new requirements for operators to report
uniform performance measures for their individual integrity management
programs. OPS*s current integrity management rules for hazardous liquid
pipelines require operators to develop performance measures for their
programs, but the rules do not specify what measures they should use. As a
result, these measures will not be consistent, and therefore OPS will not
be able to use these data to develop industrywide measures or to compare
the performance of operators. OPS and industry officials have told us that
the development of consistent performance measures for operator integrity
management programs has been difficult because of a lack of agreement on
which measures can be standardized. OPS officials have recently worked
with both the hazardous liquid and gas transmission pipeline industries to
identify performance measures for integrity management programs that can
be standardized, such as the numbers of integrity assessments conducted
and repairs completed. OPS intends to modify its integrity management
requirements for liquid pipeline operators by the end of 2002 to include a
requirement that operators adopt these standardized measures and make the
results of these measures available to OPS. 25 Until these operators start
providing such standardized data to OPS, the agency*s ability to monitor
and compare the performance of operators* integrity management programs,
some of which began in spring 2002, will be limited. The agency also
intends to include similar requirements for gas transmission pipeline
operators in the proposed and final integrity management rules for these
pipelines, anticipated by spring 2003. OPS intends to require that
hazardous liquid as well as natural gas
25 These measures would be made available to OPS electronically, either
through a company Web site or a computer (modem) connection.
Page 21 GAO- 02- 785 Pipeline Safety and Security
transmission operators start making these standardized performance
measurement data available to the agency in 2004. 26
Although OPS intends to make industrywide measures on the effectiveness of
the integrity management approach available on its Web site and in public
reports, the agency has not yet determined what measures of individual
operators* performance will be made publicly available or how this
information will be communicated. The Safety Board and some public
interest organizations have recommended that pipeline operators provide
more information to the public about their safety operations. In response,
the hazardous liquid and gas transmission pipeline industries, with the
encouragement of OPS, are developing joint guidelines for operators on
communicating safety information about their pipelines to the public and
expect to finalize these guidelines by the end of 2002. At that time, OPS
plans to consider whether to adopt all or part of these guidelines as
regulations. However, the guidelines will not address what information
operators should provide to state and local officials and the public about
their integrity management programs. The liquid and gas pipeline
industries intend to develop additional guidelines on this issue after
finalizing their initial guidelines, and OPS plans to consider
incorporating these additional guidelines as requirements after they are
finalized. In addition to this industry initiative, OPS is currently
considering alternatives for reporting information on the performance of
individual operators* integrity management programs. Because operators
want to protect information that may pose a security risk if publicly
distributed, OPS officials have told us that they are considering
developing a system that would make information on individual operators*
performance available to local officials who need it, but not to the
general public.
26 In spring 2002, the American Petroleum Institute began to collect
similar data from hazardous liquid operators on a voluntary basis.
However, the institute intends to use these data for industrywide analyses
and does not intend to report information on individual operators*
programs.
Page 22 GAO- 02- 785 Pipeline Safety and Security
Since September 11, 2001, OPS has faced the challenge of ensuring that
operators are taking appropriate actions to protect their pipeline systems
from acts of terrorism. 27 To address this challenge, OPS has been
developing an approach for overseeing pipeline security that does not
involve the development of new regulatory requirements. Under this
approach, OPS and state inspectors will review operators* pipeline
security programs to determine whether they follow guidelines developed by
the pipeline industry with OPS*s participation and review. The agency
intends to conduct these reviews as part of its comprehensive inspections
of integrity management programs as well as its ongoing standard
inspections of pipelines. 28 These reviews will focus on how operators are
managing security risks at critical facilities, because the agency will
expect operators to have more rigorous security practices in place at
these facilities. 29 OPS is developing protocols for conducting these
security reviews, but it still needs to resolve several issues to fully
develop and implement its security oversight approach. 30
Currently, OPS*s regulations have few specific requirements pertaining to
security. The agency has decided not to develop new security regulations
because it believes that progress can be achieved more quickly by
encouraging companies to voluntarily improve their security practices
following industry guidelines. In addition, OPS officials are concerned
that the inherent openness of the rulemaking process would require the
agency to publish sensitive information, such as definitions of critical
facilities and specific protective measures. Furthermore, RSPA*s Office of
the Chief Counsel has determined that OPS currently has enough statutory
and regulatory authority to take enforcement actions if it finds that
security at
27 The responsibility for oversight of pipeline security may change in the
future. DOT*s Transportation Security Administration was created in
November 2001 and has statutory responsibility for the security of all
modes of transportation, although it has focused its initial efforts on
aviation security. In June 2002, the President proposed legislation to
create a new Department of Homeland Security. Under this proposal, federal
responsibilities for securing transportation systems would be transferred
to this department.
