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This week’s Pipeliners Podcast episode features Steve Allen of ENERGY worldnet, Inc. (EWN) discussing Pipeline Safety Management Systems (Pipeline SMS) from the perspective of how to achieve stakeholder collaboration.

In this episode, you will learn about the stakeholders in pipeline safety, the most important industry initiatives such as API RP 1173, and the relationship of risk management to pipeline SMS.

Pipeline SMS and Stakeholder Collaboration: Show Notes, Links, and Insider Terms

  • Steve Allen is the Executive Director of Pipeline Safety for ENERGY worldnet, Inc. (EWN). Connect with Steve on LinkedIn.
  • Pipeline SMS (Pipeline Safety Management Systems) or PSMS is an industry-wide focus to improve pipeline safety, driving toward zero incidents.
  • The Merrimack Valley gas explosion in Massachusetts in September 2018 was the result of excessive pressure build-up in a natural gas pipeline owned by Columbia Gas that led to a series of explosions and fires. [Read the preliminary NTSB Accident Report] 
  • AGA (American Gas Association) represents companies delivering natural gas safely, reliably, and in an environmentally responsible way to help improve the quality of life for their customers every day.
  • INGAA (Interstate Natural Gas Association of America) is a trade organization that advocates regulatory and legislative positions of importance to the natural gas pipeline industry in North America.
  • American Public Gas Association (APGA) is the only association for municipal gas utilities in the United States.
    • Erin Kurilla is the Vice President of Operations and Safety for AGPA. Access Erin’s presentation, “PHMSA Grants Industry Petition Concerning Gas Transmission Rule.”
  • API (American Petroleum Institute) is the only national trade association representing all facets of the oil and natural gas industry, which supports 10.3 million U.S. jobs and nearly 8 percent of the U.S. economy.
    • API 1173 established the framework for operators to implement Pipeline Safety Management Systems (SMS). A significant part of this recommended practice is a training and competency aspect.
  • NTSB (National Transportation Safety Board) is an independent U.S. government investigative agency responsible for civil transportation accident investigation. 
  • ASME (American Society of Mechanical Engineers) is an international developer of codes and standards that support the practice of mechanical engineering.
  • ASTM International (f/k/a as American Society for Testing and Materials) is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services.
  • PHMSA (Pipeline and Hazardous Materials Safety Administration) ensures the safe transportation of energy and hazardous materials.
  • Deming Method is a continuous quality improvement model consisting out of a logical sequence of four repetitive steps for continuous improvement and learning: Plan, Do, Check (Study) and Act.
  • Distribution Contractors Association (DCA) serves as a link between its members, government agencies, organized labor and other industry organizations. Through its many programs, committees and organized events, DCA also offers its members professional recognition and the opportunity to serve this specialized facet of the underground construction industry.
  • API RP 1177 provides a framework for a quality management system (QMS) for onshore pipeline construction. 
  • FAA (Federal Aviation Administration) is a governmental body of the United States with powers to regulate all aspects of civil aviation in that nation as well as over its surrounding international waters.
  • United States Department of Transportation (DoT) is a federal Cabinet department of the U.S. government concerned with transportation.
  • Association of Oil Pipe Lines (AOPL) promotes responsible policies, safety excellence, and public support for liquids pipelines.
  • GPAC (Gas Pipeline Advisory Committee) is organized by PHMSA to review their proposed regulatory initiatives to assure the technical feasibility, reasonableness, cost-effectiveness, and practicability of each proposal.
  • Cybernetics is a transdisciplinary approach for exploring regulatory systems—their structures, constraints, and possibilities.
  • SCADA (Supervisory Control and Data Acquisition) is a system of software and technology that allows pipeliners to control processes locally or at remote location. 

Pipeline SMS and Stakeholder Collaboration: Full Episode Transcript

Russel Treat:  Welcome to the Pipeliners Podcast, episode 110 sponsored by iPIPE, an industry-led consortium advancing leak detection and leak prevention technologies to eliminate spills as pipeliners move towards zero incidents. To learn more about iPIPE or to become a partner, please visit ipipepartnership.com.

[background music]

Announcer:  The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now your host, Russel Treat.

Russel:  Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time. 

To show that appreciation, we give away a customized YETI Tumbler to one listener each episode. This week our winner is Mike Letson with Kinder Morgan. Congratulations, Mike, your YETI is on its way. To learn how you can win this signature prize pack. stick around ‘til the end of the episode.

This week, Steve Allen returns to talk to us about Pipeline SMS and a stakeholder’s perspective. Steve, welcome back to the Pipeliners Podcast.

