THE HONORABLE PAUL BRUBAKER
ADMINISTRATOR
RESEARCH AND INNOVATIVE TECHNOLOGY ADMINISTRATION

U.S. SENATE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
SUBCOMMMITTEE ON Surface Transportation and Merchant Marine Infrastructure, Safety, and Security

Keeping America Moving: National Strategies for Efficient Freight Movement

WASHINGTON, DC

JUNE 10, 2008

Chairman Lautenberg, Ranking Member Smith, and Members of the Subcommittee, I am grateful for the opportunity to come before you today to testify on National Strategies for Efficient Freight Movement.

The United States (U.S.) freight transportation system is efficient, reliable, safe, and secure.  The freight system underpins the nation’s continued economic growth, and historically the U.S. has led the world in freight system design and management. Yet dramatically increasing freight flows have created congestion in some sectors of the transportation system, imposing costs on shippers, consumers, and the environment.  This statement will focus on current and future challenges facing the efficient movement of freight throughout the nation’s transportation system, including in ports, on railroads, and by commercial motor vehicles, and will also address new technological developments that could help improve the efficiency of freight transportation.

The U.S. transportation system must not only be able to handle both growth in the volume of freight and passenger movement, but as new markets and trade routes emerge,   it must enable increasingly complex supply chains to operate.  The Interstate Highway System was a critical innovation that helped fuel the unprecedented growth of 20th century, post-war America, enabling the movement of freight arriving at our ports from overseas and goods manufactured in our large cities to small towns across the country.  

The Interstate Highway System provided an infrastructure that not only offered the interconnectivity for economic expansion, but acted as a catalyst for it.  However, the highway system we are using today must handle very different dynamics.    

Changes in demographics, manufacturing, and warehousing, and a dramatic increase in imported manufactured goods and foods, have caused freight funneling at major gateway ports, leading to congestion on the highways and at the rail connections as containers are reloaded on trucks and rail cars.  Private sector changes in inventory management and production operations are placing demands on the transportation system that go beyond connectivity to speed, reliability, and throughput.  Logistics costs have been rising for some time.  As reported by the Council of Supply Chain Management Professionals, logistics costs as a percent of gross domestic product have increased 63 percent since the beginning of 2004.  In 2006, inventory carrying costs jumped 13.5 percent, while transportation costs were up 9.4 percent over 2005 levels, and the trends are expected to continue. To make maximum use of the entire transportation system, it is imperative to develop better and smarter approaches to moving cargo and people through the entire intermodal system, from origin to destination.

The United States is part of an unprecedented, global economy that transcends borders.  Telecommunications and computing technology have evolved to meet the demands of consumers, industry, and government in a world that is vastly more connected on a daily basis than when the Interstate Highway System was built.  Each day, an estimated 50 million tons of freight, worth $36 billion dollars, moves over our highways, roads, bridges, rail, ports, coastal and inland waterways, or Marine highways, ports and pipelines.  Current analysis clearly shows the predominant corridors through which freight is moving, and the connection between freight flows and metropolitan areas.

The Department estimates that the total tonnage of domestic and foreign freight traveling along the U.S. transportation system will almost double by 2035, with international shipments, most of which move by water, growing at a somewhat faster rate than domestic shipments.  The U.S. freight system faces significant capacity constraints at key freight gateways, and it is straining to move the current volume of freight quickly, reliably, and economically in order to sustain growth.  The difficulties posed by increased cargo volumes are compounded by environmental challenges, a limited supply of land on which to expand transportation facilities, congested road and rail linkages, and increasing fuel costs.  Effective policy solutions will require coordinated and collaborative action by both public and private parties.  To be credible and achievable, these solutions require input and buy-in from the broader freight sector, including both public and private sector interests.  The Department has begun the process of soliciting such input, and DOT looks forward to working with its partners to further develop the freight framework.

It is clear that the public and private sectors will need to closely coordinate to address modern freight challenges.  The private sector owns and operates the mobile assets, controlling when, where, and how goods are moved on public and private transportation facilities.  Trucks, rail cars, and ships are privately owned.  Maritime terminals are predominantly operated by private entities, with only a few publicly operated. 

This largely private-sector ownership of the components of the transportation network has been extremely effective in increasing transportation productivity and reducing transportation costs to shippers.  From 1987 to 1999, productivity in rail freight transportation – the freight mode (other than pipelines) that is most completely in private hands – increased by 48 percent, and rail freight rates fell by 18 percent.  Trucking productivity rose by 15 percent during the same period, and airline productivity rose by 16 percent – all more than the overall 10-percent increase in U.S. private business productivity.  Moreover, all the freight modes have responded effectively to shipper requirements, providing more frequent service of smaller shipments to accommodate their demands for Just-in-Time deliveries of freight that allow reductions in inventories and logistics costs.

The Department of Transportation’s Framework for a National Freight Policy identifies seven objectives for addressing the congestion that has been created in the transportation system from dramatically increasing freight flows.  With regard to capacity, these are to improve the operations of the existing freight transportation system, and add physical capacity to the freight transportation system in places where investment makes economic sense.  A third objective is to use pricing to better align costs and benefits between users and owners of the freight system and to encourage deployment of productivity-enhancing technologies.  It recommends actions be taken to reduce statutory, regulatory, and institutional barriers to improved freight transportation performance, and to proactively identify and address emerging transportation needs.  The sixth objective is to maximize the safety and security of the freight transportation system.  Lastly, the Framework recommends that actions should be taken to mitigate and better manage the environmental, health, energy, and community impacts of freight transportation.  Effective policy solutions will require coordinated and collaborative action by both public and private parties.

Solutions that unlock the constraints of these complex,   interwoven networks must extend beyond the jurisdiction, or authority, of any one entity.   Effective solutions to these challenges will necessitate coordinated and collaborative efforts of all transportation stakeholders.

Here are some examples that exemplify this level of cooperation:

The National Cooperative Freight Research Program (NCFRP) is a multi-modal freight research program, guided by an oversight committee of industry representatives, academics, and public officials.  Current NCFRP projects now underway, or being initiated, include mobility constraints, measuring operational performance, identifying investment needs, and assessing the environmental and economic impacts of freight transportation.  This program is indicative of the potential found in cooperation between stakeholders.

Likewise, the University Transportation Centers (UTC) program is an investment,   and cooperative endeavor, in our nation’s institutions of higher education; to cultivate U.S. expertise in transportation research and technology transfer, offering a wealth of knowledge and innovation to the area of freight movement.   Sixty UTC’s are currently active, including the Alan M. Voorhees Transportation Center at Rutgers University,   which is exploring the establishment of a Freight Transportation Center for Excellence.

The Freight Performance Measures program, another public-private effort, enables the Department to measure travel speeds and travel time reliability across two-thirds of the Interstate Highway System.  This data is available through an arrangement with the trucking industry.  Many long-distance trucking firms use GPS transponders on their cabs to track their assets; this allows businesses to maintain continual awareness of asset movement.  Through a collaborative agreement with the American Transportation Research Institute, we can tap into GPS data from over 350,000 trucks that are traversing our nation’s roadways on any given day.  We hope to expand this data to include over 400,000 trucks by 2009.  We use this data to calculate travel speed and time reliability throughout twenty-five corridors across America.  This helps the Department gain insight into system performance, so that we can better focus our efforts in increasing network capacity.

These system performance measures allow every entity involved in transportation,   public and private, to better manage its resources.  Performance measures are driven by data -- data that are absolutely vital for the Department to conduct accurate analysis,   simulation, and modeling.  The Department’s Research and Innovative Technology Administration has several programs that have been critical to our efforts to collect data and assess our nation’s freight movement performance and needs. 

The largest of these data programs, the Commodity Flow Survey (CFS), provides primary national and state-level data and forecasting on domestic freight shipments and exports by American establishments, with the latest data expected to be released at the end of the year.  The CFS is also the main data engine that supports the Federal Highway Administration’s Freight Analysis Framework (FAF). The FAF commingles the CFS data with a broad array of publicly available freight data to create the complete picture of freight flows you see here.

We are also supporting private sector investment in freight transportation through our Private Activity bond program, authorized by section 11143 of SAFETEA-LU.  This provision allows private investors to benefit from tax-exempt financing of transportation infrastructure.  We have received three applications for intermodal freight transfer facilities totaling $2.2 billion, and capable of handling more than 2 million containers per year.

As noted earlier, the complexity of supply chains and the multi-jurisdictional nature of freight movement complicate our institutional ability to address stresses on the transportation system.  As part of its Congestion Initiative, the Department announced the Corridors of the Future Program which will challenge agencies to work collaboratively to develop dynamic financial and operational mechanisms to improve the flow of goods and people.  

The PierPass program in Southern California is an excellent example of how congestion pricing can improve to the flow of goods at our nation’s ports.     The PierPass program charges a traffic mitigation fee of $50/TEU (this equals a $100 charge for an average 40-foot container) to encourage the pick-up of containers during off-peak hours (6:00 pm to 3:00 am).  The off-peak shift now handles about 65,000 truck trips a week, or 37 percent of the container moves at the two ports.  Since its inception in July, 2005, over 8 million truck trips have shifted to off-peak hours.

The independent evaluators of this program from the University of Southern California noted:  “Like the handful of experiments with congestion pricing, it demonstrates that price incentives are powerful tools for managing the transportation system.”  

Pipelines are a transportation system that can be used to relieve congestion on the railroads.  Seventy percent of oil and petroleum products and close to one hundred percent of natural gas is transported by privately owned pipelines.  Large volumes of anhydrous Ammonia, carbon dioxide, and other chemicals are moved by pipeline.  It is expected that in the near future, large amounts of Ethanol, which is currently carried by rail, may be moved by pipeline as well.

Congestion pricing is an excellent example of how businesses can change their patterns to use existing capacity more efficiently.  While we are on our way to addressing the challenge of maintaining a resilient, secure, and efficient transportation system for the movement of freight, more has to be done to use our existing resources, and to develop innovations that will enable America’s transportation system to support the growing demand for goods and services.

One such example is America’s Marine highway, which includes our coastal waters, our inland waterway system and the Great Lakes.  Although the United States already transports one billion tons of domestic cargo on our domestic waterways each year, this 25,000 mile network of navigable waters can help us expand our way out of landside congestion.  The Energy Independence and Security Act of 2007 directed the Secretary of Transportation to establish a Marine Highway Program to encourage this transformation and identify the disincentives that keep the congestion on the highways and railroads.  The Department of Transportation’s Maritime Administration is working with their many stakeholders to implement this promising program as quickly as possible.

The key for our national freight strategy is to have a broader, more in-depth understanding of supply chains and the inter-state and multi-national dynamics that impact the flow of goods across the transportation network.  This will take greater cooperation between stakeholders, better institutional arrangements for planning and implementing multi-state projects, effective performance measures, and operational improvements to the transportation system.

Thank you again for inviting me to testify.  I would be happy to answer any questions that the Subcommittee members might have.

Freight in the Safe, Accountable, Flexible, Efficient Transportation Equity Act:  Legacy for Users (SAFETEA-LU)
P.L. 109-059

Table 1:  Direct Expenditures for Freight Infrastructure in SAFETEA-LU

SOURCE:  USDOT, 2006 Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance, page 14-7, at www.fhwa.dot.gov/policy/2006cpr/chap14.htm.

Table 2:  Other Freight Provisions in SAFETEA-LU

SOURCE:  USDOT, 2006 Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance, page 14-7, at www.fhwa.dot.gov/policy/2006cpr/chap14.htm.

Table 3:  Cooperative Freight and Hazardous Materials Research Projects through 2008

SOURCE:  http://www.trb.org/CPR/NCFPR/NCFRPProjects.asp and http://www.trb.org/CPR/HMCPR/HMCRPProjects.asp.

Statement of

Joseph H. Boardman,
Administrator,
Federal Railroad Administration

before the

Subcommittee on Railroads, Pipelines, and Hazardous Materials
Committee on Transportation and Infrastructure
U.S. House of Representatives

March 5, 2008

Chairwoman Brown, Ranking Member Shuster, and other members of the Subcommittee, I am pleased to be here today, on behalf of Secretary of Transportation Mary Peters, to discuss private investment in the railroad industry.  As you know, safety is the primary mission of the Federal Railroad Administration (FRA), so I would like to start and finish my testimony with a strong reminder that steady, properly-scaled investment in rail infrastructure facilities, rolling stock, employee training, and emerging technology is absolutely essential to achieving a high level of safety, and for the industry to meet the demands of its customers and the challenges of the 21^st century. 

