Oil & Gas:

Pipeline Safety Trust's Kessler discusses progress on regulation

After a series of devastating pipeline-related accidents, how have the oil and gas industries shifted their safety policies? During today's OnPoint, Rick Kessler, vice president of the Pipeline Safety Trust, discusses the culture of safety among oil and gas companies in the United States. He gives his take on pipeline safety proposals circulating in the Senate and explains why he believes the United States' pipeline infrastructure is not equipped to handle an influx of domestic oil and natural gas.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Rick Kessler, vice president of the Pipeline Safety Trust. Rick, thanks for coming on the show.

Rick Kessler: Thanks for having me, Monica.

Monica Trauzzi: Rick, much has changed in the pipeline safety discussion over the last year with a series of fatal accidents that really shined a national spotlight on the industry. What's the culture of safety in the industry right now?

Rick Kessler: Well, I think there's a good culture of industry in industry. I think it could always be better. I think, you know, it's human nature to kind of believe you know your system better. Just like you and I drive cars and the scientific documentation is a speed limit of 55 is the safest and fastest, but we all drive faster than-OK, I drive faster than 55, because you feel like you know your roads and you know the car well. But I think that sometimes happens in any industry, where you think you know your system best. But I think we've had a string of accidents that have really woken up industry and I hope that they want to see improvements in the law, in the regulatory process the way we do.

Monica Trauzzi: And obviously last year's PG&E San Bruno incident was disastrous for industry, but also for the surrounding community. Where does that case stand right now?

Rick Kessler: Well, we just had a finding from the-or a preliminary funding I guess from the National Transportation and Safety Board that said there was operating pressures above what was supposed to be allowed on that pipeline. They're still ongoing. I think we're going to find out more. And partly it looks like the pipe that was buried there was not the same type of pipe that was in the records and that's a real cause for concern. And one thing that the pipeline safety office has done since then has issued an advisory to say check your records against your pipes to make sure that your pipes match your records because we regulate your records, not to the pipes themselves and if the records are wrong, then you could have disastrous results.

Monica Trauzzi: But this also shows some inconsistency within the industry about how they're building the pipelines and then making a record of them.

Rick Kessler: That may be true. Well, especially with the accident that recently happened in Pennsylvania. I mean you have pipes that are, in that case, almost 100 years old and pipes in that system that are from the 19th century. So, yes, there's a huge chance that things could not match up with the records. We also have different agencies siting pipelines, that's FERC, and then also doing safety, which is the Department of Transportation, so that's an issue too.

Monica Trauzzi: You're suggesting that that maybe needs to be streamlined?

Rick Kessler: It certainly needs to be looked at and the same thing in the case of oil pipelines. We have states doing this siting and then PHMSA, the pipeline safety folks, federally doing the oversight. It's something to be looked at.

Monica Trauzzi: You've been in pipeline safety advocacy for over 16 years. What's your take on how the Obama administration is prioritizing pipeline safety? I mean is there a chance that we might see a standalone bill?

Rick Kessler: Well, I should start by full disclosure in saying I'm a Democrat. I worked as Democratic staff for many years and I have to say the issue has not gotten the attention I think it should from the administration, which is a disappointment to me. Rumor has it that the administration may be trying to roll a pipeline safety reauthorization into a greater surface transportation bill and that would really be doing a disservice not only to the industry, but to the people who died in San Bruno, in Allentown and people who lost millions of dollars in property and things like that.

Monica Trauzzi: Because it would reduce the visibility of it?

Rick Kessler: Not just reduce the visibility, but really reduce I think the attention paid to it and make it -- send a signal that it's subservient to other things.

Monica Trauzzi: Does the president's recent shift on regulation impact pipeline safety and pipeline regulation at all?

Rick Kessler: Well, it's too early to tell. The administration had a very de minimis bill last year before this regulatory streamlining was announced and regulatory streamlining eliminating red tape and things that don't make sense is a good idea, but not trying to roll back laws that are already weak and roll back agencies that really don't even have the resources to do the job to begin with.

Monica Trauzzi: There are a couple of proposals circulating in Congress right now on pipeline safety. Do the bills from Feinstein and Boxer and Lautenberg and Rockefeller go far enough? Are they good?

Rick Kessler: Well, the Lautenberg bill, which I assume since he's the subcommittee chair will be the lead bill, is a very good starting point. It's got a lot of good things in it. Obviously, we would like to see things from the Boxer/Feinstein bill incorporated. We'd like to see some other measures. We'd love to see them take a look at this risk assessment, cost-benefit mandate that's in the bill that really hamstrings the ability to make regulations. I mean, obviously, we should be considering these things, but they shouldn't have a veto over safety. But I think they're a good start. Lautenberg has been involved, got involved in pipelines about the same time I did because of the Edison New Jersey accident in 1994. And he's been a diehard advocate on this issue. And I think he intends to get a really good bill. But I think he really wants industry and Republican support because pipelines aren't democratic, they're not Republican, and the people who die in these accidents are Democratic, Republican, independent.

Monica Trauzzi: And industry has sort of said the same thing about these proposals, that they're a good starting point. Do you think that there's enough cooperation happening between industry and government right now when it comes to possible legislation and also regulation?

Rick Kessler: Well, I mean one problem with the pipeline safety office in the past there was a little too much cooperation. I think we've made strides. Jeff Wiese who runs the office is a very good man and I think he's working hard to keep a balance and I think things have gotten better. Even under President Bush things got better. So, I think they're working at it. I've reached out to the industry. I have said and I think they've all agreed that we need to sit down and try and that we can really come to some agreement on a lot of these things. Sure, there will be a few things that are outstanding and we're going to have to haggle over, but I think a lot of the basis we're all ready to agree on.

Monica Trauzzi: Do the resources exist within the pipeline safety office to actually make substantive changes?

Rick Kessler: That's a good question. I think the main thing is we need to get more resources into that office. Look, particularly natural gas, we've got an abundance of it. We've got new finds daily. It's an important fuel. In fact, it's a critical fuel for heating, for electricity generation, for chemical processes. And the best way to transport that is absolutely through pipelines. But I think because we're going to have that growth in pipelines, it's all the more important to pay attention and to get the resources in. And I think that's what the administration needs to focus on, is that these are growing, they're critical. You know, we say and sometimes it sounds like hyperbole that there's an incident every day on one of these pipelines. But the morning after we have the Allentown explosion, we have a whole incident in Ohio where you had a pipeline explode and fire. I don't think anyone so far we know has been hurt in this, but it just drives home the need to really focus on this. And people have lost their heat at a minimum in the dead of winter, so there's an energy security and health and safety issue with this.

Monica Trauzzi: So, it sounds like the nation's infrastructure at this point is not ready to handle an increased flow of natural gas.

Rick Kessler: It is not ready to handle it in the long run, for sure. I think, you know, we might be able to get away with something initially, but without further resources, extensive resources and the tighter law, no, we're not ready.

Monica Trauzzi: OK, we'll end it there. Thank you for coming on the show.

Rick Kessler: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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