The Failure Files: San Bruno, Part 2

Rhett Dodson Last week we took a look at the factual incidents surrounding San Bruno. This week we take a look at, perhaps we should call it the sentence, the NTSB passes on the PHMSA and we ask questions such as, “Should the grandfather clause have been eliminated? Can manufacturing defects be considered stable only if you have a subpart J hydro test?” And Christopher goes so far to ask, “Are you a prudent operator?” Hang around and take a listen to this episode as we dive into some of the recommendations from San Bruno and close out this chapter from the NTSB reports. Rhett Dodson Bam. All right. Welcome to today's episode of Pipeline Things. I am your host, Rhett Dotson. My co-host, Christopher De Leon. And thanks for joining us today. So, a little bit of a different episode, different pickup maybe than you're used to in the interest of full disclosure to the audience. You would know, if you listen to us, we discuss the factual evidence around the San Bruno incident from 2010 on our last episode. That took a lot more time to give it, I thought, what it was do in terms of weight. And by the time we got to the point of wanting to dive into the impact on regulations and where it appeared in the updated gas roll in particular, it didn't feel like we're able to give that enough time. And so, we went ahead and made the executive decision to edit that episode and end it where we presented only really the what happened in that incident. This episode is going to be dedicated entirely to, I'm going to say that the four key points or maybe four key discussions that I wanted to pull out that Christopher and I felt were kind of weighty. And so, again, if you feel like you're really familiar with San Bruno, maybe you can skip the last episode. I always think it's a good story just to understand the magnitude of the events that led up to it. Christopher De Leon It's about who we are as an industry and you see a lot of the social and political scrutiny around pipelines. I mean, those instances that we talk about, you know, over the last couple of episodes, don't help us, you know, especially when they're in quick succession to each other, you know. So It makes sense to know the details. Rhett Dodson You know, it kind of reminds me of because it's interesting that the two incidents happened at the same time. George W Bush after he was president and September 11th happened, he said that it forever changed his presidency because he never, ever wanted to have a day like that again. So, it actually influenced a lot of the decisions that he made later on in his presidency. And I feel to some extent, like San Bruno is a significant impact in the regulatory environment in California. And I imagine some of that has to do with the fact that those regulators probably don't ever want to have a day like that again. And I'd say that we as an industry don’t ever want to have a day like that again. So it's good. Christopher De Leon That's why we have proper management. Rhett Dodson Yes, I wanted to make a comment about didn't we have pipeline integrity management then? Christopher De Leon Yeah, we did that. We can go another way. Should we depend on requirements in regulation to keep pipe round, sound and in the ground? I feel like I haven't said that in a couple of podcasts. Rhett Dodson Round, sound, and in the ground? But you know, Chris, I think after going back and reading these NTSB reports in detail, I am finding it very difficult to argue for anything other than prescriptive regulation. I'm sorry, I know as a consultant I probably shouldn't say that. Christopher De Leon And we started you were like, “Oh man, we need to be a little bit controversial.” That is a great way to get people to get polarized on our opinions. Rhett Dodson I know it is, but it's hard. Like when you read the reports, it's hard to argue sometimes that we as an industry don't do things when we're not told thou shall do it. It is a very difficult argument. Christopher De Leon There's only finite resources and that includes time, talent and monetary resources. Rhett Dodson All right, so let's go ahead and do it. You might end up changing this part of the podcast altogether. So, our producer said the exact thing to me, and I said, you know what? You're right. I'm sorry that your family fell outside of the time, resources and whatnot available to ensure that that incident didn't happen. That doesn't fly. Christopher De Leon Yeah, but there's also an element of negligence, right? So, we can't we can't hold those. We can't. Again, this is a this is a sophisticated system that requires professionals who are competent. You know, and all of those require their own subsystems. Rhett Dodson Yeah, right. This is like a whole philosophical conversation. Christopher De Leon It’s a segue. Rhett Dodson I just said, well, it would be great to actually do a whole episode around that, on the balance of what we all acknowledged to be true, which is there is only so much time and