28 OPS gathered some preliminary information on operators* security
practices immediately after September 11, 2001, through a survey of major
pipeline operators. 29 A critical facility is one whose failure would have
a high consequence.
30 OPS has undertaken a number of other security- related initiatives
since September 11, 2001. For example, the agency has worked with the
Department of Energy, the Federal Energy Regulatory Commission, state
pipeline agencies, and industry to address issues related to rapid
response and recovery of pipeline service in the event of an attack and
has solicited research and development proposals to protect pipeline
infrastructure. Developing and
Implementing an Approach for Overseeing Pipeline Security
Page 23 GAO- 02- 785 Pipeline Safety and Security
a critical pipeline facility is inadequate. Industry representatives told
us that they prefer a nonregulatory approach, citing concerns about the
need for flexibility in designing security programs suitable for each
facility. However, some state pipeline safety officials, as well as some
Members of Congress, have suggested that new security regulations may be
needed to ensure that operators improve their security programs and
practices. Legislation has been proposed that would require DOT to
prescribe standards for pipeline security programs and approve or
disapprove each operator*s program on the basis of their adherence to
these standards. 31
Before fully implementing its security oversight approach, OPS must reach
agreement with pipeline operators on certain aspects of its security
reviews, including the identification of critical pipeline facilities. 32
A representative of the hazardous liquid pipeline industry told us that
pipeline companies are concerned about this issue because of the cost of
increased security at critical facilities, particularly if higher threat
levels are declared. OPS has worked with the pipeline industry to develop
guidance on how to determine which pipeline facilities are critical and
what protective measures need to be taken at these facilities for various
threat levels. 33 According to OPS officials, during security reviews of
individual operators, OPS and state inspectors will review whether each
operator has appropriately applied this guidance to its facilities. OPS
must also reach agreement with the pipeline industry on what sensitive
company security information inspectors will need to examine when
reviewing pipeline security programs. Industry representatives have told
us that operators are reluctant to share such information with OPS because
the agency may not be able to prevent its public disclosure under
31 Pipeline Infrastructure Protection to Enhance Security and Safety Act,
H. R. 3609, 107th Cong. (2001). 32 We have previously reported that the
identification of critical facilities is important for prioritizing
protection efforts. See U. S. General Accounting Office, Homeland
Security: A Risk Management Approach Can Guide Preparedness Efforts, GAO-
02- 208T (Washington, D. C.: Oct. 31, 2001).
33 In March 2002, the Office of Homeland Security announced the creation
of a Homeland Security Advisory System in order to disseminate information
on the risk of terrorist attacks. The system includes five levels of
threat to characterize this risk and associated suggested protective
measures. The office has requested comments on the system and plans to
finalize it by September 2002. 67 Fed. Reg. 12047 (Mar. 18, 2002).
Page 24 GAO- 02- 785 Pipeline Safety and Security
the Freedom of Information Act. 34 OPS officials have told us that they
will try to address such concerns by having inspectors review sensitive
documents on- site and take with them only those documents they need.
