Leader Of Liquids Pipeline Group An Experienced Team Player

March 2011, Vol. 238 No. 3

Lew Bullion, Senior Editor

What is the latest with America’s petroleum liquids pipelines organization as these critical systems continue to increase their share of the petroleum liquids transportation market? In particular, what is the group thinking about the latest notice of proposed rule making issued by the U.S. Department of Transportation’s Pipelines and Hazardous Materials Safety Administration (PHMSA).

The agency has begun a process that has – based on the broad issues touched on in its request for comments – the potential to result in, among other things, a dramatic and expensive increase in the number of liquid pipeline miles considered to be in regions termed High Consequence Areas (HCAs).

The prime source for hearing the industry’s views on the proposed rule making is Andrew J. Black, president and CEO of the Association of Oil Pipe Lines (AOPL). He took time out from various locations around the country recently to talk with P&GJ.

First, let us take a brief look at his background. He joined AOPL in September 2009, coming from the post of director, federal government relations for El Paso Corp. Prior to that, he was director of external affairs for the Federal Energy Regulatory Commission (FERC) and before that, deputy staff director of policy for the U.S. House of Representatives Committee on Energy and Commerce. He has a B.S. degree in economics from Texas Christian University (1991) and an MBA from the University of Maryland.

Concerning issues facing his membership, P&GJ asked Black about a proposed rule making that has come from PHMSA that will affect onshore hazardous liquid pipelines, and has the potential to spread the agency’s mandates for intensive integrity management to many more rights of way miles.

PHMSA regulates about 173,000 miles of hazardous liquid lines and about 76,000 miles are in areas that could be HCAs, defined as areas of pipeline right-of-way that traverse commercially navigable waterways and high population areas. The safety regulatory agency said it is considering expanding the definition of an HCA, saying this would ensure that more miles of line are subject to more stringent operating and inspection requirements.

PHMSA further asked in its notice if it should expand its oversight of lines in or crossing “commercially navigable waterways” to something broader like “waters of the United States,” as employed in the Clean Water Act. Another regulatory escalation being mulled would be to rephrase the reference to jurisdictional “waterways” from “commercially navigable” to “navigable waterways.” P&GJ and others have observed that the latter term, “navigable waterways,” has been used by some particularly entrepreneurial attorneys to embrace, in the words of opposing attorneys, “just about every damp or formerly damp spot” in the United States.

He said, “PHMSA has raised several questions for the industry and other stakeholders to comment on about liquid pipeline integrity management. AOPL and the American Petroleum Institute (API) are working on a joint response. One major question is whether PHMSA should stray from the current requirement that integrity management plans by liquid pipeline operators focus on pipe sections that could affect a high consequence area.

“We will comment to PHMSA that we believe the current focus on high consequence areas is right. We need to ensure that we don’t divert resources into areas with lower risk and with lower consequences. Government has got it right. They made wise decisions beforehand. And we encourage them to stick with it. We believe it promotes pipeline safety in the best manner.”

P&GJ: What comes next on the proposal?
This was what they call an advanced notice of proposed rule making (NPR). So PHSMA will consider the comments of anyone who responds and then later they may come forward with a proposed rule and stakeholders will be able to comment on that proposed rule. So this really is a preliminary step. They did not propose anything. They just asked several questions.

P&GJ: This is a lengthy rule-making procedure?
Yes, it could take well more than a year. They raised many more questions than the one HCA question I just commented about.

We think they are right to ask these questions but we also think when they look at the way pipelines have been regulated and the way the safety record has really improved over time they will conclude that there aren’t any gaps in regulation right now. They will conclude that the major causes of pipeline failure are already addressed by existing laws and regulations. So, we don’t expect significant changes.

P&GJ: What is AOPL’s role?
AOPL is an advocacy-based trade association representing hazardous liquid pipelines before government, the public, other stakeholders, and the press. Our primary issues are pipeline economic regulation, safety and security, so our most important government contacts are with Congress, FERC, DOT, and the Department of Homeland Security (DHS). AOPL has a staff of five and a close partnership with the pipeline-related staff of the API.

P&GJ: How has the association’s agenda changed in recent years?
While I expect AOPL to always maintain a focus on advocacy, the mission has evolved since the 1999 Bellingham (Washington) accident to also pursue continuous improvement in pipeline operations. Member company executives, operations personnel, and association staff work in the joint AOPL-API Environment and Safety Initiative, to learn from experience and to build on success. A safety culture may not be part of the original AOPL mission, but it is an important part of what we do and probably won’t ever go away.

P&GJ: You have been president for about 18 months. What did you expect when you came to AOPL?
I came to AOPL with experience in Congress and FERC, but none at DOT. The idea of learning the DOT issues and working with the Office of Pipeline Safety (OPS) interested me greatly. OPS is an aggressive regulator that is clearly focused on pipeline safety and pipeline operators. I spend more time on OPS issues than I expected; OPS keeps us busy.

AOPL doesn’t handle as many technical operational issues as API, the Interstate Natural Gas Association of America (INGAA), American Gas Association (AGA) or American Public Gas Association (APGA). Consequently, our staff is smaller.

AOPL is like the others in that we individually and collectively share things we have learned, we consider how the world sees pipelines and we educate policymakers, opinion leaders and the public. We try to coordinate with the other associations often.

P&GJ: What are the greatest issues facing AOPL?
The liquids pipeline industry safety record is strong and improving, but this message is not universally understood. Our record has improved over the last decade when measured by either incident numbers or volumes released. The public should be confident in pipeline transportation, and pipeline industry advocates need to help maintain that confidence. Pipeline accidents remain rare but get considerable attention now, perhaps because the Internet makes it easier for stories to spread. The Deepwater Horizon accident made “oil and gas industry mishaps” an interesting category of news.

I recognize more clearly now the wisdom of Congress and the OPS in choosing performance-based safety regulation of pipelines, compared to some command-and-control bureaucratically chosen regime. Pipeline operators are required to focus on the risks of highest consequence and employ the practices that best fit the situations, which in turn, serves the public best.

As a homeowner, parent, and a gasoline purchaser, I hope we maintain pipeline safety regulations based upon engineering and risk. Anything else diverts resources from where they are most needed and uses them inefficiently. The public should trust the rigorous audits OPS conducts of pipeline operators’ safety plans.

P&GJ: Tell us about your life outside the office.
I am married to Laurie Trautner-Black of San Antonio, TX. We have two children, Victoria and Evan, who are also my hobbies. They are growing up with a father who relentlessly points out pipeline markers as we travel. They became big fans of the Common Ground Alliance’s excellent 811 pirate-themed video for kids (http://www.youtube.com/watch?v=8mLoG9jUkBQ), despite being forced to watch it.

I can occasionally be found watching race cars going around in circles, and leading short family hikes and bike rides.

(Andrew Black can be reached at (202) 292-4500, e-mail: ablack@aopl.org.)