Ken Silverstein EnergyBiz Insider Editor-in-Chief

U.S. lawmakers are now trying to beef up those pipeline safety laws ratified in 2002. But, Congress adjourned before the House and Senate could complete their work on the matter. New bills under discussion, for example, would have increased the number of inspectors from 90 today to 135, all by 2010 at a cost of $6 million a year.

It's possible that lawmakers will convene in a special lame duck session after the mid-term elections. Regulators are expressing concern with the relative few number of inspectors, noting today's levels amount to one examiner for every 18,000 miles of pipeline in this country -- something in which Congress is likely to agree.

Inspections show that operators are making good progress when it comes to assessing their pipelines and making any subsequent repairs. But, according to government watchdogs, they need to better document their management practices and decisions. Indeed, the U.S. Department of Transportation's Inspector General's office says that operators have fixed the major threats that have been identified but some of the reports contain errors, which makes analyzing the actual threats more difficult.

The Government Accountability Office (GAO) generally concurs with those findings. It says that pipeline inspectors have examined 6,700 miles in highly populated areas. They have subsequently found 338 problems that required immediate repair -- about one problem for every 20 miles. "While the gas integrity management program is still being implemented, early indicators suggest that it enhances public safety by supplementing existing safety standards with risk-based management principles," says Katherine Siggerud, director of physical structure issues for the GAO.

On average, about 3 people have died and about 8 others have been injured annually over the last 10 years in natural gas transmission pipeline incidents, according to the GAO. The number of incidents has increased from 77 in 1996 to 122 in 2004 and 200 in 2005. Altogether, there are 2.4 million miles of interstate oil and gas pipelines in the United States as well as 1.8 million miles of distribution lines.

The 2002 pipeline safety law includes provisions that require gas transmission pipeline operators to systematically assess the risks of pipelines located in populated and sensitive areas such as parks. A pipeline is at risk if there is corrosion, welding defects or third party damage tied to excavation. The law requires that operators perform these evaluations on half of the pipeline mileage in highly populated areas by December 2007 and the remainder by December 2012. The lines with the greatest potential for risks are to be examined first and subsequently every 7 years.

Productive Changes

According to the Transportation Department's statistics, the single largest cause -- 82 percent -- of all distribution pipeline incidents reported to federal pipeline safety authorities between 2001 and 2005 resulted from excavation damage.

The fix is not easy. Right now, state pipeline safety programs are responsible for overseeing 222,000 miles of natural gas and liquid transmission and gathering lines. They are also charged with watching over 1 million miles of natural gas distribution lines and 764,000 miles of service lines. The Transportation Department reimburses the states half of their pipeline safety enforcement costs.

The American Gas Association explains that data collected over the last five years shows that states with strong enforcement programs have better safety records than those without such programs. It points to Virginia and Minnesota, which have reported reduced problems because they have implemented those laws.

For the states to be effective, they must have public outreach programs as well as good working relations with the local distribution companies that they oversee. Along those lines, each natural gas utility employs safety professionals, provides ongoing training and conducts its own inspections and any possible repairs. While local utilities are diligent when it comes to running safe pipelines, they say they have little control over the third parties that cause damage to their lines because of excavation.

"Pipeline operators recognize the need to change this risky behavior in order to protect their lines and have used educational efforts to help raise awareness about the need for safe practices, but with a limited effect," says Frank Bender, vice president of gas distribution for Baltimore Gas & Electric.

Overall, both federal and state regulators are making strides. Beyond more thorough inspections and public outreach programs, they have incorporated new technologies to enable them to better collect and analyze data so as to detect and respond to problems. Toward that end, federal and state agencies collaborate when it comes to training, sharing databases and facilitating communications.

At the same time, regulators are imposing and collecting larger penalties. The Transportation Department says that 2003 was the first year that they could levy fines of some substance. In 2005, regulators proposed $4 million in penalties -- more than double the amount it proposed in 2003. And from 2003 to 2005, they have collected 94 percent of that amount.

The progress has not gone unnoticed. But, more remains to be done, namely the addition of new inspectors who could do a more detailed and more frequent job of overseeing the nation's pipeline system. Congress, luckily, agrees. But any change may have to wait until the political season is over and a new year has begun.

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