Pipeliners Podcast


In this episode of the Pipeliners Podcast, host Russel Treat delivers his take on the PHMSA Pipeline Advisory Committee meetings held in December in Washington, D.C.

After attending these meetings, Russel relays the information that came out of the discussions, what the conversations were among industry leaders and regulators, and what is coming in the future for pipeliners. Get ahead of the game before the latest changes are implemented by listening to this week’s episode!

PHMSA Report — Show Notes, Links, and Insider Terms:

PHMSA Report Full Episode Transcript

Russel Treat: Welcome to the Pipeliners Podcast, episode seven.

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

Russel: Thanks for listening to the Pipeliners Podcast. We appreciate you taking the time to listen to this episode. To show our appreciation, we want to let you know about our signature prize pack. We are offering a free customized YETI tumbler to one listener each episode.

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Here we are. It’s just about a week before Christmas, a little less. I recently returned from a quick trip to Washington, D.C. for several days to attend the Pipeline Advisory Committee meetings of PHMSA.

Most people, if you’re pipeliners, you’re going to know who PHMSA is. That’s our regulatory body. That’s the Pipeline Hazardous Materials Safety Administration. They are the people who drive regulatory rulemaking for the pipeline industry.

They use the Pipeline Advisory Committee as a mechanism to seek feedback from the public, from industry, and from state governments related to the rulemaking that they’re proposing and driving.

The meeting that they had in December — actually the reason this meeting was in December — was because Hurricane Harvey caused the meeting schedule earlier in the year to be pushed out. Consequently, it was an opportunity to go and learn about what’s coming.

There was a lot of information covered over the three days, a lot of energetic conversation. It’s an interesting process. I’m going to try to explain a little bit about the process and what I understand about how the process works. I’m also going to talk a little bit about what was discussed, and try to offer some opinions about what it’s going to mean for pipeline operators in the upcoming year or so.

You can actually go to the PHMSA website. You can look up standards and rulemaking, and read the charters of the Gas Pipeline Advisory Committee and the Liquid Pipeline Advisory Committee. You can also get the rosters and biographies of the members and participants, and learn actually quite a bit about how these advisory committees support PHMSA in the rulemaking process.

The way this works is the committees actually receive presentations from the agency. The agency provides a staff briefing. The staff briefing will contextualize the comments that have come since the notice to propose rule had been put out. Then, the advisory committee will have the opportunity to listen to comments from the public, and then they will also have the opportunity to make additional comments and maybe ask questions of members of PHMSA staff.

All of this is on the record. It’s like any other government agency. Everything that’s occurring is happening in the public domain. The public had the opportunity to make and provide commentary. It’s not just the agencies. It’s also people like the Pipeline Safety Trust, which are the public advocacy group that try to look out for the best interest of neighborhoods and cities and people that are impacted by pipelines that are being operated in their local area. It’s an interesting process to follow.

I’m not going to talk a lot on this particular episode about rulemaking and how it occurs. I think what I’d like to do is if somebody has a recommendation for somebody we can talk to that’s knowledgeable about that process, I think it would be good to bring them on and maybe ask them to kind of walk us through how rulemaking works.

You can go to the PHMSA website and read that information about how it occurs and the process they work through for proposed regulation through an advanced notice of proposed rulemaking, and a notice, and a final rule, and all that kind of good stuff.

Like many other things in pipeline world, this is full of acronyms and jargon. Frankly, it’s not an area that I’m an expert in. But I do find it interesting, and I do think it’s valuable to understand what’s going on.

The meeting itself, the joint meeting of the first day between the gas and the liquid advisory committees, was kicked off by the new PHMSA administrator, Mr. Howard “Skip” Elliott. He’s been in the position about two months. He’s a Trump appointee. He actually comes from the railroad industry, so he’s knowledgeable about hazardous materials and hazardous material movement by rail, which is one of the other areas that PHMSA regulates.

Mr. Elliott provided a presentation to the joint meeting of the committees as a kickoff, after the introductions, and is laying out the agencies go forward under Trump. The agency is going to continue to focus on pipeline safety, on technology, on the rulemaking process, and about establishing accountability for rulemakers and for operators.