Steve Allen:  Thank you, Russel. It’s good to be here.

Russel:  Last time, we talked about the state agency perspective, and we wrapped that up talking a little bit about collaboration. I asked you back because I want to talk about collaboration in more detail, particularly who are all the stakeholders, and what are the things that are going on? Maybe I can tee this off by asking you, who are the stakeholders in pipeline safety?

Steve:  To begin with, I think you have the public. You have operators, you have excavators, you have state and federal regulators, you have different association groups, you have first responders, you have public officials, anybody and everybody that could be affected or impacted by pipelines, either good or bad.

Russel:  Right. All the folks that are in a house or in a building, either using natural gas or sitting next to a pipeline right-of-way, and of course, all the industries that are not pipeline industries, but rely on pipelines to operate.

Steve:  Exactly. The stakeholders are broad and many.

Russel:  I think we often lose that perspective as pipeline operators or as pipeliners. I think it’s easy to lose just how many people are impacted by what we do, particularly when things go sideways on us.

That’s the next question. What’s the impact when we have an incident? How are all these stakeholders impacted?

Steve:  Virtually every regulation that we have on the books relative to pipeline construction, pipeline operations, pipeline maintenance. Those regulations stemmed, to a great extent, from an incident or an accident that occurred. That tends to be the driver.

If there’s an incident, it’s going to result in new regulations. Those new regulations impact a number of stakeholders. If it’s a costly regulation, it could result in a rate increase to the public. If it is a regulation that is so burdensome, it could run some construction companies or contractors out of business, or at least run them away from serving that industry.

New regulations from an incident could result in additional workload for the state or federal pipeline safety inspectors. That’s a challenge to do more with less.

Russel:  I think the other thing, too…I’m thinking about the recent incident in Massachusetts, and just the scale of that thing, and the number of agencies and first responders, in particular, that were involved. I think, sometimes, that we tend to think of these stakeholder groups. We don’t necessarily think of, what’s the broader impact to all the stakeholders?

I think one of the things that happens with these incidents is a lot of these stakeholders, for the first time, become aware of the problem.

Steve:  That’s a fair statement. That’s an absolutely fair statement. A lot of people think that electricity comes from the light switch. Until there’s a storm, and the power goes out, and, “Oh, gosh. It’s not the light switch. It’s that line that comes up to my house.” [laughs]

You’re right. I think that an incident, especially one the magnitude of Merrimack Valley, puts the public on notice. It actually educates them, and informs them, and in many cases motivates them to get involved.

Russel:  That’s right. That’s not necessarily a bad thing.

Steve:  No, no.

Russel:  I think it’s a good thing, but I think a lot of times it’s important to understand that, really, what we want to do is we want to collaborate in advance of these incidents and not have them.

Steve:  Sure, absolutely. I think that’s where a lot of those industry associations come into play. We were talking a little while ago about the American Gas Association, and INGAA, and the INGAA Foundation, and APGA. Those industry associations are engaged in trying to move the needle towards safer operations.

I can tell you, from previous experience when I was with the industry, I was involved with a number of AGA committees. Even today, I’m involved with the AGA’s quality management committee. There are an awful lot of industry stakeholders that get engaged and are actively involved with trying to find solutions to a problem before it happens.

Russel:  That’s certainly my experience. I want to transition a little bit. Let’s talk about, what are a couple of the big industry initiatives that are either ongoing or beginning to mature that are good examples of effective collaboration?

Steve:  Sure. I think the granddaddy of collaboration would be “API RP 1173 — Pipeline Safety Management Systems.” The NTSB recommendation from the Marshall, Michigan incident called for API to assemble a group of stakeholders which included representatives from PHMSA, from state government, from operators, from API.

There were 20 or so individual contributors to that. They came together and developed the recommended practice 1173. From that point, the industry has come together with the pipelinesms.org group to develop tools, and guidelines, and assistance for operators to adopt the recommended practice and begin their journey.

That particular example, like I said before, that’s the granddaddy of collaboration. That is what I am so heavily engaged with these days, with not only AGA, but APGA and others.

Russel:  What do you think is unique about how the industry queued up and got API 1173 done?

Steve:  Wow, that’s really a good question. How did they get it done? I think, to begin with, they were an awful lot of individuals on that committee that really understood the industry, understood what it was going to take to improve safety. The notion of looking at pipeline safety from a management systems perspective.

A management system or safety management system, this isn’t really a new idea. It’s been around for a long while. The airline industry, the petrochemical industry, the pharmaceutical industry. All these industries have various flavors of safety management systems.

