Exclusive: Pipeline Safety Chief Says His Regulatory Process Is 'Kind of Dying'

Jeffrey Wiese, the nation's top oil and gas pipeline safety official, recently strode to a dais beneath crystal chandeliers at a New Orleans hotel to let his audience in on an open secret: the regulatory process he oversees is "kind of dying."

Wiese told several hundred oil and gas pipeline compliance officers that his agency, the Pipeline and Hazardous Materials Administration [2] (PHMSA), has "very few tools to work with" in enforcing safety rules even after Congress in 2011 allowed it to impose higher fines on companies that cause major accidents.

"Do I think I can hurt a major international corporation with a $2 million civil penalty? No," he said.

Because generating a new pipeline rule can take as long as three years, Wiese said PHMSA is creating a YouTube channel to persuade the industry to voluntarily improve its safety operations. "We'll be trying to socialize these concepts long before we get to regulations."

Wiese's pessimism about the viability of the pipeline regulatory system is at odds with the Obama administration's insistence [3] that the nation's pipeline infrastructure is safe and its regulatory regime robust. In a speech last year [4], President Obama ordered regulatory agencies like PHMSA to help expedite the building of new pipelines "in a way that protects the health and safety of the American people."

Wiese's remarks also conflict with industry's view. Brian Straessle, a spokesman for the American Petroleum Institute [5], which represents much of the oil and gas industry in Washington, D.C., said the industry "is highly regulated at the state and federal level, and there are strong standards in place to govern the pipeline infrastructure that helps fuel our economy.

"Pipeline operators have every incentive to protect the environment and their financial health by preventing incidents," Straessle said.

But Wiese's remarks ring true with people who've long been concerned about pipelines near their homes.

Susan Luebbe, a Nebraska rancher who has fought for five years to keep the proposed Keystone XL pipeline from crossing her cattle ranch, reacted with bemusement when Wiese's comments were relayed to her by cell phone as she repaired a barbed-wire fence. She and other Keystone opponents have long been suspicious of assurances by TransCanada, the company building the line, that it will be safe because it will meet or exceed PHMSA regulations.

"It's kind of sad in a way, when we push for laws to be enforced and they just throw up their hands, PHMSA and all them, and say they can't deal with it," Luebbe said. 

Public confidence in pipeline safety has been tested by a spate of serious accidents. In 2010, a natural gas line explosion in San Bruno, Calif., set off a 95-minute inferno that killed eight people, destroyed 38 homes and damaged scores of others. That same year, a pipeline spilled more than 1 million gallons of Canadian tar sand crude into Michigan's Kalamazoo River [6]. The ongoing clean-up of that one spill has already cost more than $1 billion. This year, a pipeline rupture deposited at least 210,000 gallons of heavy Canadian crude in the streets of Mayflower, Ark [7].

Wiese, as head of PHMSA's Office of Pipeline Safety, is the federal official most directly charged with preventing these types of accidents. But as his July 24 comments in New Orleans reflect, he is constrained by a pipeline safety budget that has remained flat at about $108 million for the past three years, despite the construction of thousands of miles of new pipeline. Most of that money comes from industry user fees and an oil spill liability trust fund. Taxpayers pay just $1 million a year toward the safety program.

The Obama administration has consistently asked for more money for pipeline safety, but those requests have fallen victim to Congress' inability to pass anything more than stopgap budgets for the past three years. The administration asked for a 60 percent increase for this year, but the continuing budget standoff and effects of sequestration instead have tightened the budget.

Two stark numbers illustrate the challenge the administration faces in ensuring pipeline safety while pressing ahead with new pipeline projects: 135 federal inspectors oversee 2.6 million miles of pipeline, which means each inspector is responsible for almost enough pipe to circle the Earth. PHMSA says it has the help of about 300 state inspectors, but not all states have inspection programs.