There are those who will say that investment is not FRA’s business, because safety can be maintained by making spot repairs, adjusting operating speeds, lowering bridge ratings, and catching defective conditions just before they cause an accident.  As applied to a single hazard at a single location, at a given point in time, such an approach may be workable.  However, common sense tells us, and history confirms, that at some point management of the railroad will lose the capacity to manage all of those developing problems if it does not make minimal systematic investments.  Shippers, railroad employees, and the public will pay the price.

There have been two major reasons for under-investment in the basic infrastructure—the first caused by Government over-regulation, and the second caused by short-sightedness on the part of rail executives, often under pressure from the financial community to show short-term profit.  Both are serious, and neither can be ignored.

When the Interstate Commerce Commission (ICC) spun off its safety function to the FRA in 1967, the railroads were grossly overextended, with many more miles of railroad than the existing traffic could support, and very little regulatory latitude to rationalize their systems.  The construction of the interstate highway system had fundamentally altered the competitive balance in surface transportation, but railroads were constrained by strict rate regulation that was little changed from the days when railroads lacked effective competition. 

Conditions were ripe for the bankruptcy of major railroads in the East and Midwest during the 1970s.  Once-proud railroads began suffering frequent derailments, often accompanied by spectacular releases of hazardous materials.  The Congress tried to address the emerging safety issues through the Federal Railroad Safety Act of 1970 and subsequent enactments.  

But safety regulation alone could not turn the tide.  It was necessary that railroads have both the will and the means to manage their assets and operations safely.  And, at the same time, the Congress recognized that rail service was essential to the Nation.

By 1973 when Congress had to step in to form the Consolidated Rail Corporation (Conrail), seven major railroads in the Northeast were bankrupt and could not be reorganized independently.  Conrail received large infusions of cash from the Federal Treasury, and with major legal reforms to relieve the burdens that had been borne by its predecessor “railroads in reorganization.”  In 1976, through the Railroad Revitalization and Regulatory Reform Act (4R Act), the Congress began to nudge the ICC toward a more flexible approach to economic regulation.  Finally, with two major Midwest railroads mired in bankruptcy, the Staggers Rail Act of 1980 (Staggers Act) accomplished a dramatic reduction in the economic regulation of the rail industry.

The effects on safety of public investments in the Northeast rail system and the substantial de-regulation of freight railroads in general yielded dramatic improvements in safety.  Railroads were able to rationalize their systems, set rates that permitted them to recover their costs and make a modest profit, modernize work practices to reduce employee personal injuries, and plow back earnings into their facilities and operations so that they could be more efficient.

Does that mean that everything was destined to go well in perpetuity thereafter, as some invisible hand guided the industry toward ever safer and more profitable operations?  Not entirely.  Over the past decade and a half, some railroads, at certain times, seem to have lost the vision to invest wisely for the long haul.  If an insufficient level of investment goes on for awhile, we begin to see evidence in the form of increased derailments, bridge problems that are discovered almost too late through rough ride reports, and consequent disruptions to operations that themselves may introduce other hazards.

FRA makes it a point to conference with the railroads on a regular basis, seeking to understand their plans for investment and urging attention to areas that seem to need work, as judged by early indicators, FRA safety inspection activities, and actual safety results.  FRA will never be satisfied until the entire industry makes additional progress across a broad front of safety issues, but when we talk with rail executives about these issues, they usually understand our concerns and, in general, they share our aspirations for improved safety through investment.

Why would rail executives be willing to elevate safety to a first-rank goal?  Certainly they are interested in safeguarding their employees and the public, but there is something else at work here.  Safety is great for business, particularly in an era of significant demand and limited capacity.  For example, identifying or preventing broken rails will lead to the prevention of derailments that can cause significant delays as maintenance crews take the track out service to fix the problem.  To combat this problem, railroads work hard through internal rail flaw testing and rail grinding to find flaws before the rail breaks.  But they also need to buy new rail, because at some point the cumulative tonnages and rail head wear are such that testing and grinding the rail is no longer sufficient.  New rail is a capital cost that will return value for many years to come, but it will detract dollar-for-dollar from the funds available to pay dividends in the current fiscal period.  As a result, a CEO who attends to this kind of long-term need may not rate the most favorable reviews in financial press.   

There are many kinds of safety-relevant investments that railroads can make.  If the subject matter is fixed infrastructure, the choices are somewhat constrained, but railroads and their suppliers get better at this every year, as new maintenance-of-way equipment and better materials are brought to bear.  Today’s locomotives and cars are significantly better than their predecessors, both with respect to efficient operations and safety, and the railroads’ voluntary investments in wayside detection systems are paying off handsomely by identifying developing problems before they reach criticality.  Investments in facility improvements can make it easier and safer for yard crews and mechanical forces to do their jobs, while reducing the cost of switching cars, and a number of major rail yards have been rebuilt over the past few years.

These investments are also important to meet the future growth in traffic.  The Department estimates that tonnage on the railroad system will increase by 88 percent through 2035.  To meet this growth, the industry has been ramping up investment.  Up to now it has been able to rely on significant productivity gains, where the railroad industry has moved more freight over a smaller network with fewer employees.  The railroads are now expanding capacity on their highest density routes by double- or triple-tracking and looking to new cost-effective technological improvements that can also increase capacity.

The new investments that will advance safety, service, environmental stewardship and asset utilization over the coming years will include a transition, starting with unit train service (e.g., coal, intermodal), to electronically controlled pneumatic (ECP) brakes and other technology that will help the locomotive engineer achieve fuel savings and limit in-train forces that can result in derailment.  Under FRA waiver and encouragement, two railroads are presently trying out stand-alone ECP brake trains in coal service and gathering data to validate the business case for additional investments.  In addition, Positive Train Control technologies will play a significant role, as well, but only when the practical issues have been wrung out through the kinds of demonstrations now underway.  These are transitions that will unfold over a decade or more, and it will take patience to see the results.

FRA has worked closely with the freight railroads to reduce both the frequency and the severity of railroad accidents.  FRA has issued and enforces a wide range of safety regulations and has sponsored collaborative research with the railroad industry to introduce innovative technologies to improve railroad safety.  However, it would be difficult for the industry to accomplish and achieve its positive safety record without the funds to improve and maintain the rail system.

Many investors have come to view railroads as potentially attractive investments.  Among the entities increasing investments in the railroad industry are a variety of financial institutions, individuals, and investment funds.  These investors are risking their money in the belief that railroads will provide a competitive return on their investment by improving shareholder value.  While the interest of these new investors in raising railroad returns has, in some cases, created tensions between them and railroad management, the pressure to improve returns through gains in efficiency is healthy.  An efficient railroad is usually a safe railroad.

In today’s environment, the economic regulatory framework must ensure that access to capital and the ability to make investments are not discouraged.  Currently, high levels of demand for rail services are exacerbating tensions between carriers and shippers, with some shippers calling for more oversight on rail rates and revenues.  Since 1980, the Surface Transportation Board (Board or STB) and its predecessor, the ICC, have administered railroad economic regulation in a way that has provided a favorable climate for rail infrastructure investment.  The Board recently issued new rules that are intended to speed up the procedures for adjudication of “rate reasonableness” cases, and for small shippers, the Board has issued guidelines that would give them improved access in pursuing a case.  Additionally, it has just completed a proceeding for determining railroad cost of capital.  The implications of this decision will affect railroad revenue adequacy, could make more rates subject to regulation, and thus alter investment incentives.  It is important that the regulatory framework contribute to solving capacity problems rather than compounding them by not impeding the industry’s ability to attract capital.  The industry today is earning higher revenues and higher returns, but at this time is still not earning the STB-defined cost of capital.

Let me say it again: safety is great for business.  Contemporary railroads will prosper as they provide very reliable service efficiently.  A railroad that is capable of doing that, year in and year out, will have made the necessary investments in infrastructure, rolling stock, employee training, and advanced technology; and, with proper attention to a good safety culture, the safety record will follow. 

The Congress and FRA help this process along with laws and regulations that set specific expectations that everyone has to live up to, and we serve as a constant reminder that safety must be the first priority.  But, often as not, industry will lead the way with investments in innovations that make the railroad work better for all concerned.

Statement of

Vice Admiral Thomas J. Barrett
Deputy Secretary of Transportation

Committee on Commerce, Science, and Transportation
United States Senate

Department of Transportation Activities on Climate Change Mitigation and Adaptation

June 24, 2008

Chairman Inouye, Vice Chairman Stevens, and distinguished Members, I am pleased to appear before the Committee today to discuss the various activities of the U.S. Department of Transportation as they relate both to transportation’s impact on climate change and to the impacts that climate change may have on the Nation’s transportation networks.  I appreciate your attention on this important subject and the expertise this Committee brings to transportation and the American and global economy. 

Addressing the challenge that global climate change presents will require a sustained effort over many years.  The Bush Administration is committed to cutting greenhouse gas emissions and to mitigating the impacts of the climate change that occur.  This Administration has devoted almost $45 billion to support climate change-related programs, with an additional $40 billion in loan guarantees made available to support investments in technologies that promise to reduce greenhouse gas emissions. 

The Department of Transportation’s principal mission is to ensure the safe, efficient, and reliable performance of our highway, transit, rail, maritime, pipeline, and aviation networks.  We also support the Administration’s efforts to reduce the Nation’s greenhouse gas emissions, not only by working to reduce greenhouse gas emissions from transportation activities, but also by preparing for the impacts of climate change in order to protect our valuable transportation infrastructure.  As we pursue each of these goals, we are always mindful of the indispensable role that transportation plays in sustaining and improving our economy, and supporting our trade, and the importance of transportation infrastructure to the millions of Americans who depend on it for their mobility and the competitiveness of their businesses.  These goals are all a part of the Secretary’s priorities for a safe, efficient, reliable and clean transportation network.

Reducing Transportation’s Impacts

I would like to first discuss the Department’s approach to the mitigation of greenhouse gas emissions from the transportation sector.  Our approach focuses on: improving vehicle efficiency; increasing the use of alternative fuels; advancing the efficiency of the transportation system (often by promoting market-based measures and technological innovations); and improving our understanding of the impacts of climate change on transportation infrastructure. 

Let me state at the outset that, although mandates and regulations have their place, new technologies and private sector innovations are really the keys to effectively addressing climate change without compromising the competitiveness of our transportation providers or the shippers and passengers that rely upon them.  As evidence, I refer you to the European aviation regulatory model that has encouraged a decrease in overall ridership but an increase in emissions.  Compare that to the more open market approach taken in the U.S. – our airlines have increased ridership while at the same time decreased emissions dramatically. Between 2000 and 2006, aviation CO₂ emissions in the U.S. declined by about 4 percent. During the same period in Europe, emissions increased by around 30 percent.

Vehicle and Engine Efficiency

The Administration has been a leader in improving the fuel economy of the Nation’s fleet of passenger vehicles and light trucks.  Our record in this area speaks for itself.  In April, Secretary Peters announced a proposal that would establish the first new fuel economy standards for passenger cars in more than two decades, and would update and expand fuel economy standards for light trucks.  Once finalized, this rule would raise 2011 passenger car fuel economy standards by 13 percent and boost light truck fuel economy standards by a further 4 percent above the attribute-weighted standard set two years ago.  Overall, the fuel economy standards of the U.S. fleet would be raised by more than 25 percent through model year 2015.

The proposal reflects the fuel economy reforms passed by Congress in December 2007 at the President’s urging.  Indeed, the new law, the Energy Independence and Security Act (EISA) of 2007, incorporates many of the provisions of the President’s “Twenty in Ten” initiative, aimed at reducing light duty vehicle petroleum consumption by 20 percent in ten years through both improved fuel economy standards and increased use of alternative fuels.

The standards in the proposed rule would save a projected 55 billion gallons of fuel and reduce U.S. carbon dioxide emissions by 521 million metric tons over the lifetime of the regulated vehicles.  It also includes provisions for trading fuel economy credits between manufacturers and vehicle classes, as well as provisions for carrying forward excess credits earned in earlier years.  This proposal goes above and beyond the requirements set out by Congress.