I’ve said before, I think what we had with PSMS, contemporary business management practices that have been around for a long while being applied to pipeline safety. Rather than looking at pipeline safety from a check the box perspective, we’re looking at this holistically, driven by risk and by continuous improvement, which it’s like apple pie and motherhood.

Russel:  I actually had this conversation about…This is not new. The father of all this, to a large degree, in Deming and the stuff he did in total quality management, which was about manufacturing excellence. It’s evolved into this conversation about safety excellence.

Safety is just a flip side of the coin of achieving your business objectives.

Steve:  That’s absolutely correct. You were right on the money talking about Deming and the notion of total quality management. One of the things that’s happening right now as it relates to PSMS is the recognition that contractors and the construction of pipelines is very important to a holistic view of pipeline safety.

There are a number of entities, including the Distribution Contractors Association, that they are trying to develop, and actually they have developed, a template that incorporates all 10 elements of PSMS.

Then, it also incorporates some of the points taken from API RP 1177, which is “Quality Pipeline Construction,” along with a white paper that AGA had developed back in 2016, I want to say, regarding quality pipeline construction.

The pipeline safety begins when you put that pipeline in the ground and everything leading up to that point.

Russel:  I fully expect to see people starting to do pipeline safety all the way to the manufacturing facility where they’re rolling the pipe.

Steve:  Sure, absolutely. With material tracking and traceability.

Russel:  You bet.

Steve:  Everybody’s going to have to get on board with that one eventually.

Russel:  When I think about pipeline SMS, a couple things come to mind. One is if you think about it realistically, it was clearly overdue in our industry.

Steve:  I agree.

Russel:  In the process side, you’ve got process safety management. Nuke power’s been doing this for a long time. To my mind, it was clearly overdue.

What I think, to the industry’s credit, is when the NTSB recommendation came out, leadership in the industry, across the industry, very quickly said, “You know what? They’re right. This is overdue. We need to get behind this and get behind this now.”

They really came up with this standard quite quickly after the recommendation. They’re moving way faster than the regulators could have moved because it was the right thing to do.

Steve:  That’s right. I think that that group, the RP committee, really deserves a load of gratitude from everyone else in the industry because when I started in as a regulator and I saw the check the box approach to inspecting and auditing, being an ex-auditor or internal auditor, that grated at me. That is not the way you should go about auditing.

You need to collaborate with the auditee, or the audience, I guess, and look at things from a risk perspective. Don’t focus on things that you’re not going to get any real benefit out of.

PHMSA’s changed their approach where now they are focusing their resources on risk. I think that there was a fair amount of collaboration within PHMSA and the industry to help make that happen.

I can tell you that smaller operators, very small operators, prefer more of the check the box or prescriptive type of regulation because they need help. They simply need help.

State pipeline safety regulators tend to provide that help. I’ve heard it said before that a state pipeline safety regulator is a small operator’s best insurance policy because the state program is working with the operator collaboratively to help make sure that they are in compliance.

I think there is a lot of, I don’t want to say demand right now, but for larger operators let’s look at this more from a systems perspective and risk and not spend so much time on check the box.

Russel:  I can actually deploy my resources more effectively from a safety perspective if I do it that way.

Steve:  You bet.

Russel:  It’s an interesting sidebar on this conversation about risk. One of the best-listened episodes that we ever did was an episode we did on risk and risk management. The comment made is nobody that’s in the risk management business is actually managing risk. What they’re actually doing is helping people make better decisions.

Steve:  That’s an interesting way of putting it. That’s right.

Russel:  To summarize this whole conversation about risk management and how it relates to SMS, I think there’s a whole another level of SMS we’re going to move into where people are going to start building methods of risk management.

Which is basically applying math to get a sense of where I’m at and applying math to get a sense of what thing that I might do next creates the most value in terms of improving safety outcomes.

Steve:  I think, going back to the notion of collaboration, getting the workforce, getting contractors, getting the public engaged with the whole notion of see something, say something. That’s part of risk management, as well, is identification of risks and threats that are out there.

Russel:  Absolutely. That’s a segue into the other thing I wanted to talk about, which is another big, relatively new initiative around information sharing because the way things are set up right now, there’s a lot of risk — regulatory risk, potentially punitive risk — associated with sharing information between operators.

In my opinion, to move pipeline safety management to the next level, there needs to be an ability to benchmark. How am I doing as an operator versus how is the industry doing overall? Am I ahead or behind of the industry?