OPS will also need to determine how best to deploy its existing resources
as well as those of its state partners for carrying out pipeline security
oversight, because it does not anticipate obtaining additional resources
for this purpose. This effort will involve determining the role of state
inspectors in conducting security reviews and identifying the training
that OPS and state inspectors will need to conduct these reviews. OPS
officials have told us that states will play a key role in conducting
these reviews, but some state pipeline safety officials have told us that
they have not received clear guidance from OPS on their role in security
oversight. One official noted that states have very limited resources and
would need additional staff to conduct security reviews of pipeline
operators. Furthermore, several state officials emphasized to us that
their inspectors would need security- related training to be able to
conduct security reviews of pipeline operators. However, according to an
official of the Transportation Safety Institute, which trains OPS and
state inspectors, the institute has not yet developed such training for
these inspectors.
OPS officials have told us that the agency*s next step in developing its
security oversight approach is to communicate with its state partners
regarding their role in implementing this approach. The agency intends to
work with states in refining its protocols for security reviews and in
developing security- related training for OPS and state inspectors.
However, the lack of a workforce plan and a strategy for communicating
with its state partners, as discussed in the next section of this report,
may hamper OPS*s ability to ensure that it has the resources and expertise
it needs to oversee pipeline security and that it is effectively involving
states in this effort.
34 Some legislation has been proposed that would protect such information.
For example, H. R. 4 and H. R. 3609 would allow the Secretary of
Transportation to withhold information on pipeline vulnerabilities from
public disclosure. Energy Policy Act of 2002, H. R. 4, Secs. 741- 783,
107th Cong. (2002) and Pipeline Infrastructure Protection to Enhance
Security and Safety Act, H. R. 3609, 107th Cong. (2001).
Page 25 GAO- 02- 785 Pipeline Safety and Security
OPS*s efforts to ensure it has the resources and expertise needed to
implement its integrity management approach are hampered by the lack of an
up- to- date assessment of current and future staffing and training needs
and an examination of the workforce*s deployment across the organization*
essential elements of a workforce plan. 35 Although OPS has estimated the
number of inspectors it needs to hire to implement its integrity
management approach and has developed a curriculum to train federal and
state inspectors, the agency has not prepared a workforce plan* an
important component of successful human capital management. Furthermore,
the resource estimates are outdated and cover only the initial phases of
implementation. Also, although OPS says it will need to augment its own
resources with those of states to implement integrity management, the
agency has acknowledged that its efforts to communicate with states about
their role in integrity management have been limited. This limited
communication has left some states uncertain of their role and uncertain
about whether they will be prepared to carry out their expected
responsibilities under OPS*s integrity management approach. OPS has
several initiatives that may address some of these issues, such as using
teams of inspectors and developing inspection protocols and guidance, but
no initiative to estimate its long- term resource needs. Finally, while
the agency intends to hold some discussions with states about their role
in integrity management, it lacks a strategy for communicating how it will
involve states in implementing this new regulatory approach.
OPS is hampered in its efforts to ensure that it has the resources and
expertise to successfully implement its integrity management approach by
the lack of a workforce plan. By workforce planning, we mean the shortand
long- term strategies to identify OPS*s current and future staffing needs;
the appropriate workforce deployment across the agency; the knowledge,
skills, and abilities needed for staff to implement integrity management;
and the training to fulfill these needs. OPS has estimated that it needs
to hire 28 inspectors by fiscal year 2003, an increase of 50 percent from
fiscal year 2001, to inspect approximately 1, 000 individual integrity
management programs for hazardous liquid and gas transmission operators.
This estimate is in addition to the approximately 100 of about 400 state
inspectors that OPS plans to train and use to assist with inspecting
integrity management programs, although some states may
35 GAO/ OCG- 00- 14G. OPS*s Plan for
Obtaining Resources and Expertise Is Not Complete or Adequately
Communicated to State Partners
OPS Lacks a Workforce Plan
Page 26 GAO- 02- 785 Pipeline Safety and Security
need to hire additional inspectors. OPS based these estimates on the
proposed integrity management rule for operators of large liquid
pipelines. However, OPS made several significant changes between the
proposed and final rules but did not adjust its estimates to account for
these changes. 36 The following are examples of the outdated and
incomplete components of OPS*s resource estimates: 37
OPS added inspections to its implementation process. The agency based
its resource estimates on the assumption that inspectors would perform one
inspection but has since revised its procedures to include two different
inspections. This change should have increased the original resource
estimates.
