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1. Click to edit Master title style Operator Qualification Challenges Today & Future Dennis M. Kuhn Regulatory Compliance Specialist

2. Topics • Introduction OQ • Addressing abnormal operating conditions during evaluations and at job site • Tracking OQ during major projects • Maintaining records of who actually performed the covered task(s) • Span of Control limitations and documentation • Addressing the “gaps” between: • Qualification and Operator-specific procedures • Performing OQ work and meeting D&A requirements • Recent regulatory OQ findings and expectations • Q&A

3. Operator Qualification (OQ) Rule The OQ Rule is intended to provide an additional level of safety and requires pipeline Operators to develop a qualification program to evaluate an individual’s ability to perform covered tasks and to recognize and react to abnormal operating conditions that may occur while performing covered tasks.

4. Operator Qualification (OQ) Rule • OQ is not intended to be a one-time event, but a process that continues for the working lifetime of an individual. • After initial evaluation and qualification have been completed, re-evaluation and requalification is required. • The Operator must recognize this and designate for each covered task an appropriate time interval for requalification.

5. Operator Qualification (OQ) Rule Why do we need qualified individuals…

15. A KC-135 aircraft was being pressurized at ground level. The outflow valves which are used to regulate the pressure of the aircraft were capped off during a 5 year overhaul and never opened back up.

19. Abnormal Operating Conditions (AOC’s) Abnormal operating condition means a condition identified by the operator that may indicate a malfunction of a component or deviation from normal operations that may: (a) Indicate a condition exceeding design limits; or (b) Result in a hazard(s) to persons, property, or the environment.

20. Abnormal Operating Conditions (AOC’s) Qualified individuals must be able to recognize and reactappropriately to AOC’s. • Recognize: means that the employees are able to identify a situation or event on the pipeline that is out of the ordinary and could become a hazard to the public or environment, if not promptly corrected. • React appropriately: means the employee knows what to do to ensure that the hazard is promptly addressed. This could include notifying the employee’s supervisor or site inspector or taking the correct action to mitigate the hazard, whichever is appropriate for the AOC.

21. How do you address AOC’s? • Task-specific versus generic • PHMSA OQ FAQ - Operators are expected to develop a thorough listing of AOCs, both task-specific and generic. The task-specific AOCs may be included within the evaluation criteria for the specific task, but the generic AOCs should be maintained in a separate list and reviewed periodically. • PHMSA Integrated Inspection Guidance - In addition to task-specific AOCs (i.e., those that may be caused by performance of the task), generic AOCs (i.e., those that may reasonably be encountered during performance of the task) have been identified and used in qualification in cases where special requirements and conditions for the task being performed must be considered. • During evaluation • At the job site

22. Tracking OQ during Projects • Identify applicable covered tasks for the activities that will be performed • Communicate requirements to all affected personnel • Assure personnel are qualified to perform the applicable covered tasks, before they perform the task • Addressing Span of Control (SOC) • Obtain/maintain qualification records

23. Span of Control (SOC) No one can perform a covered task unless they are specifically qualified to perform that task or are directed, observed and supervised by a qualified individual (if span of control is allowed) as outlined in the OQ plan Sample Covered Task List

24. Span of Control (SOC) A SOC ratio of 1:3 would mean that one qualified employee could direct and observe up to three unqualified employees.

25. Span of Control Expectations • Assure that a qualified person is always present during activities where a covered task is being performed • Assure that all individuals, qualified and non-qualified, understand the requirements • Consider any conditions that may impact the SOC ratio, such as: • Language Barriers • Noise Level • Weather • Regulatory agencies’ expectations • “Sniper” Observations

26. Tracking OQ during Projects • Track personnel who actually performed task(s) • Need to identify individual for each covered task • Inspectors’ role? • How often do you verify qualifications and identities? • Who worked under SOC? • Record Discussions • AOC’s (Site-Specific) • SOC limits & adjustments • Procedures/policies

27. The “Gap” OQ and Operator-specific procedures • Task criteria versus Operator procedures • Use of “off-the-shelf” covered tasks • How is it addressed? • Need to demonstrate that the person in the “ditch” is aware of procedures • Best Practices • Tailgate meetings • JSA’s • Training • Regulatory agencies’ expectations

28. D&A Requirements 49 CFR Part 199 outlines the requirements for Operators including contractors and subcontractors. • Operators of pipeline facilities that are subject to part 192, 193, or 195, are required to test covered employees for the presence of prohibited drugs and alcohol.

29. RESPONSIBILITIES Operators are responsible for meeting 49 CFR parts 40 and 199 to include but not limited to: • All actions of your officials, reps, and agents (including service agents) in carrying out the requirements of the DOT agency regulations. • Maintain and follow a written Anti-Drug & Alcohol Misuse Prevention Plan that conforms to the requirements • Assure that all covered employees are aware of the provisions and coverage of the plan

30. RESPONSIBILITIES (Cont) • Provide clear policies and provisions for education and training, drug and alcohol testing • Provide when needed, referral for evaluation, education, and treatment to employees • Contractor compliance

31. Operator Qualification (OQ) Rule The OQ Rule is intended to provide an additional level of safety and requires pipeline Operators to develop a qualification program to evaluate an individual’s ability to perform covered tasks and to recognize and reactto abnormal operating conditions that may occur while performing covered tasks.