Steve:  Yes, that voluntary information-sharing system working group that was mandated by the Pipes Act of 2016, I guess it was. They’ve got their initial report out on that. I think that that is right on the money. We need to learn from others’ mistakes, the lessons learned.

To be able to do that effectively, you have to share information. If you share information, if you show your dirty laundry, that has a potential to result in some sort of an enforcement action. That is going to have a chilling effect on an operator’s or a stakeholder’s appetite to communicate or to share that information.

I hope that PHMSA and the state programs understand and appreciate the value of information sharing and provide some sort of safe harbor rules or whatever you want to call it for the operators to share that information.

Russel:  This is not unprecedented. The airline industry’s been doing this for a long time. The airline industry is part…They’re governed by the FAA, which is part of DoT. They’re a peer agency to PHMSA. This whole idea is not unprecedented.

One of the other things that…A big conversation in the control room where I live is we need better, more lessons learned. Being able to get lessons learned from peers who have similar kinds of processes and systems versus just being able to mine for lessons learned within your own organization, that’s a big deal.

Steve:  I couldn’t have put it any better, Russel.

Russel:  I think the other thing we ought to talk about is the alphabet soup of industry associations because there are a bunch of them. It’s a little easy, if you don’t live in that domain, to get lost about, what are all these industry associations and what do they do? How are they different?

How is AGA different than AGPA? API is different than INGAA, and so forth.

Steve:  To start off, the American Gas Association, AGA, they represent the distribution operators that also may have some transmission lines. INGAA is the interstate transmission association. The large transmission operators, and there’s only a handful of them out there. That’s INGAA’s domain.

The APGA, the American Public Gas Association, is comprised of…I want to say it’s somewhere in the neighborhood of maybe a thousand or upwards of a thousand, 750 to 1,000 municipal pipeline operators, municipal, local distribution companies.

The AGA, INGAA, and APGA are basically those associations that are representing operators. Then, you have API, ASME, ASTM. These are all consensus standard organizations. They develop standards. They do so in a collaborative manner. They each have their own approaches in how they develop a standard.

I don’t know if that helps or not. The only two I’m actively engaged in is AGA and APGA, but I know there’s lots of opportunities to get involved.

Russel:  I think you hit the high points. My perspective’s a little different. I think of API more as a liquids pipelining entity versus AGA is more of a gas pipeline entity. AGA’s certainly more focused on the utilities, and typically the larger utilities that also have transmission and distribution lines.

The INGAA, of course, you summed that up. Then, you have AOPL.

Steve:  Oh, that’s right.

Russel:  Which is all the liquid pipeline operators.

Steve:  The oil pipeline.

Russel:  All of these guys, all of these entities, if you will, they all have a similar mission. That is to work with the operators to advocate and improve operations. I would say, ultimately, that’s their role, their goal. They’re all working through, trying to figure out what’s the best way to do that.

Just like the operators themselves, and the state agencies, and everybody else, they also have limited resources. They’re trying to ask the question, “How do we help? How do we add our value?”

Steve:  It’s important. I’ve said this before. It’s very important for an operator to get involved with their industry association. The industry associations themselves, the ones we just mentioned, the AGA, the APGA, INGAA, AOPL, API. They’re all involved with the pipeline safety management systems industry group.

The folks that are pulling together some of the toolkits and guidance for operators, it is an effort that involves all of those industry associations, as well as some of the members of those associations.

Russel:  As we’re recording this podcast, which is in late December, there was recently a letter from the president of AGA strongly encouraging all members of the AGA to have safety management implemented within three years. I would say that, by and large, the industry has consistently been ahead of the targets that are being advocated, which is kind of unusual.

Steve:  Again, this is one of those situations where we really don’t want PSMS to be mandated and incorporated by reference, at least wise anytime real soon. If Congress in this next reauthorization comes out to say, “PHMSA, you need to promulgate a rule incorporating 1173 into the code.”

That right there is going to take a good long while, I think, for PHMSA to develop or promulgate that rule. Then, what’s going to happen is all those operators that are currently in their journey to adopt PSMS, they’re going to stop. They’re going to stop probably cold in their tracks. Regulatory uncertainty is not a good thing.

The AGA, the board voted, I think it was last spring or summer, that all of their members needed to adopt within the next three years. That’s a huge statement. That really is.

Looking at the level of progress that each of the respective industries, where they are with their journey, I would guess that the interstate transmission operators, they probably have the furthest level of maturity with adopting PSMS. I think AGA is behind that. I don’t know. I’m going to guess maybe 50 percent to 75 percent have adopted or at least are moving in that direction.

