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PHMSA Civil Fines Set Record; Serious Incidents Hit New Low

The federal government's pipeline safety regulators reported that 2013 marked a record year for civil penalties assessed and a minimum number of serious pipeline incidents.

The U.S. Department of Transportation's Pipeline and Hazardous Material Safety Administration (PHMSA) seized on the annual statistics issued on Monday as verification that its emphasis on more enforcement is working. Last year the proposed fines totaled $9.7 million, PHMSA said.

"We are using our enforcement tools to hold pipeline operators accountable and also resolve enforcement actions quicker than ever," said PHMSA Administrator Cynthia Quarterman. Transportation Secretary Anthony Foxx said the proposed civil fines "send a powerful message that we are holding noncompliant pipeline operators accountable."

A spokesman for the Interstate Natural Gas Association of America (INGAA) told NGI the association’s members, which are the nation's major gas pipeline operators, believe that pipelines have become safer but it is not because of higher penalties or greater enforcement.

"The drop in serious pipeline incidents, we believe, is in large part due to operator commitment to a goal of zero pipeline incident," said the INGAA spokesman. "Safe, efficient pipeline operations are at the heart of the industry. If fines are up compared with the prior year (even though incidents are down), it is likely because the civil fine rates were doubled under the 2011 Pipeline Safety Act reauthorization."

Since 2009 under the Obama administration, PHMSA has proposed more than $33 million in civil penalties against pipeline operators, $10 million more than the amount proposed during the last five years the George W. Bush administration, according to PHMSA. The bigger fines have come from 544 enforcement orders during the past five years, about half of what the agency issued during the 2002-2008 period.

"PHMSA also reported 45% less serious pipeline incidents [those resulting in fatalities or major injuries] since 2009," the agency said. "The count has declined each year since 2009."

The latest statistical summary does not include other recent PHMSA-related news, including a federal grand jury's 12 criminal charges against Pacific Gas and Electric Co. for alleged violations of PHMSA regulations in regard to the 2010 fatal San Bruno, CA, pipeline rupture and explosion (see Daily GPI, April 2). They also don't involve PHMSA's role in the White House methane emissions reduction initiative (see Daily GPI, March 28).

PHMSA proposes penalties for each federal violation, and each enforcement order includes case-specific safety instructions to ensure from the agency's perspective that "all issues have been resolved.” Last year, the agency initiated 266 enforcement cases for what the agency described as integrity management program, risk assessment, prevention/mitigation program, and other possible regulatory problems.

Foxx said PHMSA continues to focus on making sure the nation's 2.6 million miles of pipelines are "capable of safely delivering America's vital energy needs."

The industry through INGAA and PHMSA have collaborated during the formation and implementation of new pipeline rules over the past two years, following Congressional  reauthorization of the 2011 Pipeline Safety Act (see Daily GPI, Feb. 13, 2012).

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