According to an analysis of inspection records by the nonprofit Public Employees for Environmental Responsibility [8] (PEER), only a fifth of the nation's 2.6 million miles of pipeline have been inspected by PHMSA or its state partners since 2006. PEER obtained the records through the Freedom of Information Act.

InsideClimate News tried for several weeks to arrange an interview with Wiese about his remarks. At one point PHMSA spokesman Damon Hill wrote in an email, "I'm trying to help you get what you need for your story and in no way are we saying that Mr. Wiese or anyone else in PHMSA is unavailable to provide information or clarifications."

But Hill didn't respond to subsequent emails requesting to speak with Wiese and other PHMSA staffers who attended the pipeline safety conference in New Orleans, and Wiese didn't respond to interview requests sent to his official email address.

PHMSA: A Thin Green Line Protecting the Public from Spills and Explosions

PHMSA was created in 2004 as an agency within the federal Department of Transportation. It is a thin green line intended to ensure the safety of energy pipelines that crisscross the United States. Pipelines also carry other hazardous materials, including poisonous, carcinogenic chemicals like benzene. The agency's tasks include auditing the records of almost 3,000 pipeline operators; developing, issuing and enforcing pipeline safety regulations; conducting industry training, and investigating accidents.

The challenges facing regulators are daunting. More than half of the nation's pipeline was buried prior to 1970, about the same time the nation's first pipeline safety law was enacted and the Office of Pipeline Safety created. Much of the old pipe remains a question mark in terms of its location, composition, level of corrosion and quality of welding.

Some pipelines in the East are more than 100 years old. In the West, suburbs have grown up alongside lines installed when the areas were uninhabited. Age is not necessarily a critical factor if pipe is properly installed, maintained and operated. But many pipelines have changed ownership so many times that installation and maintenance records are unavailable.

In its budget proposal for this year, PHMSA defended its record, stating that its work "often goes unnoticed due to its successful efforts in reducing and containing serious incidents." The agency included a chart showing that incidents resulting in death or serious injury declined more than 60 percent during that period even as the number of miles of pipeline increased almost 40 percent. Other PHMSA data show modest declines in the number of serious incidents, injuries and fatalities in recent years.

"PHMSA is moving in the right direction," said Ravindra Chhatre, an investigator at the National Transportation Safety Board [9] who specializes in pipeline accidents. "Sometimes people get frustrated by the pace that it's moving, but definitely it's improving."

Congress Delays Action on Shutoff Valves Even After Inferno Kills Eight

The problem, Wiese said in New Orleans, is that it takes too long to issue regulations, in part because industry negotiates for the weakest possible rules. 

"Getting any change through regulation, which used to be a viable tool, is no longer viable," Wiese told the industry representatives. "I really don't see that as a way to get change. It moves so slow. I've been working on rules now for recommendations from our friends at (the National Transportation Safety Board) and U.S. Congress. I've been working very hard but with the resources we have I still can't get those rules out."

To Rep. Jackie Speier, D-Calif., whose district includes the site of one the deadliest pipeline accidents in American history, Wiese's comments were surprising only because they were delivered in public.

"To me, he was refreshingly candid," she said. "The industry has a lock on PHMSA. It has a lock on Congress. And the public's interest gets dramatically watered down."

Speier began having doubts about PHMSA after a 30-inch section of pipe ruptured in San Bruno at 6:11 p.m. on Sept. 9, 2010. The explosion generated a giant fireball that went on for 95 minutes because it took that long for gas line operator Pacific Gas & Electric to reach the manual shutoff valves.

The pipe had been installed in 1956 and was substandard and poorly welded, a National Transportation Safety Board (NTSB) investigation found later. Because it was grandfathered under PHMSA's safety laws, it wasn't subjected to the pressure testing that newer pipes must undergo.

The NTSB's investigation also found widespread failures of PG&E's operations, maintenance, record-keeping systems and emergency response. It issued a total of 39 recommendations, including 13 to PHMSA. As the third anniversary of the explosion approaches, PHMSA has yet to finish implementing any of the recommendations, according to the NTSB.