Probably the thing that’s changing the most, given the executive orders issued by Trump early on in his administration, particularly related to streamlining rulemaking and looking for opportunities to simplify things, things like what’s call the two for one, which is remove two requirements for implement any one new regulatory requirement.

Mr. Elliott was talking about the agency’s agenda to simplify the rules, and to invest their resources where it’s going to have the most impact on pipeline safety. Rulemaking to improve safety, not rulemaking for rulemaking sake. That would be my interpretation, certainly not what he said.

Also, there’s going to be a review of existing regulations. They’re going to be looking at ways that the agency can support pipeline safety initiatives beyond simply regulatory oversight.

All in all, even under the new administration, I think you’re going to see some continuity in the process. Maybe a little bit of some of the rulemaking slowing down to do some of these reviews and analysis to determine if there’s opportunities to streamline or simplify.

Certainly, what some people call the gas mega rule, or all the rulemaking that’s in process around the gas pipeline world, which is what all of the second and third day were about in terms of advisory committee meeting.

There’s also a hazardous liquid rule. It was at the Federal Register at the time that Trump took office. That rule is continuing to work through the review process.

The way I would summarize what Mr. Elliott said is they’re going to continue to focus on the agency being involved in activities that improve pipeline safety. That continues to be the goal, and they’re going to be looking for innovative and creative ways that are driven by more than just rulemaking to accomplish that objective.

One of the other presentations that was made by the agency was what they call their enforcement update. This is information that the agency collects to try to understand what is the risk and what are the issues that are needing to be addressed by industry.

I found some of this particularly interesting. First off, in terms of accident or incident reports between 2010 and 2016, the information they presented showed significantly more incidents with the hazardous liquid lines than the gas lines.

When you think about that, it’s pretty evident, because with liquid lines there tends to be a greater amount of environmental damage. Natural gas, if it doesn’t find a source of ignition, it going to vent to atmosphere, and damage is going to be relatively contained. But with a liquid spill, it can have a lot more impact, partially on environment.

In the information that they presented, they made it clear that the numbers were not final, that that work is ongoing. But they wanted to present this is where we’re at in terms of what we know right now.

The goal of all this is to understand what regulatory violations may cause or increase the severity of incidents, so that the regulated community, the operators themselves, and PHMSA can all take better action to mitigate those types of activities.

In terms of the most frequently cited type of violations, the biggest area, and almost half of the violations, 42 percent, were related to maintenance and repair. Now what’s interesting about this is that second most frequently cited violations were control room or control room management violations, at 24 percent. Between maintenance and repair violations and control room violations, you’ve got basically two-thirds of all violations occurring in those two domains.

The other thing that’s interesting about this is that most of the maintenance and repair regulations that were cited were casual, 57 percent. Integrity management violations had the highest penalties associated with those.

In terms of severity, 64 percent of the control violations related to incident severity. Meaning that incidents that occurred in the control room and the control room’s actions caused those incidents to be more severe than they might otherwise be.

To me, that’s very compelling. I’ve often said that control rooms in the pipeline world are generally not responsible for causing incidents. But they make a material and significant contribution to the mitigation of incidents when they do occur. That, interestingly enough, is supported by the data that PHMSA is presenting.

In terms of maintenance repair, what are the most common types of violations? 42 percent of the violations were hot work activity violations, followed by 30 percent being valve maintenance and repair.

Of those hot work activities, continuing to drill down, the majority of those violations were simply a failure to monitor combustibles, all of which were also a failure to follow procedures. Of the hot work violations that are listed, all but one were not following procedures. That fact should fairly compelling, I think, for us as an industry. Having the procedure is one thing, but failing to follow the procedure, that’s a whole different ball of wax there.

Likewise, with valve maintenance, the majority of those were failure to complete lockout, tagout. All of the lockout, tagout were a failure to follow procedures, as well as a couple of the other areas of violation were a failure to follow procedures.

The other way to look at this is as an operator, if your procedure is complaint and you follow them, then your chance for getting dinged with a fine or a finding is much diminished.

