Exclusive: Pipeline Safety Chief Says His Regulatory Process Is ‘Kind of Dying’

Jeffrey Wiese (center), PHMSA’s associate administrator for pipeline safety, testifies at a hearing on pipeline safety. Credit: Rep. Gus Bilirakis

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Jeffrey Wiese, the nation’s top oil and gas pipeline safety official, recently strode to a dais beneath crystal chandeliers at a New Orleans hotel to let his audience in on an open secret: the regulatory process he oversees is “kind of dying.”

Wiese told several hundred oil and gas pipeline compliance officers that his agency, the Pipeline and Hazardous Materials Administration (PHMSA), has “very few tools to work with” in enforcing safety rules even after Congress in 2011 allowed it to impose higher fines on companies that cause major accidents.

“Do I think I can hurt a major international corporation with a $2 million civil penalty? No,” he said.

Because generating a new pipeline rule can take as long as three years, Wiese said PHMSA is creating a YouTube channel to persuade the industry to voluntarily improve its safety operations. “We’ll be trying to socialize these concepts long before we get to regulations.”

Wiese’s pessimism about the viability of the pipeline regulatory system is at odds with the Obama administration’s insistence that the nation’s pipeline infrastructure is safe and its regulatory regime robust. In a speech last year, President Obama ordered regulatory agencies like PHMSA to help expedite the building of new pipelines “in a way that protects the health and safety of the American people.”

Wiese’s remarks also conflict with industry’s view. Brian Straessle, a spokesman for the American Petroleum Institute, which represents much of the oil and gas industry in Washington, D.C., said the industry “is highly regulated at the state and federal level, and there are strong standards in place to govern the pipeline infrastructure that helps fuel our economy.

“Pipeline operators have every incentive to protect the environment and their financial health by preventing incidents,” Straessle said.

But Wiese’s remarks ring true with people who’ve long been concerned about pipelines near their homes.

Susan Luebbe, a Nebraska rancher who has fought for five years to keep the proposed Keystone XL pipeline from crossing her cattle ranch, reacted with bemusement when Wiese’s comments were relayed to her by cell phone as she repaired a barbed-wire fence. She and other Keystone opponents have long been suspicious of assurances by TransCanada, the company building the line, that it will be safe because it will meet or exceed PHMSA regulations.

“It’s kind of sad in a way, when we push for laws to be enforced and they just throw up their hands, PHMSA and all them, and say they can’t deal with it,” Luebbe said.

Public confidence in pipeline safety has been tested by a spate of serious accidents. In 2010, a natural gas line explosion in San Bruno, Calif., set off a 95-minute inferno that killed eight people, destroyed 38 homes and damaged scores of others. That same year, a pipeline spilled more than 1 million gallons of Canadian tar sand crude into Michigan’s Kalamazoo River. The ongoing clean-up of that one spill has already cost more than $1 billion. This year, a pipeline rupture deposited at least 210,000 gallons of heavy Canadian crude in the streets of Mayflower, Ark.

Wiese, as head of PHMSA’s Office of Pipeline Safety, is the federal official most directly charged with preventing these types of accidents. But as his July 24 comments in New Orleans reflect, he is constrained by a pipeline safety budget that has remained flat at about $108 million for the past three years, despite the construction of thousands of miles of new pipeline. Most of that money comes from industry user fees and an oil spill liability trust fund. Taxpayers pay just $1 million a year toward the safety program.

The Obama administration has consistently asked for more money for pipeline safety, but those requests have fallen victim to Congress’ inability to pass anything more than stopgap budgets for the past three years. The administration asked for a 60 percent increase for this year, but the continuing budget standoff and effects of sequestration instead have tightened the budget.

Two stark numbers illustrate the challenge the administration faces in ensuring pipeline safety while pressing ahead with new pipeline projects: 135 federal inspectors oversee 2.6 million miles of pipeline, which means each inspector is responsible for almost enough pipe to circle the Earth. PHMSA says it has the help of about 300 state inspectors, but not all states have inspection programs.

According to an analysis of inspection records by the nonprofit Public Employees for Environmental Responsibility (PEER), only a fifth of the nation’s 2.6 million miles of pipeline have been inspected by PHMSA or its state partners since 2006. PEER obtained the records through the Freedom of Information Act.

InsideClimate News tried for several weeks to arrange an interview with Wiese about his remarks. At one point PHMSA spokesman Damon Hill wrote in an email, “I’m trying to help you get what you need for your story and in no way are we saying that Mr. Wiese or anyone else in PHMSA is unavailable to provide information or clarifications.”