D.O.T. Office of Pipeline Safety Pipeline Repair Environmental Guidance System (Pilot Project)

1. D.O.T. Office of Pipeline SafetyPipeline Repair Environmental Guidance System(Pilot Project) Roger Little July 30, 2009

2. PHMSA Mission To ensure the safe, reliable, and environmentally sound operation of the Nation’s pipeline transportation system.

3. PHMSA: Who we are • 2.5 million miles of pipelines transport 2/3 of U.S. energy consumption • Support our basic human needs, economic mobility, and security • Direct: gasoline, natural gas, propane • Indirect: electric generation, telecommunications, water supply

4. What We Regulate • Hazardous Liquid Pipelines: • 168,000 miles operated by 326 operators. • 95% engaged in interstate commerce. • Transport 2/3 of all oil and products used. 97% of U.S. transportation fueled by oil. • 17% of U.S. freight at 2% of total freight bill.

5. What We Regulate • Natural Gas Pipelines: • Deliver 25% of energy consumed in U.S. • Transport natural gas to 60 million residential and commercial customers. • Significant growth projected to meet demand.

6. U.S. Pipeline Transportation System

7. What We Do Our Base Programs • Inspection and Enforcement • Integrity Management • State Pipeline Safety Grant Programs • Regulatory Development • Damage Prevention and Public Education • Research and Development • Data Analysis and Trending

8. PREGS: Business Drivers • Integrity Management Regulations • Section 16 of PSIA 2002 (49 U.S.C. 60133) • 10 Agencies enter into a Memorandum of Understanding (MOU) in 2004 • Develop a compendium of best practices • Prioritize agency permit application reviews over other less urgent applications • Designate an ombudsman

9. Challenges • Concurrent versus sequential review process. • Early notification. • Section 7 versus Section 10 Endangered Species Act process for non-federal lands.

10. Challenges (cont’d) • Compendium of BMPs versus redundancies in paper work or effort. • Defined versus undefined authorities and jurisdictions (e.g. agency points-of-contact (POC)) • Reliable versus interrupted energy.

11. The Interagency MOU (Cont.) • Information on permits or authorizations needed to conduct repairs in areas near specific pipelines. • Participate in pre-inspection planning and coordination to help determine what actions need to be taken should repairs be necessary. • Give priority to repairs classified as “immediate” or “time-sensitive”

12. SolutionPipeline Repair and Environmental Guidance System (PREGS) • PHMSA proposed the concept to CEQ and IAC February 2005. • Demonstrate feasibility of a comprehensive, one-stop system that facilitates communications and provides information (e.g. BMPs, POCs, etc.) about environmental issues related to pipeline inspections and repairs.

13. PREGS Pilot Program • Communications between industry and federal, state and local permitting agencies. • Application of the BMPs. • The ability of the AMS to establish administrative record Initiated the IT system in September 2006.Purpose of the PREGS Pilot Program was to measure the following:

14. PREGS Pilot Program (cont.) • Permit process for time-sensitive pipeline inspection and repair activities. • Responsiveness of resource agencies. • Operators compliance to environmental protection requirements.

15. PREGS Pilot Program (cont’d) Five volunteers that operate in: 2 - California 1 - Louisiana 1 - Florida 1 - Ohio/Pennsylvania 2 - natural gas pipeline operators. 3 - hazardous liquid pipeline operators.

16. PREGS Components – website, discussion boards, BMPs, Activity Manager System. Funded Activities • BMP Development jumpstart • Facilitation, Business Process Re-design, Strategic Planning • IT Development • Interagency Reimbursable Agreement (FWS – development of Integrated Planning and Consultation System)

17. BMP Approach • CEQ, IAC and Industry agree on approach mid-2004 • Three Tiers • Tier I - General, national-scale • Tier II - Habitat-specific • Tier III - Resource-specific

18. BMP Approach (cont) • Draft BMPs – • Industry provided list of 90 or more “hot spots” • PHMSA prepared 91 draft BMPs for 12 “hot spots” March 2005 and 30 more by Nov 2006 • PHMSA receives comments from USACE for Tier 1 and Tier 2 BMPs February 2007 • PHMSA receives comments from FWS for Tier 3 on August 2007