Resource estimates cover only the first two phases of a four- phase
implementation process. According to OPS officials, their ultimate goal is
to hire enough inspectors to carry out the third and fourth phases*
conducting inspections every 2 years and responding to notifications from
operators of changes in integrity management programs. However, OPS has
not determined its resource needs for the third and fourth phases.
According to OPS officials, they informally updated their resource
estimates for integrity management for each fiscal year budget request but
did not document the changes.
Furthermore, OPS does not have an agencywide estimate of the resources it
needs to maintain its entire range of pipeline safety oversight
activities. In addition to the new integrity management inspection
responsibilities, OPS must still conduct its standard inspections.
However, OPS could not tell us how the coordination of time and resources
for all types of inspections will take place. Because OPS has not created
a workforce plan, it is unclear how the implementation of its integrity
management approach will affect the resources it needs to fulfill other
obligations.
36 OPS*s proposed rule was published in April 2000, 65 Fed. Reg. 21695
(Apr. 24, 2000), and the final rule was published in December 2000, 65
Fed. Reg. 75378 (Dec. 1, 2000). 37 OPS*s original resource estimates are
also miscalculated. By incorrectly multiplying numbers, for example, OPS
estimated that 1, 640 work weeks were required in the regions for
implementing the small liquid integrity management rule, but the corrected
figure is 2,495.
Page 27 GAO- 02- 785 Pipeline Safety and Security
Another important element of a workforce plan is training. OPS has
developed a training curriculum designed to prepare state and federal
inspectors for successfully implementing the integrity management
approach. The agency is working with the Transportation Safety Institute
to design and teach several new training courses specifically on OPS*s
hazardous liquid integrity management approach. OPS anticipates that about
180 inspectors (80 federal and 100 state) will complete the training by
spring of 2003. The training involves classroom courses and on- the- job
training. The classroom training involves eight core classes, which have
already been taken by most state and federal inspectors, and an additional
seven classes specifically designed for integrity management. The
additional classes cover such issues as the requirements and basic
concepts of using smart pigs to assess the integrity of pipelines and
integrity management program inspection and compliance requirements. For
on- the- job training, OPS is using a *team approach* to conduct integrity
management inspections, in which trainees will attend inspections led by
OPS*s senior inspectors who have been involved in all phases of
implementing the integrity management approach. Each team will consist of
staff from multiple regions, including its most experienced inspectors and
inspectors- in- training, as well as external experts. Starting in August
2002, when OPS will begin its comprehensive inspections of hazardous
liquid operators, state representatives will also be included in these
teams. This approach will allow senior inspectors to serve as mentors to
the trainees, provide on- the- job training, and help inspectors make the
transition to this new approach. When OPS finalizes the rule on the gas
transmission integrity management requirements, inspectors will require
additional training.
OPS*s training may help ensure that inspectors have the technical
expertise to conduct integrity management inspections, but making the
transition to this new approach may present a challenge for some
inspectors. Pipeline operators, industry associations, environmental
organizations, and OPS officials acknowledge that the integrity management
approach represents a fundamental shift in how OPS oversees the pipeline
industry. Federal and state inspectors that are accustomed to following an
approach for inspecting pipelines for compliance with uniform standards
will now have to evaluate programs that are unique to individual
operators. One OPS regional office official stated that this new approach
*will require a different thought process,* and that not making the
transition adequately could result in inconsistent inspections between OPS
regions and states. However, according to OPS headquarters officials, the
agency*s detailed inspection protocols and
Page 28 GAO- 02- 785 Pipeline Safety and Security
guidance as well as inspector training will help ensure that integrity
management inspections are conducted consistently.