As it relates to the control room, nearly all the incidents of the violations, 17 of the 19, directly related to the control room increasing the severity of an incident. When you drill down to those violations, alarm management was by far the most commonly cited, with 17 of the 19 control room violations assessed as being alarm management related. So, 89 percent.

When as somebody who has worked with operators to put alarm management into place, alarm management is tough. It really is tough. Alarm management in the control room, it’s actually something different than alarming in the field, with the field automation. That’s easy to get lost in the conversation about an alarm management program, and what it is, and how it needs to work. It’s a tough thing to implement, and it touches a lot of organizations that historically in our world may not work very closely together. To my mind, it’s a real challenge.

Again, of the 17 violations related to alarm management, 11 of the 17 violations had to do with not following written procedures. Again, it goes to the point of having an alarm management program and following an alarm management program are very different endeavors.

To summarize this information about enforcement, what you can address or identify as high risk activities include hot work for both hazardous liquid and gas transmission systems, valve lockout and tagout, in particular for hazardous liquids, alarm management, and again in particular for hazardous liquids systems, and temporary line marking for both hazardous liquids and gas transmission systems.

Probably the big thing is, if you’ve got procedures, follow them. It’s certainly recognized by the industry, and PHMSA’s been doing a fair amount of work to try and understand what the opportunity is for sharing information.

Now this is a difficult subject because most of the operators consider this information to be proprietary. They don’t want everybody to know all of the detailed information that smart pigging can provide.

However, it is also generally accepted that combining information across multiple entities, and using that information and applying analysis over a bigger data set, that creates an opportunity to more accurately and specifically identify anomalies and issues in pipeline integrity. There’s some really big possibilities in doing this well.

I think probably the most important thing that I take away from the presentation and discussion around information sharing is that’s going to move forward, but there’s a lot of work to be done. There was talk of establishing a number of specialized subcommittees to work on the various issues that need to be sorted out, if you will, to determine how to move forward and how technology might be applied to enable this.

Probably the next biggest rulemaking that is in progress is the rulemaking around underground storage. The rule is at present only related to natural gas storage. It’s basically taking underground storage and how bringing it in underneath the regulatory oversight of PHMSA.

What’s probably interesting about underground storage is for the most part, these storage facilities exist within the state. Whatever the federal government is doing, there’s also state programs. Of course, one of the things that’s interesting when you look at this rulemaking process at the federal level is you have to look at what’s going on with rulemaking in the states.

Of course, that’s brings up all kinds of interesting conversations about state’s rights and who has control. Of course, there is not necessarily consistency across the states about how they implement their regulatory requirements. Not every state even necessarily has natural gas underground storage.

All that being said, it is a new rule. It’s coming. It’s going to be implemented very soon, after the first of the year. It is a result of the PIPES Act of 2016. It requires the development of inspection criteria and related training for both federal and state inspectors. Inspection activity in this new area of responsibility will begin in 2018. There’s a number of recommended practices, particularly API recommended practices that are incorporated by reference. One is API 1170. Another is API 1171.

We’re currently in the process of reconsideration and comments about what PHMSA would call an IFR, an Interim Final Rule. These issues are being addressed. The answers are expected in 2018.

In the interim and for one year after the final rule, PHMSA will not issue any enforcement citations for failure to meet provisions of the recommended practices in 1170 and 1171. They’re not going to issue enforcement citations for non-compliance with the requirement to justify or document any deviations from the non mandatory provision.

As with most rules that come from PHMSA, they’re providing time for the operators to understand and modify operating policy and integrate the new rule into their operations. There are about 128 operators, about 4.8 trillion cubic feet of capacity across 406 storage fields. These storage facilities are located in 31 of the 50 states. Only six of all of the facilities have any type of interstate issue.

One of the challenges here is that in the case of underground gas storage, the state regulators are generally only responsible or only have regulatory oversight of the topside horizontal pipelines, but may not have programs for the caverns themselves. One of the things that PHMSA is trying to do is to equip the states to more effectively understand and provide oversight to gas storage. Of course, not all the states are in that situation. Some states are actually quite advanced and probably a bit more aggressive than what PHMSA might be requiring based on the rulemaking.

