Pipeline Safety: State and Local Perspectives

 THE HONORABLE MARIE THERESE DOMINGUEZ
ADMINISTRATOR
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION

STATEMENT BEFORE THE  

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
Subcommittee on Surface Transportation and
Merchant Marine Infrastructure, Safety and Security
UNITED STATES SENATE

FIELD HEARING ON

PIPELINE SAFETY:  STATE AND LOCAL PERSPECTIVES

BILLINGS, MONTANA

SEPTEMBER 18, 2015

I. Introduction

PHMSA’s reach is vast, but the mission is concise: to protect people and the environment from the risks of hazardous materials transportation in all modes, including the 2.6 million miles of pipeline nationwide.  This safety mission is what drives our talented team of experts and professionals, and it is what drives me in my commitment to make PHMSA the premier safety organization in transportation.

The American energy industry is rapidly changing, growing and expanding.  As such, PHMSA is at a pivotal juncture; as a regulator, it is critical for PHMSA to keep pace with and anticipate industry trends and make sure that, along with growth, there is a commitment to the highest safety standards—a commitment that the American public can count on.   

Thanks to resources provided by Congress, PHMSA is growing by 25 percent.  Hiring and training federal and state inspectors is of the utmost importance as PHMSA expands its workforce.  As it carries out this hiring surge and looks ahead to reauthorization of the pipeline safety program, PHMSA is committed to strategically using the resources Congress has granted us to stay ahead of industry trends, strengthen state partnerships and ensure the highest safety standards. 

The goal is to make PHMSA synonymous with safety, trust and innovation.   Safety is PHMSA’s mission and is at the core of everything the agency does.  To achieve this mission, PHMSA needs a strong foundation of trust with partners in the states, the regulated industry, and Congress—and, above all, with the American people.  And to be an effective regulatory and enforcement agency amid rapid change, it is critical to be innovative and nimble.  In recent months, PHMSA has undertaken a number of initiatives to advance its safety mission and culture of trust, and ensure that the agency is structured for the future.

First, PHMSA is undergoing an organizational assessment.  Through this assessment, the agency will work to optimize its regulations, enforcement authority and internal processes to ensure that it is structured to be responsive and drive innovation that enhances the safety mission.

In addition, PHMSA is the first USDOT modal administration to develop and begin implementing an Agency Safety Action Plan, or ASAP.  ASAP is led by the Secretary of Transportation and is an effort across the Department to proactively identify ways to improve safety.  It’s asking the question: How can PHMSA better leverage current authorities and capabilities to improve safety?

These efforts will help PHMSA to utilize the resources provided by Congress to create greater efficiency in its structure and program execution, improve data collection and utilization, mitigate risk and advance safety.

The PHMSA team looks forward to working with Congress as the agency leads the way in driving state partners and industry toward a nationwide pipeline network that is known for safety, trust and innovation.

II. Pipeline Safety: Toward Zero Incidents

PHMSA does not accept death, injury, or environmental harm as an inevitable consequence of transporting hazardous materials, and the agency drives toward the goal of zero pipeline incidents.  When incidents do occur, PHMSA investigates the root cause of the incident and, if any federal regulations were violated, levies civil penalties.  In addition, Corrective Action Orders (CAO) can require the operator to identify and address the root cause of the incident before they are allowed to return the pipeline to service.  The requirements outlined in the CAO can take months or years to implement and can require the operator to make system-wide investments that improve safety.

In January 2015, when a pipeline in Glendive, Montana, spilled as much as 1,200 barrels of crude oil into the Yellowstone River, PHMSA launched a comprehensive investigation into the cause of the spill.  A team of technically-skilled inspectors deployed to the scene in Glendive and the Bridger Pipeline Company’s control room in Casper, Wyoming, to ensure the operator took all necessary steps to prevent any additional damage as a result of the pipeline failure.   

In addition to launching an investigation of the Glendive spill, PHMSA immediately issued a CAO to the Bridger Pipeline Company, directing it to take a number of immediate and long-term actions to verify that the pipeline was safe to resume operation.  In late April, Bridger tested and, after receiving approval from PHMSA’s Western regional office, replaced the faulty pipeline with a new horizontal directional drilled (HDD) pipeline crossing under the Yellowstone River and resumed service.   HDD is a method that allows pipes to be installed with minimal environmental impacts and at depths that may help reduce the likelihood of failure due to river scouring. 

In 2011, when the ExxonMobil Pipeline Company’s Silvertip pipeline in Laurel, Montana released 1,509 barrels of crude oil into the Yellowstone River, PHMSA issued a Corrective Action Order that directed the operator to complete numerous safety improvements, including the replacement of river crossings across three major Montana rivers with a deeper HDD pipeline to reduce exposure from erosion and help ensure long-term safety.  ExxonMobil reported spending $34 million to comply with the CAO—above and beyond the $1 million civil penalty issued by PHMSA.  On June 12^th of this year, PHMSA denied ExxonMobil Pipeline Company’s petition for reconsideration of PHMSA’s Final Order and civil penalty.   

PHMSA is employing a similar investigative strategy in response to the May 19, 2015, Plains Pipeline, LP oil spill in Santa Barbara, California.  Following the spill, PHMSA immediately deployed an investigative team to the scene and an investigator to Plains’ Midland, Texas control room to review operational information and data.  Plains reported that the failure resulted in the release of 3,400 barrels of crude oil, some of which reached the Pacific Ocean.  Investigation by federal and state agencies continues as to the volume of oil spilled, the miles of beaches impacted, and other impacts to the environment.  On May 21, PHMSA issued a Corrective Action Order to Plains with a set of instructions and requirements for mitigating the hazards and restoring safety conditions, operations and culture.  The order includes an ongoing metallurgical analysis as well as third-party review of previous internal inspections carried out by the operator.  The affected pipeline remains shut down pending completion of an extensive integrity analysis.  PHMSA will not allow the line to return to operation until the operator has taken satisfactory actions to mitigate potential risks. 

The investigations for both the Glendive and Santa Barbara incidents are still in progress, and PHMSA will pursue additional enforcement actions if it is determined that either operator violated any Federal pipeline safety regulations.  These spills highlight the need for continuous improvement and commitment to safety by PHMSA, state partners and operators.

III. Leveraging State Partnerships to Mitigate Risk

The recent oil spills in Montana and California are unacceptable and unfortunate, and they underscore the importance of PHMSA’s safety mission and the need to learn from these incidents and work together with state partners to push for improvements that mitigate risk and prevent future incidents.  Montana is one example of PHMSA’s strong coordination with state partners, which is ever more important as the industry expands.    

For example, following the 2011 ExxonMobil spill, PHMSA conducted a joint study with the Montana Governor’s Oil Pipeline Safety Review Council.  The joint study revealed that many of Montana’s pipeline water crossings could be threatened by river flooding and channel migration.  PHMSA has been working closely with Montana’s Departments of Environmental Quality, Natural Resources and Transportation, as well as Montana pipeline operators, to ensure that necessary steps are taken to safeguard existing crossings.  These steps include: in-place safety procedures during flood conditions or increased river flow rates; increased frequency of patrols and depth of cover surveys during and after significant river-flow events; swift remediation measures, if needed; strengthening emergency response preparedness; and replacing trenched crossings with HDD pipelines. 

While HDD pipelines are a critical and successful tool, operators must take a comprehensive approach to improving safety.  In addition to the HDD pipeline installations, PHMSA has worked with Montana to establish more robust safety procedures for hazardous liquid pipeline operators in the state.  The point of our Integrity Managements regulations is that all operators of pipelines located in environmentally sensitive areas (“High Consequence Areas”) such as river crossings must carefully monitor their systems and take extra precautions to prevent and mitigate the potential impacts of accidents in such areas. 

Furthermore, on April 9, 2015, PHMSA issued an advisory bulletin to ensure operators were aware of the inherent risks associated with river crossings and remind them of the need to take extra steps to protect such environmentally sensitive areas.

These efforts are yielding measurable results for Montana.  Since the 2011 ExxonMobil spill, 17 pipeline crossings of major rivers (>100 feet wide) in Montana have been replaced with HDD pipelines.  Of the 64 major river crossings in Montana, 41 now utilize HDD methods. 

This kind of progress shows the need for strong state relationships across the country to stay ahead of industry and pipeline safety trends.  States’ input and experience is critical as PHMSA sets public policy, strategically allocates resources, and moves forward with new regulations.  Likewise, PHMSA plays an important role in supporting capacity-building and enforcement of high standards nationwide.  Through agreements and certifications, states assume authority over more than 80 percent of intrastate gas and hazardous liquid distribution and transmission pipelines by inspecting and enforcing both Federal and state regulations.  PHMSA’s efforts to support pipeline safety also include providing grant funding to support state damage prevention programs and technical assistance related to pipeline safety issues.

A key resource available to support states is the State Base Grant program, which can increase the capacity for inspection and compliance.  Last year, PHMSA provided Montana with more than $160,000 in grant funding—amounting to 118 inspection days.  Over the past 10 years, PHMSA grants have provided more than $650,000 to Montana.  PHMSA recently announced an estimated $214,000 to Montana to help cover the costs of its natural gas pipeline safety program for the 2015 calendar year.  PHMSA also provides Technical Assistance Grants to Montana—$49,600 in total funding from PHMSA since 2009.

PHMSA has provided significant support to Nebraska as well.  Last year, PHMSA provided $255,000 in grant funding to Nebraska—amounting to 373 inspection days.  Over the past 10 years, PHMSA grant funding to Nebraska totaled more than $1.6 million.  Last week, PHMSA announced an estimated $347,000 to help cover the costs of Nebraska’s natural gas pipeline safety program for the 2015 calendar year.

As part of the Agency Safety Action Plan, PHMSA is seeking ways to assist with and incentivize high performance among state partners, and looks forward to working with Congress to make its state partners as effective as possible.

IV. PHMSA Hiring Surge:  A Workforce to Address Evolving Safety Challenges

The FY 2015 Omnibus provided PHMSA’s pipeline safety program with 109 new positions, 80 percent of which will be in the inspection and enforcement areas.  These additional inspectors will allow PHMSA to increase its pipeline inspection regimen and improve oversight of interstate hazardous liquid and gas pipeline operations in Montana, Nebraska and across the country.

PHMSA has an aggressive strategy underway to recruit, hire and fill these positions as quickly as possible.  The majority of these positions will consist of inspectors and enforcement personnel to be located across our five regional offices to oversee operators’ pipeline safety programs, conduct critical inspections and accident investigations, and participate in spill response activities.  Twelve of these new positions will be allocated to the Western regional office, which is responsible for the State of Montana.  

One challenge is that PHMSA competes directly with industry to fill these positions.  The engineers and transportation specialists who are the target candidate pools for these positions are highly sought after by the expanding U.S. oil and gas industries that PHMSA regulates.  It is difficult to match not only industry salaries, but also the speed with which industry is able to hire.     

To address these challenges, PHMSA is pursuing a comprehensive strategy to encourage talented people to seek careers in public service.  PHMSA uses hiring authorities and pay flexibilities such as the Veterans Employment Opportunities Act and the Veterans’ Recruitment Appointment; recruitment, relocation and retention incentives; and the student loan repayment program.  PHMSA is seeking Direct Hire Authority.  The agency posts vacancy announcements on social media (Twitter and LinkedIn); conducts outreach to professional organizations and veterans groups; and attends career fairs and on-campus hiring events.  PHMSA also plans to explore creating new partnerships with colleges and universities with engineering programs. 

As the workforce increases, training is critical to achieve the highest possible level of safety.  Hiring and training federal and state inspectors is of the utmost importance as PHMSA expands its workforce by 25 percent from increased appropriations.   Enhanced training opportunities for both Federal and state inspectors include tailored training for inspectors, finding the right mix between classroom and distance learning to alleviate travel challenges.

V. Data-driven Regulation

PHMSA’s priorities and activities are guided by three strategic principles:  Safety, Trust and Innovation.  It is PHMSA’s responsibility to use its regulatory and enforcement authority effectively to assure all Americans that, even as the industrial landscape changes, safety is a constant.  

Completing all Congressional mandates is critical to PHMSA’s pipeline safety program, allowing the agency to meaningfully strengthen its oversight program.  PHMSA has completed 26 of the 42 mandates contained in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011.  

For example, in 2013 PHMSA completed section 28 of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, which directed the agency to conduct a water crossings study to determine if the depth of cover over buried pipelines was a factor in any accidental release of hazardous liquids. 

PHMSA has a plan in place to address the remaining open mandates and is working diligently to do so.  Four mandates were addressed this year by reporting to Congress on the potential extension of existing regulations to unregulated gathering lines, submitting the first of two reports to Congress on the Research & Development program, offering maintenance-of-effort waivers to states for FY 14, and implementing continued improvements to the Facility Response Program. 

The hard work continues.  The damage prevention final rule was published on July 23^rd; the rule goes into effect on January 1, 2016.  With the support of the Office of Management and Budget (OMB), over the summer PHMSA issued two proposed rules on expansion of excess-flow valve requirements, and updated incident notification requirements for pipeline operators and operator qualification.  The Operator Qualification, Cost Recovery and Accident Notification proposed rule addresses two mandates from the 2011 Act—the requirement that operators notify the National Response Center of an incident as soon as practicable, but not more than one hour after confirmed discovery, and the authorization for PHMSA to recover costs for pipeline design reviews. 

PHMSA is working to publish its proposed natural gas transmission and hazardous liquid rules by the end of this calendar year, and is working diligently within the Department and with OMB to meet this goal.  These rules will improve pipeline safety significantly in Montana, Nebraska and nationwide.   

The rulemaking process is methodical to ensure that new rules are effective, efficient, and reflect feedback from all stakeholders.  In addition to working to advance the gas and liquid rules, PHMSA is working to balance representation on the gas and liquid pipeline technical advisory committees to ensure that their recommendations are borne out of balanced and robust conversations.  There are obvious challenges in getting there; membership in the advisory committees changes, due in part to new appointments, retirements and career changes.  In the last 24 months, PHMSA has lost 8 members representing the government and public sectors.  It is important to rebalance these committees again to benefit and protect the American public from pipeline transportation risks.  

To assist with future rulemaking efforts and the broader safety mission, PHMSA has initiated an agency-wide data assessment.  The assessment will evaluate PHMSA’s data and analytical needs and review the current status of data, technology systems, and skills of the PHMSA workforce.  It will then develop a gap analysis and comprehensive strategy to become a predictive, data-driven, risk based regulatory development and enforcement safety agency.

PHMSA continuously works to develop new ways to mitigate risk with one aspirational goal in mind:  zero deaths, injuries, environmental and property damage, and transportation disruptions related to hazmat transportation.  Serious pipeline incidents have declined an average of 10 percent every three years since 1988, despite increased energy production, aging infrastructure, and increased pipeline mileage.

To sustain this safety record, PHMSA is positioning to be more predictive, in order to anticipate the risks of the future and drive innovation that enhances the safety mission. Research and development is vital to that effort. 

PHMSA conducts R&D in partnership with industry, universities, and other stakeholders, working together to identify gaps in current technology and reach consensus on the sector’s most pressing challenges.  PHMSA’s investments have contributed to new pipeline technologies entering the market, including above-ground, radar-based pipeline mapping and a nondestructive testing method for unpiggable pipelines.  In addition to these collaborative R&D efforts, PHMSA conducts R&D in the public interest to enhance our rulemaking efforts and our safety mission. 

VI. Data-sharing Need

Of the 2.6 million miles of pipeline within the United States, states monitor 80 percent.  Yet the information the states gather through inspections and enforcement activities is not shared between states or with PHMSA.  Linking state and federal inspection, enforcement, and geospatial data, and providing a consolidated national view of all pipeline data, is a vital component in identifying current and emerging risks that drive improved safety performance and informed regulations.  To that end, PHMSA has consistently requested a nationwide integrated database of pipeline inspection and enforcement data. 

This nationwide integrated database will close important gaps in the inspection, enforcement and remediation of unsafe pipelines and their operators with two important elements.  First, it will share the safety inspection records by operator and by element of the inspection and communicate those results to all impacted inspectors in states with common operators and common practices.  Simply put, a dangerous practice or pipeline element found in one location will be communicated quickly to all inspectors and operators that would have an interest in the condition identified in order to avoid environmental damage and disasters in and around our communities.  Second, this database will plot the results of inspections along the available pipeline mapping systems, giving a better optic of the coverage of inspections, pipelines, and incidents.

The improved data collection and sharing will also help inform PHMSA’s future rulemaking activity by allowing PHMSA to capture data from the States on the 80 percent of the Nation’s pipelines that they oversee.  Through this project, PHMSA and state inspection and enforcement data could be combined with current incident and annual reporting data to provide complete safety records for all pipeline operators and a more complete view of the pipeline landscape to inform future regulation.  This would include the identification of pipelines that pose a higher risk of failure as well as a more complete view of overall fitness level information to be assessed when significant determinations such as enforcement actions or the issuance of special permits are being considered.

VII. Enhancing Enforcement

Enforcement authorities are a critical aspect of preventing and deterring accidents.  PHMSA is undergoing an assessment of its enforcement capabilities and how it can use them more effectively.  Results over the course of the next three to four months will help the agency create better alignment and efficiency in program delivery, and identify opportunities to enhance enforcement of the authorities Congress has granted PHMSA. 

One of PHMSA’s most effective enforcement tools is the Corrective Action Order (CAO), which directs an operator to take immediate action to prevent or mitigate the risks from a pipeline that poses a threat to life, property, or the environment.  However, a CAO only applies to a single operator and cannot address emerging safety issues that affect multiple operators.  Advisory bulletins are important tools that provide industry with clear guidance on issues that impact safety.  While most pipeline operators will adjust their practices based on information communicated in Advisory Bulletins, the bulletins do not carry the weight of law.

As PHMSA works toward a comprehensive understanding of it enforcement capabilities, it is committed to using all enforcement authorities wisely to address the greatest risks and maximize safety. 

VIII. Promoting a Strong Safety Culture at PHMSA and Industry-Wide

PHMSA improves safety by using all the tools at our disposal—safety regulations, research and development, education and outreach, inspections, and enforcement tools such as corrective actions, civil penalties and other interventions.  A critical part of this safety system is to continually strive for improvement and to find new ways to raise the bar on safety. 

With stronger safety partnerships and enhanced coordination with states, PHMSA aims to further enhance a risk-based approach to safety management and a strong safety culture throughout the entire pipeline sector and regulated industries.   

Leading by Example

PHMSA is leading by example through the Agency Safety Action Plan and organizational review.  The ASAP should serve as a model for the entire pipeline sector to take a close look at where safety improvements can be made and to take concrete steps to drive toward enhanced safety in a methodical and comprehensive way.  The ASAP is a PHMSA-wide effort, with the strong support of the Secretary of Transportation. 

In the next few weeks, PHMSA will also begin an organizational assessment.  With additional positions and funding for both the pipeline and hazmat safety programs, Congress has invested in PHMSA.  The organizational assessment, in conjunction with a Human Capital Strategy and Staffing Study, will help determine how to allocate these resources and how to position the organization for efficiency and long-term success.  It also will help ensure effective use of resources to support PHMSA’s mission, reduce risk and improve safety.

Safety Management System Recommended Practice

In 2010, the National Transportation Safety Board (NTSB) recommended that the American Petroleum Institute (API) facilitate the development of a safety management system standard specific to the pipeline industry, in collaboration with industry, regulators and other stakeholders.  PHMSA participated in the development of API Recommended Practice (RP) 1173, the recently published recommended standard for implanting Safety Management Systems in the pipeline industry.

PHMSA fully supports the implementation of RP 1173 and plans to promote vigorous conformance to this voluntary standard.  The recommended practice is a proactive, system-wide approach to reducing risks and provides operators with a comprehensive framework to address risk across the entire life cycle of a pipeline.  The standard promotes pipeline safety, while implementing guidelines for continuous improvement.

