1. Pipeline Safety Management Systems Workshop Jacksonville, FL
PHMSA Update
April 12, 2017
Linda Daugherty
Deputy Associate Administrator

2. Overview of Regulatory Expectations – PHMSA’s Perspective
Summary of Federal SMS Regulatory Expectations
Information on Pipeline Advisory Committee’s Pipeline Safety Management Systems Working Group
PHMSA SMS Experience
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3. Summary of Federal SMS Regulatory Expectations

4. PHMSA’s SMS Regulatory Expectations
Will SMS become a Federal regulatory minimum?
What are PHMSA’s expectations for pipeline operators?
Does PHMSA inspect and enforce against API RP 1173?
If part of my company has to comply with Canada’s NEB SMS regulations and another part has to comply with DOI’s Bureau of Safety and Environmental Enforcement SMS regulations, does PHMSA expect us to comply with 1173 too?
Isn’t compliance with OSHA’s PSM enough?
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5. 1. Will SMS become a Federal Regulatory Minimum?
No, PHMSA does not intend to incorporate API RP 1173 by reference into the federal regulations.
Why? SMS centers around safety culture, behavior change and the way we make decisions that have safety impacts. Efforts to force behavior change usually fail and may have unintended consequences.
However, we are one bad accident away from Congress mandating SMS.
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6. 2. What are PHMSA’s Expectations for Pipeline Operators?
Awareness and Self-Education
PHMSA is on this journey too.
Taking the First Step on the Road to Implementation
It’s too hard? Break it down, figure out what you are already doing. (gap analysis)
It’s overwhelming? Focus on one element at a time and build confidence.
It’s too much for my little company? SMS is scalable: Figure out how the concepts and principles apply to you.
Leaders Lead.
And we are all leaders.
Share lessons learned with others. Help make their journey a bit easier.
Set Reasonable Expectations
This is a long journey; it is a marathon and not a sprint.
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7. 3. Does PHMSA inspect and enforce against API RP 1173?
Generally, no. It is not a regulatory requirement.
Exceptions: As part of corrective actions following an incident or safety investigation, PHMSA may “order” a company to implement a SMS.
In 2010 (prior to API RP 1173 development), PHMSA ordered a liquid pipeline company to develop and implement a SMS.
Volunteer, Non-Punitive Pilot Audits
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8. 4. Too Many Different SMS Standards!
…If part of my company has to comply with Canada’s NEB SMS regulations and another part has to comply with DOI’s Bureau of Safety and Environmental Enforcement SMS regulations, does PHMSA expect us to comply with 1173 too?
All SMS standards have very similar requirements. PHMSA does not care which flavor of SMS you choose.
Look for commonalities and what fits best for your company.
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9. 5. Isn’t compliance with OSHA’s PSM enough?
SMS and PSM are not the same.
OSHA’s Process Safety Management requirements are excellent for the management of hazards associated with highly hazardous chemicals.
Technologies, procedures and management practices.
SMS and PSM share some of the same critical elements.
SMS focuses more on organizational leadership and commitment, stakeholder engagement, safety culture and continuous learning.
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10. Pipeline Advisory Committee SMS Working Group

11. PAC SMS Working Group
In 2016, PHMSA asked the PAC to establish a SMS Working Group.
Composed of LPAC and GPAC members.
External experts are be included at the discretion of the working group.
PHMSA provides logistical support.
The Working Group will report out to the PAC on progress and challenges.
This is NOT the same as the separately established Voluntary Information Sharing FACA group.
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12. The Working Group Tasks
Share lessons learned, best practices and challenges from industry’s experience in implementing SMS.
Initial Focus Area: Key Performance Indicators to gauge progress of SMS implementation throughout gas and liquid industries.
Topics for continuous improvement may include:
Analysis and sharing of safety data;
Hazard identification/risk mitigation improvements via SMS;
Safety culture experiences;
Safety performance measurement; and
Leadership/employee engagement.

13. PAC SMS Working Group
The group has held three conference calls and one face-to-face meeting so far.
The group has identified a short list of survey questions for use as initial KPIs of industry implementation.
Later surveys will likely be more detailed/focused
The Working Group has asked AGA/INGAA/API/AOPL for assistance with surveys.
Various industry segments have already conducted surveys – rolling up the results when different questions are asked is challenging.

14. PHMSA SMS Experience
You are not alone!

15. PHMSA SMS Experience “Why are we doing this?”
“I can see how this applies to industry, but not us.”
“Oh good grief, not another fad program. Don’t we have enough real work to do already?”
“Let’s face it, we aren’t in charge of our destiny…there are too many external drivers in our world for this to work.”
“Finally! I know we can do better!”
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16. What is SMS?
SMS is the formal business approach to managing safety risk, which includes:
a systemic approach to managing safety,
the necessary management commitment,
including organizational structures, accountabilities, policies and procedures.
SMS is a better way of doing our traditional business that includes continuous improvement.
SMS does not rescind our responsibility as regulator.
we feel that a positive, proactive relationship with product/service providers is preferable to an adversarial, legalistic stance, we must and will maintain our position of providing effective safety oversight.
What an SMS will give us in this area is a clear set of requirements for our stakeholders to demonstrate their safety management capability. However, the importance of meeting technical standards will still be emphasized and PHMSA will continue to validate attainment of them.
A Safety Management System is a set of management practices rather than a requirement for an additional organizational "layer" or "stovepipe." SMS focuses on functional expectations by operational departments

17. SMS is NOT…
Something that will go away with the change of Administration.
Something that is spoken, SMS is something that is practiced.
Something that can be successful without individual accountability and safety leadership at all levels (Executive as well as front line).
Something that you do after a problem is identified…it needs to happen long before that.

18. SMS Committee Membership
SMS Steering Committee
DAA Field Ops - Pipeline (co-chair)
DAA Field Ops - Hazmat (co-chair
Chief Data Officer
DAA Programs & Policy – Pipeline
DAA Programs & Policy – Hazmat
Deputy Chief Financial Officer
DAA for Administration
Deputy Chief Counsel
Deputy Govt., Intl., & Public Affairs
Director of Civil Rights
SMS Management Group
Planning & Preparedness Manager (Mgr)
Dir. Program Development – Hazmat
Dir. Field Support – Hazmat
Dir. Field Operations – Pipeline
Dir. Accident Investigation - Pipeline
Two Regional Directors – Each program
One Representatives from:
Chief Counsel
Administration
Financial
Govt., Intl., & Public Affairs

19. Reactive –> Proactive -> Predictive
Where will SMS take us?
Reactive –> Proactive -> Predictive
“…SMS allows PHMSA to assess safety risks and take action to mitigate those risks before a problem occurs.”
“ An SMS will ensure that PHMSA …have the structures, processes, skills, organizational culture and resources in place to continuously improve safety performance at all levels. PHMSA’s SMS framework consists of four pillars: safety policy, risk management, safety assurance and safety promotion.”

20. What Have We Done So Far?
We have made a commitment to implement SMS principles within PHMSA.
Senior Management Performance Plans
2017 Business Plan
Resource commitment – 1.5 million
We have developed a PHMSA SMS Framework
We have implemented a SMS Governance Structure
We have begun to educate ourselves about SMS principles and what it means to promote a positive safety culture.

21. National Safe Digging Month
April is National Safe Digging Month! This month, recognized by CGA stakeholders, reminds diggers the importance of calling 811 before all outdoor digging projects, large or small.
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22. Questions?
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