1. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Distribution Integrity Management A New Era of Pipeline Safety Jeff Wiese Associate Administrator for Pipeline Safety August 25, 2010

2. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Distribution Integrity Management A New Era of Pipeline Safety Jeff Wiese Associate Administrator for Pipeline Safety August 25, 2010

3. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Aerial Patrol of the Pipeline Safety Landscape 2010 Western Regional Gas Conference Tempe, AZ August 24, 2010

4. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Great Conference Line-Up Regulatory Updates More Importantly: Guidance on Implementation –Distribution Integrity Management Program –Control Room Management –Corrosion Control –Emergency Response –Damage Prevention –Public Awareness –New Technology Deployment

5. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Discussion Topics for Today A Bit on PHMSA & OPS –Who’s Not Reorganizing? Some Stage Setting Comments –A Perspective on Reauthorization Quick Survey of Regulatory / Non-Regulatory Initiatives –Emphasis on DIMP –Emphasis on Damage Prevention Review of Upcoming Actions from the OPS

6. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Special Thanks Mike Comstock Jim Wunderlin

7. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Setting the Stage Introductions - PHMSA and OPS Leadership –Cynthia Quarterman – Administrator –Vacant – Deputy Administrator –Biz Scott – Chief Counsel –Cindy Douglass – Chief Safety Officer –Jeff Wiese – Associate Administrator for Pipeline Safety –Alan Mayberry – Deputy – OPS Field Operations –Linda Daugherty – Deputy – OPS Policy/Programs –Chris Hoidal – Western Region OPS Director –4 Other Regional OPS Directors: S, C, E, and SW

8. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Setting the Stage OPS Directors (alphabetically) –Zach Barrett – State Programs –Rod Dyck – Enforcement –Steve Fischer – Program Development –John Gale – Regulatory Program –John Hess - Emergency Support & Security –Blaine Keener – National Field Coordinator Stan Kastanas – Drug and Alcohol Prevention –Richard Sanders – Training and Qualification –Coming Soon – Engineering

9. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration

10. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Our Pipeline Safety Objectives Improve the Overall Integrity and Reliability of the Energy Pipeline System and Reduce System Risk –P = R/S + CO + BCA Engage, Lead, and Help Strengthen the Capabilities of Others Who Share in Achieving our Goals Anticipate Future Needs for Transporting Energy Products Earn the Respect of Our Stakeholders and the Public – as a Model Safety Agency

11. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Setting the Stage PHMSA’s General Approach –Focus Heavily on Performance Not Solely on Compliance –Drive Performance Through Attention to Pipeline Process People –Advance “Risk-Focused and Data Driven” Risk Identification is KEY First Step Need Operator’s Help if All Are to Improve –Strive to be Engaged and Communicative –Create a Nucleus for Building Partnerships

12. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Setting the Stage Current Events and Worries –Heavily Driven by Accidents Daily by excavation damage –Construction boom is worrisome Periodically, but notably, by corrosion failures –E.g., Alaska, Louisiana, Michigan –Congressional Attention Keeps us Busy PIPES Act Mandates – nearly done! Hearings Audits and Recommendations

13. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Pipeline Safety Reauthorization Quadrennial Check-Up Basic Ingredient Checklist –Execution of Last Mandates E.g., DIMP, CRM, Reporting, Damage Prevention, Community Assistance, Increases in State Funding –Responsiveness to Outside Auditors/Reviewers NTSB, DOT’s IG, GAO –E.g., DIMP, EFV’s, CRM, Reporting –Stakeholder Temperature Check AGA, AOPL, APGA, API, INGAA, NAPSR, NARUC, PST

14. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Pipeline Safety Reauthorization (cont.) –The Unexpected, High Profile Event BP’s Deepwater Horizon Enbridge’s Lakehead System Failure in Michigan Alyeska’s Pump Stations #1 and #9 Failures –Concerns About Critical Infrastructure Vulnerabilities Current concerns are amped up on cybersecurity –Consensus Needs to Fill Gaps

15. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Pipeline Safety Reauthorization (cont.) Some of the Themes Being Played Out This Round –Relationship of Regulator to Industry –National Consensus Standards Self Regulation Lack of Transparency –Inadequate Emergency Preparedness and Response –Inadequate Will to Enforce – Feds and States –Striking Statutory and Regulatory Exemptions –Lack of Credible Data Upon Which to Base Risk

16. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Regulatory Initiatives Recent, Final Regulatory Actions –Distribution Integrity Management (DIMP) ← –Control Room Management (CRM) Recent Proposals (Completing the PIPES Mandates) –ANPRM – 3 rd Party Excavation Damage Enforcement –NPRM – Low Stress Hazardous Liquid Lines Forthcoming Regulatory Proposals –NPRM – Accelerating Selected Parts of CRM –ANPRM – Hazardous Liquid Lines Supplement –NPRM – Excess Flow Valves – Beyond SFH’s

17. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Regulatory Update Distribution Integrity Management ← –Status and Outreach Public Website Web-casts of Key Rule Elements – next slide Support for State Seminars Supplement by Attending Other Stakeholders’ Meetings as Necessary Workshops – March 2011 (projected) –Paving the Way NAPSR, GPTC Guidance and other supporting standards, Operator/Industry Efforts, data improvement efforts, etc.

18. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Distribution Integrity Management DIMP Final Rule Published 12-4-2009 (effective 2-12-10) Written Plan & Implementation 8-2-2011 (Insp. begin) DIMP webcast ~8-30-2010 (PHMSA/Pipeline webpage) GPTC guidance (available), SHRIMP (available) & MM/LPG operator guidance (in the DIMP docket) Inspection Forms, FAQs, State reporting form (ready) Alternative Inspection approval (Deviation from current inspection intervals) Pilot Inspections (Sep-VA; Nov- IA; Dec-AL; Jan-AZ & IL; Feb-WA) Inspector Training(Between May and July 2011)

19. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Session 1 - DIMP Introduction – Jeff Wiese Session 2 - DIMP Contents – Mike Israni Session 3 - Stakeholder Perspective; Operator – Bob Howard Session 4 - Regulatory Perspective & Oversight; NAPSR - Michael Thompson Session 5 – GPTC Guidance – Marti Marek Session 6 – SHRIMP – John Erickson Session 7– Panel Discussion Bruce Paskett, Michael Thompson, Mike Israni Session 9 – Closing Remarks – Jeff Wiese DIMP Webcast

20. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Status of DIMP FR Notices First FR Notice Information Collection Gas Distribution Annual Report Form – Published June 28, 2010 The revised Annual Report Form will be used to collect information for the 2010 calendar year and submitted to PHMSA by March 15, 2011. (Revised sections C, D & E). Part F (or separate form) – Mechanical Fitting Failure Data to be reported for 2011 calendar year. Due by March 15, 2012.

21. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Status of DIMP FR Notices Second FR (DIMP Addendum Final Rule) Mechanical Fitting Failure Reporting Requirements – To be published in a few weeks (Ex Parte) Will address: 1.Comments received on this proposal 2.Revise key dates for the collection and submission of mechanical fitting failure information 3.Align threat categories with categories on the Annual Report Form and Instructions 4.Clarify the Excess Flow Valve (EFV) metric to be reported by operators of gas systems.

22. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration DIMP Web Site

23. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Damage Prevention Managing the Risks of Excavation Damage –Common Ground Alliance & Regional Partners –One-Call Center Board Leadership –Technology Improvements to One-Call Process –State Damage Prevention Assistance Program Guide to Implementing Effective State DP Programs Online: State by State DP Program Evaluation Oct.: State by State Summary of Key Provisions State Damage Prevention Program Grant One-Call Improvement Grants –Position on Federal Enforcement –Pipelines and Informed Planning Alliance –EDP Technology Development / Deployment

24. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Keeping Me Up At Night Loss Of Lifecycle Quality Control –Pipe, Process, and People Malignant Effects of Economic Downturn –Hesitancy to Proactively Investigate and Act –Economically Motivated Will to Defer Expenses –Laying Off of Key Personnel Inadequate Workforce Planning The Unexpected –Can Defend If All Responsible Actions Taken

25. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Upcoming Events – Last Slide! DIMP Implementation Workshop(s) Public Awareness Program Oversight Reauthorization of the Pipeline Safety Program: Hearings, Audits, Posturing

26. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration The End For more information on PHMSAFor more information on PHMSA –http://www.phmsa.dot.gov http://www.phmsa.dot.gov For more information on Pipeline SafetyFor more information on Pipeline Safety –http://ops.dot.gov http://ops.dot.gov Thanks for your time & enjoy the weather!Thanks for your time & enjoy the weather!