Moving forward, PHMSA will continue to work with states and other stakeholders to encourage the implementation of RP 1173 across the pipeline industry.

IX. Conclusion

PHMSA employs a talented team of experts and professionals, and is dedicated to maintaining the highest levels of safety in today’s and tomorrow’s industry. 

PHMSA has a variety of capabilities at its disposal: enforcement authority, a workforce of world-class technical experts, and safety partnerships.  The goal is to work within the organization, with partners and with Congress to implement changes that allow for long-term success and safety in Montana, Nebraska and nationwide.      

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Federal Motor Carrier Safety Administration Programs

STATEMENT OF

ANNE S. FERRO
ADMINISTRATOR
FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE INFRASTRUCTURE, SAFETY, AND SECURITY
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
U.S. SENATE

Federal Motor Carrier Safety Administration Programs

APRIL 28, 2010

Chairman Lautenberg, Ranking Member Thune, and members of the Subcommittee, thank you for inviting me to appear before you today to give an overview of the priorities and programs of the Federal Motor Carrier Safety Administration (FMCSA), the successes we have had in enhancing safety on our Nation’s highways, and our continuing challenges as we strive to significantly reduce severe and fatal crashes involving commercial motor vehicles.

INTRODUCTION

During my confirmation hearing to be Federal Motor Carrier Safety Administrator last September, Chairman Lautenberg pointed out that “[e]very year for the past decade, nearly, 5,000 people died and 125,000 were injured in crashes with a large truck. That’s nearly 14 people a day, or 14 families torn apart by horrible, and often avoidable accidents.” Each one of these fatalities and injuries reflects a tragic loss, pain, suffering, or hardship and is truly unacceptable. As the head of the Agency responsible for reducing these fatality and injury rates, I do not waiver in my commitment to prevent and eliminate these avoidable motor carrier crashes. Under the strong leadership of Secretary LaHood, Deputy Secretary Porcari, and with the dedication and support of every man and woman who works for FMCSA, we are steadfast in achieving the Agency’s mission to improve and secure motor carrier safety.

CORE PRIORITIES

As I will describe in further detail, FMCSA has a number of initiatives and programs underway aimed at achieving our mission. As the new Administrator, it is my job to set a strategic framework in which to prioritize our responsibilities and clearly focus our efforts and resources on a vision of eliminating severe and fatal crashes involving commercial vehicles. FMCSA must:

1. Raise the safety bar to enter the industry;
2. Require operators to maintain high safety standards to remain in the industry; and
3. Remove high-risk operators from our roads and highways.

This strategic framework applies to companies, drivers, brokers, and service-providers alike. To achieve the best outcome within this framework, FMCSA must improve its program and rule-development processes, its stakeholder relationships, and the health of the organization.

While recognizing the important safety work that remains to be accomplished, I would like to point to some of the recent safety improvements in motor carrier safety:

• Total miles traveled by all vehicles has grown significantly over the past 10 years, most significantly for large trucks and buses – there has been a 16 percent increase in miles traveled by these vehicles from 1998 to 2008. In addition, the number of large trucks and buses registered has increased 17 percent over this time period.
• Even with the continued growth in commercial vehicle traffic, the most recent data available show that our Nation’s highways experienced their lowest number of fatalities (4,525 in 2008) from crashes involving large trucks and buses since fatal crash data collection began in 1975.
• Fatalities from large truck or bus crashes have dropped for three years in a row, a decline of 15 percent from 2006 to 2008.
• Safety improvements have been realized not only in terms of fatal crashes, but also in injury crashes. In 2008, 113,000 people were injured in crashes involving large trucks and buses, the lowest number of persons injured in these crashes since 1988, the first year of injury crash data collection.
• The number of people injured in large truck and bus crashes declined 10 percent from 2006 to 2008.

The reduction in severe and fatal crashes involving commercial motor vehicles comes about through the dedication and hard work of many people represented by the stakeholders in this room. We are broadening the participation of these stakeholders on our Motor Carrier Safety Advisory Committee (MCSAC) to improve the transparency of the input we receive about our programs. However, we can and must do more. FMCSA’s employees are passionate about saving lives. With clear priorities and productive stakeholder relationships, I assure this Committee and the public that we are on a path to demonstrate the effectiveness of our passion better than ever.

OVERVIEW OF FMCSA

FMCSA’s primary mission is to prevent commercial motor vehicle (CMV)-related fatalities and injuries. We achieve this mission through a mix of programs, rules, and resources that together exert direct and indirect influence over approximately 500,000 actively registered commercial motor carriers and 7 million commercial driver licensees. Our direct influence is made possible by FMCSA’s workforce of 1,100 employees, almost 900 of whom are in our field operations utilizing a suite of strong laws, programs, and resources.

Indirectly, we achieve our mission by making it a priority for licensing and law enforcement agencies in 50 States and the District of Columbia through grants, laws, education and partnerships. State commercial vehicle police and inspectors, Department of Motor Vehicles (DMV) employees and examiners, public service commissions, our employees in the field, and employers are the people closest to preventing or enabling an unsafe carrier or driver from operating.

The range of FMCSA’s authority, programs and activities includes:

• Commercial Drivers Licenses: FMCSA develops standards to test and license CMV drivers and maintain the Commercial Driver License Information System. Through grants and guidelines States carry out and administer these programs.
• Data and Analysis: FMCSA collects and disseminates safety performance and crash data to improve motor carrier and motorcoach safety.
• Regulatory Compliance and Enforcement: FMCSA directs an aggressive compliance and enforcement program to improve safety performance and remove high-risk carriers from the Nation's highways through reviews of the motor carrier’s compliance with safety and economic regulations.
• Research and Technology: FMCSA works closely with the other modes within DOT on research and technology projects to identify best practices and new technologies that improve the safety of motor carrier operations, CMVs, and drivers.
• Safety Assistance Grants: FMCSA provides financial assistance to conduct roadside inspections, traffic enforcement and other CMV safety programs. These grants promote motor vehicle, motorcoach and motor carrier safety and regulatory uniformity.
• Other Activities: FMCSA supports the development of uniform reciprocal motor carrier safety requirements and procedures throughout North America. It participates in international technical organizations and committees to learn about the best practices in motor carrier and motorcoach safety throughout North America and the rest of the world. It enforces regulations, ensuring safe highway transportation of hazardous materials and enforces statutory and regulatory consumer protection provisions regarding the transportation and delivery of household goods in interstate transportation.

A discussion of current developments in FMCSA’s programs, rules, and resources follows.

PROGRAMS

COMPREHENSIVE SAFETY ANALYSIS (CSA) 2010

The CSA 2010 initiative, the Agency’s new operational enforcement business model, is a critical and far-reaching component in addressing the Agency’s priorities and meeting its goals. CSA 2010 represents a move from the current one-size-fits-all compliance review model. Once implemented, it could help FMCSA achieve a greater reduction in large truck and bus crashes and fatalities and injuries by enabling the Agency and our State partners to analyze the safety performance of a much larger population of motor carriers.

CSA 2010 will allow more comprehensive review, analysis, and restructuring of FMCSA’s current safety fitness determination process and compliance and enforcement programs. The overall goal is to lead FMCSA to a more effective and efficient operational model – one that will have a greater impact on large truck and bus safety while better using Agency resources. This new operational model includes four major elements: (1) measurement, (2) intervention, (3) safety fitness determination, and (4) information technology.

The Agency is planning to begin nationwide CSA 2010 deployment before the end of 2010. At that time, FMCSA plans to replace its current Safety Status Measurement System (SafeStat) with the new Carrier Safety Measurement System (CSMS) and send more comprehensive information on unsafe motor carriers to roadside inspectors. Through CSMS, FMCSA will focus on 7 key behaviors that are linked to CMV crash risk:

• Unsafe Driving
• Fatigued Driving
• Driver Fitness which includes licensing and medical compliance standards
• Crash History
• Vehicle Maintenance
• Improper Loading and Cargo
• Controlled Substances - Drugs and Alcohol

This new measurement system will allow the Agency to identify more high risk carriers based on improved safety performance data than under the previous system.

NEW ENTRANTS TO THE CMV INDUSTRY

FMCSA recently significantly strengthened its New Entrant Safety Assurance Program by raising the standard for successfully completing the new entrant safety audit. The Agency identified 16 safety regulations for which a violation by a new entrant carrier would result in an automatic failure of the safety audit. Any new entrant that fails the safety audit must submit a Corrective Action Plan (CAP) in order to continue to operate in interstate commerce. FMCSA also closely monitors the new entrant during the initial 18-month period of operation and, if certain violations are discovered during a roadside inspection, the new entrant will be subject to an expedited action to correct the identified safety deficiencies. Compliance with the New Entrant rule has been required for just over three months and the statistics on the new entrant safety audits to date show:

·      4,808 New Entrant Carriers underwent safety audits

·      2,184 New Entrant Carriers failed the safety audit

·      FMCSA has received approximately 632 Corrective Action Plans (CAP) to date from new entrant carriers.

VETTING - PASSENGER AND HOUSEHOLD GOODS CARRIER

FMCSA has made significant progress in identifying motorcoach carriers that operate illegally and place passengers at risk. After the tragic August 2008 fatal motorcoach crash in Sherman, Texas, FMCSA initiated its passenger carrier vetting program to examine in detail the history and background of new applicants for passenger operating authority to ensure they conform with FMCSA’s safety fitness policy. In addition, the vetting process allows FMCSA to discover reincarnated, or “chameleon,” passenger carriers before such carriers are authorized to engage in for-hire interstate transportation. The Agency subsequently expanded the program to include interstate household goods carriers. FMCSA has added additional personnel to participate in this labor intensive process, which has proven valuable as FMCSA received over 2,600 applications for operating authority and 879 have had their applications dismissed, denied or withdrawn. FMCSA is exploring the resources needed to expand the vetting program to hazardous materials carriers seeking FMCSA operating authority and eventually to all applicants for authority.

FMCSA still faces challenges keeping these carriers off the roads, however. Unfortunately, although our vetting program denied the application for operating authority from the motorcoach company involved in a crash that killed 6 people near Phoenix, Arizona, on March 5, FMCSA’s rejection of the application did not stop the carrier from operating illegally. FMCSA’s investigation of this carrier is continuing, however, the Agency responded swiftly to the carrier’s actions. Working with the Department of Justice, FMCSA was able to get the carrier to enter into a consent decree on the day of the crash in which it agreed to immediately cease all interstate and international passenger service. The following day, FMCSA obtained an order from a Federal District Judge further enforcing the consent decree and making any violations subject to the court’s contempt powers and associated criminal and civil penalties. The Agency is examining its current authorities to determine if more is needed to prevent unsafe or illegal carriers from operating after authority is denied.

MOTORCOACH SAFETY

On April 30, 2009, Secretary LaHood ordered a full departmental review of motorcoach safety and the development of a departmental Motorcoach Safety Action Plan. The review considered recommendations from the National Transportation Safety Board (NTSB) and other transportation stakeholders. On November 16, 2009, the Department released an Action Plan that contains 7 priority action items derived from that review. FMCSA is responsible for implementing 4 of these items: (1) initiating rulemaking to require electronic on-board recording devices on all motorcoaches to better monitor drivers’ duty hours and manage fatigue, (2) initiating rulemaking to propose prohibiting texting and limiting the use of cellular telephones and other devices by motorcoach drivers, (3) enhancing oversight of carriers attempting to evade sanctions and of other unsafe motorcoach companies, and (4) establishing minimum knowledge requirements for passenger transportation authority applicants.

In addition, FMCSA has increased the number of compliance reviews (CRs) conducted on motorcoach companies. In FY 2005, FMCSA and our State partners conducted 457 motorcoach company CRs. The FMCSA increased this number to 646 in FY 2006. The FMCSA conducted 1,304 motorcoach company CRs in FY 2007, which more than doubled the previous period’s efforts. In FY 2008, the Agency completed 1,307 CRs. The FMCSA completed 1,286 motorcoach company CRs in FY 2009. Given that there are approximately 3,100 motorcoach companies in the United States, FMCSA conducted CRs on about one-third of the industry during each of the past three fiscal years.

The FMCSA requires State agencies to include a formal motorcoach inspection program in their Commercial Vehicle Safety Plan in order to receive grant funding through the Motor Carrier Safety Assistance Program (MCSAP). As a result of this initiative, the number of motorcoach inspections increased annually for the last several years. In Fiscal Year 2005, States inspected 12,991 motorcoaches and in FY 2009 inspected 28,957 motorcoaches.

COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA)

In late 2008, the Agency sent informational letters to authorized over-the-road bus companies and over 100 disability stakeholder organizations about the Over-the-Road Bus Transportation Accessibility Act of 2007 (OTRBTAA). In compliance with the OTRBTAA, in February 2009, FMCSA and the Department of Justice executed a Memorandum of Understanding that defines the respective enforcement efforts of both agencies for accessibility requirements of the ADA.

In March 2009, FMCSA began conducting ADA Reviews (ADARs) to investigate the regulatory compliance of over-the-road bus companies. As of February 23, 2010, FMCSA had conducted 33 ADARs on large and small fixed route over-the-road bus companies. FMCSA had initially targeted large fixed route companies for ADARs because this industry sector transports the largest number of passengers. No major violations have been discovered to date.

COMMERCIAL ENFORCEMENT OF HOUSEHOLD GOODS (HHG)

The FMCSA regulates household goods carrier and broker compliance with motor carrier safety regulations, financial responsibility requirements and commercial regulations. Our authority provides protection to consumers during interstate moves by defining the rights and responsibilities of consumers, household goods carriers and brokers.

In FY 2009, FMCSA Safety Investigators conducted 557 HHG reviews; responded to 2,127 consumer complaints, many of which were satisfactorily resolved by HHG staff; and maintained a consumer based “Protect Your Move” web site (www.protectyourmove.gov). FMCSA issued an enforcement policy identifying and targeting the top 100 household goods carriers for compliance reviews. These carriers are generally those that receive the most consumer complaints, although some have also been identified as unsafe or as operating while their authority has been inactivated. For the last two years, FMCSA field staff have conducted strike forces on household goods carriers that have been identified as unsafe and the subject of various consumer complaints. In FY 2009, the strike force activity concluded, having completed 224 targeted compliance reviews that resulted in 50 enforcement cases.

The Government Accountability Office recently published its final report on the HHG moving industry stating that progress has been made in enforcement, but indicating that increased focus on consumer protection is needed. The report identified the enforcement tools used to regulate the HHG industry, noting that FMCSA conducted 629 HHG reviews in FY 2008. The report also identifies a provision in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) that permits State regulatory agencies and State Attorneys General to bring Federal consumer protection actions against interstate HHG carriers that has not been implemented by States.

PRE-EMPLOYMENT SCREENING

FMCSA recently launched the initial phase of its Pre-employment Screening Program (PSP) to provide motor carriers with access to crash and inspection data found in FMCSA’s Motor Carrier Management Information System (MCMIS) on drivers they are seeking to hire. The driver must provide his or her prior written consent to have information released to the motor carrier. The program is expected to be rolled out next month.

SAFETY BELT USE

Safety belts save lives and FMCSA is committed to promoting and educating CMV drivers on the importance of using them. In March, FMCSA announced that safety belt use for CMV drivers has improved. New data show that 74 percent of commercial truck and bus drivers currently use their safety belts, an improvement from the 65 percent of drivers who were using safety belts in 2007. It is important, however, to note the key research findings that show there is work yet to be done:

·  In States where not wearing a safety belt is a primary offense, 78 percent of CMV drivers and their occupants used safety belts, compared to a 67 percent usage rate for CMV drivers and their occupants in States with weaker belt use laws.

·  CMV drivers for regional or national fleets showed higher safety belt use at 78 percent, versus 64 percent for independent owner-operators.

·  Safety belt use rates for CMV drivers and their occupants were highest at 79 percent in the West, compared with 75 percent in the South, 68 percent in the Midwest, and 64 percent in the Northeast.

DRIVER MEDICAL STANDARDS - PROGRAMS

The FMCSA’s medical program promotes the safety of America’s roadways through the development and implementation of medical qualification standards that ensure physical qualifications of interstate truck and bus drivers. The Agency receives important advice and recommendations concerning the physical qualifications and standards for CMV drivers from its Medical Review Board (MRB), a Federal Advisory Committee Act committee. FMCSA staff reviews MRB recommendations in developing regulatory options for future rulemakings.

In the meantime, FMCSA is phasing in new regulatory requirements issued in December 2008 to combine the medical certification process with the commercial driver’s license (CDL) issuance and renewal process. The rule requires interstate CDL holders and those applying for a CDL to operate heavy trucks and buses in interstate commerce to provide a copy of the medical certificate to the State licensing agency as proof the individual is medically qualified to drive commercial vehicles in interstate commerce.

Later this year, FMCSA expects to issue a final rule to establish a National Registry of Certified Medical Examiners. This rulemaking would establish minimum training and testing requirements for all healthcare professionals that issue medical certificates for interstate truck and bus drivers.

RULEMAKING

HOURS OF SERVICE FOR TRUCK DRIVERS

Regulating the number of hours commercial drivers may work has been a Federal government responsibility for 75 years, beginning with the Interstate Commerce Commission (ICC). Through the years, there have been three reforms of the rules, the most notable of which was the April 2003 rule, when FMCSA made significant revisions. The 2003 rule limited driving to 11 hours within a 14-hour, non-extendable window after coming on duty following 10 consecutive hours off duty (known as the 11-hour rule). Although the rules concerning weekly limits for on-duty time were unchanged, drivers were allowed to restart the weekly limit calculation after they took 34 consecutive hours off duty (known as the 34-hour restart provision). The rule also extended the requisite off-duty time from 8 to 10 hours, providing drivers more time for restorative rest.

As this Subcommittee is well aware, FMCSA’s efforts to craft revised hours of service (HOS) regulations for CMV drivers has been an arduous process and has resulted in court challenges. In October 2009, FMCSA entered into a settlement agreement with parties that had challenged the rule and agreed to undertake a new rulemaking.

One of my top priorities as Administrator has been to elicit the views of the many individuals and entities affected by this rule and for the Agency to craft an HOS rule that provides the best framework for managing fatigue and making our roads as safe as possible.

To that end, in December 2009, FMCSA tasked its MCSAC with providing the Agency with a list of ideas and concepts that should be considered in drafting a HOS rule. In January, FMCSA took steps to encourage all interested parties to help the Agency identify new research and perspectives. Specifically, the Agency posted the MCSAC’s meeting notes, opened the HOS public docket and held a series of public “listening sessions” around the country. Over 3,500 people participated in the listening sessions – in person, by phone, or web – to provide a broad range of comments, ideas, information, and relevant research the Agency might consider in developing a Notice of Proposed Rulemaking (NPRM). We are committed to using all of the information we have received to propose a rule that addresses the concerns of our stakeholders and presents the safest option. FMCSA intends to publish its NPRM later this year and issue a Final Rule no later than July 2011.

ELECTRONIC ON-BOARD RECORDERS (EOBRs)

On April 5, 2010, the Agency took another step toward reducing the number of fatigue related crashes by publishing a final rule mandating the use of EOBRs by carriers that have violated the hours of service rules. This action will reduce the likelihood of falsified or incomplete records of duty status.

The final rule follows up on the January 2007 NPRM but broadens the remedial directive to require installation of EOBRs on many more carriers. It represents a significant step forward in response to Congressional concerns about the 2007 NPRM, the NTSB Most Wanted Safety Recommendation concerning EOBRs, and the public comments we received in response to the proposal. The final rule establishes: 1) a new performance-oriented standard for EOBR technology; 2) a mandate for certain motor carriers to use EOBRs to remediate regulatory noncompliance (a remedial directive); and 3) incentives to promote voluntary EOBR use by all carriers. The rule will result in approximately 5,700 motor carriers being required to use EOBRs each year after the first full year of implementation.

