AGA Perspectives on Current Pipeline Safety Regulations August 2014

The American Gas Association The American Gas Association, founded in 1918, represents more than 200 local energy companies that deliver clean natural gas to more than 68 million Americans nationwide. Members deliver 94% of the natural gas in the US 2

Key DOT Pipeline Safety Activities 9 Rulemakings In Progress 42 Legislative Mandates Recommendations from NTSB, OIG, GAO Advisory Bulletins Numerous other initiatives to improve pipeline safety SMS Data Analysis Improvements Inspection Program – Inspection Integration 3

Expected to include: IVP: Expansion of IM + Testing NTSB Recommendations Eliminate Grandfather Clause Pressure test lines to 1.25 MAOP + spike test Legislation Confirm material strength of previously untested lines Located in HCAs & operating above 30% SMYS Repair criteria for both HCA and non- HCA areas Gas gathering lines & Other items Assessment methods, corrosion control, problematic or “legacy” pipe, etc. Rule Status ANPRM published August 25, 2011 NPRM has moved past PHMSA Still within DOT Labeled a Significant rule Safety of Gas Transmission & Gathering Lines Rule 4

AGA Position on Proposed Integrity Verification Process 5 IVP Combines MAOP with TIMP expansion Complexity Validation is a one time activity IVP nullifies valid MAOPs based on historical PHMSA regulations and ASME B31.8 Lacking complete MTRs = coupon sampling program to establish material prosperities MAOP Foundation Records of historic pressure tests that currently meet code requirements should be acceptable Post Construction Pressure Test Introduces MCA Concept Class 2, 3 & 4 non-HCA + Class 1 with 1 home in PIR MCA High Stress Line is defined as ≥ 20% SMYS Legacy Pipe: No Common Definition Susceptible Seam Type: No Common Definition Engineering Critical Assessment (ECA): Not currently defined or understood New Definitions Should be situational and operational decision Spike Test

Other Pipeline Safety Rulemakings in Progress EFVs Beyond Single Family Homes Miscellaneous Rule Excavation Damage Prevention OQ, Cost Recovery and Other PL Safety Proposed Changes Plastic Pipe Rupture Detection and Valves Supportive of installation on: -branched service lines -Multi-family dwellings and small commercial up to 1,000 SCFH where load is not expected to increase In AGA’s Commitment to Enhancing Safety AGA generally supports the proposed requirements for qualifying plastic pipe joiners Concerns on proposed amendments for performance of post-construction inspections Should be a significant rulemaking. AGA encourages PHMSA to address states that have inadequate enforcement AGA generally supports: Operator Qualification for New Construction Inclusion of special permit renewal requirements in regulations. Cost recovery on design safety reviews AGA supports: Increase in the design factor from 0.32 to 0.40 for PE pipe Incorporation of ASTM D a if not included in the Standards Incorporated by Reference rulemaking AGA Members are Taking Action: Commitment to Enhancing Safety: Evaluate use of ASVs and RCVs on Transmission HCA block valves 6

AGA Supports a modernization of the NPMS Dramatic increase in quantity of data requested Concerns on security of pipeline infrastructure Industry believes this request should be formalized in Rule Making not Information Collection Proposal is significant burden on many operators PHMSA Estimated Burden = 420,516 hours 347 hours / respondent Very high estimate for PHMSA & still too low Examples of Data Requests National Pipeline Mapping System 7 New Data Requested Includes Narrow positional accuracy requirements 5 Feet Pipeline material and manufacturing details Location details on facilities Federal Register Notice = July 30, 2014 Comments Due = September 29, 2014

Stay Tuned… … New National Transportation Safety Board (NTSB) Incident Report... New NTSB Safety Study on Transmission Integrity Management... Pipeline Safety Reauthorization … Pipeline Safety Hearings 8 … Office of Inspector General Reports? … Government Accounting Office Reports?

Erin Carmichael Kurilla Manager, Engineering Services