OIG Report Critical of PHMSA Oversight Signals Change

May 7, 2014 § Leave a comment

The Office of Inspector General (OIG) recently issued an Audit Report criticizing PHMSA’s oversight of state pipeline safety programs and calling for change.

In the aftermath of the 2010 San Bruno incident, the National Transportation Safety Board called for an audit of PHMSA’s policies, procedures and oversight activities applicable to states certified under PHMSA’s Natural Gas Program.

The Report found documentation of inspection intervals lacking, an absence of trending analyses of operator’s annual reports and no defensible formula for state inspector staffing or training.

OIG made recommendations in 7 areas including:

  1. Revision and periodic validation inspector staffing formulas.
  2. Improvement of State Program Guidelines minimum training requirements, tracking of distribution of revised inspection forms, and standards for inspection intervals.
  3. Review of the adequacy of inspection procedures as part of the annual program evaluation.
  4. New PHMSA guidance drafted to ensure states employ risk analysis methods for scheduling inspections.
  5. Procedures documented for conducting triennial grant reviews.
  6. Improvements in training of PHMSA evaluators to effectively determine whether states have complied with all program evaluation requirements, issue notices of non-compliance, and ensure corrective action is taken.
  7. Audit states’ use of suspension funds.

Intrastate pipeline operators should expect heightened scrutiny, increased inspections and stricter interpretation of regulations in light of this report.

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