DISTRACTED DRIVING

Since the Department’s historic Distracted Driving Summit last fall, FMCSA has played an active role in supporting Secretary LaHood’s efforts in bringing to bear all the tools at DOT’s disposal to address this critical safety issue. FMCSA completed its ‘‘Driver Distraction in Commercial Vehicle Operations’’ study and released the final report on October 1, 2009. The purpose of the study was to investigate the prevalence of driver distraction in CMV safety-critical events (e.g., crashes, near-crashes, unintended lane departures). The study included over 200 truck drivers and 3 million miles of data. The dataset was obtained by placing video recorders on vehicles and monitoring the behavior of real drivers driving in real-world situations.

The study concluded that drivers who engage in texting took their eyes off the road for an average of 4.6 seconds out of the 6 seconds prior to a safety-critical event. At 55 miles per hour, this means that the driver is traveling the length of a football field, including the end zones, without looking at the road and is 23 times more likely to have a safety critical event than drivers who do not text while driving. Because of the safety risks associated with texting while driving, FMCSA took expedited action. The Agency published regulatory guidance in the Federal Register on January 27 regarding the applicability of current regulations to texting by commercial motor vehicle drivers. The regulatory guidance clarified that truck and bus drivers operating in interstate commerce who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750. FMCSA followed up on the regulatory guidance by publishing a NPRM with an explicit prohibition against texting on April 1, 2010. The NPRM also provides driver disqualification penalties that would enable FMCSA and its State partners to take unsafe drivers off of the road.

As part of our effort to get the maximum amount of public participation and collaboration in the texting rulemaking, the Department announced an unprecedented partnership with Cornell University. The Cornell e-Rulemaking Initiative (CeRI) partnership will make the Federal regulatory process more accessible to the public through its “Regulation Room,” an online public participation environment where people can learn about and discuss proposed Federal regulations and provide effective feedback to the Department. This is an important step toward keeping President Obama’s promise of opening government to more effective public citizen participation.

DRUG AND ALCOHOL DATABASE

FMCSA is currently drafting a proposed rule that would mandate reporting requirements to identify CDL holders who test positive for drugs or alcohol or otherwise fail to comply with drug and alcohol testing requirements. The system will also track a driver’s compliance with the return-to-duty requirements of the Department’s workplace drug and alcohol testing programs.

UNIFORM CARRIER REGISTRATION PLAN AND AGREEMENT (UCR)

The UCR is a fee program established under SAFETEA-LU as a means to provide States with funds equivalent to the revenue they collected under a previous, State-only program known as Single State Registration System (SSRS). Many States use UCR fee revenue to pay for motor carrier enforcement programs.

The UCR law requires FMCSA to set a fee schedule based upon a recommendation by a governing board composed largely of State and motor carrier industry members. The fee schedule must be projected to provide approximately $108 million in revenue to the 41 participating States.

The UCR Board proposed a change in the 2010 fee schedule prompting a rule-making cycle that has encountered a series of delays. The rule was published on April 27. The States now have the authority they need to begin collecting fees for calendar year 2010 to support important motor carrier safety programs to protect the traveling public.

RESOURCES

MOTOR CARRIER SAFETY ASSISTANCE PROGRAM

MCSAP grants provide financial assistance to States to help them reduce the number and severity of CMV involved crashes, fatalities, and injuries through consistent, uniform, and effective CMV safety programs. It uses crash and fatality rates as critical performance measures. One of the strengths of MCSAP is its performance-based structure. Although FMCSA limits spending eligibility and sets performance goals in a range of areas based on the Agency’s targeted safety program elements, our State partners have the flexibility to mix and match a range of strategies that they believe will be most effective in reducing their CMV fatality and crash rates based on specific needs of their State.  States conduct compliance reviews, safety audits, roadside inspections, and other programs to improve CMV safety. While FMCSA provides guidance and direction in a number of areas based on analyses of nationwide safety data, we do not dictate a prescriptive program for each State expecting them to produce a completed, effective plan of action.  In FY 2009, MCSAP lead agencies or sub-grantees employed 13,300 certified CMV inspectors almost 11,000 of which had traffic enforcement authority. FY 2010 funding for MCSAP is $212,000,000.

COMMERCIAL DRIVER’S LICENSE (CDL) IMPROVEMENT PROGRAM

FMCSA works closely with the American Association of Motor Vehicle Administrators (AAMVA) and the States to improve CDL driver history record (DHR) data quality and the timely exchange of conviction, withdrawal, and other DHR data elements.  Through a phased implementation of electronic edit checks that prevent the movement of bad data from one State to another, and a battery of matrices and reports that notify States of their compliance with the requirements for accurate, complete, and timely exchange of information, FMCSA continues to ensure that the data elements critical to the success of the CDL program are improving. 

FMCSA has expanded fraud prevention through a grant-funded update of the AAMVA Fraudulent Document Recognition training for frontline State driver licensing agency employees.  The Agency also assisted the Department of Transportation’s Office of the Inspector General in investigating fraudulent CDL practices throughout the country.  Recently, FMCSA provided grant funds to help enhance and increase usage of the Fraud Emergency Warning System maintained by AAMVA, which allows for real-time alerts to State driver licensing agencies on the potential for fraudulent activities and suspicious documents. 

To ensure that States are making continuous improvements in their compliance with the CDL program requirements, in the coming months, FMCSA will deploy the Automated Compliance Review System.  This web-based system will provide real-time tracking of State compliance issues.  It will also allow FMCSA to generate reports that document outstanding compliance issues at the State or national level.  Through this increased reporting, FMCSA can focus its oversight efforts and provide targeted outreach and education to assist States with specific compliance issues. 

DATA QUALITY

FMCSA relies on high quality data for identifying CMV safety issues, assessing individual carrier safety performance, and allocating enforcement and compliance resources.  The Agency has developed, an online system, known as DataQs, that allows motor carriers, commercial drivers, State agencies, FMCSA staff, and the general public, to request a review of the accuracy of Federal and State data collected by FMCSA.  With the implementation of CSA 2010, which relies heavily on high quality data, and the initiation of the Pre-employment Screening Program, which, as described above, provides drivers’ crash and inspection data to prospective employers, it is important that DataQs is effective in resolving data issues quickly and responsively.  To assist responsible agencies in meeting data quality requirements, FMCSA is developing a DataQs operational procedures guide. .

NEW TECHNOLOGIES

FMCSA is continuously developing and researching new technologies that improve commercial vehicle safety. Such technology resources include applications that help avoid a crash, prevent rollovers, and warn of lane departures. The technologies improve CMV operations, limit technical and mechanical road failures, and reduce the probability of crashes involving CMVs. Examples of FMCSA’s technology resource development include the following programs and activities:

Commercial Vehicle Information Systems and Networks (CVISN):

FMCSA plans to implement an electronic credentialing function. Electronic credentialing will allow carriers to submit various credentials, including International Registration Plan and International Fuel Tax Agreement credentials, to States for automated electronic processing via Web-based or computer-to-computer solutions. States that implemented e-credentialing have reported noticeable benefits.

Onboard Safety System Testing Program:

FMCSA has partnered with motor carriers to test and evaluate several onboard safety systems and identified those systems that showed promise for having the greatest impact on reducing crashes

New Technologies Evaluated at the CMV Roadside Technology Corridor:

In partnership with the Tennessee Department of Safety, Tennessee Department of Transportation, University of Tennessee, and the Oak Ridge National Laboratory, the Agency created the Commercial Motor Vehicle Roadside Technology Corridor in Tennessee.  The goal of the Corridor is to provide a test bed for existing, new, and emerging truck and bus safety and enforcement technologies and concepts.  Currently, the partnering agencies are evaluating a fully automated inspection station screening device – (Smart Infrared Inspection System (SIRIS) – that uses temperature measurements derived from infrared cameras to identify trucks with potential brake, tire, or hub defects.

Creating Opportunities, Methods, And Practices To Secure Safety (COMPASS): Business Improvement And Information Technology Modernization Program

The COMPASS information technology modernization effort is a multi-year, FMCSA-wide initiative to improve data accessibility, data quality, system flexibility, and business processes. COMPASS and CSA 2010 are closely integrated efforts within FMCSA. The Agency plans to issue incremental releases of COMPASS as legacy systems are replaced; these releases will be closely aligned with the roll-out of the new CSA measurement system (CSMS) later this year.

CONCLUSION

In summary, over the course of the Agency’s past 10 years, there have been encouraging results in declining numbers of severe crashes and fatalities involving commercial vehicles thanks to the dedicated work and commitment of FMCSA’s employees and stakeholders. Yet, we are not satisfied with the progress to-date. We cannot justify or explain away the CMV crashes that take lives not ready to leave this earth and destroy the fabric of their families’ joy. With the strategic framework and expectations I outlined at the beginning of my presentation and the foundation of programs, rules and resources described herein, we are poised to achieve more significant gains in saving lives than ever before.

Thank you for inviting me to discuss the FMCSA’s current work and future programs. I would be pleased to respond to any questions you may have.

The Technical Aspects of DOT’s Role in Setting Intra-Alaska Mainline Mail Rates

STATEMENT OF

DENNIS J. DEVANY,
DEPUTY DIRECTOR,
OFFICE OF AVIATION ANALYSIS, 
U.S. DEPARTMENT OF TRANSPORTATION,

before the 

Subcommittee on Federal Workforce, US Postal Service and the Census,
Committee on Oversight and Government Reform, 
U.S. HOUSE OF REPRESENTATIVES

March 4, 2014

Chairman Farenthold, Ranking Member Lynch, and Members of the Subcommittee:

Introduction

I appreciate the opportunity to appear before you to discuss the technical aspects of the Department’s role in setting intra-Alaska mainline mail rates.  The Department has performed this role for many years at the direction of Congress.  For intra-Alaska mail rates, 49 U.S.C. Section 41901 requires the Department to:

“Prescribe and publish after notice and an opportunity for a hearing on the record, reasonable prices to be paid by the Postal Service for the transportation of mail, and the services related to the transportation of mail…”

The Department’s role has nothing to do with the price that a shipper pays to the Postal Service for stamps.  Rather, the Department’s set the rates the Postal Service pays airlines to carry intra-Alaska mail, including “bypass” mail.  In addition, the Department’s role is limited to intra-Alaska mail rates; the Department plays no role with respect to mail that either begins or ends outside of Alaska.

Overview of the Intra-Alaska Mail System

When Congress deregulated the airline industry in 1978, an exception was made for intra-Alaska mail rates.  The mail system in Alaska comprises both what is considered “regular” mail and “bypass” mail.  Regular mail in Alaska is treated the same as it is in the rest of the country, i.e., the shipper delivers the goods to the Postal Service, pays the postage, and the Postal Service takes possession of the shipment and ensures its delivery.  Bypass mail, on the other hand, takes its name from the fact that the mail bypasses all physical handling by the Postal Service.  When a shipper wants mail to be transported to a destination, the shipper contacts the Postal Service and the Postal Service instructs the shipper to deliver the mail to a specific air carrier.  Bypass mail is a subcategory of nonpriority mail.  Approximately 85 percent of the nonpriority mail is bypass, and the remaining 15 percent is referred to as “in-house nonpriority.”  In-house mail is delivered directly to a Postal Service facility, which physically handles it and disburses the mail to a carrier. 

While the focus of my testimony is on mainline mail carried on mainline aircraft, the Department also sets mail rates carried by bush aircraft, known as the bush rates.  Mainline aircraft are defined as having a payload exceeding 7,500 pounds while bush aircraft payloads are 7,500 pounds or less. 

The mainline mail rate comprises two elements -- the linehaul rate  and the terminal rate  The linehaul rate varies with the distance that the airlines fly the mail and is expressed as dollars per revenue ton of mail, and the Postal Service pays the airlines on the basis of how many revenue ton miles of mail they carry.

The terminal rate relates to the cost of loading mail onto an aircraft, irrespective of distance, and is typically expressed in dollars per ton of mail enplaned.  The Postal Service, in fact, pays the airlines on the basis of mail tons enplaned.

Methodology

In establishing the current mail-rate structure, the Department conducted an exhaustive investigation to determine the actual costs incurred by airlines in carrying the mail.  While Congress intended the system to promote an integrated passenger, freight, and mail system, the Department is tasked solely with determining the cost of moving the intra-Alaska mail, and setting the rates accordingly.  The Department determined the cost drivers of carrying the mail, by way of a formal hearing in front of an Administrative Law Judge, which included exhibits submitted by stakeholders.  The Department addressed myriad issues such as the directionality of mail, the fact that mail can displace cargo if the aircraft is full, debt/equity ratios and returns on both debt and equity, mark-up for income taxes, circuity etc.  At the end of the process, the Department issued an order setting what it still refers to as the “base rates.”

Subsequently, the Department has updated the base rates in much the same way that other rates are indexed to the Consumer Price Index (CPI).  Rather than using the CPI, the Department has used the changes in unit costs of Alaska mainline carriers to adjust the rates up or down.  Specifically, for the linehaul rate, the Department compiles all the costs of the Alaska mainline carriers associated with flying the aircraft -- fuel, pilots, maintenance, lease costs, etc. -- and divide by total capacity, defined as available ton miles (ATMs), commonly referred to as the cost per ATM.  The Department takes the result and compare it to the base year’s results and weight each carrier’s unit costs by the amount of intra-Alaska mail that each airline carries.  In other words, if there are two carriers of the same size but one carries twice as much intra-Alaska mail as the other one, it would be weighted double. 

The Department then derives an aggregate change in unit cost per ATM.  Simply put, if the total cost per ATM increases two percent, the Department increase the linehaul rate by two percent.  As a final adjustment, the Department recognizes that it is setting rates for a future period based on historical data.  Therefore, the Department runs a regression to determine what the long-term (10-year) trend has been in unit costs and adjust the historical data accordingly to project the new rate at the midpoint of the future rate period.

This methodology includes measuring the change in unit costs of all traffic -- passengers, freight and mail.  The underlying assumption is that, as the airlines’ unit costs change due to newer, more fuel-efficient equipment, different labor contracts, insurance rates etc., those changes apply equally to passengers, mail and freight. 

The Department follows the same methodology with the terminal rate by examining the total costs of loading traffic onto the airplanes and then divide by total tons enplaned.

The most recent refinement the Department made to the mail-rate system was the introduction of a fuel surcharge in 1999, primarily at the request of the carriers because, at that time, fuel prices were rapidly increasing.  It is important to note that, even without the quarterly fuel updates, airlines would ultimately be made whole for the fuel price increases.  However, with only annual updates and the lag in getting data, it would have taken a year or more for the carriers to recoup rapidly increasing fuel costs.  The quarterly adjustments make the rates more responsive to actual fluctuations in costs.

In addition, the Department sets a separate priority and non-priority rate for the linehaul and terminal elements.  These rates were established in our original base-rate investigation and they rise or fall together based on the changes in unit costs.  Priority rates are significantly higher than nonpriority, and reflect the greater costs of carrying mail on a flight-specific, more time-definite basis; nonpriority rates are lower because they provide the carrier with more flexibility to determine when the mail will move, thus allowing the carrier to efficiently utilize aircraft payload and human resources.

Below is a chart showing all of the current mail rates set by the Department, both mainline and bush.  All mainline bypass mail moves on a nonpriority basis.

[CHART NOT FOUND]

Statewide Class Rates

The different mail rates in the classes above are calculated by the Department and applied by the Postal Service on a statewide basis.  The Department uses the class rate concept to ensure that the carriers have incentives to control their costs.  Under the class rate concept, a single class rate is developed for all of the members of that class of carriers.  For mainline carriers the Department currently includes the costs of five carriers – Alaska Airlines, Era Aviation, Everts Air Cargo, a/k/a Tatonduk, Lynden Air Cargo, and Northern Air Cargo.  If an airline’s costs are above the average of the class, its profits are reduced.  If an airline’s costs are below the average of the class, then it enjoys additional profits. 

Process

Once a year, the Department issues a show-cause order fully laying out all our calculations and rational for the rates that the Department is proposing.  That order takes the publicly available Form 41 financial and T-100 traffic information provided by the carriers, calculates a “tentative” rate and directs the parties to show cause, within approximately two weeks why the Department should not make those rates final.  Any party may comment on any aspect of the order or object to the show-cause order, raising any issue that it believes should be handled differently.  Other parties then have an opportunity to respond to the comments submitted in the record by stakeholders.  After considering all the comments, the Department then issues a final order establishing the new mail rates for a new year.  Of course, if no parties object to the show-cause order, that order is simply made final.

The data supplied by the carriers – Form 41 and T-100 traffic -- are not special data, but are the same data that all large certificated carriers are required to provide.  Thus, there is no additional reporting requirement on the carriers.  As with all air carriers, the mainline carriers are required to certify that their data are true and accurate, and the data are periodically reviewed by Department staff. 

Transparency

The Department emphasizes transparency in the administration of the intra-Alaska mail rate system.  The Department has sought to minimize the administrative costs of the program to the carriers and the Postal Service by using a fully public process in setting the mail rates, while also encouraging all parties to submit comments on the record.  While any party can at any time request a full oral evidentiary hearing before an administrative law judge, no party has chosen to do so.  The Department believes this reflects the fairness of the system, the accuracy of the rates, and the recognition of that fact by stakeholders. 

Conclusion

I hope that I have helped bring some clarity to the Departments’ role in setting intra-Alaska mail rates.

Chairman Farenthold, this concludes my testimony. I would be happy to answer any questions you may have regarding the rate-setting methodology DOT uses in establishing intra-Alaska mail rates.

Airport Financing and Development

STATEMENT OF

BENITO DE LEON,
ACTING ASSOCIATE ADMINISTRATOR FOR AIRPORTS,
FEDERAL AVIATION ADMINISTRATION,

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION,

ON

AIRPORT FINANCING AND DEVELOPMENT,

ON JUNE 18, 2014.

Chairman LoBiondo, Ranking Member Larsen, Members of the Subcommittee:

Thank you for the opportunity to appear before you today to discuss the Federal Aviation Administration’s (FAA) role in developing our nation’s airport infrastructure. This is my first time testifying before the Subcommittee as I recently assumed the position of Deputy Associate Administrator for Airports. I am succeeding Kate Lang, who I am sure many of you know well. I also am currently serving as Acting Associate Administrator for Airports as the agency looks forward to Eduardo Angeles coming onboard as the newly appointed Associate Administrator for Airports. It will be my pleasure to get to know you as I serve in these positions.

The FAA is committed to continuing to ensure that we have a safe and efficient national airport system.  Airports require extensive high-precision infrastructure, which in return requires careful attention to engineering and construction standards. Airfield, terminal, landside facilities and supporting infrastructure like drainage and utility systems all require constant vigilance as well as periodic rehabilitation and reconstruction. These processes take years of careful planning so that the work does not compromise airport safety or capacity, or cause congestion that may be reasonably avoided.

For FY 2014, the FAA will issue approximately $3.2 billion in grants-in-aid to state and local airport sponsors through the Airport Improvement Program (AIP). These investments will facilitate eligible airport improvements in the core areas of safety, capacity and delay reduction, security, and environmental sustainability, and will contribute to addressing the most pressing needs of the national airport system.  I would like to update the Subcommittee on how we assess the airport system’s needs, the specific areas where we have focused to address those needs, and where we see opportunity to improve flexibility that would enable investment to be more effectively targeted to meet the needs of the system and its users.

The principal planning tool the FAA uses for assessing system-wide development needs is the National Plan of Integrated Airport Systems (NPIAS), which the FAA publishes every 2 years. The NPIAS details the projected 5-year capital needs of airports of all sizes that are identified as significant to the air transportation system.  The NPIAS cost estimate reflects only AIP-eligible improvements and provides a consistent framework within which to evaluate proposed projects.