OPS officials told us that they will use the assistance of state pipeline
safety inspectors to achieve their ambitious schedule for inspecting the
integrity management programs of pipeline operators, but OPS has had only
limited communications with its state partners about their role in
implementing integrity management. This limited communication could result
in states not being adequately prepared to meet the demands of the
integrity management approach. State pipeline safety inspectors are an
invaluable resource for OPS because they are familiar with pipeline safety
issues unique to their states and can improve safety by increasing the
frequency and thoroughness of inspections of pipeline operators. OPS plans
to leverage federal and states* resources to inspect the integrity
management programs of more than 1,000 hazardous liquid and gas
transmission operators. For example, states will be primarily responsible
for inspecting the programs of an estimated 156 intrastate hazardous
liquid and 520 intrastate gas transmission operators.
Despite the important role of the states, state pipeline officials we
spoke with said that they have had little to no communication with OPS
about how states will be involved in integrity management inspections. For
example, one state*s officials assumed OPS would contact them to
participate in the quick hit inspection, but these officials did not know
that states were being excluded from these inspections. OPS did not allow
state inspectors to participate in the quick hit inspections because the
agency felt it would be too difficult to coordinate the inspections within
its self- imposed time frame. 38 OPS*s apparent lack of communication with
states leaves some states unsure if they will have the resources and
expertise to meet the demands of the integrity management initiative.
State officials told us that they are unsure how many of their inspectors
will be trained by OPS over the next few years, and that they do not know
enough about OPS*s integrity management approach to determine whether they
need to change some of their own in- house training, hire more inspectors,
or both. One state*s officials said that, because OPS has not provided any
information to their state, they could only speculate about states* roles
under the published final rule and could not justify requests
38 OPS made an exception in the case of Texas by allowing Texas inspectors
to accompany OPS on the quick hit inspections, mostly because Texas has
its own integrity management rule. OPS Has Not Adequately
Communicated Its Plans to State Partners
Page 29 GAO- 02- 785 Pipeline Safety and Security
for additional resources in preparation for the new integrity management
approach. Another state official said that, given the availability of
training in the past, it could take about 10 years to train just that
state*s inspectors. When we raised this concern to OPS officials, they
responded that the agency has changed its training schedule and will be
capable of training more people.
Although OPS has described its relationship with its state partners as an
important component of the integrity management program, OPS officials
acknowledge that in their initial phase of implementing integrity
management, they have not focused on communicating with states regarding
their plans for implementing the new approach. The officials explained
that they have delayed communicating this information to states because
states were not involved in the first phase of implementation, which
included quick hit inspections of hazardous liquid operators. OPS
officials further noted that since September 11, 2001, their
communications with states have focused on security- related issues.
(However, as previously described, some state pipeline safety officials
told us that they have not received clear guidance from OPS on their role
in security oversight.) According to agency officials, they are starting
to contact states that will be involved in their first comprehensive
inspections of hazardous liquid operators, scheduled to begin in August
2002, and will communicate further with states about their role in
integrity management as these inspections continue. In addition, OPS
officials explained that the agency plans to hold an annual meeting with
states in September 2002 and a planning exercise with states in January
2003; both of these events will provide opportunities for OPS to
communicate with states about their role in the integrity management
initiative. However, these annual meetings do not address the need for OPS
to formally communicate with states throughout the implementation process
in order to effectively coordinate the use of both federal and state
inspectors.
Obtaining complete and accurate data on reportable pipeline incidents is
important to OPS for monitoring operators* safety performance, identifying
safety trends, and planning future initiatives. Under the integrity
management approach, useful and reliable data are also important, because
OPS is using its data to, among other things, measure the effectiveness of
this approach in improving pipeline safety. According OPS Is Taking Action
to Improve Data Quality
Page 30 GAO- 02- 785 Pipeline Safety and Security
to a joint government and industry task force report on hazardous liquids,
39 complete and accurate information on pipeline incidents is essential
for the successful implementation of a risk management system.