This proposal builds on earlier initiatives to raise light truck fuel economy under prior law.  The Department issued new fuel economy rules for light trucks in 2003 (covering model years 2005-2007), and in 2006 (covering model years 2008-2011).  The 2006 rulemaking implemented an innovative attribute-based standard for light trucks that Congress extended to passenger cars in EISA.  The two earlier rules are estimated to save 13 billion gallons of fuel over the lifetimes of the regulated vehicles.

Through the Federal Highway Administration’s Congestion Mitigation and Air Quality Improvement Program (CMAQ), the Department is working with State and local governments on a range of programs to improve urban air quality within the transportation sector.  For example, DOT has cooperated with the Environmental Protection Agency's SmartWay Program initiative to retrofit trucks and truck stops with on-board and off-board auxiliary power to run vehicle lights and air conditioning and reduce truck idling.  This program has reduced fuel consumption, criteria pollutant emissions, and greenhouse gas emissions, and has expanded to include idling emissions from marine, agricultural, rail, and off-road heavy-duty engines.  The Federal Transit Administration funds the development and deployment of alternative fuel buses, including hydrogen fuel cell buses, and diesel-electric hybrid buses, as well as alternative fuels infrastructure for transit systems across the United States. 

The Department also has focused on efficiency beyond the highway.  In aviation, we have begun to implement the Next Generation Air Transportation System to modernize the U.S. air traffic system, of which I will say more in a moment.  The Federal Aviation Administration is in the process of setting up a new program, CLEEN – Continuous, Low Energy, Emissions, and Noise – a research consortium focused on cost-shared efforts accelerating the maturation of lower energy, emissions, and noise technologies for aircraft and engines and advancing cleaner alternative fuels.  The Maritime Administration (MARAD) is focused on new technologies to reduce the harmful emissions from marine diesel engines through research on alternative fuels (such as biodiesel) and reduced ship stack emissions.

Alternative Fuels

The Administration also is supporting research on and use of alternative fuels.  The EISA requires fuel producers to supply at least 36 billion gallons of renewable fuel by the year 2022 -- a 500 percent increase in the use of renewable fuels.  President Bush is calling on every vehicle manufacturer that serves the U.S. market to produce flex-fuel vehicles across its fleet, providing tax incentives for drivers to buy fuel-efficient hybrid vehicles that run on both gasoline and electricity and investing in plug-in hybrids that can cover up to 40 miles on electricity alone.

Though corn-based ethanol is currently the primary way to meet that standard, that will not always be the case, and so the Administration also is investing in next generation biofuels such as cellulosic ethanol.  Since President Bush took office, the projected cost of cellulosic ethanol has dropped by more than 60 percent.

Last year, the U.S. produced about 450 million gallons of biodiesel – up 80 percent from 2006.  Today, there are more than 968 biodiesel fueling stations, and hundreds of fleet operators use biodiesel to fuel their trucks.  Over the last five years, the Administration has invested about $1.2 billion in hydrogen research and development to help bring hydrogen fuel cell vehicles to market.  These vehicles use no gasoline at all, and emit only clean water.

Even as the Administration focuses on alternative fuels and alt-fuels vehicles, we must ensure that the environmental improvements they bring do not erode the safety levels that Americans expect.  Through the National Highway Traffic Safety Administration, the Research and Innovative Technology Administration, and the Pipeline and Hazardous Materials Safety Administration, we have undertaken research required for the development of safety standards for future hydrogen vehicles and infrastructure.

We are exploring the potential of alternative fuels for aviation -- fuels that could have benefits for energy security as well as emissions performance.  The FAA is one of the key partners in the Commercial Aviation Alternative Fuels Initiative (CAAFI).  CAAFI’s participants, which include airlines, manufacturers, airports, fuel producers, federal agencies and international players, are implementing a roadmap for the use of alternative fuels for commercial aviation.  Commercial airlines and manufacturers are beginning to make some headway in experimental use of biofuels in jet aircraft.  Using an unmodified Boeing 747, pilots for Richard Branson's Virgin Atlantic have successfully flown from London's Heathrow airport to Amsterdam using a biofuel made of a mix of coconut and babassu oil.

System Efficiency and the Marketplace

As important as research may be, the Department is of course concerned first and foremost about making our networks as safe and reliable as possible.  Secretary Peters has made improving the performance of those networks one of the Department’s primary objectives, because severe congestion is choking our major urban areas (and, for that matter, more and more medium-sized cities), impeding the efficient flow of goods, and threatening our mobility – to the tune of about $200 billion every year just on our highways.  As we focus on increasing efficiency, we simultaneously can and should reduce the amount of needless greenhouse gas (GHG) and other emissions that those networks generate through idling, inefficient routing, and other undesirable effects.

The problem is significant.  The Texas Transportation Institute estimates that highway congestion in the U.S. wastes approximately 2.9 billion gallons of fuel annually, translating into 2.6 million tons of unnecessary CO₂ emissions every year.  We think this figure actually underestimates the costs associated with the near-constant congestion that afflicts so many of our cities and our most important highway corridors.  I think all of us have experienced this first hand while stuck in traffic watching the gas tank empty as congestion brings highway speeds to a crawl.

The Department has responded with the Congestion Initiative, a multifaceted program aimed at easing highway, aviation, freight/intermodal, and border congestion.  As part of the Initiative, we have focused on encouraging States and localities – which, after all, own nearly all our highways – to embrace congestion pricing and direct user fees for both their operational and environmental benefits. 

Researchers have for decades predicted the beneficial environmental impacts of pricing, and we have recently seen real evidence of reduced emissions in cities around the world following adoption of congestion pricing.  One study found that congestion pricing reduced emissions up to 10 percent in the aggregate and as much as 30 percent in high pollution areas.[1]  These benefits are obtained because efficient pricing mechanisms reduce the number of trips taken, alter trip routes, reduce trip duration, decrease variation in travel speeds, and facilitate more pollution-efficient travel speeds.  A study of Atlanta during the 1996 Summer Olympics revealed significant benefits[2].  Several travel demand management measures were introduced to reduce traffic congestion during the 17 days of the games.  The study found that daily peak ozone levels dropped 28 percent and hospitalizations for asthma fell by almost 20 percent during that time.

Moreover, with the proliferation of open road pricing technology, highway facilities can achieve free-flow conditions without intrusive toll booths, thus obtaining the efficiency and environmental benefits of pricing without the harmful impacts of queued vehicles waiting in line to pay.

Real evidence of the emissions benefits of pricing is now available from Singapore, London, Stockholm, and Germany.  Through congestion pricing, London reduced emissions of particulate matter and nitrogen oxides by 12 percent and fossil fuel consumption and CO₂ emissions by 20 percent.  Singapore uses pricing to manage demand on its downtown road network during peak travel periods and has prevented the emission of an estimated 175,000 pounds of CO₂.  Stockholm’s congestion pricing system, which targets congestion in the city center, has led to a 10-14 percent drop in CO₂ emissions.  In January 2005, Germany implemented a new system to price trucks on the autobahns.  These charges, which are collected electronically using Global Positioning System Satellites (GPS), are based not only on distance traveled and number of axles, but also on a vehicle's emissions class.  This system has increased freight efficiency and cut freight greenhouse gas emissions by 7 percent.  A 50 percent premium charge for older, more polluting trucks has doubled the replacement rate to new trucks.   

Our focus on variable pricing and other direct user fees also responds to the drawbacks of a highway funding model that relies on gas tax revenues even as we strive towards increased energy independence, greater fuel economy in automobiles, development of alternative fuels, and reduced emissions.  The EISA, and the increasing popularity of hybrid vehicles, presage reductions in the amount of gas tax revenue available for investment in transportation.  Concerns about the viability of gas tax revenues are only exacerbated by the recent increases in fuel prices which have led to reduced vehicle miles travelled on U.S. roads (Americans drove 1.4 billion fewer miles in April 2008 than they did in April 2007, the sixth consecutive monthly drop).  As the United States works to reduce emissions and promote alternative fuels, a transportation funding system that relies primarily on the gas tax undoubtedly contradicts the Nation’s overall policy objectives.  Pricing and other market solutions can help address concerns about the viability of the gas tax by substituting private capital and direct user fees for gas tax revenue.

Because of these benefits, tolling and direct user charges have won support from a wide range of ideological viewpoints in the United States – from Environmental Defense and the Nature Conservancy to the Competitive Enterprise Institute and the Reason Foundation.  Recognizing the environmental benefits of this approach, San Francisco Mayor Gavin Newsom stated in his recent inaugural address that a “sensible congestion-pricing plan is the single greatest step we can take to protect [San Francisco’s] environment and improve our quality of life.”

All of this is to say that we view congestion pricing as a win-win concept because it generates revenues that can be used to expand and maintain highways or bridges or transit, and it provides users with price signals that encourage rational decisions about how and when to drive – yielding efficiencies that are at once an environmental and economic boon.

Anyone who has flown lately can attest to the fact that the current aviation system needs fundamental changes.  I briefly made reference to the Next Generation Air Transportation System, or NextGen.  As with congestion pricing, this is an area in which efficiency improvements and environmental advances go hand-in-hand.  NextGen aims to improve our air traffic management procedures and route structures so that aircraft can choose more efficient routes, make quicker in-flight decisions to avoid weather and other traffic, and even operate more efficiently on the ground. 

The FAA and our commercial airlines have saved 300 hundred million gallons of jet fuel and displaced over 6 million tons of carbon dioxide emissions by implementing Reduced Vertical Separation Minimums (RVSM), permitting aircraft flying in U.S. air space to operate at more efficient altitudes.  FAA has achieved further improvements in system performance through the related reforms of Area Navigation (RNAV) and Required Navigation Performance (RNP) – both of which allow for the more efficient routing for commercial air traffic and more reliable service during marginal weather conditions, particularly at congested airports such as Atlanta Hartsfield.  If we want to reduce jet fuel consumption and aircraft emissions without discouraging air travel, we must transform our aviation system.  As we move to push Automatic Dependent Surveillance Broadcast (ADS-B) into the cockpit, we anticipate still greater efficiency gains.  And, because every gallon of jet fuel not burned equates to roughly 20 pounds of displaced CO₂, even small improvements yield huge GHG savings when deployed systemwide.

These advances, combined with the imperative for commercial airlines to save fuel, have produced reductions in GHG emissions that – contrary to frequent criticisms – are quite impressive.  Compared to the year 2000, U.S. commercial aviation in 2006 moved 12% more passengers and 22% more freight while actually burning less fuel, thereby reducing our carbon output by a million tons.  U.S. airlines have committed to another 30% improvement by 2025.  With the recent spike in fuel prices, reduction in schedules, and retirement of older aircraft, fuel consumption by U.S. airlines will continue to decline.

Internationally, the Department supports the International Civil Aviation Organization’s continued leadership in the environmental arena and its decisive action in developing a comprehensive plan to mitigate aviation GHG emissions and establishing a new high-level Group on International Aviation and Climate Change to work with ICAO's 190 Member States to implement the plan.  We oppose, I should emphasize, the European Union’s proposal to include aviation in an “emissions trading scheme,” as both unworkable and contrary to international aviation law

In 2008, we have seen auto buyers shift toward smaller vehicles and hybrids; airlines modify their fleets (and their operations) to do more flying with fuel-efficient aircraft and to get weight off the airplane; shippers move freight to an increasingly efficient rail network; and commuters utilize transit services in greater numbers.  These examples contain a common thread, and, of course, that thread is that the market itself – especially of late – will provide ample incentive for transportation providers and consumers to travel more efficiently and with reduced emissions.The Secretary has demonstrated a clear commitment to improving transit.  Cumulative VMT has fallen by 17.3 billion miles since November 2006, and we estimate that greenhouse gas emissions in the transportation sector fell by an estimated 9 million metric tons for the first quarter of 2008.  The pain from increased fuel prices that Americans are experiencing at the pump and in the grocery store is real and should not be minimized, but the changes we are seeing in transportation systems response to the high price of oil remind us that the marketplace can be a major ally in reducing transportation’s environmental footprint and creating the conditions necessary to spur private sector environmental innovation.