Bakken Petroleum: The Substance of Energy Independence

An Update: The FAA's Call to Action on Airline Safety and Pilot Training

Pilot Flight Time, Rest and Fatigue: When I was last here I told you that the aviation rulemaking committee (ARC) I convened for the purpose of making recommendations on flight time, rest and fatigue, consisting of representatives from the FAA, industry and labor organizations, provided me with recommendations for a science-based approach to fatigue management in early September.  While I was extremely pleased with the product provided to me, the ARC did not reach a consensus agreement on all areas and was not charged with doing any type of economic analysis. Consequently, in spite of my direction for a very aggressive timeline in which to develop a Notice of Proposed Rulemaking (NPRM), my hope that a rulemaking proposal could have been issued by the end of last year did not happen.  The complexities involved with these issues are part of the reason why the FAA has struggled to finalize proposed regulations on fatigue and duty time that were issued in the mid-1990s.  However, with my continued emphasis on this topic, we hope to issue an NPRM this spring. Although this is slightly later that I originally hoped, it is still an extremely expedited schedule and I can assure you the FAA team working on this is committed to meeting the target.

Surface Transportation Reauthorization – Oversight and Reform of the Federal Motor Carrier Safety Administration

STATEMENT OF

THE HONORABLE T. F. SCOTT DARLING, III,
ACTING ADMINISTRATOR FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION AND
MERCHANT MARINE INFRASTRUCTURE, SAFETY, AND SECURITY
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE

SURFACE TRANSPORTATION REAUTHORIZATION – OVERSIGHT AND REFORM OF THE FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION

MARCH 4, 2015

Chairman Fischer, Ranking Member Booker, and Members of the Subcommittee, thank you for the opportunity to speak to you today on the Administration’s proposal to reauthorize the commercial motor vehicle (CMV) safety program, included in the GROW AMERICA Act.

Safety is the Department of Transportation’s top priority. Since the Federal Motor Carrier Safety Administration (FMCSA) was established in 2000, the number of lives lost in large truck and bus related crashes has decreased 24 percent, from 5,620 in 2000 to 4,251 in 2013. While this represents significant progress, more must be done. Every life is precious and the Department is committed to reducing the number of crashes, injuries and fatalities involving commercial motor vehicles.

GROW AMERICA Act

The provisions proposed in the GROW AMERICA Act build on the Agency’s three core safety principles: (1) raise the bar to enter the motor carrier industry; (2) require high safety standards to remain in the industry; and (3) remove high-risk carriers, drivers, and service providers from the industry.

The GROW AMERICA Act includes measures that will empower State and local communities to help achieve our shared goals through more streamlined and efficient grant programs. The Act will also build on FMCSA’s continued, unprecedented motorcoach safety efforts by expanding locations where inspections may occur and will provide new authority over brokers who arrange passenger transportation. Furthermore, FMCSA proposes to promote safety while also easing the economic stress on long-distance truck and bus drivers, including thousands of small businesses, by ensuring they receive fair compensation for the hours they work.

Motorcoach Safety

Bus travel is increasingly popular because it is a convenient, inexpensive option for many people, including students, groups and families. FMCSA is committed to raising the bar for safety in this highly competitive and rapidly changing industry by employing more effective investigation methods and strengthening the Agency’s oversight authorities. Last year, FMCSA 2

stepped up its enforcement efforts, shutting down more than 50 unsafe bus companies that put passengers at risk. FMCSA also increased its efforts to educate the public on safe motorcoach travel.

Expands Locations for Motorcoach Inspections: To build on this unprecedented motorcoach safety effort, the GROW AMERICA Act will clarify and expand the locations at which motorcoach inspections may occur. The GROW AMERICA Act will clarify that inspectors may inspect motorcoaches at designated sites equipped with adequate food, shelter and sanitation facilities to accommodate passengers during the process.

Provides Jurisdiction Over Motorcoach Brokers: The GROW AMERICA Act will also provide FMCSA with jurisdiction over brokers of passenger transportation. This provision will enhance FMCSA’s ability to prevent unsafe bus companies from reorganizing themselves as unregulated "brokers." Additionally, requiring bus brokers to comply with the DOT’s commercial registration requirements will help ensure that they are authorized to operate safely in interstate commerce. The change will also provide greater transparency for consumers who are booking bus travel.

Allows Criminal Prosecution for Unscrupulous Carriers: Finally, the GROW AMERICA Act will take stronger steps to prevent unscrupulous motor carriers from skirting FMCSA enforcement actions by allowing for criminal prosecution of a person who knowingly and willfully violates an imminent hazard out-of-service (OOS) order issued to prevent the death or serious physical harm to the public.

Safety-Based Improvements to Compensation for Long-Distance Truck & Bus Drivers: Many over-the-road truck and bus drivers are compensated by the mile or on a fixed-rate per load. As a result, they are not paid for extended periods of time while waiting for shipments to be loaded or unloaded at shippers’ or receivers’ facilities. Similarly, over-the-road motorcoach drivers are often not compensated through an hourly wage. As a result, they often face pressure to drive beyond hours-of-service limitations as a matter of economic necessity, risking driver fatigue and jeopardizing highway safety in the process. The GROW AMERICA Act addresses these problems by providing the Secretary authority to issue regulations that would require motor carriers to compensate drivers for detention time and other similar non-driving work periods at a rate that is at least equal to the Federal minimum wage.

Improvements to the Motor Carrier Safety Grants

The GROW AMERICA Act will also streamline and consolidate FMCSA safety grant programs – a change that will reduce redundant grant application submissions, reviews, awards approvals, vouchering and oversight time, and thus increase dramatically efficiencies not only for FMCSA but for its State partners. Among other changes, the Motor Carrier Safety Assistance Program (MCSAP) will be restructured to include the current New Entrant and Border Enforcement grant programs. While the high-priority program will continue under MCSAP, the current safety data improvement grant program will be absorbed into the high-priority program to avoid duplication. In addition, the Commercial Vehicle Information Systems and Networks (CVISN) grant program will be replaced with a new Innovative Technology Program, and additional flexibility will be available to address eligible activities under the Commercial Driver’s License program improvement grant program.

As a condition of full MCSAP funding, every State will be required to participate in the Performance and Registration Information Systems Management Program (PRISM) within three years of enactment, thus expanding the number of States that can suspend or revoke the vehicle registration of carriers subject to FMCSA out-of-service orders. States will also gain the ability to use MCSAP funds to conduct reviews of household goods carriers, brokers, and freight forwarders, protecting the public from predatory practices. The Act will provide a new minimum Federal share of 85 percent, a funding level applied to each of FMCSA’s grant programs. The Agency will also have the ability to withhold incremental amounts of MCSAP funding for State non-compliance with grant conditions, rather than being required to withhold either the full amount or none at all. This added tool will allow FMCSA to address compliance issues while allowing States sufficient funds to continue critical safety activities.

MAP-21 Implementation and Other Priorities

FMCSA is working to implement the provisions of the Moving Ahead for Progress in the 21st Century Act (MAP-21), as well as advance core safety initiatives including the Compliance, Safety, Accountability (CSA) program, and hours-of-service (HOS) research.

Compliance, Safety, Accountability

CSA is the cornerstone of FMCSA’s compliance model to improve CMV safety and reduce large truck and bus crashes, injuries, and fatalities on our Nation's highways. CSA consists of its Safety Measurement System (SMS) to identify companies for enforcement interventions, a wide array of interventions that target carriers’ safety performance and compliance problems, and a new methodology (to be proposed in future rulemaking) to determine the safety fitness of motor carriers.

Given the size of our Federal workforce and the very limited resources of our State enforcement partners relative to our regulated population, it is imperative that we apply our resources efficiently. The Agency, therefore, utilizes SMS to identify noncompliant and unsafe companies to prioritize them for enforcement interventions. FMCSA continues to improve SMS to identify those motor carriers that pose the greatest risk to safety. Our responsiveness to industry, safety advocates, oversight agencies and Congress continually prompts new and revised policies, reports, and changes to the SMS. Last year, we announced changes to our adjudicated violations process. Since August 2014, motor carriers and drivers have been able to request updates to their data through the DataQs process to reflect when the driver or carrier is found not guilty or a violation is changed or dismissed in court.

This spring, the Agency will announce additional changes to SMS. These changes will strengthen our ability to identify companies for investigation before they are involved in a crash. We will publish these changes in the Federal Register and provide the public an opportunity to comment before finalizing.

Recently, we announced the results of our crash weighting research, which addressed the feasibility of using a motor carrier’s role in crashes as an indicator of future crash risk. The study considers the use of police accident reports in determining crash accountability and the reliability of using crash involvement or crash weighting as an indicator of future crash risk. We are currently receiving comments on this issue and will determine next steps based on that feedback. We published the notice in January, and the comment period runs through March 25.

We continue to work toward publication of a proposed rule that would increase the use of inspection data in making safety fitness determinations for motor carriers. The Safety Fitness Determination proposal will include a fixed, non-relative failure standard and will take into account recommendations for larger amounts of data to make accurate determinations of a carrier’s fitness to operate.

Importantly, as is shown by the figure below, carriers identified as having one or more areas above the established thresholds in SMS have crash rates significantly higher than carriers that aren’t identified. As the number of Behavior Analysis and Safety Improvement Categories (BASICs) over threshold increase, so does the crash rate.

The issue of data sufficiency has received a lot of attention recently. Based upon studies completed by the Agency and independent researchers, the SMS is effective at identifying carriers that are engaging in behaviors likely to cause a crash. FMCSA, our State partners, the Government Accountability Office (GAO), the Office of Inspector (OIG), and the National Transportation Board (NTSB) all share a common goal of finding the most effective tools for identifying high risk carriers and taking appropriate enforcement actions. While we all share that goal, we have also had clear differences over specific methodologies for prioritizing a carrier as higher crash risk and for taking action. For example, a February 2014 GAO study recommended that the Agency revise the SMS to account for what it sees as data limitations. The GAO developed a methodology that only considers carriers that have at least 20 inspections or 20 vehicles and eliminates the use of safety event groups. That approach runs counter to the goals of SMS, which identifies dangerous violation patterns much earlier. The overwhelming majority of motor carriers – more than 90 percent of our regulated population – never reach the 20 observation level during the relevant measurement period. Under GAO’s approach to SMS, the safety performance of all these companies would be simply ignored. The public demands a proactive approach, rather than waiting for 20 –observation – or a crash – before we intervene.

The SMS is effective at identifying carriers that are more likely than others to crash because the carriers are engaging in risky behaviors. The Agency is working hard to intervene with those carriers exhibiting high risk behaviors in the most efficient manner possible and to engage the companies before they have a crash.

Hours-of-Service

Due to the importance of driver fatigue as a safety risk, we issued new rules regarding drivers’ hours of service in 2011. The final rule required truck drivers who use the "34-hour restart" provision to maximize their weekly work hours to limit the restart to once a week and to include in the restart period at least two nights off duty from 1:00 to 5:00 a.m., when our 24-hour body clock needs and benefits from sleep the most. The provision was included in response to research showing that drivers who routinely work overnight schedules and sleep during the daytime tend to "switch their sleep clocks" on weekends while they are with their families, doing errands, and so on. As a result, they often get only one night of sleep during the 34-hour break – which research shows is insufficient to eliminate fatigue – before climbing back into the truck Sunday evening.

The rule was structured with flexibility such that each driver would use the restart based on his or her specific schedule for the week which would establish the point at which the driver would determine whether a 34-hour restart was needed, and if so, when it would begin and end.

As mandated by MAP-21, the Agency conducted a field study which expanded upon the results of the laboratory-based study relating to CMV driver fatigue. This research was conducted between January and July 2013, and not as an aspect of our regulatory process. MAP-21 did not require the study to address the impact of the new rule on the volume of truck traffic during daytime hours. However, the Agency is not aware of study results or data that suggests the 2011 rule forced drivers to shift their work schedules from nighttime operations to daytime operations.

On December 16, 2014, the Congress enacted the Consolidated and Further Continuing Appropriations Act, 2015, which included provisions restoring the pre-2013 restart rule, pending further study of the post-2013 rule. In particular, the once-a-week limitation on the use of the restart and the requirement for two nights off duty were suspended until the end of this fiscal 6

year. FMCSA issued a notice in the Federal Register on December 17 suspending the 2013 restart provisions. Those restart provisions have no force or effect from the date of enactment of the Appropriations Act through the period of suspension, and have been replaced with the previous restart provisions that were in effect on June 30, 2013. FMCSA notified motor carriers and commercial drivers, and trained thousands of State Motor Carrier Safety Assistance Program grant recipients, and other law enforcement personnel on these immediate enforcement changes.

The Agency selected the Virginia Tech Transportation Institute (VTTI) to conduct the study mandated by Congress. We have worked diligently to reach out and recruit potential drivers from all segments of the trucking industry as the statute requires. VTTI has a solid national reputation for conducting vehicle-related safety and driver fatigue research. VTTI pioneered the use of naturalistic driving studies and has successfully carried out similar FMCSA projects for the past 10 years. As required by Congress, the study methodology is now undergoing review by the DOT Office of Inspector General. This driver restart study is the largest naturalistic study of its kind that FMCSA has ever undertaken. We anticipate releasing the findings later in the year.

Electronic Logging Devices

MAP-21 included a provision mandating the use of electronic logging devices (ELD) for those CMV drivers who are required to keep a record of duty status under the HOS regulations. FMCSA is preparing to issue its final rule on ELDs this fall. The ELD rule will require CMV drivers who are now required to keep a record of duty status under the HOS regulations to maintain these records electronically. ELDs will automate HOS tracking, making it easier for drivers to log hours and more difficult to conceal violations of the hours-of-service rules. Once promulgated, the rule will help businesses cut paperwork and will increase the efficiency of law enforcement personnel and safety inspectors. The rule will also ensure that the devices are not used to harass drivers. By improving HOS compliance, ELDs are expected to prevent approximately 1,400 crashes, 20 fatalities, and more than 400 injuries each year, with a net economic savings of close to $450 million.

National Registry of Certified Medical Examiners

In May 2015, FMCSA will celebrate the first anniversary of the full implementation of the National Registry of Certified Medical Examiners (National Registry). As mandated by SAFETEA-LU and MAP-21, the National Registry rule requires all Medical Examiners (ME) who conduct physical examinations and issue medical certifications for interstate CMV drivers to complete training on FMCSA’s physical qualification standards, pass a certification test, and demonstrate competence through periodic training and testing. Currently, all CMV drivers whose medical certification expires must use MEs on the National Registry for their examinations.

Between May 2014 and November 2014, more than 2.4 million examinations of commercial motor vehicle drivers were conducted by healthcare professionals on the National Registry. We anticipate receiving data for December 2014 and January 2015 by the end of March. The National Registry has been a great success. To date, we have reached our goal of 40,000 certified MEs on the National Registry. Drivers can now find MEs throughout the nation who can competently perform their medical examination. Any physician or other qualified medical professional (such as a physician’s assistant or an advanced practice nurse) licensed by a State to 7

conduct physical examinations can be listed on the National Registry if they are trained, tested, and certified.

With the help of the OIG and our State law enforcement partners, we have identified and prosecuted uncertified MEs and others who have committed fraud or otherwise abused the physical qualifications process.

We are preparing to issue a follow-on "National Registry 2" rulemaking that will require MEs to submit the medical certificate information for CMV drivers to FMCSA on a daily basis. The Agency will then be able to promptly transmit medical certificate information electronically to the State Driver Licensing Agencies for the CDL holders. This will dramatically decrease the chance of drivers falsifying medical cards and will lessen the amount of paperwork required currently.

Drug and Alcohol Clearinghouse

To further prevent crashes, we must ensure that CDL holders are sober and drug-free. We published a Notice of Proposed Rulemaking (NPRM) on the Drug and Alcohol Clearinghouse (Clearinghouse) to implement the MAP-21 provision on this subject. The Clearinghouse would require truck and bus companies (and other entities responsible for managing DOT drug & alcohol testing programs) to report verified positive drug and alcohol test results, test refusals, negative return-to-duty test results and follow-up testing. This information would populate the Clearinghouse database with positive drug and alcohol test information on CDL holders. This information would remain in the Clearinghouse for a requisite period of time after the CDL-holder completes the return-to-duty rehabilitative process, which allows the driver to become re-qualified to operate a CMV. Once the Clearinghouse is fully implemented, employers would be required to conduct pre-employment searches in the repository as part of the hiring process for CDL drivers and annual searches on current employee drivers. The final rule is in development and is scheduled to be published later this year.

Entry-Level Driver Training Requirements

MAP-21 directed the Agency to issue final regulations to require entry-level training for drivers who require a CDL and for those upgrading from one class of CDL to another. The Agency’s rulemaking must address knowledge and skills for safe operation and other issues. In 2013, the Agency held listening sessions and asked our Motor Carrier Safety Advisory Committee (MCSAC) to provide recommendations on ELDT. These sessions and the MCSAC gave the Agency substantial information about training for entry-level CDL applicants. In August, the Agency engaged the services of a convener to assess the feasibility of conducting a negotiated rulemaking (Reg Neg) to implement this provision. The convener recommended that the Agency proceed with a Reg Neg on ELDT. In February, the Agency announced the appointment of 26 stakeholders to participate in the negotiated rulemaking committee. Known as the Entry-Level Driver Training Advisory Committee (ELDTAC), the Committee held its first meeting last week, on February 26-27. The Department plans an accelerated Reg Neg to reach consensus among these key stakeholders so that we can issue a Notice of Proposed Rulemaking (NPRM) by fall 2015 and a final rule by 2016. 8

We hope these changes will make it easier for all of our stakeholders, from drivers and carriers to enforcement partners, to work together toward our shared safety goals.

Conclusion

Thank you, Chairman Fischer and Ranking Member Booker, for the opportunity to discuss Federal motor carrier safety programs. We look forward to working with you on enacting the next surface transportation bill to improve safety, reduce crashes, prevent injuries, and save lives on our Nation’s highways

Implementing the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

Written Statement

of

Stacy Cummings
Interim Executive Director
Pipeline and Hazardous Materials Safety Administration

Before the

U.S. House of Representatives
Committee on Energy and Commerce
Subcommittee on Energy and Power
Washington, D.C.

Implementing the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

July 14, 2015

I. Introduction

Chairman Whitfield, Ranking Member Rush, and members of the Subcommittee, thank you for inviting me to testify today on the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) progress in implementing the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pipeline Safety Act).

The Nation’s 2.6 million mile pipeline networks are a vital part of our country’s infrastructure.  These pipelines sustain our everyday life by transporting gasoline to our cars, heating and cooking fuel to our homes, and natural gas to many of our power plants.  Our future is underpinned by these energy transportation networks.  Pipelines have played a crucial role in our Nation’s energy renaissance, which has driven down fuel prices and manufacturing costs, while providing more jobs in the energy sector. As we continue to see historic highs in domestic energy production[1], our Nation’s energy infrastructure is shifting to accommodate these changes and the increased demand associated with it.  New pipelines are being constructed, and other pipelines are being converted to carry different products.  Our vast energy reserves confer an enormous potential for growth, but it is imperative that our transportation infrastructure remains safe, reliable, and efficient in order to support this growth.

Our agency’s top priority is safety, and PHMSA is dedicated to reducing the risks associated with transporting hazardous materials.  We are taking a comprehensive approach to keep pace with increasing energy production and the challenges associated with increasing and changing infrastructure.  While we hold operators accountable through regulation and strong enforcement – these measures only set minimum expectations for compliance.  PHMSA goes beyond regulations and enforcement by providing programs and resources that increase safety.  These measures include providing grants to the States with pipeline safety programs, emergency response training, technological innovation through research and development (R&D), public engagement with our community assistance and technical services program, and promoting smart land use development in proximity to pipelines, just to name a few.  We are committed to using all of the tools at our disposal to achieve our shared goal of zero pipeline spills or releases.

