U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Liquid/Gas Pipeline Advisory Committee Meetings

Joint SessionDecember 12, 2012

Jeff Wiese

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Content Review• Stage Setting Remarks

– Energy Future & Pipeline Implications– Preordained Workload– Uncertainties Abound– Pipeline Metrics Review

• FY 2013 Priorities

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Energy Future• Key Takeaways from DOE’s Annual Energy Outlook for 2013

– Crude oil production, particularly from tight oil plays, rises sharply over the next decade

– Natural gas production is higher, with natural gas increasingly serving the industrial and electric power sectors, as well as an expanding export market

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

2011 Top Oil Producing States• Texas. The Eagle Ford shale formation in south Texas contributed to gains in

the state's oil production, which averaged 1,425 thousand barrels per day (bbl/d), the highest level since 1997.

• Alaska. Oil production fell for the ninth year in row, averaging 563 thousand bbl/d.

• California. Oil production averaged 535 thousand bbl/d, the lowest level in at least three decades.

• North Dakota. Preliminary data indicate increasing oil production from the Bakken formation pushed North Dakota ahead of California in December as the third biggest oil-producing state. North Dakota's oil production averaged 535 thousand bbl/d in December 2011 and 419 thousand bbl/d for the year.

• Oklahoma. Oil production averaged 204 thousand bbl/d during 2011, topping 200 thousand bbl/d for the first time since 1998.

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

2011 Top Gas Producing States• Texas. Natural gas production increased 4.5% from the year before to the highest

level since 1980, due in part to growing output from the Eagle Ford shale formation where drillers who are aggressively pursuing high-value liquid hydrocarbons are also producing growing amounts of natural gas.

• Louisiana. Natural gas production increased 38% as the Haynesville shale gas formation in the northwest part of the state was one of the biggest shale gas producing plays in the United States.

• Wyoming. Natural gas production fell 5.6% to the lowest level since 2007, as lower natural gas prices made coalbed methane gas that accounts for almost two-thirds of the state's natural gas production less profitable because high-priced gas liquids aren't normally found in coal seams.

• Oklahoma. Natural gas production increased 3.9% to the second highest annual output since 1994 due to higher output in the Woodford shale play.

• Colorado. Natural gas production grew about 1.4% as output increased for the 25th year in a row to break another record output high. The Niobrara shale play in the northeast corner of the state helped raise Colorado's natural gas production.

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Implications for Pipelines• Clearly – A Rapid Expansion of Gathering Lines

– Many no longer present traditional low risk profile• Significant Expansion of Both Gas and Liquid Transmission

– Many will try to use existing ROW– But expect a significant uptick in new siting applications

• Immediate Issues– Need to regulate riskier “rural” gathering lines– Communities need to consider/adopt PIPA best practices– States need to up their damage prevention oversight

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Preordained Workload• U.S. Congress

– 37 mandates• National Transportation Safety Board

– 28 open recommendations / 2 closed + 6 to DOT • Office of the DOT Inspector General

– 9 open recommendations + ongoing audit• U.S. Government Accountability Office

– 2 open recommendations + ongoing audit• Organizational and Workforce Management

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Uncertainty Abounds• Resources

– FY 2013 President’s Budget Request – Currently Under a Continuing Resolution that Bars “New Starts”

– Looming “Fiscal Cliff” – 8.2% Across the Board Cuts– Difficulty with Recruiting – With Emphasis on Diversity– Uncertainty and Sluggishness of the Regulatory Process

• Partisan/Philosophical Debate at All Levels

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Pipeline Safety Metrics• January 7-8, 2013 Pipeline Data Workshop

– http://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=81&nocache=9447

• Significant Accidents - Frequency

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Pipeline Safety Metrics• Significant Accidents – Total Fatalities

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Pipeline Safety Metrics

• Significant Pipeline Accidents – Injuries

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Pipeline Safety Metrics• Significant Pipeline Accidents – Property Damage

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Pipeline Safety Metrics• Significant Pipeline Accidents

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U.S. Department of TransportationPipeline and Hazardous Materials Safety Administration

Top Priorities for FY 2013Anticipate & Avert High Consequence Events by:•High Priority Rule Making (Refreshing IMP, Gathering, etc.)•Improvement of State Program Oversight•Improve Oil Spill Response PlanBuild & Broadcast Understanding of Safety Risks by:•Data Driven Risk Informed Inspection Process (II and IA)•Public and Emergency Responder Awareness•Recruiting and Retaining a Diverse and Qualified Staff•Congressional Act Mandates•Recommendations (NTSB, OIG, GAO)Catalog & Curtail Highest Risks by:•IMP 2.0 - Sharpening understanding and communication of specific integrity challenges•Implement the Data Strategic Plan•Damage Prevention (PIPA, 811,…)

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