Better scientific understanding

I also would like to summarize the Department’s efforts to measure and prepare for the impacts that climate change may have on our transportation infrastructure.  The Department’s Center for Climate Change and Environmental Forecasting was designated by EISA to be the Office of Climate Change and Environment.  This virtual organization is the focal point within DOT for multimodal technical expertise on transportation and climate change.  Nine DOT operating administrations contribute resources to conduct strategic research, engage in policy analysis, and ensure coordination on multi-modal approaches to reducing transportation-related greenhouse gases and to mitigate the effects of global climate change on the transportation network.  Recent and continuing research has focused on a range of topics, including emission modeling, evaluation of State and local efforts, early action, tax credits, alternative fuels, and urban ferries.

Most recently, the Center has focused on research requirements from EISA:  first, US DOT has approved a statement of work to conduct an EISA-required report on transportation’s impact on climate change and ways to mitigate transportation’s contribution.  The study will also consider co-benefits of fuel savings and air quality improvement.  This report will be conducted in coordination with the Environmental Protection Agency and in consultation with the United States Global Change Research Program.  Second, the US DOT, in coordination with a range of other groups, is developing a Transportation and Climate Change Clearinghouse to provide one-stop shopping for transportation decisionmakers and planners.

As part of the NextGen effort to advance our understanding of aviation’s effects on climate, the FAA has launched the Aviation Climate change Research Initiative (ACCRI) in partnership with the National Aeronautics and Space Administration (NASA) and other agencies.  This initiative will help accelerate our scientific understanding to inform policy decisions in this area.

The Department also is addressing the challenges posed by the impacts of climate change on transportation infrastructure and systems.  Our Center for Climate Change and Environmental Forecasting has been studying this question for several years.  Early this year, DOT released The Impacts of Climate Change and Variability on Transportation Systems and Infrastructure: Gulf Coast Study, Phase I.  This study provides an assessment of the vulnerabilities of transportation systems in the region to potential changes in weather patterns and related impacts, as well as the effect of natural land subsidence in the region.  The area examined by the study includes 48 contiguous counties in four States, running from Galveston, TX to Mobile, AL.

Based on 21 simulation models and a range of future scenarios, the study found that potential changes in climate, through both sea level rise and subsidence over the next 50-100 years, could disrupt transportation services in several key ways.  Twenty-seven percent of major roads, 9 percent of rail lines, and 72 percent of area ports are at or below 4 feet in elevation above sea level, and could be vulnerable to future sea-level rise combined with non-climate related sinking of the area’s land mass that is occurring in the area.  The study is designed to help State and local officials as they develop their transportation plans and make investment decisions.  Subsequent phases of the study are intended to focus on risks and adaptation strategies involved in planning, investment, and design decisions for infrastructure in the Gulf Coast region and nationwide.  The study was performed in partnership with the U.S. Geological Survey and State and local researchers, and is one of 21 “synthesis and assessment” reports produced as part of the U.S. Climate Change Science Program.

A similar study that will soon be released is The Potential Impacts of Global Sea Level Rise on Transportation Infrastructure.  This study was designed to produce rough estimates of how future climate change, specifically sea level rise and storm surge, could affect transportation infrastructure on the East Coast of the United States.  Like the Gulf Coast Study, this study’s major purpose is to aid policymakers by providing estimates of these effects as they relate to roads, rails, airports, and ports.  

In sum, the Department is approaching greenhouse gas mitigation and adaptation in a comprehensive, multimodal, and innovative way, in line with the Secretary’s priorities for safety, system performance, and 21^st century solutions.  I commend the committee for paying attention to this important subject and appreciate the opportunity to discuss this issue with a group of individuals who are so knowledgeable about our transportation network.  I look forward to your questions.

Statement of

Jeff Wiese
Associate Administrator for Pipeline Safety
Pipeline and Hazardous Materials Safety Administration
U.S. Department of Transportation

Before the

Committee on Homeland Security
Subcommittee on Management, Investigations, and Oversight
United States House of Representatives

Field Hearing - - Plant City, FL
April 19, 2010

Chairman Carney, members of the Subcommittee, thank you for the invitation to speak to each of you today. My name is Jeff Wiese, Associate Administrator of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) pipeline safety program.

We greatly appreciate this Subcommittee’s attention to our efforts in advancing safety, which is the top priority of Transportation Secretary Ray LaHood and PHMSA Administrator Cynthia Quarterman.

As the only modal administration within the U.S. Department of Transportation (DOT) that doesn’t involve moving people, PHMSA still bears a significant responsibility in ensuring the safety of our most important stakeholders, American citizens. Today, I will speak to the challenges we face in the coexistence of people and pipelines in our communities and the ways we are working to address safety risks.

The nation’s pipelines, our energy highways, are a significant part of our country’s critical infrastructure and are essential to our economy and our way of life. Over 2.5 million miles of natural gas and hazardous liquid pipelines crisscross the country transporting nearly two-thirds of the energy products we consume annually. Pipelines are by far the safest way to transport such enormous quantities of hazardous products over long distances in short time intervals.

Safety: PHMSA’s Primary Mission

Strong oversight has been an important strategy in strengthening pipeline safety. Ensuring the safety of the nation’s hazardous liquid and natural gas pipeline network is an enormous task. To assist us in this feat, PHMSA utilizes the help of its state agency partners, giving us the opportunity to employ over 400 additional inspectors to oversee 81 percent of the infrastructure. State and federal inspectors train together to enforce national regulatory pipeline safety standards. We aim to function as a coordinated workforce to safeguard the American public from the risks pipelines pose. With over 30,000 miles of pipelines in the state, Florida has a significant piece of this critical network right here within its borders. To assist us in our efforts, PHMSA has an agreement with the Florida Public Service Commission to oversee intrastate natural gas pipelines – those that provide gas to homes and businesses. For all other pipelines in Florida, including anhydrous ammonia lines, PHMSA is chartered with the inspection, enforcement, and safety assurance of pipelines. The Federal-State partnership is a crucial component to our safety strategy and our ultimate success.

Over the years, PHMSA has taken a hard look at incidents, their causes, and what can be done to prevent them. One thing is clear – the leading cause of incidents in which people are hurt or killed is a result of third party damages. This type of damage, which includes vandalism, causes an immediate rupture or damage that later grows to failure. Third party damage most often occurs on natural gas distribution systems located in areas where people live and work, but it also poses a significant threat to larger pipelines such as anhydrous ammonia, natural gas, crude oil and other hazardous liquid pipelines.

Our record in pipeline safety is good. We have seen the number of serious pipeline accidents – those involving death or injury – decline by an average of 30 percent for the ten year period of 1999-2008. In Florida, the state has seen an average of one serious pipeline accident a year over the past five years compared to a national five year average of 41. This data is proof that our strategy of enhancing our oversight is working. Nevertheless, we recognize that one serious pipeline accident per year in Florida is still one too many and our ultimate goal is zero.

Addressing the November 2007 Pipeline Incident

Throughout the country anhydrous ammonia is commonly used as a chemical compound for agricultural fertilizer because of its rich nitrogen composition. The product is also used as an industrial refrigerant for agricultural retailers.

The U.S. contains nearly 4,500 miles of anhydrous ammonia transmission pipelines and PHMSA is the primary safety regulator for all of them. There have been 53 reported accidents on anhydrous ammonia pipelines since 2002 and of these, 15 percent were attributed to vandalism.

As we have seen here in Florida, occurrences with anhydrous ammonia pipelines can result in very tragic consequences. Since the year 2000, Tampa Bay Pipeline Company (TBPC) experienced three incidents involving its anhydrous ammonia pipeline, two of which were caused by vandalism. The most recent incident occurred on November 12, 2007 in which three teenagers drilled a hole into the pipe, immediately releasing product and a vapor cloud into the surrounding area, causing serious injuries to one of the teens and requiring the hospitalization of several fire fighters. In addition to these consequences, 300 people were evacuated from their homes as a safety precaution.

Vandalism to pipeline facilities is considered a deliberate act of sabotage and is therefore a security-related issue. To ensure security related issues concerning pipelines are adequately addressed, PHMSA entered into an Annex to a Memorandum of Understanding with the Transportation Security Administration (TSA) acknowledging TSA’s lead role in transportation security. Both agencies possess a shared commitment to a systems risk-based approach and to the development of practical solutions. The Annex recognizes that each agency brings core competencies, legal authority, resources, and expertise to this shared mission of protecting the public, but that the ultimate authority for pipeline security lies with the TSA.

As with any pipeline incident with security implications, PHMSA immediately held discussions with the TSA to identify jurisdictional authority, roles, responsibilities, and possible subsequent actions of each agency to remediate the situation following the November 2007 TBPC failure.

We investigated the company’s response and evaluated the adequacy of their processes, training and equipment to prepare for and respond to threats to their pipeline. Pipeline operators are required by law to have emergency procedures, conduct emergency training, and maintain liaison with local public officials and emergency responders. In addition, to augment our understanding of the company’s response activities, PHMSA participated in a multi-agency “After Action” review meeting with emergency responders, law enforcement, Florida transportation and environmental management agencies, local school officials and the media. Finally, PHMSA completed a comprehensive follow-up inspection, examining TBPC well beyond its emergency response issues.

When examining operator compliance, PHMSA looks for more than just fulfillment of routine maintenance requirements. We expect operators to incorporate all Federal and State regulations, including training staff, educating the public, and installing effective emergency response procedures.

During our investigation of the TBPC accident, we found the company’s response procedures were inadequate in a number of areas including public awareness, record-keeping, personnel qualification, liaison with public officials, emergency response procedures, and training. As a result of our investigation, PHMSA issued TBPC a Notice of Probable Violation which included a Proposed Civil Penalty of $398,000 and a Proposed Compliance Order to restore safety assurance and readiness within its pipeline operations.

Keeping Communities Ready to Respond

Looking at the TBPC incident and holding discussions with the Hillsborough County emergency response community, PHMSA decided to increase its efforts in promoting anhydrous ammonia transportation safety in the Tampa area. In late August of 2008, PHMSA hosted its Emergency Response to Anhydrous Ammonia Transportation Incidents Roundtable before an audience of emergency response man­agement personnel, anhydrous ammonia industry stakeholders, and transportation industry representatives to dis­cuss and share safety perspectives and best practices. The workshop further advanced the emergency response community’s knowledge of anhydrous ammonia and their understanding of how to appropriately respond to incidents should they occur. In addition, PHMSA worked with the TSA to hold an additional invitation-only workshop for law enforcement and security agencies involved in planning for Super Bowl activities in the Tampa area. The law enforcement community was able to benefit from discussions about pipeline security and threats and vulnerabilities concerning ammonia transportation.

Damage Prevention: Helping communities deal with pipeline safety has always been a priority of PHMSA. At the top of our list remains using the best information available to guide our excavation damage prevention efforts. Working with the Common Ground Alliance and all the underground damage prevention stakeholders, we have supported educating the public on the importance of calling the national 811 phone number, to help prevent damage to pipelines during an excavation. Pipeline operators believe that this number is effective in preventing damage to their facilities, and many are voluntarily adding this number to their permanent pipeline markers. In addition, we target for assistance those states whose risk of construction related damage is the greatest or those states in which the potential for improvement is real. We are putting representatives in the field to help explain the benefits of effective damage prevention and have invested in research to improve excavation location and communications technology so that the one call notification system is more accurate, works faster, and contributes to a safer work place.

Guiding Safe Land Use Decisions: There are other ways to help communities live safely with pipelines. One of the most important of these is guiding communities to make safe land use decisions. Building on the model of the Common Ground Alliance, we have called stakeholders together in a similar model, called Pipeline and Informed Planning Alliance (PIPA). This is a follow-up activity to a mandate of the Pipeline Safety Improvement Act (PSIA) of 2002, and results from a recommendation by the National Academy of Science’s Transportation Research Board.

National Pipeline Mapping System: A companion effort is helping communities understand where pipelines are located, who owns and operates them, and what other information is available for community planning. Following the passage of the PIPES Act, PHMSA worked with the Department of Homeland Security/Transportation Security Administration to resolve concerns about security sensitive information. Vital information that communities need for land use, environmental and emergency planning around pipelines is publicly available through PHMSA’s National Pipeline Mapping System (NPMS). We continue to work with states, industry and other stakeholders to make the NPMS information more accurate and more useful. Additionally, we have completed a review of thousands of operators’ public education programs and provide operators with feedback.