II. Our Results:  PHMSA is Making Significant Progress

Serious pipeline incidents have declined an average of 10 percent every three years since 1988, despite increased energy production, aging infrastructure, and increased pipeline mileage.  However, we continue to face many challenges, and unfortunately pipeline accidents still occur.  In May, I travelled to Santa Barbara, California, where a 10.6 mile crude oil pipeline ruptured.  I saw firsthand the effect that pipeline failures have on communities and the environment and also saw our rapid and comprehensive response.  Immediately following notification of this accident, PHMSA personnel were on the scene, where we remain actively involved.  Our inspectors are conducting a comprehensive investigation into the cause of this failure, and we continue to support the Unified Command’s spill response efforts led by the U.S. Coast Guard and the Environmental Protection Agency.

PHMSA issued a Corrective Action Order (CAO), and the affected pipeline remains shut down under PHMSA’s authority.  We will ensure the operator identifies the root cause of the failure and mitigates any additional risks associated before they will be allowed to restart the pipeline. The CAO is an important enforcement tool that enables us to respond quickly to emergency conditions that pose a hazard to the public or the environment.  We are continuing our investigation into the cause of this failure.  If we determine that the operator has violated any of our Federal regulations, we will pursue additional enforcement action. 

When the Bridger Pipeline spill occurred in Montana earlier this year, PHMSA also responded quickly and comprehensively.  PHMSA deployed a team of highly skilled investigators to the scene to ensure that the operator took immediate steps to prevent any further release and to identify the root cause of the pipeline failure.  Although the circumstances surrounding these two failures are different, PHMSA’s response demonstrates that we are focused on safety.  It is imperative that we fully understand the root cause of pipeline failures to ensure that operators take the necessary steps to prevent future accidents.  In addition, PHMSA shares lessons learned with other pipeline operators through safety advisories and updated or new rulemakings so that they can take preventative actions.

Pipeline safety is a shared-responsibility.  It is incumbent upon operators to build, maintain, and operate their pipeline systems in the safest possible manner.   Operators know and understand the operating environment of their systems and are required by regulation to apply the right risk control practices to ensure performance and safety.

PHMSA implements a comprehensive oversight program that involves ongoing inspections, strong enforcement, and the issuance and maintenance of pipeline safety policies and regulations.  We also take proactive steps to incorporate lessons learned from accidents into new policies and regulations in order to prevent future occurrences.

III. Congressional Support is Imperative

Responding to a pipeline incident requires the coordination and cooperation of many stakeholders.  Achieving our safety goals for the Nation’s 2.6 million miles requires a similarly multi-faceted approach.   I thank the Congress for its support in increasing our appropriations for this year.  The fiscal year 2015 Omnibus included a $34.5 million increase over fiscal year 2014 for PHMSA, which significantly strengthens our ability to carry out our mission and provide safe, clean, and reliable transportation energy products.  This would not be possible without your support.

PHMSA estimates that we can fund 109 new positions – a near doubling in the pipeline safety workforce – with the FY 2015 enacted appropriations.  PHMSA employees are passionate about our mission, and their continued hard work is critical to our success.  The inspectors and engineers who respond to incidents, and the people who work every day to promote our message, manage our programs, and help us oversee a massive infrastructure system are an integral part of our vision for the future.  I’d like to thank all of our employees for their efforts, and I am looking forward to welcoming all our future hires onto such a committed team.

The vast majority – approximately 80 percent – of the new positions are designated for field positions.  Most of these hires will conduct safety inspections and accident investigations.  We are allocating these regional positions based on a variety of risk factors, including new construction projects, identified safety challenges and current accident investigations.  We are aggressively hiring these inspectors and maintaining a rigorous training schedule.  We understand that there is a great need for these roles.

The remaining 20 percent of the positions will support regulation development, state program management, inspector training and qualification, enforcement, and external engagement.

While Congress has continued to support additional hiring, it is important that PHMSA also receive funding to allow that implementation in a strategic manner.  PHMSA has consistently requested additional funding to support enhancing our risk management, analytical frameworks and mapping capabilities.  Through PHMSA grants, state pipeline safety programs are funded up to 80 percent, but PHMSA has limited insight into state data on where interstate pipelines actually exist, their conditions, and the inspection reports performed by our state partners.  We would like to work with Congress to further explain our risk reduction proposals.  Boots on the ground are helpful to oversee a growing infrastructure, meet our emerging challenges, and maintain strong enforcement and regulation during this critical period in America’s energy development.  However, we need to strategically place those boots.

IV. Sustained Efforts to Satisfy Mandates

Since its establishment a little over 10 years ago, PHMSA has been fortunate to receive continued support from Congress for its pipeline safety program through the attainment of a considerable amount of resources, such as the ones previously mentioned.  At the same time Congress has imposed a number of mandates on PHMSA that are critical to our success.  Completing these mandates is one of PHMSA’s highest priorities, as it allows us the opportunity to strengthen weaknesses in our regulatory and enforcement responsibilities, and implement other necessary programmatic improvements to enhance pipeline safety nationwide. 

The Pipeline Safety Act of 2011 included 42 new requirements.  PHMSA continues to tackle these requirements through a comprehensive approach and has made considerable progress by completing 26 of the Act’s mandates.  While we are pleased to report that we have completed more than half of the mandates, we understand that there is still much more work to be done in protecting people and the environment from pipeline hazards and fulfilling the intent of the Pipeline Safety Act.  Recent actions to comply with the Act include:

• In June, PHMSA published proposed rules on incident notification requirements for natural gas and hazardous liquid pipeline operators, cost recovery for design reviews, and the expansion of excess flow valve requirements. 
• Earlier this year, we completed the mandate in Section 21 a-b to report to Congress on the regulations for gathering lines, including exemptions and the possible application of existing regulations to unregulated lines.  We addressed the mandate in Section 32 by submitting the first of two reports to Congress on the status and results-to-date of our R&D program. 
• We also addressed the mandate in Section 19 by offering a maintenance of effort waiver to States for fiscal year 2014. 
• We implemented continuing improvements to the facility response program to complete the mandate in Section 6 to maintain operators' most recent oil facility response plans and provide a copy to any requester, excluding sensitive information.

To track our progress in implementing each section, please visit the PHMSA website at http://phmsa.dot.gov.    

Of the remaining mandates and non-mandated actions, more than 10 will be addressed as part of current rulemaking activities while others are tied to reports that are currently under internal review, or future rulemakings or information collections currently under consideration.  PHMSA has also taken numerous other actions using its bully pulpit by conducting public workshops, issuing advisory bulletins, and funding R&D.

PHMSA currently has eight rulemakings in progress, 5 of which will help address open mandates related to the Pipeline Safety Act.  Consistent with federal requirements, this year, we issued two final rules – including one which establishes criteria for determining the adequacy of State pipeline excavation damage prevention enforcement programs, and a Federal adjudication process for proceedings against excavators in states with inadequate enforcement programs – addressing two open NTSB recommendations[2],  We expect to issue many of our significant rules, including our Notices of Proposed Rulemaking (NPRMs) for gas transmission and hazardous liquid pipelines by the end of the year[3].  These rulemakings are important priorities for the Department and address several important mandates.  We are working as hard and as quickly as possible to address all of stakeholder input we are receiving, publish the needed rules, and satisfy the remaining mandates. 

We must implement these mandates nationwide, and some of them are a heavy lift.  For the mandates that involve the development of new regulatory requirements, our rulemaking process engages the public to identify concerns and potential solutions, through public meetings, workshops, and the public comment process.  Our significant rules undergo interagency review at OMB in accordance with Executive Orders 12866 and 13563.  It can take a long time to promulgate rules, but our rulemaking process is careful and methodical.  Each step exists to make sure that the rules we publish are effective, efficient, and reflect feedback from all stakeholders and stand up to scrutiny.  

We fully acknowledge that it is imperative for PHMSA to adapt along with the sector that we regulate. that it is imperative for PHMSA to adapt along with the sector that we regulate. Our Nation’s energy supply and transportation pipeline network are rapidly changing and expanding, posing new opportunities for better oversight.  Whether it’s through smarter data, more inspectors or funding research for better detection technology, PHMSA is committed  to weighing and acting on a range of options for implementing innovative pipeline safety solutions.  We are committed to quadrupling our efforts so that Americans can be confident that PHMSA is protecting people and the environment.  As we look ahead to the next reauthorization, we look forward to working with the Committee to ensure that PHMSA is well-poised to adapt to a modern and evolving infrastructure.

V. Continuing Commitment to Improving Safety

The rulemaking process is not the only tool we have to improve pipeline safety.   Strong regulations go hand in hand with strong inspection and enforcement programs.  PHMSA and the pipeline safety program are undergoing significant growth and change. Our inspection and investigation workforce is at the heart of our pipeline safety program and is charged with overseeing the growing demands of old and new infrastructure.  We are doing everything in our power to expeditiously hire and train and develop an estimated 109 full time positions in FY 2015.

We are also committed to using our full enforcement authority.  Our enforcement actions go beyond assessing fines and play a critical role in improving pipeline safety.  For example, CAOs, like the one we issued in response to the Santa Barbara spill, allow our agency to require an operator to determine the cause of a failure and the condition of the pipeline involved, and mandate the mitigation of all factors that contributed to the release.  This provides a level of assurance that another release will not happen in the pipeline system.

Enforcement actions like CAOs lead to significant safety improvements to the pipeline and represent significant financial costs to operators, beyond the cost of any fines PHMSA could impose for a violation of our regulations.  For example, following the Marshall, Michigan spill, PHMSA fined Enbridge $3.7 million, but the company has separately reported that it spent an additional $2.5 billion in complying with PHMSA’s CAO.  Following ExxonMobil’s Laurel, Montana incident, PHMSA assessed a $1 million civil penalty, but ExxonMobil reported an additional $34 million expenditure in complying with PHMSA’s CAO.  These CAOs improve the safety of a failed pipeline or system and send a strong signal to industry that failures will not be tolerated.

With the additional resources that we have received, we are rethinking the way we do business – including the workforce skillsets for conducting inspections and investigations.  For example, we are adding an auditing function to our workforce skill set to work in tandem with our engineers, who provide the technical expertise, and our transportation specialists, who add the field verification element. Broadening the skillset and making this a team effort will be used to enhance our field presence for more robust inspection and enforcement oversight to ensure compliance with Federal safety requirements covering the transportation of the Nation’s energy products. We are also creating a division focused on pipeline accident investigation.  This group will broadly share lessons learned with all stakeholders to help improve safety.

We are in the third year of fully implementing a new inspection protocol for “Integrated Inspections,” where inspections are tailored to the risk profile of a pipeline operator. Our new inspection protocols can be customized to focus resources on risks but are flexible enough to reflect new knowledge gained during an inspection. Inspections now cover multiple facilities and more miles of pipeline; they are performed by a team of engineers and can take several months to complete. As a result, our inspection results are more comprehensive, and may result in fewer, but more expansive, enforcement cases.

We continue to make adjustments to our risk-informed integrated inspection approach and our requirement that integrity management programs ensure operators are adequately identifying and addressing the greatest risks. Under integrity management, operators are required to conduct integrity assessments of gas transmission and hazardous liquid pipeline systems in high consequence areas and apply lessons learned across their entire system. Driven by the lessons learned from the first dozen years of integrity management, failure investigation recommendations, and mandates, we have initiated and are actively considering a variety of improvements to our integrity management regulations and other parts of our oversight process.

We are also working to strengthen State pipeline safety programs and improve oversight nationwide.  The States are responsible for inspecting and overseeing approximately 80 percent of the existing infrastructure, and the States employ approximately 63 percent of the inspector workforce.  PHMSA trains these State inspectors alongside our Federal inspectors, so it is vitally important that we have a consistent national inspection program and cutting edge training that is aligned with PHMSA’s goals and initiatives.

All inspectors, whether State or Federal, must be familiar with our regulations and technical standards.  To that end, our training and qualifications (T&Q) office provides training and technical assistance to both PHMSA and State inspectors.  Last year, T&Q students completed over 1,300 courses, 5,400 seminars, and 1,800 computer-based training modules.

Getting new inspectors up to speed is important because, as we’ve seen a significant increase in new gas and liquid pipeline constructions projects, PHMSA has strived to dedicate about 25 percent of its inspection resources each year to construction inspections.  From 2006 through 2013, construction of gas and hazardous liquid transmission pipelines increased from approximately 3,000 - 4,000 miles per year to 3,500-7,500 miles per year.  Our priority is to identify and correct issues before failures occur, so it is critical that new pipelines are designed and built correctly, prior to being put into service. During these projects, our inspectors examine all processes, including welding, bending, field coating, testing, and other activities to ensure that the construction is in accordance with our Federal safety regulations. Since 2007, our inspectors have identified and acted on hundreds of construction issues, which operators were required to remediate before the pipeline could be put into service.  We have followed up our field observations from inspections with safety advisory bulletins, public workshops, and industry meetings focused on quality control practices.  We know that our new inspectors will be key as we strive to keep pace with the growing pipeline infrastructure while maintaining high standards of safety.

Strong pipeline infrastructure policy also requires collaboration between stakeholder groups.  PHMSA has many partnerships and outreach programs that educate stakeholders and prevent issues from occurring.

One area where our outreach efforts really make a difference is excavation damage prevention.  Last year, 28.3 percent of all distribution incidents were caused by excavation damage[4].  These incidents caused over $25 million in damages, one fatality, and 15 injuries.  The most troubling part of these statistics is that almost all of the incidents could have been prevented with a call to 811, our national Call-Before-You-Dig hotline, which prevents damages to pipelines 99 percent of the time.[5]  We are working hard to raise 811 awareness.  Since its inception, PHMSA has continuously supported the efforts of the Common Ground Alliance (CGA), and we also implement 811 outreach activities that align with CGA’s recommended approaches such as major league baseball campaigns, radio and web messaging, and outreach to children across the country through a national poster contest.  

Additionally, we are also working with States to reduce the unnecessary exemptions to one-call laws.  The Pipeline Safety Act directed us to study the impact of exemptions, and we submitted a report to Congress last year.  One of the key findings was that States with five or more exemptions had over 100 percent more incidents than States with fewer exemptions. Many States are already working to improve and strengthen their damage prevention laws, and PHMSA is working with these states to identify gaps, coordinate with stakeholders, track legislative efforts, and build effective enforcement into their state one-call programs. We believe that damage prevention can have clear results through outreach and strong State partnerships.

As our Nation’s pipeline infrastructure grows with the energy industry, our country’s population is also growing. More people are now living closer to transmission pipelines than ever before, increasing the risks to larger populations.  PHMSA convened and led the Pipelines and Informed Planning Alliance (PIPA) which created recommended practices to help growing communities plan land use and development near existing transmission pipelines.

This January, PHMSA released a primer in coordination with the Federal Emergency Management Agency (FEMA) that provides guidance for incorporating pipeline hazards into community hazard mitigation plans. We encourage communities to use this primer to make pipeline safety an integral part of many communities’ planning efforts—from zoning ordinances to risk-based land use and development decision making.

PHMSA’s Strategic Plan seeks to reduce the consequences of failures when they occur.  With that in mind, we are also working to improve emergency responder training and outreach.  We work with numerous emergency response groups, including the North American Fire Training Directors and the International Association of Fire Chiefs, to improve pipeline emergency response training by advocating for institutionalizing pipeline training on a local and State level and working to create sustainable training programs.

We are also committed to investing in our workforce, technology, and infrastructure.Since 2002, PHMSA has coordinated with the industry to collaborate on more than 230 projects and to invest approximately $89.9 million of PHMSA funding, plus $84.81 million worth of resource sharing with various stakeholders. This collaboration has resulted in 25 patented technologies that operators can use to improve pipeline safety.

In 2013, PHMSA launched the Competitive Academic Agreement Program (CAAP), which supports university-level pipeline safety research.  The CAAP initiative goes beyond seeking practical solutions; it also introduces young researchers and engineers to consider employment in the field of pipeline safety.  To date, the program has awarded over $1.5 million in multi-year research projects and involves 80 students. Projects from this past year have explored improved pipeline coatings, patches and repairs for through-wall defects, and monitoring early stages of corrosion.  This summer, PHMSA will be expanding the program and awarding up to $2 million in additional research.  We are confident that the CAAP initiative will not only result in new and innovative technological solutions, but also future PHMSA safety initiatives.

Finally, we are working with State pipeline regulatory agencies and pipeline operators to continue to invest in our infrastructure.  In 2011, the Department issued a Call to Action to encourage accelerated repair, rehabilitation, and replacement of high risk pipeline infrastructure.  Since then, 38 states and the District of Columbia have implemented measures for accelerated infrastructure cost recovery and replacement of aging pipe.  Sixteen states have completely eliminated cast or wrought iron in their natural gas distribution systems.  While this work isn’t finished, this is great progress.

VI. Closing

As you can see, PHMSA is heavily involved in efforts and activities to fulfill all of the important mandates that Congress included in the Pipeline Safety Act.  PHMSA will continue to work with Congress to prepare for and remain a step ahead of the Nation’s forever changing energy landscape and infrastructure needs. 

I’d like to thank you again for inviting me to testify and for your continued support of PHMSA’s mission; the new positions that we are now filling will help ensure PHMSA’s oversight of our Nation’s growing pipeline system.  Our pipeline system is vast, but it is vital to our way of life and economic security.  To that end, we are committed to a strong oversight program that facilitates the growth and maintenance of an efficient, safe and environmentally friendly pipeline transportation network for energy products.

Safety remains our top priority and we look forward to working with Congress in addressing pipeline safety issues and strengthening PHMSA’s pipeline safety program.  Everyone at PHMSA is dedicated and committed to fulfilling the remaining mandates and accomplishing our pipeline safety mission, and I am honored to work with them in enhancing the safety of the American public. 

Thank you again for the opportunity today to report on our progress.  I would be pleased to answer any questions you may have.

# # #

Implementing the Moving Ahead for Progress in the 21st Century Act and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

Written Statement

of

Timothy P. Butters
Acting Administrator
Pipeline and Hazardous Materials Safety Administration
U.S. Department of Transportation

before the

Subcommittee on Railroads, Pipelines, and Hazardous materials
Committee on Transportation and Infrastructure
U.S. House of Representatives
Washington, D.C.

on

Implementing the Moving Ahead for Progress in the 21^st Century Act and
the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

April 14, 2015

Mr. Chairman, Ranking Member Capuano, and Members of the Subcommittee, thank you for inviting me to testify today on the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration’s (PHMSA) oversight of the Nation’s hazardous materials transportation network, as well as the agency’s progress in implementing title III of the Moving Ahead for Progress in the 21^st Century Act, the Hazardous Materials Transportation Safety Improvement Act of 2012 (MAP-21), and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pipeline Safety Act). 

On November 30, 2004, the 103^rd Congress passed the Norman Y. Mineta Research and Special Programs Improvement Act (Public Law 108-426) to authorize the formation of PHMSA, designating safety as the agency’s highest priority.  Ten years later, PHMSA continues to champion its safety mission: to protect the American people and environment from the risks of hazardous materials transportation by all modes, including rail, vessel, aircraft, highway and pipeline.

A supply chain consists of a few key segments: the raw materials supplier, manufacturers and end consumers. In order for these goods to get from one phase to the next, they must be transported safely – this is where PHMSA comes in.  Our role is to set safety standards for the transport of these products. Shippers and carriers move more than 6.1 million tons of hazardous materials, valued at about $4 billion, through 886 million miles on the nation’s multi-modal transportation network each day, according to the Bureau of Transportation Statistics Commodity Flow Survey. Additionally, energy products like natural gas and oil move through 2.6 million miles of pipelines, most of which are buried underground.

