(6) OPS does not collect comprehensive information on the causes of pipeline accidents. Despite its role as the primary overseer of the pipeline industry, OPS information on pipeline accidents is extremely limited. OPS uses only five categories of causes for accidents on natural gas distribution pipelines, four categories for those on natural gas transmission pipelines, and seven categories for those on hazardous liquid pipelines. As a result, a large proportion of accidents are attributed to "other causes" that range from failed gaskets or seals to faulty valves. From 1989 through 1998, the three most prevalent causes of pipeline accidents were damage from outside forces (45 percent), "other" (25 percent), and corrosion of the pipe (15 percent).

(7) Historically, OPS has had the lowest rate of any transportation agency for implementing NTSB recommendations. Some of the recommendations that OPS has not fully implemented have dealt with issues upon which NTSB has reported repeatedly.

(8) OPS is not complying with the law. OPS has failed to implement nearly half of the 49 requirements mandated by Congress since 1988 to improve the safety of pipelines and enhance OPS’ ability to oversee the pipeline industry. In fact, 22 of these requirements have not been implemented, and 12 of them date from 1988-1992. Ten of these 12 requirements were to be completed by deadlines stated in the statutes and are now between about 5 and 11 years past these deadlines.

(9) OPS is discontinuing the use of states to help conduct inspections of interstate pipelines.

(10) OPS is moving ahead with a risk-based approach to safety regulation despite a complete lack of quantified evidence to justify such a change, and based only on the preliminary qualitative results of an incomplete program. The 1996 pipeline safety legislation authorized OPS to undertake a risk management demonstration program in order to help demonstrate the application of risk management, evaluate its cost effectiveness, and its implications for safety. The statute required that by March 31, 2000, OPS evaluate the program and make recommendations as to whether risk management principles should be incorporated into the Federal pipeline safety program. Yet, OPS has not transmitted its report on the program, nor has it complied with either statutory requirements or its own guidance on developing performance measures for the risk management demonstration program and its component projects. Despite President Clinton’s directive that the individual projects demonstrate environmental and safety benefits superior to existing regulatory requirements, many of the participating companies are not collecting the types of data necessary to support an evaluation of the program’s safety impacts. In fact, only one participant has actually developed performance measures, but OPS officials state that it is limited in scope and produced little data. However, despite the lack of evidence to justify such action, OPS has already incorporated risk management into a proposed rule on pipelines in "high-consequence areas" which would apply to 66 companies comprising 87 percent of the Nation’s hazardous liquid pipeline mileage.

The safety of our Nation’s natural gas and hazardous liquid pipeline system is critical to public health and the environment, as well as our Nation’s economy. Nothing so vividly illustrates the former point than last year’s tragic, and perhaps avoidable, accident in Bellingham, Washington that resulted in the loss of three young lives. The recent rupture of the Wolverine Pipeline may have contributed to recent gasoline price spikes in my state of Michigan, highlighting the impact unsafe pipelines can have on the economy.

Unfortunately, GAO’s report, together with the Inspector General’s report commissioned by Senator Patty Murray, paints a picture of an agency that places disturbing amounts of faith in the industry it is supposed to regulate, and is either unable or unwilling to carry out any of its responsibilities under the law. This is very alarming to me and to anyone concerned with good government. While the Administration’s legislation does take steps that might address GAO’s concern over OPS efforts to minimize the role of state authorities in ensuring the safety of interstate pipelines, the legislation contains little else that would rectify the problems illustrated in the GAO report, and includes at least two provisions on risk management that should be omitted in light of this study.

While the pipeline safety reauthorization that the Administration has forwarded to Congress admirably proposes to increase the outdated monetary limits on civil penalties, such increases are meaningless if OPS never issues a fine. GAO’s report clearly shows that OPS has drastically cut its use of fines, even though major pipeline accidents continue to increase at a rate of 4 percent annually. Additional OPS data provided to me by GAO reveals that the few fines issued by OPS are for sums that are relatively insignificant compared to pipeline revenues, and that even these meager amounts are only occasionally collected by the Office. What steps will you take to ensure that OPS enforces the law and its own minimal regulations?

The GAO report shows that in regard to accident data and in other areas, OPS monitoring and oversight of the industry is abysmal. The legislation you submitted to Congress wisely proposes a drastic reduction in the reporting threshold for oil pipeline accidents. However, it is my understanding that such a change could be accomplished administratively, without a further change in the statute. And while the Administration’s legislation proposes the creation of a national depository of data on pipeline accidents, the Department has always had the authority and, arguably, the responsibility to maintain critical information on pipeline accidents and releases. In light of your existing authority to improve the collection and management of critical pipeline safety information, please explain what, if any, specific action you intend to take, regardless of enactment of new legislation, to improve the collection and maintenance of data on the frequency and causes of accidents?

OPS has consistently failed to fulfill its obligations under the law and to heed the direction of Congress, the NTSB and even the President of the United States. Unelected bureaucrats in a small office continue to brazenly thumb their noses at two branches of government. This should alarm every citizen of the United States. What action do you plan to take to ensure that OPS improves its acceptance of NTSB recommendations and, more importantly, adheres to the deadlines and mandates imposed upon it under law?

The GAO report clearly shows that incorporation of risk management into OPS regulations is unjustified at this time because OPS has yet to produce a shred of credible, quantifiable evidence to support its claim that allowing industry to police itself is beneficial to the protection of public health and the environment. However, the Administration’s reauthorization legislation allows the risk management demonstrations to continue regardless of the existence of disposition of recommendations currently required by law, based upon criteria that, as GAO’s study shows, your Department has no ability to assess. Furthermore, OPS has issued a proposed rule on inspection of pipelines in high consequence areas which substantially incorporates risk management, and the legislation the Administration has submitted to Congress seems designed to codify this proposed rule – all without any evidence to show that risk management is achieving minimal safety and environmental protection levels, let alone the superior levels directed by the President. Will OPS rescind its rule on inspection of pipelines in high consequence and issue a rule based upon a factual record rather than the "feelings" of its personnel? If not, will you delay the rule until you have completed any of the requirements of the 1996 Act regarding evaluation of risk management?

With regard to the tragic events in Bellingham, both this report and that of the Inspector General indicate that human error caused or significantly contributed to this disaster. Specifically, computer controllers and those responsible for analyzing and interpreting internal inspection data at the Olympic Pipeline Company may have been inadequately qualified or lacked sufficient training for their jobs. In fact, the Inspector General’s report even questions the qualifications of OPS personnel in regard to their ability to interpret internal inspection device data. Will you establish a certification program for pipeline operators similar to the licensing you require for other modes of transportation under your jurisdiction? What steps will you take to ensure that OPS staff are qualified for their jobs?

The focus of our Nation’s pipeline safety program and its regulator should be on preventing the loss of life, rather than on the preventing the loss of a profit margin to industry. Unfortunately, OPS seems to lack this focus and, consequently, the ability to regulate. While I hope you will respond expeditiously to my questions, more importantly, I urge you to undertake a thorough review and restructuring of OPS in light of these findings and those of the Inspector General.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER

Enclosure