One of those recommendations was for remote shutoff valves to be installed on energy pipelines near suburbs, dams or other areas where an explosion would have grave consequences. Safety advocates had been arguing for remote or automatic safety valves since the 1970s, but the oil and gas industry always objected, saying the cost was too high and false alarms could shut down a pipeline, disrupting the flow of oil or gas. 

On the first anniversary of the tragedy that rocked her district, Speier introduced legislation designed to implement many of the NTSB recommendations, including the call for remote shutoff valves.

But the law President Obama signed several weeks later was a compromise bill—the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. It was praised in its final form by the American Petroleum Institute, the Interstate Natural Gas Association of America and other industry groups. It was far weaker than Speier's legislation, especially when it came to the remote shutoff valves that might have reduced the death and destruction in San Bruno.

Instead of requiring operators to install the valves quickly, the act directs PHMSA to spend a year studying the mechanics and costs of such a rule and then spend another year deliberating the implications. It also stipulates that PHMSA may not proceed down the road toward regulations—a process that typically takes 18 months to three years—until it first determines that remote shutoff valves are economically feasible for the industry. Even then, the new rule could be applied only to pipelines laid in the future.

"Laughable," Speier said of the provision in a recent interview. Industry, which has argued for decades that remote shutoff valves are too costly, will no doubt continue to do so, she said. 

Non-Industry Groups Find PHMSA Less Accessible

In addition to Wiese, PHMSA sent at least three officials to address the safety conference at the Royal Sonesta Hotel in New Orleans. Two former PHMSA officials who left the agency to work as industry consultants also addressed the group of 300 to 400 oil and gas pipeline operators. Throughout the week, the Louisiana Gas Association [10] operated a hospitality suite overlooking Bourbon Street, where regulators and industry representatives gathered each evening to sip libations and drop beads to passersby.

Speaking just before Wiese, Bob Kipp, president of the Common Ground Alliance [11], an industry-backed safety group, drew on Sun Tzu's classic treatise, Art of War, in urging the crowd to "keep your friends close and your regulators closer." The comment drew chuckles from the audience.

Groups outside the industry have found PHMSA far less accessible.

In preparing for a recent trip to Washington, a delegation organized by the National Wildlife Federation [12] tried to set up appointments with the State Department, the Environmental Protection Agency and PHMSA to discuss pipeline safety. While the delegation was welcomed by the State Department and the EPA, a PHMSA official denied the request without explanation.

To Beth Wallace, the federation's community outreach coordinator for the Great Lakes Regional Center, it was typical of the brushoffs environmental groups get from PHMSA. "It seems that the agency always gives an ear to the industry," she said. "But when it comes to public participation, there doesn't seem to be that same level of access."

PHMSA spokesman Hill said agency officials had met with the National Wildlife Federation in May and didn't feel another meeting was necessary.

In New Orleans, Wiese said "an under-informed populace highly dependent on fossil fuels" is prone to negative perceptions of the industry. He said that penchant is exacerbated by a press corps that doesn't "have time to fully understand the story" and has instead served as a vehicle for "gang warfare" through its coverage of events like the March 29^th rupture of ExxonMobil's Pegasus pipeline in Mayflower, Ark.

Congress, Wiese contended, hasn't done much to help.

"It's very political in Washington. Nobody wants to try to figure out what's the best thing to do. They're thinking about what's the most advantageous position to take," he said, later adding that he'd recently had an unpleasant meeting with a "very hot" congressional delegation about the Pegasus spill in Arkansas.

Rep. Tim Griffin, R-Ark., a member of the delegation Wiese was referring to, has criticized the operations and maintenance of the pipeline and PHMSA's lack of transparency.

"If public officials and Arkansans would have known then what we know now, changes to the operation of the pipeline may have been demanded years ago," he said.

InsideClimate News reporter David Hasemyer contributed to this report.