PHMSA works hard to provide communities with the information they need to make informed decisions and live safely with pipelines, but like the ammonia incident, accidents can and do still happen. In almost all instances, it is our firefighters and other emergency officials who are first to arrive at the scene of a dangerous pipeline incident. In light of this, we support the development of training material and educational seminars to help educate emergency responders in how to safely respond to emergency pipeline situations.

Emergency Responder Training Materials: Through our relationship with the National Association of State Fire Marshals (NASFM), PHMSA has gained a better understanding of the informational needs of the fire service and utilized NASFM state contacts to conduct outreach and training for local emergency responders. Our Pipeline Emergencies training curriculum and course materials offers a comprehensive, integrated emergency response training program designed to teach emergency responders and pipeline industry personnel to safely respond and effectively manage pipeline incidents. In addition, PHMSA is providing $500,000 to NASFM this year to support the update of Pipeline Emergencies, including new hardcopy training books and DVD material that can be distributed to local fire service personnel. The training material will also include new sections on transportation of alternative fuels via pipelines and how to respond to ethanol pipeline incidents.

Conclusion

As you can see, our expanded partnerships with state and local officials are helping us to strengthen the effectiveness of our safety and prevention efforts.

PHMSA very much appreciates the opportunity to report on our pipeline safety program. We share your commitment to improving safety, environmental protection and reliability of our nation’s pipeline system.

Thank you. I would be pleased to answer any questions you have.

##

FRA Administrator
Joseph C. Szabo

Testimony before

House Transportation and Infrastructure
Subcommittee on Railroads, Pipelines, and Hazardous Materials

Miami, FL

May 3, 2010
2:00 PM

Thank you Chairwoman Brown, Chairman Oberstar, Ranking Member Mica and Ranking Member Shuster for inviting me to Miami to update your committee on the President’s program of investments in high-speed and intercity passenger rail service.

Madam Chairwoman, thank you for hosting this hearing and the one on April 20th. These forums have provided a valuable opportunity to highlight our high-speed and intercity passenger rail initiative and deliver our message to different parts of the country. Today, you have chosen to highlight how passenger rail contributes to creating a truly intermodal transportation system.

Over the past year, there has been a dramatic change in our nation’s view on transportation and specifically the growth and development of passenger rail systems throughout this country.

Less than two years ago, a Federal partner for the States to develop high-speed rail did not exist. The Passenger Rail Investment and Improvement Act of 2008 (PRIIA), championed by this Committee put a new spotlight on intercity passenger rail. President Obama advocated for the $8 billion provided in the American Recovery and Reinvestment Act of 2009 (Recovery Act) for the largest single national investment in passenger rail.

There are some who believe that only investments yielding 200 mph service will yield benefits. The facts show otherwise. The Federal Railroad Administration (FRA) views high-speed and intercity passenger rail service in the context of meeting the needs of the passengers in transportation markets, rather than as a race to see how fast a piece of equipment can move. FRA also believes that trip times between stops, rather than speed, is a critical factor in developing viable high-speed rail corridors.

It is for that reason that our Vision for High-Speed Rail in America, published just over a year ago had a comprehensive vision for passenger rail encompassing trains running at speeds of 150 to 200 mph on stand-alone tracks (Express High-Speed Rail); trains running at speeds in the 125-150 mph range (Regional High-Speed Rail); upgrades to existing railroads with speeds of 110 to 125 mph (Emerging High-Speed Rail); and significant improvements to traditional 79 mph service (Improved Intercity Passenger Rail). This means that there are opportunities to fund customized rail systems that work for different markets and regions. The States determine their individual needs. Regions and States will have the opportunity to seek funding for projects that meet their specific transportation needs.

This is certainly not a one-size-fits-all endeavor. Those who have experienced rail service in Europe and Japan will recognize the criticality of taking a comprehensive approach to create a successful passenger rail system. This approach needs to include rigorous planning to ensure funds are focused on projects that maximize benefits to the public, transportation networks, and overall economic performance.

Support for this program was evident in the numerous applications received by the Department of Transportation (USDOT) following the President’s announcement. 259 applications requesting $57 billion competed for the $8 billion made available in the Recovery Act.

We received a variety of applications, varying tremendously in size and scope, reflecting the priorities of the State applicants. We worked hard to quickly review these proposals, while ensuring that we allocated the Recovery Act funding to the projects posed to deliver the most benefits relative to their investment costs. Less than a year after the Recovery Act was enacted, the President announced that 31 States and the District of Columbia will receive grants. This includes major investments in Florida and California, the only two States to apply for help standing up brand new Express High-Speed Rail systems. In rough terms, approximately 45 percent of the funds will go for Express High-Speed Rail, 40 percent for Regional or Emerging High-Speed Rail, and 15 percent for projects to benefit intercity passenger rail that can be under construction quickly.

Over time, our goal is for a number of regional routes to link cities and regions together, reflecting our comprehensive approach and creating a seamless network that offers Americans a real transportation alternative. This will reduce congestion that everyone expects will grow in the coming decades.

I have been a frequent visitor to Florida for decades. My observation has been that Florida is one of the States with the greatest potential to cost effectively reshape its transportation system through improved public transportation. Florida has the potential to create a system that will be safe, energy efficient, environmentally beneficial, make communities more livable, and improve the local economy. But the key word here is “potential”. To date, most of this potential has been unrealized. The current high-speed rail efforts represent the fourth attempt to develop a high-speed rail service. Each past initiative has been very promising. Each has demonstrated the potential for significant benefits, and each has floundered.

The Department’s decision to allocate significant resources to high-speed rail in Florida reflects our view that Florida now has the will to create a high-speed rail system. Florida has begun to develop a comprehensive intermodal transportation network – including intercity passenger rail, commuter rail, light rail, buses, airports and roads. There is even the existing Auto Train, operated by Amtrak, which carries passengers and their vehicles from Virginia to Florida.

Included in this network is a comprehensive rail program. One of the remaining pieces is the development of high-speed rail. And, in the case of Florida, trains running at speeds greater than 150 mph meet the needs of the local markets.

At FRA we recognized the public benefits this technology could deliver in the State. We awarded funding for the creation of a brand new high-speed rail corridor that will eventually connect Tampa Bay, Orlando, Miami and other communities in central and south Florida. These plans have been in the works for 20 plus years.

There are a couple of reasons why FRA allocated funds to this project. As you know, this region has experienced significant population growth in recent decades, as well as increases in the volume of visitors, leading to significant strains on area roadways and airports. These cities together have a population of over 10 million people and account for two of the nation’s 20 largest metro areas. These new high-speed rail lines are designed to provide an attractive and competitive transportation alternative for residents and visitors in the area.

The first phase of the service will connect Orlando to Tampa, with intermediate service to several of central Florida’s major tourist destinations. Our investment of over $1 billion will initiate the development of this segment, with speeds reaching 168 mph and 16 round trips per day on right-of-way dedicated solely to high-speed rail. Trip time between the two cities on the new service will be less than one hour, compared to around 90 minutes by car. This project will create substantial numbers of jobs and generate economic activity as miles of track are constructed, stations are built or enhanced, and equipment is purchased. We anticipate that this phase of the project will be complete in 2014.

The second phase will connect Orlando to Miami. This line will be 220 miles in length and is expected to operate at speeds up to 186 mph. Once operational, this service will reduce travel time between these two cities to approximately two hours, or roughly half as long as it takes to drive the same route. Ultimately, we expect 20 round trips per day between Orlando and Miami. Although Recovery Act funding will not be used for this segment, significant planning activities are on-going to prepare for this second phase of Florida’s high-speed rail vision. This project is scheduled for completion in 2017.

The key to our new High-Speed Intercity Passenger Rail (HSIPR) Program is a strong, committed State government and State DOT. Florida faces the challenge of developing the project management structure that will assure timely development and operation of the system, addressing issues of liability for intercity, as opposed to commuter, rail service, and having such confidence in the project at the State level that the State is willing to assume risk – both during the construction phase and the start – up of operations. So far, we are pleased with our decision to allocate Recovery Act resources for the first segment and look forward to continuing to work cooperatively with Florida transportation officials to move this exciting State-driven project forward. FRA is committed to its partnership with Florida. We firmly believe Florida has benefitted from our comprehensive program that enables States to tailor their choices to fit the needs of the marketplace.
Projects such as the one in Florida have longer-term horizons, because of the complexity of the States’ plans. However, there are smaller, more incremental projects that were awarded Recovery Act funds that we are working hard to implement.

To ensure that jobs can be created in the near term, consistent with the overall objectives of the Recovery Act, we have also implemented a “Fast Track” program. We are already coordinating with States on those projects that are ready-to-go, and move them out quickly so construction can start this year. We hope to be announcing final grant agreements through this program in the coming weeks. By comparison, it took the Federal government three years to get the first dollar out the door when the national highway system was being developed.

We have seen real progress both in the States and among transportation communities in terms of getting this initiative off the ground. President Obama is committed to transparency. Long-serving USDOT staff say the HSIPR program is one of the most transparent in the Department’s history.

As the program matures, we have worked hard to maintain strong relationships with States and stakeholders. Since the beginning of the application process, we have held biweekly conference calls with State DOT CEOs, with dozens of participants on each call. We also organized eight regional meetings with State DOTs and other stakeholders. We held individual, in-person meetings with Governors and legislators from across the country. This unprecedented back and forth with States was tremendously helpful as we thought about how to make this program a success.

We have also forged strong partnerships with rail and transportation associations and stakeholder groups. In fact, the American Association of State Highway and Transportation Officials recently commended FRA’s outreach efforts as well as our dedication to implement the Administration’s ambitious agenda.

In short, we are upbeat and confident that this program will make important contributions to America’s transportation landscape. Florida has the potential to be the model project for the Nation provided it can sustain the State’s commitment. We look forward to working with Florida and the other States, and Congress to help make America’s passenger rail system the best in world.

Thank you.

Written Statement of

Peter M. Rogoff,
Administrator
Federal Transit Administration

Before the

House Committee on Oversight and Government Reform

April 21, 2010

Chairman Towns, Ranking Member Issa, and Members of the Committee:

Thank you for the opportunity to appear before you today to discuss the Federal Transit Administration’s (FTA) audit of the Tri-State Oversight Committee (TOC) and the Washington Metropolitan Area Transportation Authority (WMATA).

Before I summarize some of the highlights of our audit report, I want to point out that this audit was very different from past audits conducted by FTA.  Because FTA currently lacks the legal authority to establish national safety standards that would govern agencies like WMATA, FTA limits the focus of our audits to the State Safety Oversight (SSO) agency, which in this case is the TOC.  At the request of Senator Mikulski and Secretary Ray LaHood, and with the encouragement of WMATA’s interim Chief Safety Officer, this audit, for the first time, took a hard look at WMATA’s own safety program. 

FTA’s audit uncovered a number of troubling facts about WMATA and TOC.  The audit concludes that these two agencies face serious challenges that could compromise the safety of WMATA’s riders, if left unaddressed.  While each of these agencies has effected recent improvements, a great deal more needs to be done to ensure that those advances become a permanent feature within the safety culture.

Our audit resulted in 21 findings and recommendations: 11 findings to TOC and 10 recommendations to WMATA.

Before I highlight the findings and recommendations made by FTA, I want to convey to you three important messages. 

First, the findings in our audit are merely symptoms of a larger problem. Each finding and recommendation in our report reveals a hole or vulnerability in the very systems that have been implemented to ensure the safety of WMATA passengers and employees.  Without a strong and daily commitment to safety from everyone at WMATA, from executive leadership down to the most junior employee, these systems cannot succeed.  Addressing each of our recommendations, one by one, will not solve the whole safety problem.  The overarching safety problem will only be solved through a top-to-bottom change in the safety culture and focus at WMATA.

Second, I want to emphasize that, under current law, FTA does not have the legal authority to compel WMATA to take specific corrective action to address our recommendations.  As I have testified before, FTA is not empowered legally to issue national safety regulations for transit systems.  And with few exceptions, State Safety Organizations, like the TOC, similarly have no legal authority to compel transit agencies like WMATA to respond to their safety findings.  They don’t have to respond to them in a timely way.  In fact, they don’t have to respond to them at all. 

