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Robin Rorick's remarks at press briefing on PHMSA pipeline safety rule

As prepared for delivery

Press briefing teleconference on PHMSA pipeline safety rule
Robin Rorick
January 8, 2016

Opening statement:

Good morning/afternoon, everyone. Thank you for joining the call today.

As API President and CEO Jack Gerard mentioned earlier this week in his State of American Energy address, investments in U.S. energy infrastructure are crucial not only for the oil and natural gas industry but also for overall economic growth and consumer savings. The amount of energy sector infrastructure needed through the middle of the next decade could spur $1.15 trillion in private capital investment and support more than 1.1 million jobs, according to an IHS study. Failure to address infrastructure constraints, on the other hand, can raise costs for families and businesses. New England knows this all too well. That region’s residents paid up to 69 percent more for their electricity than the national average last winter, while its industrial sector paid up to 90 percent more.

Opposition to infrastructure projects, including pipeline construction, is all too often NOT based on facts because the facts show that pipelines are smart investments and safe.

America’s more than 199,000 miles of liquid pipelines transport about 16 billion barrels of crude oil and petroleum products per year at a safety rate of 99.999 percent. Industry continues to work toward its goal of zero incidents through continual safety improvements, including – most recently – the release of three new recommended practices. This work has taken place because of leadership by our industry and our core value of safety, not regulatory requirement. While we welcome regulatory certainty promised by a new proposed rulemaking on hazardous liquids from the Pipeline and Hazardous Materials Safety Administration, and the proposal makes some necessary updates to regulations, we are concerned that some of its provisions may ultimately hamper successful safety practices detailed in the existing and currently-released API documents.

For this reason, API, in coordination with the Association of Oil Pipelines (AOPL), is submitting comments today that highlight aspects of the proposal which limit companies’ ability to use their expertise to manage pipeline operation appropriately. Operations vary significantly from pipeline to pipeline, so regulations need to allow for necessary engineering judgment and analysis. Several of the proposals do not allow this ability and are take a one-size-fits-all approach that isn’t appropriate. For example, pipeline operators go to great lengths to manage resources effectively by focusing on pipe that may be located next to environmentally sensitive or more populated areas. Proposals that require operators to expend resources conducting unnecessary inspections on low risk piping do not allow companies the flexibility to use resources to protect more sensitive locations. PHMSA also proposes inspections of pipelines “within 72 hours after the cessation of an extreme weather event…” Putting a specific time requirement to complete a survey can actually decrease safety by placing a regulatory requirement for company personnel to access a facility when the dangers from a hurricane or earthquake, may be present.

Another issue of concern is that PHMSA’s proposals are duplicative. Arbitrary timelines – of 72 hours or 48 hours or 100 hours – don’t allow on the ground decision making about when it is safe to reenter area or facilities. Requirements for operator action after weather events are already covered by existing statutes.

Since Congress asked PHMSA to draft the rule back in October 2010, API has been coordinating with pipeline operators and trade associations like AOPL, and has advocated for the rule’s completion. But, we have not waited for the completion of the regulation to advance safety in the industry. For instance, the industry has developed a series of consensus documents that challenge companies to implement best practices and push them to achieve the industry-wide goal of zero incidents. And our track record continues to stay strong.

And we are finalizing another new safety measure in the first quarter of this year – Recommended Practice 1176 – which will strengthen the industry’s current capability to predict and prevent crack-related pipeline failures by enhancing the gathering, integration, and analysis of data. When complete, this document will aid operators in finding and analyzing anomalies even more in advance of a potential problem so that concerns can be identified and addressed well before an incident may occur.

And two recent Recommended Practices were released just last month – and developed in a joint effort with pipeline operators, emergency response organization, experts, EPA and PHMSA.

The first, Recommended Practice 1174, provides operators with an enhanced framework to enable continual improvement of the pipeline emergency planning and response process. The comprehensive framework defines the managerial elements for a safe, timely, and effective emergency response.

And the second, Recommended Practice 1175, addresses leak detection programs. This RP provides guidance on the development, implementation, and management of a sustainable program, to minimize the size and consequences of leak events through the advancement of new technologies and enhanced internal and external coordination.

All of the Recommended Practices follow the new Pipeline Safety Management Systems recommendations – adopted last summer – that outlines the best safety framework for pipeline operators, ensuring companies continually assess their practices to guarantee the appropriate steps are taken to achieve the industry goal of zero incidents. We will be holding our first implementation work shop in Houston next month to discuss tools and methods to ensure that companies can put this new RP into practice.

It is efforts like these by our industry that will help us continue to provide the energy this country needs safely and reliably. And, if we are to realize our nation’s true potential as an energy superpower, we NEED the best infrastructure in the world and government rules that support, not hinder building and maintaining that infrastructure.

Industry will continue to lead on creating new standards to enhance pipeline safety as part of these broader infrastructure goals for our country, and we look forward to working with PHMSA and other stakeholders in this effort, as well as advancing and improving the new rule.

Now I’ll be happy to take your questions.

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