PHMSA Pipeline and Hazardous Materials Safety : Remarks of Acting Administrator Tristan Brown Before American Petroleum Institute – Association of Oil Pipe Lines Liquid Pipeline Leadership Meeting

April 20, 2021

Good afternoon. Thanks for that kind introduction and thanks to API and AOPL for the opportunity to speak today about our shared goal of advancing pipeline safety and, more specifically, what we at PHMSA are doing to advance our mission to protect people and the environment by advancing the safe transportation of energy and other hazardous materials that are essential to our daily lives.

For those of you who I have yet to meet, I'll note that I am familiar with your organizations and your industry. I worked on pipeline safety issues when I served in the Senate. In the private sector, I practiced energy law as well as transportation law, which included issues related to PHMSA. As Deputy Associate Administrator for the U.S. Environmental Protection Agency, I worked on a number of issues related either directly or indirectly to this sector. And, most recently, as counsel to Senator Gary Peters I focused on some of PHMSA's sister modes of transportation and overlapping issues.

Through these experiences, I've grown a love of the BLUF.

So for those of you who like the BLUF: 1) Safety can and should be an area of collaboration-particularly with respect to SMS adoption; 2) it is our responsibility to work together to address greenhouse gas emissions, reduce liquid spills and improve environmental justice; 3) transparency and data can have an increasingly important role in regulation, and we must expand stakeholder engagement.

Safety is always our #1 priority, and at PHMSA, like you and many of your members, we are continuously working towards zero pipeline and hazardous material incidents.

One way we seek to do this is to promote the adoption of a robust safety management system (SMS), underpinned by a strong safety culture, by every pipeline operator. I laud your support for implementing SMS and making sure that the framework is built into all processes of your companies, from the time a pipeline is designed, and on through start up, operation, maintenance, and even abandonment. For operators who are not yet supportive of SMS, I would encourage them to review the writing on the wall. And I entreat you to share your ideas of how to not just ensure maximum adoption of SMS but maximum enthusiasm for a safety culture that underpins SMS.

And, as you know, a strong culture of safety is needed to make Pipeline SMS work in practice. A culture-based approach to safety is driven by individual values and accountability, where everyone knows that safety is paramount, even when it means increased marginal costs to operators. Because in the long run, the overriding goal of safety first-is good for employees, good for the public, good for the environment, and good for operators and investors.

This is evident from past accidents -like those in Marshall Michigan, Pelham Alabama, Merrimack Valley, Huntington North Carolina and others -where preventable mistakes metastasized through the system and ultimately led to human and environmental tragedies. A sound integrity management plan combined with a solid SMS can prevent harmful spills like we have seen at Refugio Beach, California and recently in Linden, New Jersey.

As many of you probably saw, the National Transportation Safety Board (NTSB) recently released its annual Most Wanted List, which highlights transportation safety improvements that the Board believes are needed to prevent accidents, reduce injuries, and save lives. NTSB noted that in 2015 -the same year that RP1173 was issued -the Federal Aviation Administration required commercial airliners to develop a comprehensive SMS to improve safety for the flying public. NTSB further noted that a vast majority of airliners continue operating without an SMS in place, and that it's high time more got on board, as the risk to the flying public is too great. I can say that personally, meeting with victims of the 737 MAX was seared into my memory-particularly when some industry representatives admitted that they were shocked that Boeing for example, hadn't implemented SMS prior to the 737 MAX disasters.

I can also tell you that whatever PHMSA believes about the value of voluntary implementation of SMS, we're probably still only one bad accident away from a Congressional mandate to regulate SMS.

The Merrimack Valley gas incident in 2018 almost resulted in an SMS mandate. As some of you may know, a provision of the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2020 requires that PHMSA submit a report to Congress on the progress that gas distribution system operators have made in implementing SMS.

Another area of increased focus for the agency, also addressed in the PIPES Act of 2020, is to work to eliminate hazardous leaks and minimize releases of natural gas from pipeline facilities. This is a self-executing provision of the law. PHMSA looks forward to working with those of you who operate natural gas pipeline systems to address this important mandate. Keep in mind the concept of an 'acceptable level of release into the environment' is a long-outdated concept - for gas or hazardous liquids. We must change how we think about small releases, because they too add up and can impact the environment.