PHMSA is a unique agency housed in the U.S. Department of Transportation because it centers on the safe movement of hazardous materials, making it an inherently multi-modal transportation agency.  Regulated hazardous materials include a diverse range of products that the general public and the regulated industry use daily (e.g., household cleaning products, gasoline). The hazardous materials placards, labels and marking displayed on rail cars, cargo tank motor vehicles and hazardous materials packagings are a visual example of PHMSA’s regulations at work. 

PHMSA executes its safety mission on five simultaneous fronts – through regulations, inspections, research, funding, and education (outreach and training). Developing, issuing and enforcing safety regulations are a significant portion of PHMSA’s work; however, PHMSA also conducts research, funds State regulatory authorities, emergency responders and representatives of communities affected by hazardous materials transportation, and educates stakeholder groups – including the general public – through outreach initiatives and training.  

PHMSA has two primary safety programs: the Office of Hazardous Materials Safety (OHMS) and the Office of Pipeline Safety (OPS). There are about 450 Federal employees working for PHMSA; more than 140 inspectors work in the pipeline safety program, with an additional 50 inspectors in the hazardous materials safety program. Because hazardous materials move through various transportation modes, PHMSA’s inspectors represent one of several Department agencies that inspects and enforces compliance with the Hazardous Materials Regulations (HMR).    

Even before PHMSA was organized in 2005, the Offices of Pipeline Safety and Hazardous Materials Safety were enforcing and updating Federal transportation regulations. Under  their oversight, hazardous materials transportation – including transportation pipelines – has been incredibly safe for a long time. This safety record has been demonstrated through consistent declines in deaths and major injuries attributed to hazardous materials transportation incidents.  Pipeline incidents with death or major injury have declined an average of 10 percent every three years between 1988 and 2014, despite increases in risk exposure measures like population, pipeline mileage, aging infrastructure and pipeline ton-miles. Although the sector has grown safer over time, we continue to take action, especially in the face of tragedies like those in San Bruno and Allentown. As of April 8, 2015, PHMSA satisfied five pipeline safety recommendations from the National Transportation Safety Board (NTSB), bringing down our count of open audit recommendations to 18.

In terms of all other hazardous materials transportation modes, there has also been an overall downward trend in the number of incidents involving death or major injury, declining an average of approximately 10 percent every eight years since 1988.  The relatively low number of annual deaths and injuries is noteworthy, particularly considering that the number of hazardous materials shipments have dramatically increased over the years. Due to more shale activity, specifically, the 50% jump in crude oil production since 2008, our Nation is poised to become the world’s largest energy producer, placing unprecedented demand on freight transportation - especially railroads.  In fact, the Association of American Railroads estimated that a half million Class I carloads moved crude oil throughout the country last year alone.  The value of freight is expected to grow by 125% to $39 trillion over the next thirty years, and more demand for U.S. exports means American jobs.  A thriving transportation sector is a vital component of our economy, but we can’t enjoy the benefits without first and foremost ensuring transportation safety.

Regrettably, there’s been a recent spike in derailments of trains carrying crude oil. We have heard your concerns, and I’d like to reiterate that the entire Department shares your concern and urgency on this issue.  Additionally, on April 6, 2015, PHMSA received four new recommendations for ensuring the safe rail transportation of flammable liquids from the NTSB. We have taken a comprehensive approach to crude by rail safety that includes prevention, mitigation, and emergency preparedness and response.  We are in the final stages of developing a high-hazard flammable train rule to improve the safety of trains carrying flammable liquids.  The Department is also considering additional actions to further improve rail transportation safety.

Many stakeholders continue to believe that, given the scope and importance of our mission, PHMSA needs to grow as an agency and be better resourced. The President’s FY 2016 budget provides a framework to enable PHMSA to perform its primary functions and keep pace with the changes occurring in the hazmat transportation sector.  The FY2016 budget proposal requests $289 million – a $44.2 million increase over the amount enacted in FY 2015 to advance PHMSA’s capacity to execute its safety mission by investing in information technology modernization plans such as the National Pipeline Information Exchange to map the nation’s pipelines. As I mentioned before the House Appropriations committee last month, we need that budget to keep up and keep the American public safe.

I served as PHMSA’s Deputy Administrator for four years prior to becoming PHMSA’s Acting Administrator in October of 2014. With more than 25 years of emergency response experience –including serving as an assistant fire chief – I not only understand the opportunities and challenges that come along with today’s changing hazmat transportation sector; I have also experienced first-hand the benefits of strong safety standards and protocols. They protect not only the American public and industry, but also the brave women and men who serve as emergency responders. 

My testimony today will provide an update of our progress in implementing Congressional safety mandates (e.g., MAP-21 and Pipeline Safety Act), in addition to how continuing this progress will further improve hazardous materials transportation safety.

I. MOVING AHEAD FOR PROGRESS IN THE 21^ST CENTURY ACT (MAP -21       

Enacted on July 6, 2012, MAP-21 provides PHMSA’s Office of Hazardous Materials Safety with important new tools to bolster compliance with the hazardous materials laws and regulations and enhance emergency response capabilities. MAP-21 authorized or mandated numerous rulemakings, reports, and programmatic changes within the Office of Hazardous Materials Safety.  PHMSA finalized its strategy to implement the Act on August 31, 2012 and a supporting Action Plan on October 10, 2012.  The Action Plan assigned responsible staff to 13 areas, covering 32 separate provisions.  As a result, PHMSA has met established timelines for more than 90 percent of the 32 provisions.  This is significant given the many challenges and emerging issues that PHMSA has faced over the same period. All of the following MAP-21 information pertains to PHMSA’s Office of Hazardous Materials Safety.

The MAP-21 mandates are organized below into three categories:

1. Rulemakings;
2. Studies and Reports to Congress; and
3. Other Mandates and Programmatic Changes.

Rulemakings

To date, the Office of Hazardous Materials Safety has finalized four of the six regulatory actions required under MAP-21. The Office of Hazardous Materials Safety has already initiated the two remaining actions, with plans to finalize them by the end of the fiscal year.

The Office of Hazardous Materials Safety has finalized the following rules:

1. August, 7, 2014: Published final rule HM-258A (79 FED. REG.46194), “Failure to Pay Civil Penalties.”
2. October 2, 2013: Published final rule HM-258B (78 FED. REG. 60755), “Enhanced Enforcement Procedures - Resumption of Transportation.”
3. April 17, 2013: Published final rule HM-258 (78 FED. REG. 22798), “Revision on Maximum & Minimum Civil Penalties.”
4. October 5, 2012: Published final rule HM-244E (77 FED. REG. 60935) to revise PHMSA’s preemption authority.

Failure to Pay Civil Penalties (HM-258A Final Rule)

MAP-21 directed PHMSA to issue regulations by October 2014 to require a person who is delinquent in paying civil penalties for a regulatory violation(s) to cease any and all activity regulated under the Federal hazardous materials transportation law until payment has been made or until an acceptable payment plan has been arranged. On September 24, 2013, PHMSA published a Notice of Proposed Rulemaking (NPRM) (78 Fed. Reg. 58501) addressing the MAP-21 mandate to prohibit hazardous materials operations by persons delinquent on payment of civil penalties.  The comment period for the NPRM closed on November 25, 2013.  The rule was finalized and published on August 8, 2014 - two months before the October 2014 deadline.

Open Package – Resumption of Transportation (HM-258B Final Rule)  

PHMSA met MAP-21’s October 2013 deadline to codify procedures for an agent of the Secretary of Transportation to open packages of perishable hazardous materials and to provide notification to the responsible party that an agent has performed a safety inspection or investigation. Additionally, MAP-21 stressed that inspectors be provided appropriate training and equipment to open and close a packaging in accordance with the HMR. The Department's enhanced inspection, investigation, and enforcement procedures were previously established through notice and comment rulemaking and thoroughly addressed the hazardous material transportation matters identified by Congress.  The rule also ensures transparency and consistency for hazardous materials inspectors across all modes of transportation. PHMSA published the final rule on October 2, 2013.

Update of Published Guidelines on Civil Penalty Amounts (HM-258 Final Rule)

PHMSA works to ensure that regulated entities are aware of and understand Federal safety regulations so that they comply the first time, every time; however, PHMSA will continue to hold accountable those found in violation of Federal transportation safety regulations.

MAP-21 removed the minimum penalty amount for a violation and retained the maximum penalty of $450 for a training violation(s). Additionally, it  raised the maximum penalties for persons who knowingly violate a Federal hazardous materials transportation law, regulation(s), order(s), special permit(s) and/ or approval(s) and persons who  knowingly violate a Federal hazardous materials transportation law(s), regulation(s), order(s), special permit(s) and/ or approval(s), resulting in death, serious illness, severe injury or substantial destruction of property to $75,000 and $175,000, respectively.  PHMSA adopted these changes in final rule HM-258 on April 17, 2013.

Revision of Preemption Authority (HM-244E Final Rule)

The Federal hazardous materials transportation law contains strong preemption provisions.  Under 49 U.S.C. § 5125, a requirement of a State, political subdivision of a State, or Indian tribe is generally preempted if complying with the non-federal regulation and complying with the Federal hazardous materials transportation law or regulations is not possible; or the non-federal requirement is an obstacle to carrying out the Federal hazardous materials transportation law or regulations.  Further, unless it is authorized by another federal law or a waiver of preemption from the Secretary of Transportation, a non-federal requirement applicable to any one of several specified covered subjects is preempted if it is not substantively the same as the Federal hazardous materials transportation law or regulations.

MAP-21 amended the preemption language for the covered subject relating to the written notification of an unintentional release of a hazardous material in transportation.  As such, PHMSA revised the implementing regulations for the preemption authority to reflect this amendment.  PHMSA adopted these changes in final rule HM-244E on October 5, 2012.

Standard Operating Procedures for Handling Applications for Special Permits and Objective Criteria for Evaluating Special Permits (HM-233E Proposed Rulemaking)

MAP-21 required PHMSA to issue regulations that establish: (1) Standard operating procedures to support the administration of the Special Permits and approvals, and (2) objective criteria to support the evaluation of Special Permits and approval applications. PHMSA published an NPRM on August 12, 2014, and the comment period ended on October 14, 2014. Stakeholders have expressed an interest in resolving Special Permit and approval processing concerns through rulemaking, commenting on whether an applicant’s fitness needs to be assessed to perform a requested task, and suggesting several alternatives.  MAP-21 mandated a final rule by October 2014.  PHMSA has reviewed the comments and is drafting the final rule with plans to finalize it by the summer of 2015.

PHMSA has initiated the following rulemaking proposals, with a goal of finalizing them by the end of the year:

1. January 30, 2015: Published an NPRM in HM-233F (80 FED. REG. 5339), “Special Permit Incorporation.”
2. August 12, 2014: Published an NPRM in HM-233E (79 FED. REG. 47047; 79 FED. REG. 54676), “Special Permit and Approvals Standard Operating Procedures and Evaluation Process.”

Incorporation of Special Permits into the HMR (HM-233F Proposed Rulemaking)

PHMSA’s Office of Hazardous Materials Safety develops, issues and updates the HMR, which establish safety standards for the movement of hazardous materials by rail, vessel, aircraft and highway. Under the HMR, the Office of Hazardous Materials Safety is authorized to review and grant, as appropriate, applications for Special Permits. A Special Permit authorizes alternative ways to meet safety requirements, as long as the Office of Hazardous Materials Safety has determined that such alternatives achieve safety levels equal to or greater than the HMR’s safety levels.

MAP-21 required an initial review and analysis of the Special Permits that have been in continuous effect for a 10-year period to determine which ones may be converted into the HMR.  MAP-21 mandates a final rule by October 2015. 

Although, MAP-21 limited the review and analysis to Special Permits with a lifespan of greater than 10 years, PHMSA determined that an initial review and analysis of all active Special Permits would be more beneficial because many Special Permits are interrelated.  PHMSA published an NPRM on January 30, 2015; the comment period closes on March 31, 2015. The rulemaking is intended to grant wider access to the regulatory flexibility authorized through existing special permits and minimize renewal requests; thus streamlining the administrative review process and facilitating commerce while maintaining safety.    

Continued Incorporation of Special Permits (HM-233E Proposed Rulemaking)

As just discussed, MAP-21 requires an ongoing review and analysis of Special Permits that have been in effect for more than 10 years.  Based on this review and analysis, PHMSA must either institute a rulemaking to incorporate the Special Permits into the HMR or publish in the Federal Register its justification for why the Special Permits are not appropriate for incorporation into the regulations.  MAP-21 mandates a rule annually, beginning October 2016.  Therefore, PHMSA plans to conduct future reviews of Special Permits with a lifespan of greater than 10 years.  PHMSA’s ongoing review and analysis of Special Permits will use the same methodology and tools as the initial NPRM, outlined above.  However, in future reviews, PHMSA will only focus on Special Permits that have been in effect for 10 or more years.  PHMSA anticipates future analysis and review will be more streamlined due to the reduced volume of Special Permits to be evaluated.  In the initial Special Permits incorporation NPRM, PHMSA plans to request comments and supporting documentation for Special Permits that are suitable for incorporation in future rulemakings. 

Studies and Reports to Congress

Hazardous Materials Emergency Preparedness Grant Report

The Hazardous Materials Grants Program (HM Grants Program) was a key focus area of MAP-21.  The HM Grants Program is comprised of three types of grants:

1. Hazardous Materials Emergency Preparedness (HMEP) Grant ($21.8  million appropriated);
2. Hazardous Materials Instructor Training (HMIT) Grant ($4 million appropriated); and
3. Supplemental Public Sector Training (SPST) Grant ($1 million appropriated).

MAP-21 required PHMSA to submit a report to Congress by October 2013 providing a detailed accounting and description of the HMEP grant expenditures by each grant recipient, including the amount of, and purpose for each expenditure. In addition, MAP-21 imposed a biennial reporting requirement on a State, political subdivision of a State, or Indian tribe that levies a fee in connection with the transportation of hazardous materials.  Before PHMSA may collect and report this information to Congress, it must receive OMB approval for the information collection pursuant to the Paperwork Reduction Act (PRA) (44 U.S.C. §§ 3501-3521). Once PHMSA obtains authorization to collect the information, grantees will be asked to submit quarterly and final reports with the required information.  In accordance with PRA requirements, PHMSA published a 60-day Federal Register notice on December 4, 2013 (78 Fed. Reg. 72972).  PHMSA published the 30-day Federal Register notice on September 26, 2014. PHMSA is expecting to include the information collected during fiscal year (FY) 2015 in a 2016 report to Congress. 

We provided updates on our actions to comply with the MAP-21 requirements on HMEP grant expenditures in the FY12 Report to Congress and are drafting further updates to be included in the next annual update. PHMSA also provided clearer guidance to the grantees on allowable and unallowable activities, and we implemented a risk assessment tool to help us identify high risk/low performing grantees. 

Paperless Hazard Communication Pilot Program

MAP-21 authorized PHMSA to conduct pilot projects to evaluate whether paperless hazard communications systems are effective and feasible in hazmat transportation operations. Per MAP-21, pilot project requirements state that at least one pilot project must be conducted in a rural area and the current statutory shipping paper requirements may not be waived.  Moreover, in developing the pilot projects, PHMSA must consult with organizations representing fire and other emergency responders, law enforcement, and regulated entities. A report to Congress was due by October 2014, covering the following:  (1) a description and performance evaluation of each pilot project; (2) a safety and security assessment; (3) costs and benefits; and (4) a recommendation for incorporation into the HMR. 

In order to initiate a pilot program, however, PRA requires PHMSA to obtain the Office of Management and Budget’s (OMB) authorization to collect the additional information.  Accordingly, PHMSA published a 60-day Federal Register notice on July 19, 2013 (78 FED. REG. 43263), then a 30-day Federal Register notice on November 25, 2013 (78 FED. REG. 70399).  In preparation for OMB’s approval, PHMSA hosted a roundtable discussion with members of law enforcement and the emergency response communities on March 13, 2014. On September 30, 2014, PHMSA received that approval. Subsequently, we finalized the selection of volunteer pilot project participants.  The pilot projects began in February 2015. PHMSA expects the pilot projects to end this month. The pilot projects are taking place in three regions, including at least one rural area. Once the pilot projects are completed, PHMSA will evaluate the results and perform impact analyses on the collected data.  PHMSA is expecting to include results in a report to Congress by October 1, 2015.

In a matter related to the paperless hazard communications initiative, in December 2013, PHMSA issued an special permit to UPS, Inc., authorizing the electronic transfer of shipping paper information for certain low hazard ground shipments.  As I have stated previously, we made it a priority to cut red tape and improve efficiency and moved expeditiously with this special permit. In this instance, sharing hazardous materials information electronically will improve transportation efficiency without sacrificing public safety.

Improving Data Collection, Analysis, and Reporting

PHMSA aims to improve hazardous materials transportation data collection, analysis, and reporting by eliminating reporting fields that don’t provide useful information, and adding and/or clarifying useful reporting fields to identify and analyze trends and prevent future incidents. Adjustments include developing a smart form for incident reporting to ensure more consistent and reliable incident reports.   

MAP-21 required PHMSA to consult with the United States Coast Guard in order to assess and improve the collection, analysis, reporting, and use of data related to transportation accidents and incidents involving hazardous materials. Further, MAP-21 required PHMSA to review methods for collecting, analyzing, and reporting hazardous materials related transportation accidents and incidents.  After completing the assessment, PHMSA was required to report to Congress its plan and timeline for improving the collection, analysis, reporting, and use of data, including revising PHMSA databases, as appropriate.  PHMSA reported its findings to Congress on September 3, 2013.  PHMSA continues to implement its recommendations based on the availability of resources.

Other Mandates and Programmatic Changes

Enhancing Emergency Response Preparedness, Response, and Training

As mentioned in the HMEP Grant Report discussion above, MAP-21 provided several provisions related to PHMSA’s Hazardous Materials Grants Program.  These changes aligned with steps we had already taken to enhance the program.  Specifically, MAP-21 requires HMIT and SPST grants to be awarded through a competitive process.  In addition PHMSA must ensure that HMEP and SPST grants are awarded to emergency responders that will have the ability to respond to the effects of accidents or incidents involving the transportation of hazardous materials in accordance with existing regulations or National Fire Protection Association (NFPA) standards.  Further, SPST grant agreements must specifically state that training courses must comply with Federal regulations and national consensus standards for hazardous materials emergency response. 

As a result of our own initiatives and the MAP-21 provisions, PHMSA has increased its oversight of grantee training programs to ensure that responders and instructors trained under PHMSA hazardous materials grant programs will have the ability to protect nearby persons, property, and the environment from the effects of accidents or incidents involving the transportation of hazardous material in accordance with existing regulations or National Fire Protection Association standards.

PHMSA has and will continue to increase its outreach efforts to ensure that States, Native American Indian Tribes, Territories, and eligible non-profit organizations are aware of the MAP-21 program changes.  This outreach will also serve to broaden the pool of applicants and ensure that stakeholders are aware that the HMIT and SPST grants are awarded competitively.  PHMSA has created an online certification program that will require each HMIT and SPST grantee to certify during the application process that they will use the grant funding to train to the NFPA standards. 

Hazardous Material Enforcement Training

MAP-21 mandated that by April 2014, PHMSA must develop uniform performance standards for training hazardous materials inspectors and investigators on the following: (1) how to collect, analyze, and publish findings from inspections and investigations of accidents and incidents involving the transportation of hazardous materials; and (2) how to identify noncompliance with the HMR, and take appropriate enforcement action.  These standards may provide the following: (1) guidelines for hazardous materials inspector and investigator qualifications; (2) best practices and standards for hazardous materials inspector and investigator training programs; and (3) standard protocols to coordinate investigation efforts among Federal, State, and local jurisdictions on accidents and incidents involving the transportation of hazardous materials.  The standards were completed in Aril 2014.  We are currently implementing the standards in coordination with our other modal administrations.   

