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DOT Secretary Orders End to Co-Funding of Pipe Safety Research

Responding to a Hearst Newspapers investigation that was highly critical of joint government-industry funding of pipeline safety research, Transportation Secretary Ray LaHood Monday directed the federal agency responsible for ensuring pipeline safety to cease its practice of using industry funds to help finance pipeline research.

LaHood ordered the Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) "to revise its research program to ensure that all future pipeline research is conducted in an independent manner that meets the highest research standards," a DOT spokeswoman said. The department believes the practice of co-financing research studies with industry groups subject to its regulatory authority is inappropriate.

An investigation by Hearst found that the cozy relationship between PHMSA and various pipeline associations has skewed the results of joint studies that are intended to shape national and state safety rules.

Pipeline operators and their trade organizations have shaped, managed and provided major funding for many of the safety studies that were launched by PHMSA, and were used to fashion safety and inspection procedures for 2.3 million miles of natural gas and hazardous liquids pipelines, said the Hearst report.

The Interstate Natural Gas Association of America (INGAA), which represents interstate natural gas pipelines, immediately went on the defense. The article "mistakenly assumes pipeline safety research funded in part by the natural gas industry is worthless. On the contrary, public-private collaborative research makes sense because the parties share a common goal -- zero pipeline incidents," wrote INGAA President Donald F. Santa in a letter-to-the-editor to Hearst.

"Instead of seeking sinister intent, let's look at collaborative research for what it is: putting the best minds together to find the best solutions to difficult problems," he said.

The Hearst chain estimates that two-thirds of the 174 safety studies of land-based pipelines that PHMSA conducted over the past decade were largely funded by pipeline operators or the organizations they control. This is because PHMSA requires that in most cases at least half of the funding for its pipeline safety research come from outside resources, such as pipeline associations.

PHMSA's existing requirement that outside sources pay at least half the cost of research was imposed in 2002 under the Bush administration. As a result of this practice, the pipeline industry and its allies enjoy virtual veto power over the direction of the agency's research program, a pipeline safety consultant said in the article.

But defenders of the outside funding requirement contend that without it many safety studies would not be conducted. In 2010 PHMSA scrapped a study when no suitable co-financier or manager was found. The study was to focus on the type of seam weld present in pre-1970 pipelines -- which make up the majority of the pipe infrastructure -- that is vulnerable to rupture.

In May the agency relaunched the study, which will be managed by an independent research group, Battelle Memorial Institute in Columbus, OH, and co-funded by four industry trade groups with a stake in the outcome, the article said.

PHMSA did not return phone calls seeking a comment on the article.

The pipeline industry's influence over safety research goes beyond just funding, according to the newspaper chain. Of the 174 studies that were conducted since 2001, 37 were directly managed by industry organizations, the article said. Industry groups also have had a hand in shaping the final production. It noted that INGAA edited a 2007 agency study on the handling of defects in older pipes.

John Ahearne, former commissioner of the Nuclear Regulatory Commission and a leading expert on research ethics, told Hearst that it appears PHMSA has been "providing some sort of cover" for the pipeline industry's agendas through its research program.

Concerns about pipeline safety have been heightened in the wake of three pipeline incidents -- two major -- in the past year. Defective seam welds are suspected as the cause of the Sept. 9, 2010 explosion of the Pacific Gas and Electric line, which killed eight people, wounded dozens and destroyed a number of homes in San Bruno, CA. The National Transportation Safety Board still is working to determine the cause of the blast (see Daily GPI, Oct. 15, 2010).

In February a pipeline explosion in Allentown, PA, killed five people, including a four-month-old child (see Daily GPI, Feb. 11). The blast, which was apparently triggered by a "break" in UGI Corp.'s underground natural gas pipeline, affected a total of 47 properties, including 10 businesses, and forced more than 750 people to evacuate over a three-block area.

And in July 2010 a failure occurred in a 30-inch diameter Enbridge oil pipeline, releasing approximately 19,500 bbl of crude oil into a tributary creek of the Kalamazoo River in Marshall, MI.

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