In the past, we, the Safety Board, DOT*s Office of the Inspector General,
and others have identified problems with the completeness and accuracy of
OPS*s data. For example, as we testified earlier this year, OPS*s former
incident report forms included so few cause categories (seven or fewer,
depending on the form) that about one- fourth of all pipeline incidents
were attributed to *other* causes* a category too broad for useful
analysis. In addition, OPS*s incident forms did not provide for collecting
data on hazardous liquid spills of less than 50 barrels or for measuring
the total impact of an incident, particularly its damage costs. In
addition, OPS did not require liquid pipeline operators to submit data on
the characteristics of their pipeline infrastructure (e. g., age or size),
which it needed to analyze trends and compare the operators* safety
performance, nor did it collect complete data from natural gas pipeline
operators. Finally, OPS did not have a procedure for following up with
operators to ensure that their incident reports included any necessary
revisions.
To improve the completeness and accuracy of its data, OPS is undertaking
several initiatives, most of which it plans to have implemented for the
collection of 2002 data. To more accurately determine the causes of
incidents, OPS revised its incident report forms in 2001 and early 2002
for natural gas transmission and hazardous liquid incidents, respectively,
to include 25 categories of causes. The agency plans to revise the form
for natural gas distribution incidents by the end of 2002. The revised
forms for hazardous liquid operators also require these operators to
report spills of 5 gallons or more (instead of 50 barrels or more) and to
provide more complete information on the total costs of an incident. To
enable it to better analyze trends and compare operators* performance, OPS
revised its annual report forms for natural gas transmission pipeline
operators for 2001 data and intends to revise these forms for natural gas
distribution pipeline operators for 2002 data. In July 2002, the agency
proposed instituting annual reports for liquid pipeline operators for 2002
data. To ensure that operators complete incident reports in an accurate
and timely manner, OPS has assigned an inspector in each region to review
incident
39 The Joint Government/ Industry Risk Assessment Quality Team, Risk
Management within the Liquid Pipeline Industry, sponsored by OPS and the
American Petroleum Institute, June 20, 1995.
Page 31 GAO- 02- 785 Pipeline Safety and Security
report forms for completeness and accuracy. It has also instituted new
electronic notification procedures to ensure that operators submit revised
incident reports, if necessary. These and other major data improvement
initiatives are summarized in table 2.
Table 2: OPS*s Data Quality Initiatives Data problem Initiative Status of
initiative
Data provided on incident reports were not complete or accurate. Revise
incident report forms to include more
cause categories, a wider range of hazardous liquid spills, and more
information on total costs of an incident; revised forms also use
electronic notification procedures to ensure completeness.
Inspector in each region will be responsible for regularly reviewing
incident reports for relevance, completeness, and accuracy.
Gas transmission and hazardous liquid forms revised in 2001 and early 2002
for 2002 data.
Revision of gas distribution form expected to be completed by the end of
2002 and usable to collect 2003 data.
Existing staff will be used in 2002 to review incident reports while new
inspectors are being hired and trained. Data to analyze trends and compare
operators* performance were not sufficient.
Revise existing annual report forms for natural gas pipeline operators to
require more information (e. g., pipeline mileage, age, and type).
Institute annual reports for hazardous liquid pipeline operators.
Form for natural gas transmission annual report revised in 2001 for 2001
report.
Form for natural gas distribution annual report expected to be revised by
the end of 2002, in time to collect data for 2002 report.
New form for hazardous liquid annual report expected to be finalized in
2002, in time to collect data for 2002 report. OPS staff made errors
entering data from operators* reports into OPS*s database.
Have operators file reports electronically to eliminate errors and
expedite filing. Direct electronic filing by operators began in
January 2002. States collect data in different formats, limiting OPS*s
ability to compare and consolidate data from different states.
Establish a team to develop uniform data elements and reporting
procedures. Completion expected by the end of 2003.
OPS lacks complete understanding of the causes of incidents, which is
needed to focus oversight efforts on the greatest risks.
Hire contractors to analyze incident causes* focus in 2002 is on the
consequences of incidents on gathering lines and the benefits of
increasing the regulation of gathering lines.
Contractors to provide reports by the end of 2002 and on a regular basis
thereafter.
