1. State Regulatory Perspective and Expectations
American Gas Association Pipeline Safety Management Systems Workshop Jacksonville, FL April 12, 2017
State Regulatory Perspective and Expectations
Steve Allen
Director of Pipeline Safety, IURC
Past-Chairman, NAPSR

2. Overview
National Association of Pipeline Safety Representatives (NAPSR) - Background
Member Survey and Perspectives
“Audit” versus “Inspect”
Training Needs
Expectations
SMS in Action – Real life examples

3. National Association of Pipeline Safety Representatives (NAPSR)
Members from State Pipeline Safety Programs from the 48 contiguous states, District of Columbia and Puerto Rico.
A collective voice of its members and works in partnership with PHMSA and NARUC toward improvements in pipeline safety.
Through certification agreements with PHMSA, State Programs have been granted enforcement authority over all intrastate distribution and transmission pipelines in the country.

4. National Association of Pipeline Safety Representatives (NAPSR)
NAPSR States have enforcement authority over:
12,000 miles of jurisdictional gas gathering lines (69% of U.S. total)
106,000 miles of gas transmission pipelines (35% of U.S. total)
2,200,000 miles of gas distribution mains and service pipelines (>99% of U.S. total), and
122 liquefied natural gas (LNG) plants (82% of U.S. total) and 166 LNG tanks (73% of U.S. total)

5. Member Survey and Perspectives
NAPSR members were surveyed over the last two weeks regarding their opinions and or perspectives on PSMS.
29 out of the 50 programs responded (60% response).
Results confirmed a variety of opinions exist throughout the NAPSR membership on certain aspects of PSMS.

6. Has your program ever included within an order or enforcement action a mandate that an operator pursue adoption of API RP 1173 including performance of a gap analyses or safety culture assessments?

7. If your program has not included a mandate for API RP 1173 in a previous order or enforcement action are you considering doing so in the future?

8. Do you support voluntary adoption of API RP 1173 by industry/operators?

9. In your opinion do you think PHMSA will be required to incorporate API RP 1173 by reference into Part 192 in the future?

10. Do you have any operators under your jurisdiction that either have existing Pipeline Safety Management Systems or are in the process of adopting API RP 1173?

11. Do you think API RP 1173 is “scalable” to all operators, especially smaller operators?

12. Do you believe in the value of Pipeline Safety Management Systems?

13. Member Survey Takeaways
Extensive discussions during last year’s Regional and National meetings regarding PSMS found mixed opinions.
Survey confirmed mixed opinions still exist
Newer Program Managers seem more open and receptive to PSMS.
Many are unsure or are skeptical.
Skepticism could be due to already high existing workloads, opposition to change and/or preferences for “Black and White” .

14. Why the Skepticism or Hesitancy?
PSMS is an inherently subjective area (grey)
Inspectors do not have the requisite knowledge or expertise to adequately evaluate (audit) these subjective management systems
From an inspector’s perspective, negative findings from an audit of a PSMS will likely be more difficult to enforce than the traditional check box type inspection.
PSMS is an abstract concept for operators as well as inspectors.

15. Why the Skepticism or Hesitancy?
Engineers make up the vast majority of state inspectors and seem to prefer objective types of inspections (black/white or yes/no) over the subjectivity of management systems audits (expected with PSMS) where an “Opinion” is expressed based on the evidence gathered.
Check the box compliance inspections are mature and more straight forward
Easier to enforce non-compliance in check box inspections (burden of proof less difficult).
Check box (prescriptive) regulations are easier to understand than subjective (performance based) regulations.

16. Training
As mentioned many State Program Managers see PSMS as too abstract and conceptual and believe it would be too hard to enforce. More examples SMS in Action might help illustrate the value of PSMS to those still skeptical.
State Pipeline Safety Inspectors are not adequately trained to effectively “audit” performance-based or management-system based regulations. PHMSA TQ trying to address with development of an Auditing class. NAPSR involved on CTSB.

17. Training
Additional training on organizational behavior and how to influence change will be included in Auditing class.
PHMSA, State Pipeline Safety Programs AND Operators must help educate NARUC and State Commissions regarding the desirability and value of PSMS for rate recovery purposes.

18. Expectations
Tone at the Top in establishing a positive pipeline safety culture is critical.
“See something – say something”
Integrity management (Risk Assessment, Prevention and Mitigation) are all central to an effective PSMS
Continuous improvement and process evaluations must be consistently practiced by all. Operators must be intentional, systematic and diligent in this regard.
Operator/regulator relationships must be more collaborative and not secretive or confrontational (NIGYSOB must be put to rest!)

19. Expectations Commitment Culture Collaboration Communications
Continuous Improvement
Controls
Competence
Compliance

20. SMS in Action Contractor Failed to Follow Procedure – Near Miss
Operational Control enable failure to be identified and Safety Culture helped ensure communication of near miss without fear of reprisal.
Risk Assessment, Investigation and Evaluation completed with a focus on Risk Reduction and Improving Processes.
Competence, Awareness and Training - Alert sent out
Stakeholder Engagement – Contractor and Pipeline Safety Program contacted
Quality Management Program – Safety Assurance
Near miss - Documented

21. My Opinion
Intentional and systematic actions by operators is required for successful PSMS
Safety culture is of paramount importance
Diligence and continuous improvement efforts by operators is essential
Open, honest and ongoing communications at all levels within organization and with external stakeholders is critical
Regulators must recognize difficulties in transforming industry culture and provide appropriate levels of assistance and enforcement.

22. Questions?