One of the things they made a point of saying — and I think it’s important for operators for operators to understand — is that the new PHMSA regulations are not going to supersede permits, certifications, or licenses that are required by local, state, or other agencies. That’s good news for operators in that they’re not going to have to relicense their facilities.

Obviously, that’s a big change. It’s coming soon. For the operators who aren’t already deep into understanding their plans, they may be up against it a little bit. It’ll be interesting to watch how this rolls out. I’m certain that there will be an opportunity to talk about it more.

If anybody in the listening audience has any ideas about someone who might be a good guest for the podcast to talk about the storage rule in more detail, I would love to hear from you. I think it would be great to get somebody with that background involved to talk to some of the questions you might have. If you have specific questions about this, please submit them, and I’m going to be looking for somebody to come and talk about this in more detail.

There were a number of other things talked about, but probably the thing I want to talk about most is safety management, or pipeline safety management, what is being referred to a pipeline SMS, Safety Management Systems for the pipeline.

I had the opportunity to sit at lunch with one of the members of the committee. Actually, a couple of members of the committee. I was really just there to learn. What is safety management for pipelines? What’s perceived? What’s the opportunity? What’s the push? Some of these people have working towards this for a long time.

I’m going to walk through some of the things that were presented and discussed about this. The presentation is actually available off the PHMSA website. We’ll provide a link to it for those that interested.

This whole SMS rule has a lot of broad support. The implementation team actually started in May 2015. There’s 24 members on the implementation team. It includes both operators and associations. You’ve got the American Petroleum Institute, the American Oil Pipeline pipeliners, the Interstate Natural Gas Association, the American Gas Association, the American Public Gas Association, and a number of operators.

They’re actively meeting several times a year, trying to work towards getting this done. Probably the biggest thing about safety and management system is this is a journey. It’s not a destination. It’s building a new industry capability.

It’s voluntary versus regulatory. It’s meant to be proactive. The desire is that it’s a program for looking for weak signals and being active about addressing those weak signals. It’s not just about safety. It’s really about overall pipeline performance. It’s designed specifically to figure out what is SMS for pipelining as opposed to SMS for other industries.

We’re in phase three. We’re trying to demonstrate actual progress. Some people are already quite far down the road in implementing SMS and already starting to see some of the benefits.

They also presented and talked about a maturity model. It’s got five levels, the first three having to do with learning about the program, developing a plan, implementing a plan, and then getting into the process of continually improving by taking action, doing planning, doing the work, checking the work, and then determining how to improve the action, and then just doing that in a perpetual way.

What the staff briefing talked about as it relates to SMS is, the goals for 2018 is to create a webinar series about the maturity model, and to develop tools to enable operators to mature their programs, and then to do a workshop. The API is looking to pilot a voluntary third-party audit program in 2018. During 2018 there’s going to be an effort to develop metrics that can used by industry to measure progress.

There are a number of resources out there. There’s actually a website specifically dedicated to pipeline safety management systems. That’s pipelinesms.org. If you’re looking for resources to learn more about pipeline safety management, that would be a place to go.

Phase two and three, in particular, there’s was a lot of discussion about specifics around integrity management programs. Frankly, a lot of that material is just outside of my knowledge and expertise. It is something I think it would be great to find a guest to get on and to learn more about that. We’ll certainly be looking for somebody who can talk to these things.

All and all, I think the meeting for me was encouraging. I’m looking forward to see where all of this heads.

I think that the whole pipeline safety management initiative really creates a lot of opportunity, not just for industry, not just for the pipeline operators, but also for vendors that can provide tools and technologies to help the operators implement safety management for the pipeline.

One of the challenges, I believe, in doing this effectively is going to be, how do you pull together all of this disparate types of data, between right of ways, digs, and integrity management, cathodic protection, ILI runs, etc. How do you pull all of that together into a program that’s actively looking for where’s the best opportunity to improve safety?

With that, I’m going to wrap this episode of the Pipeliners Podcast up. Just a reminder before you go, that you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinerspodcast.com/win. That’s pipelinerspodcast.com slash W-I-N to enter yourself in the drawing.

Thanks for listening. I’ll talk to you next week.

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