1. Pipeline Safety and Reauthorization Pipeline Safety Trust conference November 4, 2010

2. Perspectives of liquid pipeline operators No accidents are acceptable Safety record has improved over the decade –Inside and outside HCAs –All leading causes (corrosion, equipment, materials/seams, operator error, excavation damage) “Annus Horriblus” –Major project (Keystone XL) opposed partly because of non-pipeline energy policy concerns –Deepwater Horizon, even though not a pipeline accident –And then Marshall, MI, and San Bruno, CA

3. Perspective on the MI and CA accidents Operators say “I don’t want that to happen to us” Operators are eager for NTSB findings –What happened and how do we prevent it? –Will the findings identify any regulatory gaps? Industry works to learn from accidents –PPTS, Performance Excellence Team, Data Mining Team, Pipeline Information eXchange (PIX), Safety Culture workshops PHMSA has many tools and is not afraid to use them

4. Incentives to avoid a release Injury to public, employees, contractors Clean-up costs Claims and litigation Penalties and fines Reputation hurt with regulators Lost business; reputation with shippers

5. Dramatic Improvement: Liquids Pipeline Industry Onshore Pipe Spill Record Source: Pipeline Performance Tracking System, a voluntary spill reporting system involving 85% of the U.S. liquids pipeline mileage. Percentage decline from 1999-2001 average to 2006-2008 average. Number of Spills per 1,000 MilesBarrels Released per 1,000 Miles 3-Year Averages Ending in Year Shown -63% -48%

6. Public concerns about ‘aging infrastructure’ Data shows no specific trends –Some accidents on older pipe not caused by time-dependent factors Very long lives if properly constructed, operated, maintained, and protected –Operators focus on specific construction methods, coatings, welding practices, etc. Thankful for recognition of this by others –But we need to find a better way to explain that

7. Focus in Reauthorization Excavation damage prevention (One-call exemptions) Improving the NRC telephonic notification regime Maintain focus on protecting against the greatest risks Any requirements should have a technical and engineering basis and enhance safety Avoid creating security risks Remember the leading causes of accidents are already covered by regulations

8. PPTS Onshore Pipe Incidents '99-'08 (3-year Average) TOTAL, ALL CAUSES CORROSION THIRD PARTY EQUIP./NON-PIPEOPERATOR/OPER'NMAT'L/SEAM/WELD ’01 ‘08

9. Excavation damage prevention Causes 7% of all incidents Leading cause of injuries and deaths Exemptions have seemed to surprise Congress Common message among stakeholders Great starts in PHMSA ANPRM and S. 3856 (Lautenberg-Rockefeller)

10. Telephonic reporting Rigid National Response Center rules create a conflict between the need to report and the need to estimate –Operators must estimate release volume –Operators cannot revise a report Options to make immediate reporting more practicable –Allow revisions of estimates –Estimate ranges initially, not specific amounts A possible common goal for work together

11. Ways we can work together PIPA promotion Damage prevention –States, PHMSA, Congress Notification process reforms Continued discussion of leading indicators and concerns Continued discussion of perspectives

12. Thank you Andy Black President and CEO Association of Oil Pipe Lines (AOPL) 202 292 4500 phone ablack@aopl.org www.aopl.org