Natural Gas Pipeline Safety:

Integrity Management Benefits Public Safety, but Consistency of Performance Measures Should be Improved

GAO-06-946: Published: Sep 8, 2006. Publicly Released: Sep 8, 2006.

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The Pipeline Safety Improvement Act of 2002 established a risk-based program for gas transmission pipelines--the integrity management program. The program requires operators of natural and other gas transmission pipelines to identify "high consequence areas" where pipeline incidents would most severely affect public safety, such as those occurring in highly populated or frequented areas. Operators must assess pipelines in these areas for safety risks and repair or replace any defective segments. Operators must also submit data on performance measures to the Pipeline and Hazardous Materials Safety Administration (PHMSA). The 2002 act also directed GAO to assess this program's effects on public safety. Accordingly, we examined (1) the effect on public safety of the integrity management program and (2) PHMSA and state pipeline agencies' plans to oversee operators' implementation of program requirements. To fulfill these objectives, GAO interviewed 51 gas pipeline operators and surveyed all state pipeline agencies.

The gas integrity management program is designed to benefit public safety by supplementing existing safety requirements with risk-based management principles that focus on safety risks in high consequence areas, such as highly populated or frequented areas. Early indications show that the condition of transmission pipelines is improving as operators complete assessments and related repairs of their pipelines. For example, as of December 31, 2005, operators had assessed 33 percent of pipelines in high consequence areas and completed over 2,000 repairs. Furthermore, up to 68 percent of the population living near gas transmission pipelines is expected to benefit from improved pipeline safety because they live in highly populated areas. Representatives from the pipeline industry, safety advocacy groups, and state pipeline safety agencies generally agree that integrity management improves public safety, but operators noted that the program can be costly to implement and cited concerns with implementing the program, such as meeting the documentation requirements. PHMSA's performance measures should demonstrate the impact of the program over time. However, we are recommending revisions to improve the measures. For example, adjusting the incident reporting requirement to account for changes in the price of natural gas would allow PHMSA to more accurately track trends in pipeline incidents. PHMSA and states plan to use a variety of inspection tools to oversee operators' implementation of integrity management requirements and expect to complete the first round of inspections no later than 2009. To assist in conducting these inspections, PHMSA has developed a range of tools, including guidance documents and training courses for inspectors. Overall, state agencies have found these tools to be useful, although some states have found it difficult to schedule the required training courses and have some concerns about the adequacy of their staffing. To address these concerns, PHMSA is taking steps to make it easier for state inspectors to attend the training and supports providing additional funding to states. Initial results from 20 federal inspections and 117 state inspections show that operators are making good progress in assessing pipelines and making repairs, but they generally need to better document their decisions and processes.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In September 2006, we reported that the Pipeline and Hazardous Materials Safety Administration's (PHMSA) natural gas pipeline incident reporting requirements do not include an adjustment for changes in the price of natural gas, even though the value of gas released is a key factor in determining whether an incident must be reported. As natural gas prices increase over time, smaller releases of gas from a pipeline meet the definition of an incident and artificially inflate the number of pipeline incidents. We recommended that PHMSA revise the definition of a reportable incident to consider changes in the price of natural gas. In response to this recommendation, PHMSA has proposed revisions in a Notice of Proposed Rulemaking "Pipeline Safety: Updates to Pipeline and Liquefied Natural Gas Reporting Requirements. PHMSA proposes to change the definition of a natural gas incident to establish a volumetric basis for reporting rather than a cost basis. This reporting change will more accurately depict the safety performance of gas pipelines over time. PHMSA officials anticipate this rule to be finalized in September 2010. Accomplishment report GAO-10-2625A is being prepared.

    Recommendation: To improve the consistency and usefulness of the integrity management performance measures, the Secretary of Transportation should direct the Administrator for the Pipeline and Hazardous Materials Safety Administration to revise the definition of a reportable incident to consider changes in the price of natural gas.

    Agency Affected: Department of Transportation: Pipeline and Hazardous Materials Safety Administration

  2. Status: Closed - Implemented

    Comments: In September 2006, we reported that the Pipeline and Hazardous Materials Safety Administration's (PHMSA) performance measure data was limited by inconsistencies in the reporting of causes of incidents and leaks in high consequence areas compared with the rest of the pipeline system. For example operators reporting a leak within a high consequence area could choose from 3 causes of corrosion, while operators outside a high consequence area used one overall corrosion category. We recommended that PHMSA establish consistent categories of causes for incidents and leaks on all gas pipeline reports. To improve the consistency of categories for causes on incident reports, PHMSA issued a Federal Register notice on September 4, 2008, seeking comments and OMB approval for the paperwork collection burden. The revision was approved by OMB and data collection began on the new forms on January 1, 2010. To improve the consistency of categories for leak causes, PHMSA has proposed revisions for annual reports in a Notice of Proposed Rulemaking "Pipeline Safety: Updates to Pipeline and Liquefied Natural Gas Reporting Requirements." PHMSA officials anticipate this rule will be finalized in September 2010. Accomplishment report GAO-10-2629A is being prepared.

    Recommendation: To improve the consistency and usefulness of the integrity management performance measures, the Secretary of Transportation should direct the Administrator for the Pipeline and Hazardous Materials Safety Administration to establish consistent categories of causes for incidents and leaks on all gas pipeline reports.

    Agency Affected: Department of Transportation: Pipeline and Hazardous Materials Safety Administration

 

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