Over the 15 years that the SSO regulations have been in place, only a few states have developed comprehensive state-level regulations and granted an SSO with authority to enforce them. While there is no federal impediment preventing states from developing independent authority, the vast majority of states have not done so. This is precisely the reason why Secretary LaHood, on behalf of President Obama, transmitted a transit safety reform bill to the Congress back in December 2009.  I want to thank Chairman Dodd, Subcommittee Chairman Menendez, Senator Mikulski, and Senator Cardin for their assistance in getting this bill introduced.  I also want to thank Representative Edwards for serving as an original co-sponsor of the House bill along with Chairman Oberstar and Subcommittee Chairman DeFazio.   

The WMATA crash last summer certainly accelerated our efforts within the Obama Administration to develop and transmit our transit safety reform bill.  But, WMATA is not the only transit system that has had accidents recently or safety lapses. We have been greatly concerned because the Chicago Transit Authority, the MTA (formerly MUNI) system in San Francisco, the “T” in Boston, and rail systems elsewhere have also experienced accidents or safety incidents.  While we believe the situation at WMATA is particularly urgent, we believe that some of the deficiencies and vulnerabilities identified in our audit of WMATA and TOC are similar to problems that exist at other transit operators and State Safety Oversight organizations across America. 

That is why it is so imperative to public safety that Congress enact our rail transit safety reform bill now.   The U.S. Department of Transportation cannot move forward to address these problems in any meaningful way while we lack the authority to issue national safety regulations and to conduct direct safety oversight of rail transit agencies and operators.   Just a few weeks ago, Secretary LaHood used his statutory authority to prohibit texting while driving nationwide for commercial truck and bus drivers.  But even a simple common-sense safety measure like that will not automatically apply to employees operating the rail transit portions of systems, such as WMATA, until Congress changes the law.  So, on behalf of the President and Secretary LaHood, I must ask you collectively to do all you can to rapidly move this legislation to the President’s desk.    

Third, we must remember that, despite WMATA’s safety challenges, every Washington area commuter is safer traveling on WMATA than they are traveling on our highways.   Thus, we cannot allow any degradation in WMATA’s reliability and performance such that commuters opt to abandon Metro in favor of our already congested highways.  We must also caution against any proposals that will reduce significantly WMATA’s existing capacity, forcing more commuters onto our highways.  Any actions or proposals pushing WMATA riders onto our highways simply will degrade safety and worsen congestion in the region.

Moving on to the results of our audit of WMATA and TOC, I will first provide a brief summary of FTA’s State Safety Oversight Program and then I will summarize some of the findings from our audit that concern us most. As I summarize our findings, you will see that there are common challenges faced by both TOC and WMATA in the areas of: inadequate management of resources, inadequate expertise, inadequate authority, and inadequate communication. Should this Committee wish to review our findings in more detail, we have provided every Member a complete copy of the audit report and the report can be found on our public website at http://www.fta.dot.gov/news/speeches/news_events_11396.html.

FTA’s State Safety Oversight Program

Congress authorized FTA’s State Safety Oversight (SSO) program in 1991, in the Intermodal Surface Transportation Efficiency Act of 1991. FTA published a final rule in 1995, with a phased-in effectiveness period. States with rail transit agencies had to come into compliance with all of the rule’s requirements by January 1, 1998. The SSO regulations use a framework of shared safety oversight responsibility that is unique among all of the operating administrations within the Department of Transportation. The SSO program is designed to work through the states to establish minimum safety requirements for the rail transit industry, must designate an oversight agency, and must develop a Program Standard. The Program Standard requires each rail transit agency to prepare and implement a System Safety Program Plan (SSPP). Under FTA’s SSO regulations the designated SSO agency must hold each rail transit agency accountable for implementing its safety program.

FTA’s regulations also require states to review and approve annually the rail transit agency’s SSPP. And, once every three years, SSO agencies must conduct on-site reviews to assess the rail transit agency’s implementation of its SSPP and to determine whether these plans need to be updated. States are also required to review and approve accident investigation reports and corrective action plans, participate in the rail transit agency’s hazard management program, and oversee the rail transit agency’s implementation of its internal safety and security audit program.

While I mention FTA’s current authority to regulate SSO’s, it is important to note that FTA’s authority is indirect, at best, in relation to the actual operations of the rail transit systems. In fact, the establishment of any safety standards is left to the decision-making of each individual SSO, which results in a hodge-podge of non-uniform and inconsistent requirements across the country.  Implementation of the resulting SSO safety requirements and program standards also suffer greatly because such enforcement is only as effective as the state specific SSO administering and monitoring those requirements.  This does not provide for a uniform, nationwide, assurance of safety.  It is one of many reasons this Administration finds the status quo unacceptable and has proposed legislative reforms designed to enhance the SSO program through the establishment of consistent, uniform, national safety standards.

Inadequate Management of Resources

This audit of TOC and WMATA revealed that each agency faces resource management challenges that limit its ability to effectively oversee and implement a safety program in accordance with FTA’s State Safety Oversight regulations. For example, at the time of our audit we learned that out of 41 positions in WMATA’s Safety Department, 25 percent are vacant. We also were told by WMATA representatives that recent accidents have placed additional burdens on the Safety Department’s ability to carry out its daily activities. In addition, WMATA officials noted that unfilled vacancies limit the Safety Department’s ability to ensure its SSPP is implemented. This is a key point because part of the SSPP is the hazard management program, which is at the core of an effective safety program.

A hazard management program fosters hazard identification and analysis, which provide the rail transit agency an opportunity to proactively eliminate hazards before an accident. For WMATA, however, its representatives stated that due to a lack of resources, a formal hazard analysis is not routinely performed on system-wide issues. Furthermore, WMATA personnel also pointed out that WMATA’s Board of Directors rarely requests formal hazard analysis or other information on how operating, maintenance or budget decisions may have safety impacts or how the agency is addressing safety-related concerns. This is exemplified by the fact that at the time of the audit, WMATA and TOC representatives were unable to identify the agency’s top ten safety concerns or hazards.

Similarly, WMATA officials explained that the Safety Department’s Division of Regulatory Compliance, which is responsible for hazard analysis, has experienced reductions in work force and on-going budget issues. As a result, all four analyst positions within the Regulatory Compliance Division have been vacant for over a year.

TOC fares no better when it comes to resource allocation. Since its inception in 1997, TOC has experienced considerable turnover among its members. Only one TOC member has served on TOC for three years, two other members have served for less than two years, and one member has served for less than one year. Further, with the exception of one Virginia representative, each member serves on the TOC as a collateral duty and TOC membership was not included in TOC member employee job descriptions with their home agencies. Only recently did the Virginia member begin dedicating full-time effort to TOC. Equally troubling, the home jurisdictions provide no training for serving on TOC, and a background in rail transit or system safety is not required.

Since there is a steep learning curve required to understand WMATA’s operations and issues, part-time involvement of new members who change from year to year does not give TOC a strong foundation to carry out its oversight mission. We made this finding in past audits and the Government Accountability Office made a similar finding when it recommended that the jurisdictions provide one or more TOC full-time members to enhance responsiveness to WMATA requests, and to provide dedicated, on-site support at WMATA. Virginia has made this commitment and the other TOC jurisdictions must also dedicate full-time specialized employees to carry out the SSO activities.

We also find that the safety program management in all three jurisdictions has failed to assess the level of resources needed to meet TOC responsibilities. The jurisdictions must conduct an assessment and use the results of that assessment to establish resource commitments from each jurisdiction for the next three calendar years.

For WMATA, we recommend that management conduct an assessment to identify and prioritize the resources necessary to adequately administer its safety program and use the results of the assessment to ensure adequate staffing levels within the Safety Department.

Inadequate Expertise

During audit interviews, representatives from WMATA’s Safety Department stated that the department lacks sufficient skills to conduct ongoing hazard analyses. In fact, over the last five years, TOC and FTA have made repeated findings regarding the inability of WMATA’s Safety Department to work with other WMATA departments to develop and manage an effective internal audit program. For example, in FTA’s audit of TOC in 2005, FTA raised a concern about WMATA’s ability to identify, elevate, and address safety deficiencies. In 2007, when FTA again audited TOC, FTA found TOC deficient in ensuring that WMATA conducts internal safety audits according to approved schedules. As this 2009 audit was being conducted, WMATA personnel, noting similar deficiencies, explained that they did not have the expertise to provide training on how to conduct internal safety audits and would need to rely on outside contractor support.

Furthermore, during audits in 2005 and 2007, FTA determined that TOC was not ensuring that WMATA conducted internal safety audits according to approved schedules and requirements. Independent reviews conducted by TOC in 2004 and 2007 identified the same deficiency. WMATA began its new internal safety audit cycle in 2009 by submitting an audit schedule and audit checklists to TOC. WMATA failed, however, to meet approved schedules and has not performed the audits in an on-going manner as required by TOC Program Standards and Procedures and FTA’s State Safety Oversight regulations.

When the Safety Department does conduct an audit, it does so primarily to assess compliance with Occupational Safety and Health Administration and Environmental Protection Agency rules and requirements and to ensure the use of appropriate Personal Protective Equipment at work sites. WMATA’s Safety Department does not routinely design and execute methodologies to effectively review documentation, interview personnel, and conduct field observations to determine compliance with specific operating rules and procedures. Further, our audit revealed that there is general confusion within the Safety Department as to why it would need to conduct or manage internal audits of other departments.

Given this, FTA is concerned that over the last decade WMATA has failed to develop an effective internal safety audit process even after repeated warnings by FTA and TOC. While TOC has monitored this process, and noted its deficiencies, FTA finds that TOC must take a more active role in ensuring that WMATA develops the necessary expertise within its Safety Department to implement this critical process. We also find that TOC must evaluate the technical and professional skills that TOC representatives need to effective carry out their oversight duties.

Inadequate TOC Authority

Throughout the course of our audit, we identified several deficiencies regarding the implementation of the State Safety Oversight regulations, as well as on-going challenges in maintaining the quality of the oversight relationship.

The TOC jurisdictions—the District of Columbia, the Commonwealth of Virginia, and the State of Maryland—have structured TOC as a committee created by Memorandum of Understanding. While the TOC members and the home jurisdictions are committed to implementing the State Safety Oversight requirements, the jurisdictions have not provided TOC with the authority to ensure that WMATA effectively implements its SSPP. For example, until recently, TOC had limited interaction with WMATA’s executive leadership. Instead, TOC members corresponded primarily with the Chief Safety Officer and held working meetings with lower level staff at WMATA. Also, because TOC lacks authority to compel action by WMATA, requests for information were provided late or not at all, TOC members were denied access to the right-of-way, and TOC members were excluded from key meetings.

We find that TOC must determine the best method for quickly and professionally responding to safety issues that arise at WMATA. We ask the jurisdictions to consider vesting the full-time TOC positions with decision-making authority to act in specific safety situations with WMATA.

Inadequate Communication

Most troubling about the findings in this audit is the clear indication that both TOC and WMATA suffer from inadequate communication within their organizations and between the two agencies. This defect impacts how quickly TOC can react to safety findings, how WMATA communicates internally regarding safety issues identified by TOC, and how the agencies communicate with one another.

TOC Communication

When specific compliance issues emerge at WMATA, TOC members often must obtain the authority to act from higher level executives in their own separate agencies. This creates challenges for TOC members because there is no formal process to manage conflicts of law or policy that arise among the three jurisdictions. Thus, our audit revealed that it is difficult for TOC members to speak as a unified entity. This is further exacerbated by the fact that most of TOC is part-time. The one full-time member of TOC conducts various meetings with WMATA and then has to debrief the part-time members regarding his activities. Our audit shows that the part-time involvement of a majority of the committee, who change from year-to-year, is not an effective communication strategy and does not give TOC a strong foundation for developing institutional knowledge to carry out its oversight mission.

