1. 2015 Pipeline Safety Trust Conference, November 19, 2015 TURNING TO THE STATES: WOULD MORE STATE AUTHORITY AND OVERSIGHT IMPROVE SAFETY? A Look at the Issues from the Perspective of State and Federal Regulators Office of Inspector General U.S. Department of Transportation Toayoa Aldridge, Program Director Office of Surface Transportation

2. PHMSA’s State Pipeline Safety Program Lacks Effective Management and Oversight, May 7, 2014 OIG Report ENBRIDGE PIPELINE BREAK, MARSHALL, MI 2015 Pipeline Safety Trust Conference NATURAL GAS PIPELINE EXPLOSION, SAN BRUNO, CA

3. Why OIG Conducted the Audit The National Transportation Safety Board investigation of the 2010 San Bruno, CA, explosion found that PHMSA’s monitoring of State oversight programs had been weak and resulted in the lack of effective Federal oversight and State oversight exercised by the California Public Utility Commission. NTSB recommended that the Secretary of Transportation conduct an audit of PHMSA’s State pipeline safety certification program to assess and ensure that State pipeline safety programs and Federal pipeline safety grants are used effectively to conduct oversight of intrastate pipeline operations. 2015 Pipeline Safety Trust Conference

4. What OIG Reviewed At the request of the Secretary of Transportation, OIG assessed PHMSA’s 1.policies and procedures for managing its State Pipeline Safety Program, including guidelines to participating States, and 2.oversight of State pipeline safety programs. We randomly selected 5 of the 48 States certified under PHMSA’s Natural Gas Program for calendar years 2010 and 2011 to review and visit. 2015 Pipeline Safety Trust Conference

5.  PHMSA’s staffing formula was outdated.  No minimum qualification standards for State inspectors who lead standard pipeline operator inspections.  No detail for how States should include thresholds or weigh risk factors for scheduling inspections.  PHMSA did not review the adequacy of States’ pipeline inspection procedures.  No procedures to inform States of updates to pipeline safety inspection requirements.  No written procedures for triennial reviews. What OIG Found 2015 Pipeline Safety Trust Conference PHMSA’s Guidelines, Policies, and Procedures for State Inspection Programs Lacked Rigor

6. PHMSA’s Oversight of State Pipeline Safety Programs Was Insufficient PHMSA personnel lacked training on how to review State programs in accordance with the Agency’s specific program requirements and procedures. PHMSA did not provide sufficient guidance or conduct audits of States’ use of suspension funds. What OIG Found 2015 Pipeline Safety Trust Conference

7. 1. Revise the staffing formula to account for risk and non-standard inspections, and periodically analyze State-provided inspection unit data to validate staffing formula results. 2. Develop and include in PHMSA’s State Program Guidelines: a)Minimum training requirements for State inspectors’ qualification to lead standard inspections (classroom, on-the-job training, or both). b)A system that tracks revisions to Federal inspection forms and actively notifies States when these new forms are available. c)Standards for time allowed between inspections for all inspection types. What OIG Recommended 2015 Pipeline Safety Trust Conference

8. 3. Develop and implement procedures to review the adequacy of inspection procedures as part of the annual program evaluation. 4. Provide States with comprehensive guidance to ensure States effectively implement PHMSA’s risk analysis methods for scheduling inspections. 5. Document the procedures for conducting triennial grant reviews to ensure consistency of oversight. What OIG Recommended (cont.) 2015 Pipeline Safety Trust Conference

9. 6. Develop a training program that ensures PHMSA evaluators can successfully conduct the following program evaluation procedures: a)Determine and verify whether States have complied with all program evaluation requirements according to its procedures. b)Accurately notify States in writing of non-compliance with program evaluation requirements to ensure States take correct action to achieve compliance. 7. Develop and implement a plan for auditing States’ use of suspension funds, and work with State program managers to identify current suspension fund administration challenges requiring additional guidance. What OIG Recommended (cont.) 2015 Pipeline Safety Trust Conference

10.  An Inspection Activity Analysis and Peer Review process—a new approach to more accurately address States’ staffing needs.  Minimum training requirements for State inspectors’ qualifications to lead standard inspections.  Notification regarding inspection form updates as well as the location of the forms.  Maximum interval between inspections.  Guidance for State inspection procedures, including pre-inspection planning, inspection activities, and post-inspection activities.  Procedures for conducting triennial reviews.  Additional suspension fund guidance located in the guidelines. PHMSA Action Revised Guidelines 2015 Pipeline Safety Trust Conference

11. Training  Developed Web-based training on risk assessment methods.  Created review materials for conducting State program evaluations with evaluators/state liaisons at the State Programs’ Annual All-Hands Meeting. Guidance  Developed guidance that included examples of risk-based inspection approaches. 2015 Pipeline Safety Trust Conference PHMSA Action Training and Guidance

12. Questions, Comments CONTACT: Toayoa Aldridge Program Director toayoa.aldridge@oig.dot.gov 2015 Pipeline Safety Trust Conference OIG Report Available at: https://www.oig.dot.gov/library-item/31987