Source: GAO analysis of information provided by OPS.
According to OPS officials, OPS plans to use the data that it collects to,
among other things, help measure the effectiveness of its integrity
management approach, focus its oversight efforts on the greatest risks to
pipeline safety, and prioritize research and development projects. One
performance measure that OPS plans to develop using the new incident
report forms is the number of high consequence areas affected by pipeline
incidents. This number should decrease over time as operators focus their
Page 32 GAO- 02- 785 Pipeline Safety and Security
efforts on these areas through their integrity management programs. To
focus its oversight efforts on the greatest risks, OPS plans to analyze
the improved data on incident causes to better understand the greatest
safety risks and deploy staff accordingly to address these risks. OPS also
plans to use the data on incident causes to identify the research and
development projects that are most critical to improving pipeline safety.
Although OPS*s initiatives appear to address past criticisms, government
and industry officials believe it is too early to say whether further
improvements are needed. According to the Safety Board, state pipeline
safety officials, industry groups, and pipeline operators, OPS*s
initiatives address the agency*s underlying data problems and will enable
OPS to better understand the causes of incidents so it can focus its
efforts to improve safety. However, officials from the Safety Board noted
that these initiatives are merely a first step, and they emphasized that
OPS should periodically reassess its forms and procedures and take steps
to revise them as necessary. In addition, a state pipeline safety official
noted that although there are now 25 cause categories on the incident
forms, there will still be some uncertainty, since operators have the
option of choosing *other.* Finally, officials from industry groups told
us that it will be several years before OPS has sufficient data for
analyzing trends in incidents.
OPS is aggressively pursuing its integrity management approach and taking
action to improve the quality of its data. If properly implemented, these
initiatives should improve pipeline safety. However, OPS still has
significant challenges to overcome in implementing its new regulatory
approach. Although OPS is carrying out a variety of activities aimed at
overcoming these challenges, the agency lacks a workforce plan containing
current and future resource estimates for these initiatives. The absence
of such a plan could hamper OPS*s ability to meet its ambitious time
frames and successfully implement its new regulatory approach.
Furthermore, OPS does not have an effective strategy for communicating
with its state partners and, as a result, these states may not be fully
aware of the role OPS expects them to play in implementing integrity
management and may not be adequately prepared for this role. If states are
not adequately prepared, OPS will probably not be able to meet its
ambitious time frame for inspecting pipeline operators* integrity
management programs. Finally, the lack of a workforce plan and strategy
for communicating with states may hamper OPS*s ability to ensure that it
has the resources and expertise it needs to oversee pipeline security and
that it is effectively involving states in this effort. Conclusions
Page 33 GAO- 02- 785 Pipeline Safety and Security
We recommend that the Secretary of Transportation direct OPS to develop
a workforce plan that contains an updated assessment of OPS*s
current and future staffing and training needs and an examination of the
workforce*s deployment across the organization and develop a strategy
for communicating to the states what role they will play
in conducting integrity management inspections and other oversight
activities.
We provided a draft of this report to DOT for its review and met with DOT
officials, including OPS*s Associate Administrator, to obtain their
comments. In addition, DOT*s Assistant Secretary for Administration
provided written comments, which are reprinted in appendix I. The DOT
officials generally agreed with the draft report*s recommendations.
Regarding workforce planning, they noted that OPS intends to formulate
detailed plans for the longer term after it has completed the final
integrity management rule for gas transmission pipelines. While we are
encouraged that OPS intends to develop a workforce plan, we believe that
the agency needs to ensure that its planning efforts encompass both its
short- term and long- term staffing and training needs. In particular, the
agency should develop a strategic workforce plan now in order to establish
a solid foundation for implementing integrity management and accomplishing
its mission and programmatic goals. Such a plan should identify the
resources and expertise OPS needs to carry out its initiatives, including
how it will leverage its resources with those of its state partners. A
workforce plan will help the agency meet its ambitious time frame for
implementing the integrity management approach and address challenges it
faces in doing so. OPS should monitor and periodically update the plan to
address changing needs.