APGA — and it’s really because of a resource issue — they are quite a bit behind in that regard. Probably less than 10 percent, 15 percent tops, of the APGA operators have embraced, or at least they’ve started their journey.

I think that the APGA leadership is making progress. This is something that is discussed at each and every meeting. There was a webinar that Erin Kurilla put on last week talking about PSMS and discussed some of the tools that were available to their membership to begin their journey.

All that was done, again, through a collaborative approach. The fact that, like you said, AGA came out and made a statement that their industry was, in fact, going to adopt and needed to adopt within three years.

I think it was intended to send a message, perhaps, to Congress to say, “Look. We believe in this. We want to go ahead and embrace SMS.” Hopefully, that would help avoid a mandate in this upcoming reauthorization.

Russel:  I actually think that…This is now my opinion. I don’t really have anything to base this on, but when I look at SMS and I look at how quickly the industry’s adopting it. The industry’s moving very fast. Fast is a relative concept but it certainly fast versus my experience with other things.

I think that the leadership in industry is looking at this and they see some real opportunity. They don’t want it slowed down or encumbered by regulatory rulemaking because it will lose its effectiveness and it will lose its speed.

We need, as an industry, to sustain that speed. You’ve talked to this already, Steve, but a couple things I think are true. At the last GPAC meeting in November, Angie Kolar, who’s the industry representative that’s leading the SMS work group this year. She talked about making a presentation at APGA, which is the small utilities, and asking who’s doing something with SMS.

She made the statement…I was surprised. Virtually everybody in the room was doing something. That’s a pretty strong statement about the industry’s leaning into this.

That being said, which is a good thing, I had a conversation with someone at a large operator in the alarm management role and was asking them about had they taken alarm management and linked it up with what’s going on with pipeline safety management. Alarm management would be one of the standards that it falls under cybernetics, which is control room, and SCADA, and cybersecurity.

Cybernetics is one of the big groups within SMS. They weren’t even aware of anything going on with pipeline SMS.

What that tells me is that leadership is behind it and they’re working it, but it’s not gotten its way down to where the boots are yet.

Steve:  That’s exactly right. I can tell you, from my view, we have made so much progress in the last year, two years for sure, but just within this last year. We’ve picked up a full head of steam as it relates to PSMS throughout the industry.

Russel:  I agree with you, absolutely. I see that only accelerating.

Steve:  We mentioned this before, to now reach out and include contractors and construction with this is absolutely the right direction.

You talked about the APGA meeting with Angie. I was there at that meeting. Yeah, I do recall the question and the show of hands. I think that most of the APGA membership at least is listening.

The number of participants or attendees there at those meetings are usually limited to some of the larger municipal operators, and those that are just more engaged. Like I said, with a membership of 750 to 1,000, there’s an awful lot of operators that are just simply not in the room, and they’re going to need some real help.

I think that the APGA leadership like I said before, they’ve got a pretty good beat on this. They’re starting to pick up some steam and really focusing their resources on trying to move this forward. You were talking about control rooms, and alarms, and stuff. That’s really fascinating to me that this is growing.

It’s just moving out from the…you throw a pebble into the water, and you start to see the ripple effect going out. We’re talking about alarm companies, we’re talking about contractors, we’re talking about materials and supplies. It’s growing,

Russel:  Everything that’s in the current safety programs, and the way that these companies administrate their safety programs with their contractors, all that’s going to be impacted by this, I think. I would also say…I’m babbling again. I apologize. I get animated about this conversation. I would also say that the vendors are looking for the opportunity to lean into this.

Steve:  Sure, they are.

Russel:  They’re trying to understand, how do we participate in Pipeline SMS?

Steve:  Right.

Russel:  Look, Steve, this is great. As always, I appreciate you coming on and sharing your perspective, and look forward to running into you again in some of my journeys, and look forward to having you back.

Steve:  Thank you, Russel. I can tell you, I appreciate everything that you do out there with this podcast. It’s a wonderful thing. I know that you’re getting more and more listeners all the time, so keep up the good work. Thank you.

Russel:  Thank you very much. I appreciate that, Steve.

I hope you enjoyed this week’s episode of the Pipeliners Podcast. Just a reminder, before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinerspodcast.com/win, to enter yourself on the drawing. If you would like to support the podcast, the best way to do that is to leave us a review.

You can do that on iTunes/Apple Podcast, Google Play, or whatever smart device podcast app you happen to use. You can find instructions at pipelinerspodcast.com.

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Russel:  If you have ideas, questions, or topics you’d be interested in, please let me know on the Contact Us page at pipelinerspodcast.com, or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next week.

Transcription by CastingWords

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