WMATA Communication

Throughout FTA’s audit, evidence indicates that WMATA’s Safety Department is not “plugged in” to critical conversations, decision-making meetings and reporting systems that provide information on hazards and potential safety concerns throughout the agency. Key documents, reports, and decision are not consistently shared with the Safety Department. For example, the Safety Department does not receive and review available monthly reports from Rail Operation, Quality, or Maintenance. On numerous occasions during the audit interviews, Safety Department representatives indicated that they were learning, for the first time, that information of a safety nature was being documented by operating departments.

The lack of communication from operating and maintenance departments to the Safety Department, coupled with the lack of communication of top safety priorities from the Safety Department to the General Manager presents a disconnect in the flow of critical safety information within and throughout WMATA.

Communication between WMATA and TOC

It should not be surprising that communication lapses in TOC and WMATA lead to communication failures between the agencies. During this audit, WMATA staff told us that it believes that TOC, at times, appeared to be using the media in a punitive manner to resolve differences of opinion with WMATA. WMATA managers stated that, in a few instances recently, media reporters were better informed regarding a conflict with TOC than WMATA’s own senior leadership. TOC members disagree with WMATA on this point, but they acknowledge media coverage has been largely helpful to TOC because, as noted earlier, TOC has had problems in the past with WMATA’s responsiveness to TOC’s specific requests.

TOC representatives stated that when TOC members disagreed with the decision of the Chief Safety Officer, or did not believe that enough work had been done in a specific area, there was no process in place to bring these concerns directly to the General Manager for action. (At FTA’s recommendation, TOC did conduct an annual meeting with the General Manager, but minutes show that these meetings were introductory and general in nature.) WMATA’s General Manager and Board of Directors have since taken action to ensure greater responsiveness to TOC.

As a result of this audit, FTA is requiring TOC to develop a procedure to ensure that critical safety concerns are elevated to the highest levels in each jurisdiction and WMATA for immediate action. We also recommend that WMATA develop an internal process to require communication of safety-related information across all WMATA departments.

Conclusion

In conclusion, I want to take a moment to explain how the Obama Administration’s transit safety reform bill would address many of the deficiencies that we found at WMATA and TOC.

First, our legislative proposal would provide FTA, as the delegate of the Secretary of Transportation, direct oversight authority over transit agencies and operators.  The bill would grant us the authority to issue notice and comment regulations, and to enforce those regulations.  Our legislative proposal would allow FTA to set minimum, national standards in areas such as track worker protection, transit rail car crashworthiness, on-board event recorders or the institution of safety management systems to ensure critical safety issues receive the attention they deserve. Under our legislative proposal, FTA would be empowered with tools similar to those available to agencies like the Federal Aviation Administration (FAA), allowing the FAA to compel the compliance of regulated parties.  While State Safety Oversight agencies would have the opportunity to enforce Federal regulations on FTA’s behalf, they would only be allowed to do so if they had the staff strength, expertise, and legislative authority as determined by FTA. 

Moreover, our legislative proposal would provide Federal funds to SSOs for hiring, training, inspections, and other safety-related activities.  Rather than having SSOs that are understaffed and undertrained, FTA would provide resources to ensure that they are up to the task. 

Finally, our legislative proposal is built around the goal of getting every rail transit provider, including WMATA, to embrace a state-of-the-art Safety Management System (SMS).  An effective SMS is one where all employees, from the lowest to the highest rungs of the operation, are keeping their eyes and ears on safety concerns.  When operating under an SMS model, employees at every level of the organization should be routinely reporting their observations and concerns in a non-threatening environment to agency experts who regularly analyze and address the most critical safety concerns first.  It’s an environment where communication is constant and safety is paramount.  That is our vision for safer rail transit systems across the nation.  We ask for your help in getting us there by passing President Obama’s transit safety legislation promptly. 

I thank you again for the opportunity to be here today to summarize our audit findings, and I would be happy to answer any questions you may have.

Department of Transportation

Statement of the

Maritime Administrator
David T. Matsuda

Before the

Sub-Committee on Coast Guard and Maritime Transportation
United States House of Representatives

On the

State of the United States’ Merchant Fleet in Foreign Commerce

July 20, 2010

Good afternoon, Mr. Chairman and Members of the Committee.  Thank you for the invitation to testify on the state of the United States’ Merchant Fleet in foreign commerce, an industry that is vital to the economic and defense security of our Nation.  The Maritime Administration looks forward to working with the Committee to find ways to strengthen our U.S.-flag maritime industry as a whole, including our Jones Act trade.  It is my hope that our discussions today will lay the groundwork for legislative initiatives and policies that will add new permanent capacity to our Nation’s merchant marine.  

The United States is the world’s largest trading nation and our national policy is to maintain a U.S.-flag merchant marine sufficient to carry our waterborne domestic commerce and a substantial part of our foreign commerce.[1]  The portion of our Nation’s international trade carried on U.S.-flag ships, however, has declined from a high of 92.5 percent in 1826 to 57.6 percent 1947 to a low of less than 2 percent today.  In fact, today there are no U.S.-flag carriers listed among the top 20 global carriers. 

In 1947, the U.S.-flag fleet consisted of around 980 privately-owned vessels over 1,000 gross tons and above, representing over 40% of the world’s shipping capacity.  These large U.S. carriers created many of the technological innovations now used by the rest of the world.  For example, one key innovation from the 1950’s was containerization of cargo, an American idea that completely reshaped international commerce.  However, U.S. maritime programs have not been successful in inducing or even maintaining capacity within the Nation’s domestic merchant marine.

Today, there are 115 self-propelled, U.S.-flag ships engaged in the U.S. foreign commerce.  This fleet is composed of 5 tankers, 11 dry bulk, 28 roll-on/roll-off vessels, 61 container ships, and 10 multipurpose ships.  All of these ships participate in the Federal Government’s cargo preference program.  Twelve of the vessels are Jones Act qualified and do not regularly carry foreign commerce.  Sixty of them participate in the Maritime Security Program, which has been successful in maintaining the required number of militarily-useful ships and their crews that could be called upon to respond to possible military contingencies.

As the U.S.-flag commercial fleet operating in foreign commerce has declined in number, so too have direct shipboard jobs for American workers.  Further, technological innovations such as increased automation, have reduced average crew sizes from 45 to 20 or less per vessel even as typical vessel capacity has increased.  This impact has been felt in the international and Jones Act trade causing the number of U.S. mariners to decrease from about 69,100 in 1970 to about 20,500 in 2009. 

The primary source of personnel to meet military sealift demands is the commercial U.S.-flag shipping industry.  These men and women crew the government’s Ready Reserve Force and surge vessels which are activated for emergencies like the recent one in Haiti.  As a whole, these mariners are part of an aging workforce, with the average age currently over 42 years. 

The ability of the U.S. merchant marine to respond to major military contingencies worldwide is dependent on adequate U.S.-flag active/reserve sealift resources, including  a skilled U.S. maritime labor pool.  In coordination with the U.S. Coast Guard, our mariner outreach program tracks maritime workforce trends.

One method of attracting new individuals to a professional maritime career is through a collegiate maritime program, such as the U.S. Merchant Marine Academy (USMMA) or one of the six state maritime academies located in Texas, California, New York, Michigan, Maine, and Massachusetts.  The Maritime Administration is responsible for directly overseeing the USMMA at Kings Point, New York.  The agency also provides training vessels, student incentive payments, and other support to the six state maritime academies.  These academies offer four-year undergraduate engineering and logistics programs, and their graduates find employment as licensed mariners and in shoreside occupations such as shipyard management and transportation logistics.  Collectively, the USMMA and the six state academies graduate more than 700 highly trained, U.S. Coast Guard licensed deck and engineering officers each year. 

I’d like to take this opportunity to highlight a little known fact about the U.S. Merchant Marine Academy and the state maritime academies – they accepted women earlier than either West Point or Annapolis.   In 1974 the U.S. Merchant Marine Academy became the first federal service academy to enroll women students, two years ahead of the Army, Navy, Air Force or Coast Guard academies. 

The Maritime Administration is also working with 19 maritime high schools around the nation to attract young men and women into the industry by learning about the merchant marine while still in high school.  Last February, I had the opportunity to visit one such high school in Baltimore, Maryland.  I was impressed with the dedication the students at the Maritime Industries Academy demonstrated towards learning about a key component of our nation’s economy: maritime transportation.  These young men and women are the future of this industry and I will be working with the school to help them achieve success.

The Maritime Administration also has a role in implementing international training standards for mariners.  Mariners must receive a significant amount of training to be qualified to work aboard a ship.  In addition, they must receive recurring training to maintain proficiency.  Lastly, the training that mariners are required to have is constantly increasing.  The reason is for this increase is to improve safety, security, and environmental compliance.  

Economic Issues

Our economy depends on the ability of goods, both imports and exports, to move smoothly through the international supply chain.  As President Obama stated on March 11^th, when he launched the National Export Initiative (NEI), the United States exported more than a trillion dollars of manufactured goods in 2008, supporting more than 20 percent of all manufacturing jobs.  There were also exports of nearly $100 billion in agricultural goods.  To facilitate this, the U.S. transportation industry employs millions of people on our ships and tugs, in our ports and shipyards, operating our trucks and railroads, and in related activities.  U.S. trade with the rest of the world is projected to continue growing and reach about 3.2 billion tons by 2038.  Most of these goods, about 75 percent, are now and will continue to be transported by sea.  The Maritime Administration and U.S. merchant marine have a key role to play in the NEI, as the utilization of U.S.-flag ships to carry our commerce is itself a “service export.”

Defense Issues

The U.S. merchant marine has supported every conflict and crisis since our Nation’s founding.  They U.S. mariners are our valuable eyes and ears.  Our national policy calls for a merchant marine capable of serving as a naval and military auxiliary in time of war or national emergency.  Almost 95 percent of our military supplies move by water and over 85 percent of our strategic commodities are imported by water.  Much of this is moved by the military using their own ships or chartered vessels, and under cargo preference laws, a portion is also moved by the merchant marine.  Time and again, the U.S. merchant marine and its citizen mariners have brought the equipment from the fort to the foxhole.  They are among the first into a war zone and the last out.  Of the five Federal service academies, only the U.S. Merchant Marine Academy is entitled to carry a battle flag, as it has sent its students aboard U.S. merchant vessels into every conflict, and many have died in that service to our country.

The Wilson-Weeks Agreement of 1954 and Presidential Directive 28 of 1989 mandate that U.S.-flag merchant marine vessels are given priority to carry Department of Defense (DOD) materiel in times of both peace and conflict.   The Government-owned cargo fleet is sized to provide the capacity that our U.S. commercial fleet cannot provide, such as during surge conditions when a very large amount of cargo must be quickly transported overseas.  The Voluntary Intermodal Sealift Agreement provides DOD with assured access to a global intermodal infrastructure.  Our commercial merchant marine already has access to operations and assets in or adjacent to every country where there might be a threat in the future.

Maintaining the U.S. Merchant Marine

The U.S. merchant marine is among the safest, most secure and environmentally-responsible in the world.  Federal requirements are designed to ensure U.S. crews are trained, vessels are built and maintained to safe operating standards, and operations have no unnecessary adverse impact on the environment. However, operating vessels under the U.S. flag under these requirements imposes higher wage, maintenance, repair, and insurance costs; increased regulatory burden; and tax implications. Transport of commercial cargoes does not generate sufficient revenue to cover the cost of operations under the U.S. flag.

Two federal programs administered by the Maritime Administration are a major reason vessels remain under or seek U.S. registry – the Cargo Preference Program and the Maritime Security Program.  Of the foreign trade currently carried by U.S. flag ships, a significant share is attributable to preference cargoes that provide a revenue base upon which the carriers can build commercial cargo orders. Our latest 5 year data review shows that the program generates over 16 million revenue tons of cargo and over $1.3 billion of ocean freight revenue annually.  Military cargoes represent about 64% of the revenue while food aid is 29% and other programs are 7%.   Preference cargoes provide a minimum revenue base of 5% to 7% of cargoes for liner vessels and over 50% vessels in tramp or charter service. 

The Maritime Security Program provides an annual stipend to partially offset the cost differential of operating under U.S.-flag registry.  The ten year authorization for the Maritime Security Program expires in 2015 and carriers have expressed some concern about the need to take steps to reauthorize the program well before that time in order to maintain some continuity and availability of U.S.-flag ships and the future business prospects for their assets.  Shipbuilding is expensive and investors need to have confidence in order to commit their dollars to building vessels with a 25-plus year life.  The concern that the program may not be renewed, or renewed at a sufficient level, could negatively affect future investment decisions.

