PHMSA reports record year for penalties/pipeline incidents and staff cuts

The federal regulator for petroleum pipelines and railcars is offering employee buyouts that could shrink the agency's staff by 9% by mid-June.

The step that has confounded some observers, because the agency is widely regarded as being chronically understaffed.

The US Pipeline and Hazardous Materials Safety Administration (PHMSA) spokesman Damon Hill said the buyout offers are meant to "help the agency manage attrition in areas where a large and growing number of employees are eligible for retirement by offering an inducement for a limited number of employees to voluntarily retire or resign."

Hill said PHMSA is continuing to hire in key areas at the same time. "I understand how some folks may be looking at [the buyout effort], but it's part of an overall plan to retain expertise and plan for retention and things like that," he said. "There is some good that comes out of this."

Still, the job cuts come at a time when PHMSA is already under considerable duress. Politicians and the public have been asking the agency to more rigorously regulate the nation's ageing pipeline network, as well as the many new pipelines tied to surging domestic oil and natural gas production.

Recent pipeline spills and oil by rail incidents have added to the workload.

PHMSA oversees US pipelines, and transport by other means

PHMSA, which is part of the US Department of Transportation, regulates the 2.6 million miles of US pipelines that carry hazardous liquids such as crude oil and fuels. It is also responsible for making sure that more than 6 million t of other hazardous material travels safely across the country each day via air, rail, ship and vehicle.

The size of PHMSA's payroll cut seems small compared to private sector layoffs and the big reductions that have hit elsewhere in the federal government. But the losses are likely to have an outsized effect on PHMSA, which is already hampered by substantial vacancies, a plodding hiring process and the lengthy training that is required for many of its new hires.

Previous efforts to substantially boost PHMSA's budget and staffing have been thwarted by political wrangling over the federal budget and the regulator's inability to hire and retain enough inspectors and other key employees.

The administration had hoped to beef up PHMSA in 2013, but Hill said it got a US$ 10.5 million funding cut instead because of the federal government's across-the-board budget cuts called for under the sequester agreement between Congress and the White House. The agency saw a modest rise in funding for the current fiscal year, but PHMSA is hoping for a more significant increase in the next budget.

In making the case for more money, the regulator's 2015 budget proposal said, "The pressing dangers of ageing pipelines, the introduction of increasingly vulnerable pipeline materials, and the significant growth in new pipeline infrastructure demand PHMSA not only sustain, but increase current [inspection and enforcement] staffing levels to prevent incidents involving major injury to humans and damage to property and the environment."

2013 pipeline safety report

In related news, the US federal government's pipeline safety regulators reported that 2013 marked a record year for civil penalties assessed and a minimum number of serious pipeline incidents.

The US PHMSA seized on the annual statistics as verification that its emphasis on more enforcement is working. Last year the proposed fines totalled US$ 9.7 million, PHMSA said.

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

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

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

Edited from various sources by Elizabeth Corner

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