Industry and Government -- A Commitment to Pipeline Safety

Office of Pipeline Safety, Research and Special Programs Administration, DOT
Fred Fowler
Group President, Energy Transmission
Duke Energy

Arlington, VA

Good morning. Thank you for the opportunity to speak on behalf of the natural gas pipeline industry at this public meeting on the Pipeline Integrity Rulemaking. We look forward to having an open dialogue on this topic that is important to all of us.

For more than a year, the natural gas pipeline industry has worked to support the Office of Pipeline Safety’s efforts to develop an effective integrity rulemaking proposal. For us, this is only one of many steps we take in our continuous journey to keep pipelines safe for the public and the communities we serve.

Our industry has one goal with respect to pipeline safety—and that is to have zero failures. Our decades of research and development as well as the implementation of additional practices and procedures specific to individual system risks have paid off in safer pipelines. But we recognize that there is still room for improvement. Our work is not done.

The natural gas pipeline industry is a mature industry and the easy fixes have already been implemented. In an effort to continue to improve the safety performance of our industry, we must continue to attack the complex issues—and work to find solutions that will move us toward zero failures.

The group of technical experts you will hear today was asked to start with a clean slate, to investigate integrity issues and to identify ways to improve pipeline safety.

Their role in development of a pipeline integrity plan has been to take a rigorous technical review of the effectiveness of the current state of applied practice and identify and define opportunities to improve. These experts took a grassroots look at our business across the entire spectrum of integrity issues.

To enhance the effectiveness of this effort, we worked openly with the OPS and state officials. We enlisted their technical expertise to help address this issue. A large part of our workgroup was comprised of interstate gas pipeline companies belonging to INGAA, as well as intrastate gas companies belonging to the American Gas Association. This diverse team provided us with the depth and breadth of knowledge we need to make meaningful progress in addressing our pipeline safety challenge.

I won’t go into a lot of detail about the technical issues here. That’s for the rest of the speakers who will follow me today.

Instead, I want to talk about the natural gas pipeline industry’s commitment—past, present and future—as we drive toward our ultimate goal of zero failures.

When we speak about our past commitment to safety, we include 50 years and hundreds of millions of dollars in gas industry sponsored safety research, including $20 million dedicated toward development of the pipeline simulation facility located in Columbus, Ohio.

Our present commitment includes continuing our support of voluntary research. We continue to spend millions of dollars in this area each year. In fact, the industry has been instrumental in the development and enhancement of the in-line inspection (ILI) tool, better known as a “smart pig.” We all certainly recognize the value of this tool for detecting defects in the line. But we must acknowledge that it is not the “silver bullet” for pipeline safety.

If only it were that easy.

We recognize the broad scope of pipeline risk factors and their complexities—and correspondingly ILI’s limitations in addressing these risk factors. That’s why we focus our energies into developing and integrating additional tools and processes to improve our effectiveness. It is from this perspective that we recognize that ILI tools are not the solution for third party damage due to the randomly occurring nature of this leading cause of pipeline incidents. Therefore, we must use other means to mitigate this leading threat to pipeline integrity and public safety. That’s why we have committed support to methods other than ILI such as the Common Ground Alliance and its Path Forward Initiative.

In setting the stage for the discussion on the new integrity rules, we evaluated the lessons learned through the DOT’s Risk Management Demonstration Program. This program provided valuable insight and alignment with our current commitment. We borrowed heavily from those concepts as we worked to address the pipeline safety challenge. We believe that risk management plans improve pipeline safety by promoting more definitive and aggressive risk analysis and allocating resources to the areas that will benefit pipeline safety the most.

The Integrity Rule proposal we have collectively worked to compile incorporates this risk management approach by thoroughly defining threats a pipeline faces in the real world, evaluating mitigation and inspection practices, and deploying them effectively—with increased communication and public involvement.

Our current commitment to safety also involves a commitment of resources—both financial and human. For instance, interstate natural gas pipelines spend about 600 MILLION DOLLARS annually on safety activities—about half the industry’s maintenance budget. These financial resources are for facilities testing… maintenance… training… public information… and research.

Our human resource investment is equally impressive. For example, for our work on this rule-making proposal, we endeavored to engage the top technical experts in the world to work along side industry experts to help us solve the challenges of pipeline safety. You will be hearing more today about how their work has contributed to our recommendations.

This industry has a good safety record—and that record is a product of our commitment to safety—a continuous push to improve our performance. We view human and research commitments not only as an investment in our business, but as an investment in public safety.

Our third and final commitment is to the future—and that is of continuous improvement across the entire system—from construction to maintenance. We don’t believe for one minute our job in the pipeline safety arena is finished. We have additional work to do to continue making our pipelines safe—and reach that ultimate goal of zero failures.

Make no mistake: We remain committed to maintaining and improving upon the safety and reliability of the nation’s natural gas delivery system.

Recent failures in the pipeline infrastructure help remind us of the important need to honor that commitment of continuous self-improvement. It is vital not only for the value of human life, but a necessity in the world in which we now live.

We live in an economy where energy demand is growing—particularly for natural gas, the cleaner burning, domestically available fuel of the 21st century. In order to maintain our standard of living and our economic status, we need pipelines that can safely transport natural gas to homes and to the industries that keep the economic wheels turning.

As we move forward, we remain committed in our support of the Office of Pipeline Safety in their endeavor to ensure pipeline safety. We will support:

• Appropriate funding of the Office of Pipeline Safety
• Research and funding of new and innovative technologies
• Constructive public involvement
• The Path Forward Initiative to implement the Best Practices from the Common Ground Alliance and its Path Forward Initiative
• Development of the Integrity Rule, which is specifically what we are here to address today

In a letter to OPS Administrator Kelley Coyner last fall, we acknowledged our support of these issues. Our position hasn’t changed. We stand behind the promises we made then—and look forward to pursuing these responsibilities with Kelley’s successor.

We are pleased that President Bush and his Cabinet are aware of the importance of a strong domestic energy policy—particularly one that relies on a fuel that is not subject to the vagaries of an international cartel. We look forward to working with the new Administration in developing policies that will help move the energy infrastructure forward.

As you know, the Senate passed a Pipeline Safety Bill last week.

We encourage a consideration of the adverse impact to gas deliverability resulting from the mandated interval included in the bill. We acknowledge the merits of an inspection interval, but we strongly urge that such intervals be a product of informed decision-making, based on a rigorous application of technical principles and sound science.

Our technical experts have been chartered to think innovatively to develop solutions that will help us meet our goal. No practical solution will be discarded before being thoroughly examined.

As you hear details about the plan to develop the Integrity Rule, I’d like you to keep in mind the commitments we have made to you, the public and the communities we serve. We are committed to the safety of the nation’s natural gas pipeline infrastructure—committed to providing the human and capital resources—and most important, committed to continuing our quest to improve our knowledge and expertise.

We are diligent in our responsibilities, thorough in our approach and open to constructive public interaction and dialogue with our industry. We truly believe that this proposal is practicable, measurable and we will aid in the continuing quest to make real strides toward realizing our collective goal of zero failures. We remain open to input from all stakeholders on how we can effectively improve our efforts.

All reports developed through this effort are publicly available and we encourage you to review and comment on them. We have also taken this opportunity to have the technical experts available to answer questions this afternoon. We encourage you to participate in this opportunity.