In addition, the PIPES Act requires that by December of this year, PHMSA issue final regulations requiring certain classes of operators to conduct leak detection and repair programs in order to '(a) meet the need for gas pipeline safety and (b) protect the environment.'

In an effort to gather information and feedback from industry, other government agencies, the technology sector, and the public on this important topic, PHMSA will hold a virtual workshop on May 5th and 6th. Some of your colleagues on the gas side will be involved in panel discussions. I invite those of you with liquid facilities to pay attention - concepts that start with the gas pipeline industry may translate to the liquid industry. We look forward to the industry's participation, as we learn more about best practices and new technologies.

I won't go into additional detail right here and now, but there are many other provisions in the PIPES Act of 2020 aimed at enhancing safety and protecting the environment. The Act's timeframes are aggressive, but PHMSA enjoys a challenge, and we are working hard to address all requirements expeditiously. We are also considering these mandates in conjunction with how our rulemakings and agency decisions affect underrepresented communities. This whole-of-agency approach to environmental justice is something that many other agencies and departments are focused on and we welcome your input on how we can do this efficiently and effectively.

We know, for example, that our Nation's older -and higher risk infrastructure is primarily located in less recently developed and often disadvantaged communities and urban areas. So we will continue to promote the upgrading, replacement, and repair of aging infrastructure-especially older infrastructure such as cast iron pipelines.

While many of these topics have a primary focus on natural gas pipelines, there are lessons learned for addressing aging infrastructure that can be applied for liquid pipelines. Regarding the larger PHMSA oversight program:

• We are continuing to focus on how operators implement pipeline integrity management as we have seen that issues remain with operators not implementing the program in a way it was intended;

• We will promote industry efforts to improve methods to identify and address slow leaks beyond the current physical detection limits, using all available means, in addition to investing in research to address this area; and

• We will always seek input from ALL stakeholders -including industry, but also tribes, public advocacy groups, and labor union representatives. This is something I'll refer to later but in all of my initial meetings with these groups, there is a common desire for increased input and dialogue.

• In addition to our work to enable current infrastructure to continue to safely supply energy to the public, we will seek to position America to adopt the infrastructure of the future. This includes upgrading systems to transport hydrogen and other renewables, which will support the Administration's climate and job creation priorities.

As I wrap up, I know there is always interest in PHMSA's regulatory agenda and rulemaking efforts. Our team has been very busy trying to advance the final rules for rupture detection and valve installation, as well as for gas gathering pipelines. Expect to hear more on this front soon.

Lastly, I would add that I look forward to continuing our collaboration-and one area where I think we can collaborate most closely is stakeholder engagement. The ESG and investor communities have raised the level of stakeholder engagement in the private sector and that creates an opportunity for increased cooperation. Transparency is often a major focus of stakeholders-whether its non- governmental organizations or investors.

I entreat you and your members to set an example for improving transparency and data sharing in the industry and believe that this can help improve performance in a way that all stakeholders can appreciate. When operations are more transparent, there is often not a need for a one-size-fits-all solution but rather a performance solution that fits each unique situation. Keep in mind that transparency and trust goes both ways: when you find yourself in an uncertain situation, that is when we need you to pick up the phone and call us.

We have identified multiple instances where various companies have waited until the last allowable moment to notify us that a serious non-compliance has occurred or that at spill estimate has drastically increased in size. Surprises are not good for healthy regulator-industry communications and working together, we can often address challenges to meet safety, environmental and public confidence needs.

On a related note, I appreciate the great work that is happening now with developing a new standard for public engagement through API's RP 1185 working group. We appreciate the diverse group assembled that we expect to be successful.

To this end, I hope to work with you to expand and improve stakeholder engagement in the agency's work but also in the gathering and dissemination of information.

Finally, I'd be remiss if I didn't thank several of your members that participate on PHMSA's Liquid Pipeline Advisory Committee (LPAC), particularly Todd Denton, Graham Bacon, and Shawn Lyon. These advisory committees are an important part of the agency's work-ensuring constructive, in-depth look at the work we do.

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