At this time, I will be pleased to answer any questions the Committee may have.  Thank you.

Statement of

The Honorable John D. Porcari
Deputy Secretary
and
Michael Huerta
Acting Administrator, Federal Aviation Administration
U.S. Department of Transportation

before the

Subcommittee on Aviation
Committee on Transportation and Infrastructure
U.S. House of Representatives

September 12, 2012

A Review of and Update on the Management of FAA’s NextGen Program

Chairman Petri, Ranking Member Costello, Members of the Subcommittee:

Thank you for the opportunity to appear before you to discuss the state of the Federal Aviation Administration’s (FAA) Next Generation Air Transportation System, known as NextGen. 

NextGen is one of the nation’s largest infrastructure projects underway today, but it is more than just a single project, plan or new system.  It is the integration of many systems, projects, concepts, technologies, plans, and organizations working with our National Airspace System (NAS) stakeholders to deliver new service capabilities that meet increasing air transport demands. The future of the NAS depends on the success of NextGen, and NextGen’s success depends on FAA’s effective management and oversight of program implementation, as well as collaboration with our industry partners and our employee labor representatives. We would like to highlight the significant progress we have made to date, and outline how our program management and industry collaboration have contributed to our successes and helped us meet challenges. 

Airline passenger travel is expected to nearly double in the next 20 years. That translates into many more aircraft carrying a lot more passengers who will need to arrive at their destinations safely and on time.  NextGen can meet that challenge.  Our latest estimates show that by 2020, NextGen improvements will reduce delays, in the air and on the ground, by 38 percent as compared to what would occur without those improvements.  Such delay reductions are estimated to result in $24 billion in cumulative benefits to aircraft operators, the traveling public and the FAA.  Full implementation, which is defined in the NextGen Implementation Plan as occurring in 2020, will result in 1.4 billion gallons of fuel saved and a 14 million metric ton reduction in carbon dioxide emissions.

While we are on track to meet these long-term goals, it is important to stress that NextGen is happening now.  Across the country, we are creating satellite-based procedures that will transform the NAS.  Satellite navigation is essential to deliver benefits to users right away.  The new flight tracks will relieve bottlenecks, improve safety and efficiency, and foster the flow of commerce. 

NextGen programs are delivering benefits to users of the system and the traveling public today.  Through our work with an advisory group composed of industry stakeholders, we received expert input on the problem of congested airspace in busy metropolitan areas.  We have turned those recommendations into specific action by launching our Metroplex initiative.  This is a collaborative effort with industry to bring benefits to the public as soon as we possibly can.  We are creating new, more direct routes across the country that will relieve bottlenecks and congestion, in addition to improving safety and efficiency.  We are making progress in many  different areas, including Houston, Atlanta, Charlotte, the San Francisco bay area in northern California, the Los Angeles area in southern California, the Dallas-Fort Worth area in northern Texas and right here in the metropolitan Washington, D.C.  We are also working on additional metropolitan areas.  Satellite-based navigation is expected to cut a total of seven million nautical miles from flight plans around these cities each year.  These shorter routes, together with gradual descents under reduced engine power, are projected to save at least 22 million gallons of fuel annually.  For these cities, that’s a total reduction in carbon emissions of 220,000 metric tons annually, or the equivalent of taking more than 43,000 cars off the nation’s streets.

Each Metroplex is unique and requires an integrated solution that yields benefits to the specific users of the airspace.  The development of flight tracks and procedures must take into consideration numerous factors, including the area’s terrain, the number and location of airports, the volume of operations, and the mix of equipped and non-equipped aircraft operating in the area.  The precision of satellite-based navigation being deployed under the Metroplex initiative helps us to use our airspace more efficiently by deconflicting traffic headed to adjacent airports and allowing general aviation better access to smaller airports near big cities.  It also provides GPS precision approaches to smaller airfields that do not have expensive instrument landing systems on the ground. 

NextGen is also providing the general aviation community access to airports that have previously been inaccessible in low visibility conditions. Sixty percent of general aviation aircraft that fly under instrument meteorological conditions are equipped to take advantage of satellite-based navigation into airports that have no ground navigation capability. This has the added benefit of reducing congestion around larger airports that have previously been the only available choice in bad weather.

Another initiative that is yielding positive results is the Greener Skies Over Seattle initiative, a collaborative project between the FAA, Alaska Airlines, the Port of Seattle, and the Boeing Corporation.  This initiative will create new NextGen approaches for multiple aircraft and airlines flying into Seattle-Tacoma International Airport (Sea-Tac), leaving Seattle’s skies quieter and greener.  These flight tracks are shorter, more fuel efficient and more environmentally friendly.  Thanks to a lot of hard work by all of our partners, we reached a milestone this summer.  For the first time, Alaska Airlines is flying customers into Sea-Tac using these new NextGen approaches.  The importance of Greener Skies is not just that we are creating more efficient flight paths into Sea-Tac, but that we are developing a template for how to implement these kinds of airspace improvements in cities across the country.

Finally, I would like to share another example of how the FAA is partnering with industry to advance NextGen technology.  The FAA entered into an agreement with JetBlue last year to provide data and conduct real-time operational evaluations.  JetBlue will equip up to 35 of its A320 aircraft with Automatic Dependent Surveillance-Broadcast (ADS-B) avionics.  ADS-B will provide air traffic controllers with precise positioning of the aircraft by using GPS satellite signals, enabling the aircraft to fly more direct routes off the East Coast where ground-based radar coverage is unavailable.  Field trials are scheduled to begin in early 2013.  The FAA will collect valuable NextGen data by observing and conducting real-time operational evaluations of ADS-B on revenue flights.  This agreement is beneficial to both the airline and the FAA and has the potential for industry-wide benefits.

While we’ve made significant progress in accelerating the benefits of new technology, we recognize that, as with any large-scale infrastructure program, we need to position ourselves to address the challenges that will inevitably arise.  The FAA’s Foundation for Success initiative, which we implemented last year, is helping the agency use our resources as efficiently and effectively as possible, while improving agency accountability.  The changes that we made include attaining greater productivity by improving internally-shared services, redesigning FAA’s governance and implementing a revised NextGen management structure.  We recognized that the agency needed to be more proactive and flexible in order to keep pace with anticipated growth and advancements in aviation world-wide.  We also recognized that our commitment to maintaining the safest, most efficient aviation system in the world could not be compromised in any way.  Safety will always remain our number one priority.

We have learned lessons from previous large acquisition programs, and are developing new best practices moving forward.  As an agency, we are also going through a positive transformation. You may recall that in 2010, we embarked upon Destination 2025, a long-term strategic vision for transforming not only the national aviation system, but also the agency responsible for making it happen.

In support of that vision, we launched our Foundation for Success initiative, which is putting an improved organizational structure in place to ensure the agency has the flexibility necessary to keep pace with the expected growth and advancement of aviation worldwide. As part of that initiative, we reorganized the structure of the NextGen office, moving it from the Air Traffic Organization (ATO) and elevating its top official to the position of Assistant Administrator for NextGen. This newly realigned position, reporting directly to the FAA Deputy Administrator, oversees an organization dedicated entirely to delivering NextGen benefits.  Under a revised management structure, the new NextGen organization provides technical assistance and systems integration expertise, as well as promoting collaboration and accountability across the FAA.

We also created a program management office to improve our administration and coordination of key air traffic development programs. Through the Foundation for Success, we also established a new organization solely focused on implementing major technology programs.  The Program Management Organization (PMO) is part of the FAA’s Air Traffic Organization and is responsible for strategically managing our major acquisition programs.  The PMO helps us to work across organizational boundaries to help continue to advance NextGen initiatives, ushering them from the drawing board to live operation.  Equally important, we moved responsibility for these programs out of the components of the ATO which also have responsibility and primary expertise in running the day-to-day operation of the aviation system.  As a result, both the daily operation and the transformational programs can get the focused attention they need.

This new approach is already working with the En Route Automation Modernization (ERAM), a foundational NextGen program.  ERAM has successfully been refocused and is on-time and on-budget.  Changes to the program oversight, contract management and implementation approach over the last year have delivered significant progress in deployment of the technology.  ERAM is now operating in some capacity at nine of the 20 en route centers, and five of those centers are currently using ERAM as the primary technology to direct high-altitude air traffic.  Since December 2011, the system has accumulated more than 20,000 hours of operations across a range of varying airspace needs and traffic volumes. All of the en route centers will be operating ERAM by 2014.  This turn-around is, in no small part, attributable to an improved relationship between a newly appointed management team and our labor organizations, the National Air Traffic Controller Association (NATCA) and the Professional Aviation Safety Specialists (PASS).  We created collaborative work groups and established new program governance and oversight that included a steering committee and regular program management reviews.  We standardized procedures to transition to continuous operations on ERAM, and made a series of process improvements across all aspects of the ERAM technology lifecycle.  The success of ERAM is an essential component of moving forward with NextGen, and we will apply the lessons we’ve learned from the turn-around of ERAM to other initiatives. 

Just as collaboration with the workforce has paid dividends on the ERAM program, industry partners continue to play a key role in transforming the way we travel and communicate in the NAS.  The FAA has a longstanding history of engaging with industry.  The agency has used the RTCA to develop industry consensus around policy, program and regulatory decisions for many years. 

To facilitate NextGen specific recommendations, the NextGen Advisory Committee (NAC) was formed within the RTCA.  The NAC’s goal is to develop a common understanding of NextGen priorities in the context of NextGen capabilities and implementation constraints, with an emphasis on near and mid-term initiatives.  Under the leadership of JetBlue Airways President and CEO Dave Barger, the NAC has helped foster a common understanding of success with joint performance objectives and development milestones, and focuses on implementation issues, including joint investment priorities, and the location and timing of capability implementation.  The NAC is comprised of top-level executives representing operators, manufacturers, air traffic management, aviation safety, airports, environmental, civil and military, and domestic and international interests.  Within the scope of the NAC’s purpose, the FAA will issue tasks that reflect an FAA request for aviation community advice and recommendations on a particular operational or investment topic. Representatives of FAA, MITRE, and the RTCA are non-voting members of the NAC.

The NAC is working to define accepted metrics in six areas to enable measurement of the impact of NextGen on system performance.  They include improved situational awareness, increased operational efficiency, increased capacity, increased fuel efficiency, reduced NAS costs, and improved access to the NAS. Agreed-upon NextGen metrics are critical to ensuring continued investment by users of the system, government and the international community.

Of course, the full range of NextGen goes well beyond what we have discussed.  The Joint Planning and Development Office (JPDO) is the organization responsible for interagency coordination on NextGen and other select aviation issues. The JPDO is also the primary body to consider long-term concepts for NextGen and to ensure alignment of agency priorities. 

The NextGen Institute, established by the FAA in 2005, is the mechanism through which the JPDO enables collaboration between government and the private sector to coordinate long-term NextGen goals and priorities. Key objectives are to foster a shared vision, facilitate concepts and approaches and to encourage innovations]. The Institute Management Council (IMC), comprised of 16 senior industry representatives, oversees the NextGen Institute.

The JPDO charters a variety of collaborative networks that include study teams, discussion groups, information-sharing sessions and community review and validation opportunities. Each has defined expectations and performance periods.  These collaborations have produced a long-term avionics roadmap, examined research and simulation needs for safety of more automated systems and share environmental approaches.

NextGen is a comprehensive undertaking, and can’t succeed without industry collaboration, effective management, and engaging our workforce. Continued investment in NextGen is critical to transforming the NAS and delivering benefits to the flying public.  It is not something FAA can do alone; rather, it will require partnership and commitment by the aviation industry if these endeavors are to be successful.  We know that this Committee is committed to supporting NextGen and understands its significance.  We, both government and industry, appreciate and rely on that support.  There is certainly much more to NextGen than can be discussed in a single statement or appearance before this Committee.  We will continue to work with you as we move forward delivering near-term benefits of NextGen and long-term success in modernizing our nation’s aviation system.

This concludes our prepared statement.  We will be happy to address any questions that the Subcommittee might have.

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