Hazardous Material Technical Assessment, Research and Development, and Analysis Program

MAP-21 permitted PHMSA to develop and implement a hazardous material technical assessment, research and development (R&D), and analysis program.  The agency must coordinate with other modal operating administrations and work cooperatively with regulated and other entities in the development and implementation of the program.  On January 17, 2014, PHMSA hosted a research and development forum to discuss the program with regulated entities and our modal partners and solicit comments. The forum transcript has been posted to PHMSA’s R&D Web site (http://phmsa.dot.gov/initiatives/r-and-d).  The comment period for the research projects discussed at the forum closed on March 21, 2014.  PHMSA is currently reviewing 11 comments received from our stakeholders.  Though commenters are supportive of our program, they do recommend changes to research activities involving liquefied petroleum gas odorization, anhydrous ammonia, and explosives. 

PHMSA is planning a second forum to be held on April 16, 2015.  In addition to presenting our short- and longer-term programs and projects, we will present an overview of our new R&D management system.  This new system will present the general public and the regulated industry a greater opportunity to provide input, define our project evaluation criteria; and allow public access to our program timelines and project results. 

Wetlines

MAP-21 required the Government Accountability Office (GAO) to evaluate and report on the safety of transporting flammable liquids in the external product piping of cargo tank motor vehicles (wetlines) by October 2013. PHMSA was prohibited from issuing a final rule regarding wetlines prior to the completion of GAO’s evaluation.  Per MAP-21, the GAO completed an audit on wetlines-related issues and published the final report on September 11, 2013.  We are committed to working with our stakeholders to discuss safe solutions to the risks posed by wetlines.

II. PIPELINE SAFETY ACT

Prior to 2010, the pipeline industry’s safety record was generally improving. PHMSA had implemented all but one of the mandates from the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES Act; Public Law 109-468) and acceptably closed all of its NTSB recommendations except for six, which remained classified by NTSB as “open acceptable.”

By 2010, however, energy production suddenly began growing exponentially, ushering in a domestic energy renaissance and a new set of economic opportunities and new challenges, including pipeline safety. More energy products are not only increasing demand for pipeline construction, they are also placing more stress on the Nation’s aging pipeline infrastructure. Over a relatively short period, several major accidents occurred. Since then, a string of tragic pipeline accidents at Marshall, MI; San Bruno, CA; Allentown, PA; and Billings, MT have collectively claimed 13 people’s lives, injured more than 50 people, caused environmental harm, and released millions of dollars’ worth of energy products. These incidents are sobering reminders of the tangible safety risks associated with pipeline transportation. The deadly 2011 natural gas explosion in Allentown, for example, was caused by a rupture in a cast iron pipe installed more than 80 years before.

Following these incidents, on January 3, 2012, the Pipeline Safety Act was enacted and showed there was a broad consensus about the importance of a safe and reliable pipeline system. Under the Pipeline Safety Act, PHMSA received 42 new Congressional mandates. Since 2011, PHMSA was also issued 49 new NTSB recommendations, 16 new Office of the Inspector General (OIG) recommendations, and 7 new GAO recommendations.[1]  

PHMSA has tackled these requirements through a comprehensive approach. While there is still much work to be done in protecting people and the environment from the risks involved in transporting hazardous materials – including  by pipeline – we have made good progress in completing those mandates and fulfilling the intent of the Pipeline Safety Act. As of April 8, 2015, PHMSA satisfied five pipeline safety recommendations from the National Transportation Safety Board (NTSB), bringing down our count of open audit recommendations to 18. This does not include the NTSB’s 22 integrity management recommendations; however, PHMSA staff is diligently working to respond to them.

PHMSA has completed 22 of the 42 mandates and has made great strides in completing significant work towards the remaining mandates, including finalizing its Excavation Damage Report (available at http://go.usa.gov/33H7H). The following briefly describes PHMSA’s work to carry out the Pipeline Safety Act mandates:

Section 2—Civil Penalties:

The Pipeline Safety Act increased the maximum administrative civil penalty for pipeline safety violations from $100,000 to $200,000 per violation per day and from $1,000,000 to $2,000,000 for a related series of violations.   On September 25, 2013, PHMSA published a final rule titled “Administrative Procedures; Updates and Technical Corrections” (78 Fed. Reg. 58897), which updated Part 190 of title 49 of the Code of Federal Regulations (C.F.R.) to reflect this amendment.

Section 3—Pipeline Damage Prevention:

PHMSA has been a leader for many years in preventing damage to underground facilities caused by excavation and other activities near pipelines, including establishing 811 as the national telephone number to call before beginning excavation.  The Pipeline Safety Act required PHMSA to incorporate new standards for State “one-call” programs into the State Damage Prevention (SDP) grant program criteria, including no State and local exemptions. PHMSA discussed these exemptions with members of the National Association of Pipeline Safety Representatives, the Common Ground Alliance, the pipeline industry, and many others, and incorporated revised requirements in the SDP grant program criteria. PHMSA then determined which States would be impacted by SDP grant funding limitations and sent letters that provided damage prevention and grant eligibility information to the governors of affected States on March 25, 2013. Communication with the affected States continued throughout the year, including a large, Public Exemptions Workshop that PHMSA held on March 14, 2013. PHMSA posted the 2014 SDP solicitation, which included language regarding the new standards, on November 25, 2013. On January 7, 2014, PHMSA notified the States of their eligibility status for the 2014 SDP grants.

The Pipeline Safety Act also requires PHMSA to conduct a study on the impact of excavation damage on pipeline safety, including exemptions, frequency, severity, and type of damage, and report the results to Congress. PHMSA subsequently performed significant data analysis regarding damage prevention. This analysis was incorporated into PHMSA’s report, which was sent to Congress on October 9, 2014.

Section 4—Automatic and Remote-Controlled Shut-Off Valve Use:

The Pipeline Safety Act requires PHMSA to issue regulations requiring the use of automatic or remote-control shut-off valves on transmission pipelines constructed or entirely replaced after the date of the rule, if appropriate.

PHMSA has long been committed to finding new approaches that can help mitigate the amount of product released from a pipeline in the event of a rupture. PHMSA began to collect information on the use of automatic shut-off valves (ASVs) and remote-controlled shut-off valves (RCVs) on hazardous liquid and gas transmission pipelines prior to the enactment of the Pipeline Safety Act through issuance of two Advance Notices of Proposed Rulemaking (ANPRMs) titled “Safety of On-Shore Hazardous Liquid Pipelines” and “Safety of Gas Transmission Pipelines”. For hazardous liquid transmission pipelines, an ANPRM issued on October 18, 2010, requested public comments on the use of RCVs. For gas transmission pipelines, an ANPRM issued on October 25, 2011, requested public comments on requiring the use of ASV and RCV installation.

PHMSA is taking public comments on the ANPRM and from other sources, including a large, public leak detection and valve workshop held on March 28, 2012, and an independent valve study conducted by Oak Ridge National Laboratory titled “Studies for the Requirements of Automatic and Remotely Controlled Shutoff Valves on Hazardous Liquid and Natural Gas Pipelines with Respect to Public and Environmental Safety” (submitted to Congress on December 27, 2012), into consideration as it drafts an NPRM related to ASV and RCV installation and leak detection.

Section 5—Integrity Management:

Over the last three reauthorization cycles, Congress has directed PHMSA to build on proven risk management and integrity management approaches to pipeline safety that provide for the use of the latest internal inspection and other technologies.  The Pipeline Safety Act required PHMSA to conduct an evaluation on whether integrity management programs (IMPs) should be expanded beyond high-consequence areas (HCAs) and whether gas IMPs should replace the class location system. This section also asks PHMSA to consider issuing regulations expanding IMP requirements and/or replacing class locations.

On August 25, 2011, PHMSA published an ANPRM titled “Safety of Gas Transmission Pipelines,” (RIN: 2137-AE72), which asked all stakeholders whether PHMSA should modify the definition of an HCA and develop additional safety measures, including integrity management measures. PHMSA published an NPRM in the Federal Register on August 1, 2013, to ask for comments on HCA expansion and, with respect to gas transmission, whether applying IMP requirements to additional areas mitigates the need for class location requirements. PHMSA also held a “Class Location Methodology Workshop” (79 Fed. Reg. 16421) on April 16, 2014 to inform a final report.

This section of the statute also suggests that PHMSA may extend a gas pipeline operator’s 7-year reassessment interval by 6 months if the operator submits written notice with sufficient justification of the need for an extension, and that PHMSA should publish guidance on what constitutes sufficient justification.  PHMSA is considering rulemaking to propose the 6-month extension and provide supporting guidance on what constitutes sufficient justification.

Section 6—Public Education and Awareness:

This section contained several requirements aimed at ensuring members of the public and other stakeholders are able to understand and engage on issues involving the safety of pipelines located near their communities. One mandate requires that PHMSA maintain a map of all gas HCAs as a part of the National Pipeline Mapping System (NPMS), and another mandate requires PHMSA to update the NPMS biennially. PHMSA has already begun to implement this provision using information currently available, and we continue to work on expanding the information available. As defined in the NPMS, there are five types of High Consequence Areas: Populated Areas, Other Populated Areas, Commercially Navigable Waterways, Ecologically Sensitive Areas, and Drinking Water Sensitive Areas. The first three types are updated whenever the source agency (Census or BTS) releases new data. Updating the ecological and drinking water data is prohibitively expensive for PHMSA (approximately $3 million each time the data is updated). As a result, PHMSA is considering a rulemaking to change the definition of those datasets in a way that would allow PHMSA to use other government datasets at no or low cost.

Additionally, PHMSA was required to promote greater awareness of the NPMS to State and local emergency responders and other parties. To address this requirement, PHMSA is incorporating NPMS outreach into other programs that relate to State and local officials, including emergency management and emergency responder officials. PHMSA hosted a meeting of Public Safety and Emergency Response officials to discuss pipeline emergency preparedness and response on December 9, 2011. Additionally, PHMSA continues to communicate with various emergency responder groups through its Emergency Responder (ER) Outreach program and the Community Assistance and Technical Services (CATS) program. PHMSA is also publishing articles regarding its public resources, including the NPMS, in ER publications. A brochure, designed for widespread distribution in the ER community, was also created that described available resources.

PHMSA was also required to issue guidance to operators to provide system-specific information about their pipelines to emergency responders after consulting with those responders. This requirement aligns closely with NTSB recommendation P-11-8, which recommended sharing pipe diameter, operating pressure, product transported, potential impact radius and other information.

On November 3, 2010, and prior to the passage of the Act, PHMSA issued Advisory Bulletin ADB-10-08, “Emergency Preparedness Communications” (75 Fed. Reg 67807), which reminded operators of gas and hazardous liquid pipeline facilities that they must make their pipeline emergency response plans available to local emergency response officials. PHMSA recommends that operators provide their emergency response plans to officials through their required liaison and public awareness activities. PHMSA is evaluating the extent to which operators have provided their emergency plans to local emergency officials when performing inspections for compliance with liaison and public awareness code requirements.

Following that bulletin, PHMSA issued another Advisory Bulletin on October 11, 2012, titled “Communication During Emergency Situations” (ADB-12-09; 77 Fed. Reg 61826), which reminds operators of gas, hazardous liquid, and liquefied natural gas pipeline facilities that operators should immediately and directly notify the Public Safety Access Point that serves the communities and jurisdictions in which those pipelines are located when there are indications of a pipeline facility emergency.

Further, PHMSA convened a Public Awareness (PA) Working Group that will leverage the results of PHMSA’s ER outreach efforts and issue findings on gaps in the requirements for pipeline operators to communicate with local emergency response agencies. The initial findings of the PA Working Group will be made available to the public this year. PHMSA will also make the findings available to the American Petroleum Institute (API) as input on Recommended Practice 1162. PHMSA will review the PA Working Group’s findings to determine if additional changes need to be made to Federal regulations regarding communications and information sharing between pipeline operators and local emergency response agencies.

The final mandate from this section required PHMSA to maintain the most recent oil facility response plans (FRPs), which are currently collected from operators, and provide copies of those FRPs to any requester through the Freedom of Information Act process. These plans, often spanning hundreds of pages, include sensitive information that must be redacted prior to public release. PHMSA has implemented this mandate and continues to improve the FRP program by accelerating the plan review process.

Section 7—Cast Iron Gas Pipelines:

The Pipeline Safety Act required PHMSA to follow up on the industry’s progress in replacing older cast iron gas pipelines still operated as part of gas distribution systems regulated by the states. PHMSA has collected updates on these modernization projects and has published the responses on its public Web site. This inventory was developed and posted before the deadline of December 31, 2012. We also update this data and trend reduction in cast iron pipe on an annual basis.

Section 8—Leak Detection:

The Pipeline Safety Act requires PHMSA to submit a report to Congress on leak detection systems used by operators of hazardous liquid pipeline facilities and transportation-related flow lines. This report was submitted to Congress prior to the deadline of January 3, 2013, and is available on PHMSA’s public Web site.

This section also requires PHMSA to, if appropriate, issue regulations requiring leak detection on hazardous liquid pipelines and establishing leak detection standards (though not during the Congressional review period unless there is a risk to public safety). As mentioned above for Section 4, PHMSA hosted a major workshop on leak detection and ASVs/RCVs in 2012. A two-pronged approach to address leak detection has been developed.  The first prong involves rulemaking currently underway aimed at improving current requirements based on currently available technology.  Secondly, in order to improve leak detection performance and to inform future policy making, PHMSA funded an R&D project aimed at improving leak detection system design redundancy and accuracy (Contract DTPH56-14-H-00007).

Section 9—Accident and Investigation Notification:

PHMSA was required by the Act to revise regulations to require telephonic reporting of incidents or accidents not later than one hour following a “confirmed discovery” and to require revising the initial telephonic report after 48 hours if practicable. PHMSA issued an Advisory Bulletin (“Accident and Incident Notification Time Limit;” ADB-2013-01; 78 Fed. Reg 6402) in 2012 advising owners and operators of gas and hazardous liquid pipeline systems and liquefied natural gas facilities that they should contact the National Response Center (NRC) within one hour of discovery of a pipeline incident and should also file additional telephonic reports if there are significant changes in the number of fatalities or injuries, product release estimates, or the extent of damages.

The Act also requires PHMSA to review and revise, as necessary, procedures for operators and the NRC to notify emergency responders, including local public safety answering points or 911 centers. PHMSA published Advisory Bulletins ADB-12-09, “Communication During Emergency Situations” (77 Fed. Reg. 61826), and ADB-10-08, “Emergency Preparedness Communications” (75 Fed. Reg. 67807), which issued guidance to operators on these procedures.

Section 10—Transportation-Related Onshore Facility Response Plan Compliance:

Administrative Enforcement and Civil Penalties:

PHMSA updated 49 C.F.R. Part 190 to be consistent with the new authority to enforce the facility response plan requirements in 49 C.F.R. Part 194 including using civil penalties for violations. This item was addressed when PHMSA published its final rule titled “Administrative Procedures; Updates and Technical Corrections” (RIN: 2137-AE92) on September 25, 2013.

Section 11—Pipeline Infrastructure Data Collection:

On July 30, 2014, PHMSA issued a notice considering whether to collect additional information on other geospatial and technical data for the National Pipeline Mapping System (NPMS).   On November 17, 2014, PHMSA held a public meeting to discuss the information collection and collect additional comments.  Comments are currently under review. 

Section 12—Transportation-Related Oil Flow Lines:

PHMSA is considering collecting geospatial and other data on transportation-related oil flow lines.

Section 13—Cost Recovery for Design Reviews:

PHMSA is responsible for reviewing pipeline facility designs to determine whether they are in code compliance. The Act authorizes PHMSA to recover from companies the costs of conducting pipeline facility design reviews of projects with design and construction costs totaling over $2.5 billion, or uses new or novel technologies or design. The legislation allowed for the collection of the fee as a mandatory receipt with the spending subject to appropriations. No fees have been collected to date pursuant to this authority.

Section 14—Biofuel Pipelines:
The Act clarified that pipelines that transporting biofuels such as ethanol meet the definition of hazardous liquid pipelines.

Section 15—Carbon Dioxide Pipelines:

The Act requires that PHMSA issue regulations for transporting by pipeline carbon dioxide while in a gaseous state. Although the carbon dioxide pipelines PHMSA is aware of transport carbon dioxide in a liquid state and are already regulated under Part 195, PHMSA is currently considering ways to prepare for future developments in the industry, including the possibility of conducting an information collection to gain more data to better inform our decision.

Section 16—Study of Transportation of Diluted Bitumen:

PHMSA was required to review and report to Congress on whether current regulations are sufficient to regulate pipelines transporting diluted bitumen. We engaged the National Academy of Sciences (NAS) and Transportation Research Board (TRB) to study this important issue. The NAS/TRB committee briefed PHMSA’s senior management and the Department’s Deputy Secretary on June 21, 2013. The NAS/TRB committee briefed Congress on June 24, 2013, and held a public press conference on the release of the report on June 25, 2013. The report is available publically from the NAS/TRB website at http://www.nap.edu/openbook.php?record_id=18381.

In January, 2014, PHMSA was further directed under the Explanatory Statement of the Consolidated Appropriations Act, 2014, Division L, to conduct another study on the transportation of diluted bitumen.  The new study must investigate whether spill properties of diluted bitumen differ sufficiently from those of other liquid petroleum products to warrant modifications of spill response plans, spill preparedness, or clean up regulations.  PHMSA must report the findings to the House and Senate Committees on Appropriations within 180 days of enactment.  In order to satisfy this mandate, PHMSA awarded a 21 month contract to the NAS.  An ad hoc committee of subject matter experts was convened, and work is ongoing.

Section 17—Study of Nonpetroleum Hazardous Liquids Transported by Pipeline:

This section allows PHMSA to analyze the extent to which pipelines transporting non-petroleum hazardous liquids, such as chlorine, are unregulated, and whether any such pipelines presents risks to the public. While PHMSA’s major focus with respect to hazardous liquid pipelines continues to be on the petroleum pipelines that make up the vast majority of the mileage, any information and analysis on this subject will be made available to Congress as directed by the Act. PHMSA continues to review this issue.

Section 19—Maintenance of Effort:

PHMSA was required to grant waivers of the maintenance of effort clause in FY 2012 and FY 2013 to States that demonstrate an inability to maintain funding to their pipeline safety program due to economic hardship. This action has been completed for FY 2012 and FY 2013, and we are ready to address this mandate for FY 2014.

Section 20—Administrative Enforcement Process:

This section requires PHMSA to issue regulations for administrative enforcement hearings that require a presiding official, implement a separation of functions, prohibit ex parte communications and provide other due process provisions. This item was addressed in the final rule titled “Administrative Procedures; Updates and Technical Corrections” (RIN: 2137-AE92), which was published on September 25, 2013.

Section 21—Gas and Hazardous Liquid Gathering Lines:

The Act requires PHMSA to review and report to Congress on existing Federal and State regulations for all gathering lines, existing exemptions, and the application of existing regulations to lines not presently regulated. PHMSA must also consider issuing regulations that would subject offshore liquid gathering lines to the same standards as other liquid gathering lines. PHMSA completed research and is developing the final report.

Section 22—Excess Flow Valves:

The Act requires PHMSA to consider issuing regulations requiring the use of excess flow valves on new or entirely replaced distribution branch services, multi-family facilities, and small commercial facilities. PHMSA issued an ANPRM titled “Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other Than Single-Family Residences” (RIN: 2137-AE71) on November 25, 2011, and analyzed the public comments received.