Regarding communicating with the states, the DOT officials explained that
OPS is trying to define what role the states will play in integrity
management inspections and is currently engaged in discussions with states
regarding their involvement in this initiative. Although we believe that
this is a step in the right direction, the agency needs to formulate and
adopt a strategy for communicating with its state partners that will help
ensure that the agency effectively involves states in integrity management
and other oversight efforts over the longer term.
OPS officials also provided some technical clarifications, which we have
incorporated in this report as appropriate. Recommendations for
Executive Action Agency Comments and Our Evaluation
Page 34 GAO- 02- 785 Pipeline Safety and Security
To examine OPS*s steps to implement the integrity management approach,
identify the challenges OPS faces in implementing this approach, and
assess OPS*s plans for obtaining the resources and expertise needed to
oversee pipeline safety under this approach, we reviewed OPS documents,
analyzed OPS*s resource estimates, visited states, and interviewed OPS and
pipeline industry officials as well as others with pipeline safety
expertise. OPS documents that we reviewed included the proposed and final
rules that establish the integrity management requirements, comments on
the proposed rule, OPS*s documentation on its plans for implementing the
integrity management approach, and OPS*s resource estimates and training
schedule. We analyzed OPS*s resource estimates to determine their accuracy
and consistency. We also visited state pipeline agencies in Texas,
Washington, New York, and Virginia. We chose to visit these states because
their pipeline oversight agencies are among the most active of OPS*s state
partners in implementing the integrity management approach. For example,
officials in these states provided comments on OPS*s proposed integrity
management rules and/ or have been involved in efforts to develop
integrity management program requirements. In addition, Texas has its own
integrity management rule for natural gas and hazardous liquid pipeline
operators. We also conducted in- person and telephone interviews with the
following: representatives from state and national pipeline industry
associations; officials at several pipeline companies; pipeline safety
officials in those states we visited; representatives from environmental
advocacy organizations; officials from the Environmental Protection Agency
and the National Transportation Safety Board; representatives from Cycla
Corporation, a contractor that is working for OPS on some components of
implementing integrity management; a representative from the
Transportation Safety Institute, which provides the training for state and
federal pipeline safety inspectors; and officials from OPS*s headquarters
and five regions.
To determine OPS*s major initiatives to improve the quality of its data on
pipeline incidents, we reviewed and compared the agency*s new
datacollection forms with its previous forms. We also interviewed
officials working for pipeline companies that fill out these forms. We
interviewed officials from the Safety Board and the DOT Office of the
Inspector General, OPS officials who implement the data- collection
activities, representatives from pipeline industry associations, and state
pipeline agency officials. Scope and
Methodology
Page 35 GAO- 02- 785 Pipeline Safety and Security
We conducted our work from November 2001 to July 2002 in accordance with
generally accepted government auditing standards.
As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its date. At that time, we will send copies of this report to
congressional committees and subcommittees with responsibilities for
transportation safety issues, the Secretary of Transportation, the
Administrator of the Research and Special Programs Administration, and the
Director of the Office of Management and Budget. We will make copies
available to others upon request. In addition, this report will be
available at no charge on the GAO Web site at http:// www. gao. gov.
If you or your staff have any questions about this report, please contact
me at (202) 512- 2834 or guerrerop@ gao. gov. Key contributors to this
report were Susan Fleming, Judy Guilliams- Tapia, Michael Horton, Wyatt
Hundrup, and Sara Vermillion.
Sincerely yours, Peter F. Guerrero Director, Physical Infrastructure
Issues
Appendix I: Comments from the U. S. Department of Transportation
Page 36 GAO- 02- 785 Pipeline Safety and Security
Appendix I: Comments from the U. S. Department of Transportation
Appendix I: Comments from the U. S. Department of Transportation
Page 37 GAO- 02- 785 Pipeline Safety and Security
Appendix I: Comments from the U. S. Department of Transportation
Page 38 GAO- 02- 785 Pipeline Safety and Security (544001)
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