19. Activity Manager System • Provide early notification of pipeline operator’s inspection and repair activities to resource agencies and local jurisdictions • Facilitate communication between pipeline operators and resource agencies/local jurisdictions • Use concurrent, rather than sequential, reviews of environmental documentation

20. Activity Manager System(cont.) • Assist pipeline operators with determining proper protocols • Measure and track performance of permit review process • Provides a central location for agencies’ documentation, record of decision making process, POC and references

21. Pilot Program Results • BMP Use – Widespread BMP review didn’t occur during the first iteration of the pilot program. Operators participating in the pilot program were not able to use the BMPs for their activities because the IAC agencies had not provided review and/or approval. • Activity Manager System Use – Three of five possible pilot program operators entered activities into the Activity Manager System. The participating operators had some difficulty in communicating with resource agencies via the Activity Manager.

22. PREGS Need Survey 9 operators surveyed: represent ~ 27% of the Nation’s onshore haz liquid pipeline miles and 9% of onshore intrastate gas transmission pipeline mileage. -asked about the environmental review /approval process for pipeline repair inspection and activities since issuance of the IMP regulations.

23. PREGS Need Survey (cont.) The companies reported about 4,000 inspection /repair activities since December 2000. ~ less than0.01 % of these activities were delayed as a result of an environmental permit or authorization. Emergency procedures were implemented on 34 occasions, about 1 % of the time

24. PREGS- Conclusions • Premise for PREGS was that DOT Integrity Mgt Program would be impacted by repair delays due to lengthy permit approval processes. We are well into 2nd round of IMP now- and we haven’t seen these delays. • While PREGS demonstrates that IT can greatly streamline permit approvals and help expedite other aspects of sound environmental project management, the development of such a broad interagency system is not seen as cost beneficial for such a small Agency as PHMSA. • Discussions with CEQ on the future of the project are scheduled for later this year.

25. Climate Policy Outlook American Clean Energy and Security (ACES) ActWaxman-Markey Heather Holsinger Senior Policy Fellow Pew Center on Global Climate Change America’s Energy Coast Leadership ForumJuly 30, 2009

26. Pew Center on Global Climate Change Founded in May 1998 Independent, non-profit, non-partisan Divided into five major program areas: Scientific Studies/Analyses Domestic and International Strategies Outreach Activities Business States Technology Solutions Communications 26

27. Pew Business Environmental Leadership Council (BELC)

28. Overview of Waxman-Markey Climate Policy Outlook Presentation Overview

29. Overview of Waxman-MarkeyH.R. 2454 – The American Clean Energy and Security (ACES) Act of 2009

30. Reductions in GHG Emissions Complementary Policies Other Measures Overview of Waxman-Markey

31. Reducing GHG Emissions • Coverage: approximately 85% of U.S. emissions covered through cap-and-trade provisions • Cap: 17% below 2005 levels by 2020; 83% below by 2050 • Threshold: Cover entities >25K tons CO2e; EPA may lower to 10K after 2020 • Offsets: 2 billion tons domestic & int’l • Cost containment: Strategic reserve of 2.5 billion allowances available if allowances prices rise above trigger price, unlimited banking of allowances and limited borrowing • Clean Air Act limitation: GHGs not regulated as criteria pollutants or hazardous air pollutants under CAA • State role: GHG cap-and-trade programs on hold for 5 years; other state programs unaffected • Allowance distribution: Used for consumer protection, industry and worker transition assistance, technology innovation, and adaptation (initially mostly free allocation; shift to mostly auction over time)

32. Waxman-Markey Allowance Distribution

33. Complementary Policies – Clean Energy & Coal • Combined Efficiency and Renewable Electricity Standard • Standard starts at 6% of sales in 2012 and rises to 20% in 2020 • Up to one quarter of the requirement can be automatically met with electricity savings. Upon petition by a state’s governor, FERC can allow a state’s utilities to use electricity savings to meet up to two fifths of the standard • Carbon Capture and Sequestration: • National strategy for CCS deployment and regulations for geologic sequestration sites • CCS trust fund to finance first ~5 commercial-scale demonstration projects • Support for early large scale CCS deployment (first 6 GW at coal power plants and industrial facilities) • Performance standards for new coal-fueled power plants