Section 23—Maximum Allowable Operating Pressure:

PHMSA has taken several key steps in responding to this key mandate involving pipeline operator verification or records, reporting, determination of maximum allowable operating pressure (MAOP) and testing regulations. PHMSA revised information collection procedures, requiring all operators to report pipelines without sufficient records to confirm the established maximum allowable operating pressure of pipeline segments.  This information collection, conducted through operators’ annual reporting requirements already in place, provided an inventory of pipelines without sufficient records, and further helped define the potential regulatory impact of any potential new regulations.   Interim actions were also taken under this section, including issuing advisory bulletins to alert and remind operators of needed actions to ensure safety.  On May 7, 2012, Advisory Bulletin 12-6 reminded operators of gas and hazardous liquid pipeline facilities to verify their records relating to operating specifications for MAOP (required by 49 CFR 192.517) and maximum operating pressure (MOP) required by 49 CFR 195.310.  On December 21, 2012, Advisory Bulletin 12-11 required gas pipeline operators to report exceedances of MAOP. PHMSA further engaged all stakeholders in the development of a fitness for service concept for pipelines referred to as the “Integrity Verification Process” (IVP).  On August 7, 2013, PHMSA conducted a public workshop on IVP and invited public comments prior to commencing rulemaking.

Section 24—Limitation of Incorporation of Documents by Reference:
Section 24 of the Pipeline Safety Act of 2011 (as amended by H.R. 2576 (P.L 113-30)) mandates that the standards publications incorporated by reference into the Pipeline Safety Regulations are made available to the public free of charge.

PHMSA currently incorporates by reference 65 standards from seven different standard developing organizations (SDOs).  These standards are available for viewing at PHMSA’s headquarters and regional offices, and the Office of the Federal Register. In addition, six of the seven SDOs have agreed to make their standards publications available for viewing free of charge on the Internet.  PHMSA continues to work with all the SDOs, Congress, OMB, and other affected entities to make sure that any document that we incorporate by reference into the regulations in the future is reasonably available to the general public for free. 

Section 28—Cover Over Buried Pipelines:

PHMSA was required to conduct a study and report to Congress on hazardous liquid pipeline accidents at water crossings to determine if depth of cover was a factor. This study was completed and was transmitted to Congress before the deadline of January 3, 2013.

If the study shows depth of cover was a factor, PHMSA was required to review the sufficiency of existing depth of cover regulations and consider possible regulatory changes and/or legislative recommendations. PHMSA, via letters transmitted to Congress on November 19, 2013, concluded that its existing legislative authority is adequate to address the risks of hazardous liquid pipeline failures at major river crossings. PHMSA believes that no new legislative authority is needed. However, PHMSA will continue to look for ways to enhance its depth of cover regulations, as appropriate, moving forward.

Section 29—Seismicity:

There was no specific mandate within this section, but it was suggested that PHMSA should issue regulations to be consistent with the requirement in statute that operators consider seismicity in identifying and evaluating all potential threats to each pipeline pursuant to Parts 192 and 195. PHMSA has conducted research on this issue and is planning to propose seismicity considerations in its NPRMs titled “Safety of Gas Transmission and Gathering Pipelines” (RIN: 2137-AE72) and Safety of Hazardous Liquid Pipelines (RIN: 2137-AE66).

Section 30—Tribal Consultation for Pipeline Projects:

The Act requires PHMSA to develop and implement a protocol for consulting with Indian tribes to provide technical assistance for the regulation of pipelines that are under the jurisdiction of Indian tribes. PHMSA posted this protocol on its Web site prior to the deadline of January 3, 2013.

Section 31—Pipeline Inspection and Enforcement Needs:

PHMSA was required to report to Congress on the total number of full-time equivalents (FTEs) for pipeline inspection and enforcement, the number of such FTEs that are not presently filled and the reasons they are not filled, the actions being taken to fill the FTEs, and any additional resources needed. PHMSA completed this action and submitted a report to Congress on December 20, 2012.

Section 32—Authorization of Appropriations:

This section of the Act required PHMSA to ensure that at least 30 percent of the costs of program-wide R&D activities are carried out using non-Federal sources. These efforts are currently ongoing and are on-track.

Further, this section of the Act required the Secretary of Transportation - after the initial 5-year R&D program plan has been carried out by the participating agencies and in coordination with the Director of the National Institute of Standards and Technology, as appropriate - to prepare an R&D program plan every 5 years thereafter. PHMSA must also transmit a report to Congress on the status and results-to-date of implementation of the R&D program every 2 years. The R&D program is designed to identify gaps in needed pipeline technology and map a path forward to assure there is no duplicative research and that resources are leveraged appropriately. PHMSA transmitted its latest 5-year R&D program plan to Congress on July 29, 2013.

III. CONCLUSION

PHMSA is committed to hazardous materials transportation safety by all modes, making us a distinctly multi-modal agency at the U.S. Department of Transportation. As such, we regularly coordinate and consult with other Federal agencies, State partners and stakeholder groups because safety is a shared responsibility. Much like we work with other agencies to execute our safety mission, PHMSA looks forward to continuing its progress in implementing Congress’s mandates.

In my nearly five years at PHMSA, I have witnessed the energy development activity in regions like the Bakken and Marcellus. Before PHMSA, I worked as a fire chief; I know first-hand how devastating hazmat emergencies can be not only for everyday people, but the brave women and men who work as first responders.

While PHMSA develops, issues and enforces Federal regulations, PHMSA is one component of a larger, complex transportation network.  In addition to PHMSA, the safety of hazmat transportation depends on the industry - which owns and operates the infrastructure - and other stakeholder groups like our State partners and emergency responders.

PHMSA’s mission is important and far-reaching; it’s truly an honor to work with PHMSA’s highly professional, dedicated staff in protecting the American people and environment. We will continue to work with all of our safety partners in addressing the rest of MAP-21 and Pipeline Safety Act mandates. Thank you again for the opportunity today to report on our progress. I would be happy to answer any questions you may have.

###

The Internet of Cars

Statement

of

Nathaniel Beuse,
Associate Administrator for Vehicle Safety Research,
National Highway Traffic Safety Administration

Before the

House Committee on Oversight and Government Reform

Hearing On

"The Internet of Cars"

November 18, 2015

Good morning Chairmen Mica and Hurd, Ranking Members Duckworth and Kelly, and members of the subcommittees. I appreciate this opportunity to testify about how the National Highway Traffic Safety Administration (NHTSA) is addressing emerging challenges associated with new connected vehicle technologies.

In 2013, there were over 5.7 million motor vehicle crashes in the United States, and 32,719 people died in vehicle-related crashes. The consequences of these crashes range from personal tragedies that impact individual families forever, to billions of dollars in economic damage due to lost productivity, increased congestion, environmental impact and other negative consequences. While we have made significant improvements in motor vehicle safety, vehicle crashes remain the leading cause of death for ages 11 to 27—and a major factor in most other age ranges.

NHTSA’s mission is to reduce deaths, injuries, and economic loss resulting from motor vehicle crashes. NHTSA’s vehicle safety activities will continue to enhance occupant protection when crashes occur, but, as Secretary Foxx recently said, "The Department wants to speed the nation toward an era when vehicle safety isn’t just about surviving crashes; it’s about avoiding them."

NHTSA believes this era of innovation that we are entering holds great promise to help us address the approximately 94 percent of crashes that are due to driver error. New technologies such as vehicle-to-vehicle communications and automated vehicle technologies have the potential to dramatically change the safety picture in the United States by helping drivers avoid crashes in the first place. Together, connected and automated vehicle technologies can help a driver operate his or her vehicle in a safer manner; warn the driver of an impending collision; and can even provide active crash avoidance assistance through applying vehicle’s brakes or steering if such warnings are not heeded.

These new technologies also bring different challenges that NHTSA is poised to address. For example, consumers hear a lot about cybersecurity as it relates to banks and personal information. Now in the auto space, cybersecurity is taking on new meanings, even showing up in TV shows. NHTSA’s research program is aimed at laying the foundation for active collaboration, pushing the state of the art, and informing agency policy decisions. NHTSA, and the entire Department of Transportation (USDOT), believes the emerging challenges associated with new automated and connected vehicle technologies are addressable and that they should not keep us from pursuing the innovative technologies that can save lives.

The Safety Promise of Vehicle To Vehicle Communications

Testing and analysis done by NHTSA and the Intelligent Transportation Systems Joint Program Office (ITS JPO) indicate that vehicle-to-vehicle communications, or V2V, is a crash avoidance technology that can potentially address up to approximately 80 percent of crashes involving two or more motor vehicles. This technology is different than what we hear about when vehicle manufacturers talk about providing WiFi and cellular connectivity. This technology promises to be transformative and is about enabling a new era of safety that may not only save lives, but have other benefits as well. When fully realized, this communications technology is extendable beyond vehicles and the infrastructure. It can even be deployed to other devices that would be carried by pedestrians and cyclist thereby addressing these crashes, which represent an increasing share of total motor vehicle involved fatalities. V2V is based on vehicles wirelessly sharing their position, speed and heading information with each other in near real-time fashion. Each vehicle uses the information from surrounding vehicles to determine if a collision is imminent, and then warns the driver as needed.

V2V is expected to augment today’s technologies such as forward collision warning, blind spot warning, and automatic emergency braking systems. V2V technology will likely be fused with other technologies that rely on sensors, such as radar or cameras, to further improve the effectiveness of these safety systems. This allows for potential crash situations to be detected sooner and more reliably. This is because V2V allows for enhanced 360-degree situational awareness; extends the operational range of conventional sensors such as radar and cameras; and allows a vehicle to "see" around corners, it can assist the driver in many challenging crash scenarios. Intersection related crashes is one of those scenarios and is one of the most pervasive and deadliest crash types. V2V communications will also allow development and implementation of safety applications that rely on communicating with roadway infrastructure elements, such as traffic signal controllers, and can address safety issues that cannot be entirely addressed solely by V2V applications

NHTSA and vehicle original equipment manufacturers (OEMs) also recognize that V2V provides an important capability that can be leveraged to improve the performance, reliability and safety of automated vehicles, thus allowing for the full potential of a connected-automated vehicle environment to be realized. V2V communications allows vehicles to (nearly) instantaneously share information about driver intent that is not possible with conventional sensors, including, for example, turn signal, brake and accelerator actuations. Such information can be used in advanced automated vehicle concepts to more accurately coordinate movements among vehicles to improve both efficiency and safety of traffic flow.

Proactive Vehicle Cybersecurity

USDOT and NHTSA are fully committed to the era of crash avoidance through automated and connected vehicles, due to their unprecedented safety improvement potential. These modern crash avoidance technologies have become possible with the increasing use of electronics, software and connectivity in the design of a car, similar to how our lives have been revolutionized by the rapid connectivity made possible by computers, the Internet, cellular, GPS, satellites and other communication and information processing. As these systems became integral to our daily lives, so too did the potential for attacks to those same systems. Cybersecurity rose out of necessity to protect these vital systems and the information contained

within them. Applied to vehicles, cybersecurity takes on an even more important role: systems and components that govern safety must be protected from malicious attacks and incidents, zero-day vulnerabilities, damage, or anything else that might interfere with safety functions. We are fully aware that failure to tackle the cybersecurity challenge would threaten the technology-driven safety transformation we all want to achieve.

For these reasons, vehicle cybersecurity has never been an afterthought for NHTSA. In exploring the potential of connected vehicles and other advanced technologies, NHTSA remained aware that cybersecurity would be essential to the public acceptance of vehicle systems and to the safety technology they governed.

To ensure a robust cybersecurity environment for these dynamic new technologies, NHTSA modified its organizational structure, developed vital partnerships, adopted a layered research approach, considered legislative additions (as contained in the GROW America), and encouraged members of the industry to take independent steps to help improve the cybersecurity posture of vehicles in the United States. NHTSA's goal is to be ahead of potential vehicle cybersecurity challenges, and seek ways to address them.

In 2012, NHTSA modified its research organization to focus on vehicle electronics, including cybersecurity. NHTSA established a new division, Electronic Systems Safety Research, to conduct research on the safety, security, and reliability of complex, interconnected, electronic vehicle systems. More recently, NHTSA expanded its research and testing capabilities in vehicle electronics at its Vehicle Research and Test Center in East Liberty, Ohio. Personnel at that facility are responsible for evaluating, testing, and monitoring potential automotive cyber vulnerabilities, and for leading the agency's research of highly automated vehicles.

To help develop a comprehensive approach to address cybersecurity, NHTSA consulted other government agencies, vehicle manufacturers, suppliers, and the public. The approach covers various safety-critical applications deployed on current vehicles, as well as those envisioned for future vehicles that may feature more advanced forms of automation and connectivity. A few months ago, NHTSA published a white paper, "NHTSA and vehicle cybersecurity,"i in which the agency outlined its multilayered approach to cybersecurity in further details. This approach has the following goals:

1. Expand the knowledge base to establish comprehensive research plans for automotive cybersecurity and develop enabling tools for applied research in this area;

2. Facilitate the implementation of effective, industry-based best practices and voluntary standards for cybersecurity and cybersecurity information-sharing forums;

3. Foster the development of new system solutions for automotive cybersecurity;

4. Research the feasibility of developing mandatory minimum performance requirements for automotive cybersecurity; and

5. Gather foundational research data and facts to inform potential future Federal policy and regulatory activities.

There are tremendous opportunities in this realm for proactive steps. In fact, such steps are essential. Regulation and enforcement alone will not be sufficient to address these risks – cybersecurity threats simply move too fast and are too varied for regulation to be the only answer. The auto industry can play an essential role by cooperatively establishing rigorous best practices that address the broad range of cyber threats; by reacting quickly and appropriately when such threats emerge; and by working closely with government and independent security analysts to identify and defeat attacks. The decision to establish the Automotive Information Sharing and Analysis Center (ISAC), which is expected to be in operation by the end of this year, is one important proactive step. The importance of a robust information sharing forum for the industry was demonstrated when NHTSA influenced the first cybersecurity related recall on-record in July 2015 that involved up to 1.4 million vehicles. Vigilance in mitigating the safety risks in that particular case was necessary but not sufficient. It was essential for the rest of the industry, including OEMs, equipment suppliers, and wireless carriers to review designs to determine whether similar or related vulnerabilities existed elsewhere. In the cybersecurity realm, those involved must keep moving, adapting, improving and sharing intelligence. Our efforts will need to be collective, collaborative, comprehensive, and continuous.

Addressing V2V Security

More specifically related to V2V security, for the past several years, USDOT, NHTSA, vehicle manufactures, automotive suppliers, security experts, standards development organizations, and other government agencies have been developing Dedicated Short Range Communications (DSRC) radio technology and the associated architecture and protocols to support trusted vehicle-to-vehicle and vehicle-to-infrastructure communications. We have made significant progress on the architecture and have research plans to conduct large-scale vulnerability testing and to address any security issues that emerge from that testing. In addition, as NHTSA pursues these efforts, the agency will address various aspects of the architecture including the protocols that will ensure interoperability, security and privacy protection.

NHTSA and its partners are developing a Public Key Infrastructure (PKI) based system, termed the "Security Credential Management System" (SCMS), for ensuring trusted and secure V2V and Vehicle to Infrastructure (V2I) communications. PKI security architectures and methodologies are already used extensively in the information technology and communications industries, as well as in the automotive telematics applications. The SCMS would employ highly innovative methods, encryption, and certificate management techniques to address the challenging task of ensuring trusted communications between entities that previously have not encountered each other. This is further detailed in NHTSA's publication, Vehicle to Vehicle Communications: Readiness of V2V Technology for Application.

USDOT also has reached out to our government partners at the Defense Advanced Research Project Agency (DARPA) and the National Institute of Standards and Technology for their input as NHTSA works to identify potentially unique cyber vulnerabilities associated with establishing a standardized wireless link with motor vehicles, and develop countermeasures and solutions for such vulnerabilities.

Privacy

NHTSA takes consumer privacy very seriously. The agency is committed to regulating items of motor vehicle equipment that may impact individual privacy in a manner to both protect consumers and promote advances in motor vehicle safety technology. NHTSA plans to address some aspects of privacy, as it relates to V2V, in our upcoming Notice of Proposed Rulemaking on V2V Communications.

Separately, NHTSA is also working with other Federal partners such as the FTC, which has broad authorities in regulating and enforcing relationships between automakers and consumers for purposes of protecting consumers and their privacy.

Importance of Spectrum

V2V technology relies on licensed, dedicated short range communications (DSRC) to operate effectively to provide the safety benefits outlined above. In 1999, the FCC allocated a portion of the 5.9 GHz spectrum for this important purpose, and since that time, DOT and other stakeholders have worked actively to make V2V and V2I a reality. In light of growing demand for spectrum, particularly for unlicensed Wi-Fi devices, there is a proceeding pending before the Federal Communications Commission (FCC) aimed at considering whether, and on what terms, the 5.9 GHz spectrum could be "shared." DOT is not opposed to sharing the spectrum, so long as it can be done in a way that ensures the safe functioning of V2V safety applications, and that sharing proposals do not block or disrupt safety-critical information transmissions between communicating vehicles. Toward that end, DOT is working closely with FCC, NTIA, members of industry, and other stakeholders on an expedited basis to evaluate and test potential sharing solutions for the 5.9 GHz spectrum band as soon as devices are available to test.

Moving Forward with V2V

In August 2014, NHTSA issued an Advanced Notice of Proposed Rulemaking (ANPRM) concerning a DSRC-based vehicle communications safety system on all new light duty motor vehicles.ii The ANPRM requested comment on the basic radio system, security features, and functionality to support interoperable communications—but explained that the agency did not anticipate that it did not currently intend to require specific safety applications. Such an approach will allow the market and auto OEMs to innovate and compete in offering safety applications. Concurrently, NHTSA also issued a comprehensive "Vehicle-to-Vehicle Communications: Readiness of V2V Technology for Application" report (or Readiness Report) that provides details on the technology, results of testing programs, benefits, deployment challenges, as well as security, policy, privacy and regulatory issues.iii

NHTSA received more than 900 comments in response to the ANPRM, the V2V Readiness Report, and our questions. The automotive manufacturers stated that the Federal government needed to assume a large role in establishing key elements of the V2V environment, including establishing common operating criteria for V2V devices, establishing a security credentials system, and preserving the 5.9 GHz spectrum for V2V safety. Automotive suppliers generally expressed support for the technology and indicated the technology and standards for the technology were mature enough for initial deployment. Safety advocacy groups also expressed support, but emphasized the importance of ensuring interference-free spectrum for V2V.

i Found at www.nhtsa.gov/Research/Crash+Avoidance/Automotive+Cybersecurity

ii Found at www.safercar.gov/v2v/index.html

iii Found at www.safercar.gov/v2v/index.html

Auto companies are supporting V2V technology, as demonstrated by GM’s October 2014 announcement that they would be implementing V2V technology "as soon as possible-with a target of 2017 on select models." GM acknowledged that NHTSA’s push to mandate DSRC radios was a driving force behind its announcement. This activity is not just limited to manufacturers, but states such as Michigan have also announced infrastructure deployments.

In September, Secretary Foxx announced the first three awards under DOT’s national Connected Vehicle Pilot deployment program. The locations in New York City, Tampa and Wyoming were selected in a competitive process to go beyond traditional vehicle technologies to help drivers better use the roadways, relieve the stress caused by bottlenecks, and communicate with pedestrians on cell phones of approaching vehicles.

NHTSA announced its intent to move forward with V2V for light vehicles in February 2014 because of the potential to dramatically improve vehicle safety and V2V’s importance as a stepping stone toward achieving safe automated driving. The USDOT-led research program has demonstrated through extensive analysis, controlled testing, and real world field studies that V2V communications offer an important opportunity and has the potential to dramatically improve safety on our Nation’s roads.

In May of this year, Secretary Foxx announced USDOT’s intent to accelerate V2V rulemaking activities with the goal of sending a regulatory proposal to OMB during 2015. NHTSA has accepted the challenge and the agency and the Department are working diligently to meet this goal. Connected, automated vehicles that can sense the environment around them and communicate with other vehicles and with infrastructure have the potential to revolutionize road safety and save thousands of lives. NHTSA already is laying the groundwork needed for the road ahead, and looks forward to working with Congress, manufacturers, suppliers, others in the Administration, and the American public in our exciting transportation future.