32. Operator Qualification (OQ) Rule Drugs and alcohol effect a person’s ability to make coherent decisions, motor functions and vision. Thus drugs and alcohol effect an individual’s ability to perform covered tasks and to recognize and react to abnormal operating conditions that may occur while performing covered tasks.

33. Connecting The Requirements • D&A and OQ • Cannot perform covered work until compliance with D&A are met • How is it monitored? • Need to demonstrate that the person(s) (Internal and Contractors) meet D&A, prior to performing covered work

34. D&A Program Challenges • Program Monitoring • TPA • Contractor Compliance • State laws • Medical marijuana • Recreational use

35. Medical Marijuana States • Currently there are 19 States that have approved the use of Medical Marijuana

36. State vs. Federal • Medical use and or State legalized use of controlled substances • CFR 49 parts 40 and 199 = Federal requirement • No State can authorize violations of federal law

37. Addressing D&A-OQ “Gap” • Need to periodically review program • When was the last review? • Are you using a TPA? • Need to develop method for contractor compliance • Review Contractor D&A Plans for compliance • Monitor statistical data • How do you assure contractors that do not meet compliance are not performing covered functions? • Need to communicate non compliance of contractors to field personnel

38. Who is Responsible Like OQ, the Operator is held responsible for non-compliance • Internal Plan • Contractor Plan • Third Party Administrator

39. PHMSA Enforcement Actions The Pipeline Enforcement Program has a number of different mechanisms to assure operator compliance and safe operation. Including: • Letters of Concern • Warning Letters • Notice of Amendment • Notice of Probable Violations • Corrective Action Orders • Notice of Proposed Safety Order The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 increased the civil penalty authority of PHMSA to a maximum of $200,000 per violation per day, up to a maximum of $2,000,000 for a related series of violations.

40. PHMSA Enforcements Issued 2002 – June 2013 • Corrective Action Orders 102 • Notice of Probably Violation 738 • Notices of Amendment 877 • Warning Letters 727 • Notices of Proposed Safety Orders 13 • Civil Penalties 541 Proposed Penalties $54,301,200 Assessed Penalties $37,735,437 (Including 33 cases in 2013))

41. Criminal Penalties Criminal penalties may be taken: • If any person willfully and knowingly violates a pipeline safety requirement is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than five years, or both. • If any person willfully violates a regulation for off-shore gathering lines is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than five years, or both. • If any person willfully and knowingly injures or destroy any interstate pipeline facility, is subject to a fine of not more than $25,000 for each offense, imprisonment for not more than 15 years, or both. • If any person willfully and knowingly defaces, damages, removes, or destroys any pipeline sign, right-of-way marker, or marine buoy, that individual is subject to a fine of not more than $5000 for each offense, imprisonment not to exceed one year, or both.

43. Examples of OQ Civil Penalties • 2009 – Operator failed to identify a covered task (hot tap) nor had anyone properly qualified: $100,000 fine assessed • 2009 – Operator failed to identify a covered task (threaded fitting assembly: $133,100 fine assessed (being contested) • 2010 – Operator did not enforce SOC properly: $100,000 fine assessed (being contested) • 2010 – Operator allowed unqualified personnel to perform covered tasks; $271,300 fine assessed (being contested) • 2010 – Operator failed to identify a covered task (mud plugs) nor had anyone properly qualified: $788,000 fine assessed • 2010 – Operator failed to identify covered tasks nor had properly qualify personnel: $98,600 fine assessed

44. Notice Of Amendment Operator did not have “on-site” supervisory personnel who were provided the 60-minute training regarding identification of probable drug use. • The interim area manager is trained but is only “on-site” approximately once every 3 months. Operators anti-drug plan procedures were found inadequate by PHMSA. • Did not include accident definitions • Post accident drug testing procedures did not explicitly define which employees are covered by Company’s anti-drug plan.

45. Civil Penalties A civil penalty of $40,000 for Operators violation of 49 C.F.R.§ 199.225(a)(1), for failing to test each covered employee for alcohol whose performance of a covered function either contributed to the May 4, 2009 accident or could not be completely discounted as a contributing factor to that accident.

46. Common Findings During Audits • Required annual testing percentages not met • DAMIS Reporting • No data to report (contractor compliance • Operator failed to identify contractors whom performed covered work • Flooding the pool • Plan does not meet the minimum requirements • Laboratory not approved

47. Common Findings During Audits • DER not understanding regulations/requirements • Drug/Alcohol Plans outdated • Missing data or inaccurate • Post-accident testing not meeting regulations/requirements • Rehabilitation process/procedures not followed • Testing statistics not maintained or submitted • Records not maintained or available

48. What the Future May Bring On the horizon: • New construction and inspection tasks may be included • Activities based on incorporated references • Routine monthly break-out tank inspections • Expansion of pipeline facilities • All gathering lines • Well heads • Underground storage facilities • Verification of contractor knowledge of Operator procedures • Documentation of qualified individual that actually performed the task (who wrapped that pipe, etc.)

49. Click to edit Master title style Questions? 1-800-426-1604 Dennis M. Kuhn Regulatory Compliance Specialist (281) 404-7125   dennis@veriforce.com