1. Looking Forward + Carl’s Question Pipeline Safety Trust Annual Conference New Orleans, LA November 19, 2015

2. Outline of Remarks We Need Your Help! Fiscal Year 2015 in Review – Leadership Changes – Pipeline 101 – Statistical Highlights – Selected Initiative Areas Budget and People – Congressional Injection of Personnel and Funds – 10 Year History and Allocation 2

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4. Leadership Changes New Administrator: Marie Therese Dominguez Emphasis Over the Next Year – Shoring up Safety, Innovation, and Trust – Redefining Vision, Mission, Goals & Objectives Seeking Maximum Alignment Inside & Outside – Improving Chances for Organizational Effectiveness – Assessing Data Needs and Enhancing Visualization 4

5. Pipeline Program 101 Established in 1970 –States regulated beforehand –Statute directed PHMSA to work with States –Currently have 52 State partners Code Based on Existing Consensus Standards –Supplemented by initiative, mandate, or recommendations –Overseen by roughly 200 (going to 250) Federal and 330 State Inspection and Enforcement Staff 5

6. Pipeline Program 101 Base Safety Programs – More Than Just Enforcement –Inspection, Failure Investigation, and Enforcement –Inspector Training and Qualification –Data Collection and Analysis –Engineering and Research –Regulatory and Standards Development –State Grant Programs Coordination and Oversight –Program Development: DP, PA, COMMS, PIPA, NPMS 6

7. What PHMSA Regulates Pipeline Facilities by System Type – CY 2014 data as-of 11/12/2015 System TypeMiles% Miles# Operators Hazardous Liquid 199,334 7,677 Tanks 7% 456 Gas Transmission 301,81011%1,020 Gas Gathering 17,6631%367 Gas Distribution (Mains & Services ) 2,168,59981%1,373 Total 2,687,406100% Some Operators have multiple System Types Liquefied Natural Gas 115 Plants 205 Tanks83

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11. Page: 11 Cost of Compliance with Corrective Action Orders and Safety Orders, Compliance Order (NOPV), Proposed Civil Penalties (PHMSA ONLY) Type20102011201220132014Total Cost ($) CORRECTIVE ACTION ORDER $2,629,809,467$148,872,149$33,739,261$7,500,340$14,332,677$2,834,253,895 SAFETY ORDER $9,055,200$2,702,595$2,571,355 $14,329,150 Compliance Order$45,422,449$975,698$1,447,357$44,037,693$86,620$91,969,816 Proposed Civil Penalties$4,537,800$3,670,400$8,766,900$9,775,400$2,671,200$29,421,700 Total (CAO, SO, CO, CP) $2,679,769,716$162,573,447$46,656,113$63,884,788$17,090,497$2,969,974,561 ** Data as of 8/5/2015 **

12. Page: 12 Cost of Compliance (2010 – 2014) TypeTotal Cost ($) CORRECTIVE ACTION ORDER $2,834,253,895 SAFETY ORDER$14,329,150 Compliance Order$91,969,816 Proposed Civil Penalties$29,421,700

13. Selected 2015/2016 Initiatives Regulatory –Completing All Outstanding Mandates and Recommendations –Modernize LNG and Oil Spill rules Finish Recruitment and Step Up Training of Inspectors Beef Up State Programs Oversight Advance Implementation of Pipeline SMS –YouTube “PHMSA + SMS” – especially 2/2014 Increase Transparency of Data and Performance Metrics Ramp Up Research - 13 -

14. …And Now to Carl’s Question Snapshot: PHMSA Budget and Personnel - 14 -

15. Pipeline Program 101 Day Jobs: – Regulations and Standards – Enforcement – Engineering and Research – Data and Analysis – Program Development – Emergency Preparedness – Inspector Training – State Programs Oversight 15 Office of Pipeline Safety Budget Summary 2007-2016 ($000) 200720082009201020112012201320142015 2016 Pres Budget Salaries & Benefits 19,32421,35022,93625,03626,83526,94526,89127,94037,218 48,870 Admin Expenses 10,11010,80212,63414,17413,97315,92515,89316,13821,491 24,592 Contract Programs 16,87016,43417,64018,61518,57818,71018,67319,86422,266 36,486 R & D 9,093 8,184 5,784* 6,885* 6,871* 6,920* 6,906* 12,188* 12,310* 12,433 Grants 19,51823,058 34,297 41,529 41,446 41,752 41,668 42,457 52,215 52,723 Total ($000) 74,91579,82893,291106,239107,703110,252110,031118,587145,500 175,104 FTE Total 173180.5194206215 221282 336 I & E Staff 94110118136138135 150243 * Does not include Mapping and Information Systems as in prior years.

16. 2015 Budget Federal staffing increase: –Positions, 109 includes: 85 – Field Operations 7 – attorneys for enforcement 5 – state grants 4 – training instructors 4 – HQ (2 in Regulations / 2 in Enforcement) 4 – oil spill / emergency preparedness and response State funding increase: $10 million - 16 -

17. We All Own a Piece 17