34. Complementary Policies - Transportation • Support (allowance value) for automobile R&D • Provides financial assistance to manufacturers to produce electric vehicles and consumers to purchase plug-in hybrid electric vehicles • EPA, states, and metropolitan planning organizations to develop transportation GHG reduction targets and plans

35. Complementary Policies – Energy Efficiency • Promotes energy efficiency in new and retrofitted buildings • Establishes national building energy efficiency codes • Establishes a building retrofits program • Establishes a program to upgrade inefficient manufactured homes • Establishes a model building energy performance labeling program • New efficiency standards for lighting and other appliances, including financial incentives to retailers who sell high volumes of “Best-in-Class” appliances • Smart grid and transmission provisions

36. Other - Competitiveness • Output-based allowance distribution approach is primary mechanism to deal with competitiveness • Emission allowances to energy-intensive, trade-exposed industries • Sets criteria for which sectors are presumptively eligible, allows EPA to designate more • Allowances compensate for direct and indirect carbon costs • Distribution begins phasing out in 2026 (pending Presidential review) • International Reserve Allowance program—requiring allowances for imported goods’ embodied GHG emissions – as a backstop. • Triggered in 2020 unless the President finds that a treaty meeting U.S. negotiating objectives is in force, or Congress grants a waiver.

37. Other - Adaptation • Establishes a National Climate Services within NOAA to provide climate-related data and support • States and federal agencies to develop natural resource adaptation plans. • Establishes Natural Resources Climate Change Adaptation Fund in the Treasury – states can apply for funds if have natural resources adaptation plan • Provides 2% of allowance value increasing over time for domestic adaptation (much of that goes to states)

38. USCAP Partnership

39. USCAP Recommendations - January 2009 • Consensus product of diverse companies and NGOs on climate legislation framework • Working to urge the Administration and Congress to take immediate action • Well-crafted federal legislation can: • Create meaningful action to slow, stop and reverse greenhouse gas emissions • Spur innovations in new technologies • Enhance energy security • Increase investment and provide the foundation for a low-carbon economy • Eliminate the economic cost of uncertainty 39

40. Policy Outlook

41. U.S. Congress • 60-40 D Senate majority • Majority Leader Reid • EPW Chairman Boxer • Need 60 votes for a bill • Need 67 votes for treaty • 256-179 D House majority • Speaker Pelosi • E&C Chairman Waxman • Need 218 votes for a bill

42. Recent Debate • Waxman-Markey passed House Energy & Commerce committee on May 21st, passed the full House by vote of 219-212 on June 26th • Senate committee action expected in September • Full Senate vote possible in 2009 • House-Senate Conference possibly 2009 or 2010 • President’s signature possibly 2009 or 2010 • Stars in alignment  rapid progress or overreaching?

43. EPA Action? • Supreme Court in Mass. V. EPA essentially ordered EPA to regulate GHGs • EPA has a number of options for moving forward • Key questions: • How fast will EPA act? • Which parts of the Clean Air Act will it use? • EPA has clear authority to do GHG standards; may be able to do cap and trade, but would be constrained • Threat of EPA action may drive legislation

44. A two-tiered climate policy • “Avoiding the unmanageable andmanaging the unavoidable”* • Avoiding the unmanageable → mitigation • Emissions reduction policies at state, regional, federal, and international levels • Managing the unavoidable → adaptation • Preparedness, resilience, ecosystem management, protecting vulnerable populations *Title of the UN Foundation Scientific Expert Group Report onClimate Change and Sustainable Development 44

45. For More Information www.pewclimate.org Heather Holsinger HolsingerH@pewclimate.org

46. America’s Energy Coast Leadership Forum III SUMMARY & STATUS – FEDERAL ENERGY & CLIMATE LEGISLATION Climate Assessment Update -Dr. Denise Reed, University of New Orleans -Dr. Robert Twilley, Louisiana State University

47. Changing Climate on America’s Energy Coast Denise J. Reed University of New Orleans Robert R. Twilley Louisiana State University

48. Human Sub-system Natural Sub-system External Marine Influences External Terrestrial Influences Coastal System CLIMATE CHANGE Storms Waves Sea Level Temperature CO2 conc. Run-off IPCC 2007 Thanks to Brendan Yuill, University of New Orleans

49. Current climate varies across the area – especially in terms of precipitation

50. Global increase in temperatures in the future - range associated with variations among models and uncertainty regarding future development