resources. That argument doesn't matter when you actually deal with people whose lives were lost. That's the problem. Like at that point, it's a life lost. Christopher De Leon And that's why we say culture, right, is what you need to look for. You need a safety culture. Rhett Dodson So, I actually really like the fact that we decided to dedicate a whole a whole episode to the four topics. Chris, and I'm hoping that we can get through them. Are you ready? Christopher De Leon Yeah. Rhett Dodson You ready for the first one? Christopher De Leon Let's do it. Rhett Dodson So, the first and again, the NTSB recommendations, if you read the report, there were I think it was like 27. They write them to the governor of California, the write them to the California Public Utilities Commission. They write them directly to PG&E, in the interest of time, guys, I obviously cannot cover all those. In the interest of time then, we're covering the four that I found to be most striking. Christopher De Leon As a reminder, right. So why would the NTSB make all these recommendations? So, question to you, does the NTSB work for PHMSA? Rhett Dodson No, that's the other way around. Christopher De Leon They don't right. So, the NTSB reports directly to Congress. So they're not the Department of Transportation, not PHMSA. So they do what we believe to be an objective review and then issue the recommendations to those whom they believe are appropriate. Rhett Dodson Right, so that means that these regulations we see in here, I'm sorry, these recommendations that we see in this report can be reflected in different ways by the time it actually ends up into the CFR. All right. So here's the first one, Chris. So obviously, the issue one of the issues with the San Bruno pipeline was that it had not been hydro tested. Right. Due to its year of construction, it operated under what was known as the Grandfather Clause. And we talked about that last time right. So the grandfather clause was a provision in 192 619, which allowed the MAOP to be based on the highest actual operating pressure to which the segment was subjected during the five years preceding July 1st, 1975. And that was what was known as the grandfather clause. The findings in that report said that there was no safety justification for the grandfather clause exempting pre-1970s pipeline. So their conclusion was the NTSB recommends that PHMSA amend 49 CFR 182 619 to delete the grandfather clause and require that all gas transmission pipelines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a spike test. And so, my first question to you, Chris, is how does that, where does that appear in the updated regulation that we got? Christopher De Leon So, two ways to answer. One is where do you find it? So, where we find it is in 192 624, which is MAOP reconfirmation. Rhett Dodson And that language is important. It's not MAOP confirmation. Why do they use the term reconfirmation? Christopher De Leon I think the idea is because it's the idea of saying it was substantiated at some point one way, and now the idea is you need to take a look at this again. I guess that's the way that we should interpret it, at least. Rhett Dodson Because is it fair to say that some pipelines do have it established in the OP that they believe was based upon a hydro test for which they don't have adequate records? In that case, you may truly be reconfirming. Christopher De Leon That is a great way to segue into a different topic. Right? So, it's, you know, the requirements of a substantiating hydro test are also something that we went through back and forth a lot. So to this, where do you find the impacts of San Bruno in new regulation? Many of you call it the mega rule. Some of us call it the new the new gas rule specific to REN one. It was taken into three parts. Mega was broken in three parts, the first one being REN one. You find these requirements and 191.624 and it establishes the applicability where it's like if these pipeline assets have these requirements, I mean these attributes, this, this level of documentation and non-documentation, then you have to take one of the following six steps. And of those six steps we find the NTSB’s recommendation, which is you need to hydro test, right, i.e., pressure test. So, the NTSB recommendation is found directly there. Rhett Dodson And did they take all the elements or did they require a spike test? Christopher De Leon Um, I don't think they required a spike test. I think it's a subpart J test to substantiate. Rhett Dodson It is a subpart J test, you are correct. Christopher De Leon And the basis for that is because we have language already for establishing MLP or MAOP, and that is to perform a subpart J hydro test. And that is a strength test and so specific to substantiate in MAOP, it's a strength test. A lot of times as we relate to pipeline integrity management, so addressing a specific threat, typically a crack or crack-like, you will see a spike test. Rhett Dodson So, I think two things are interesting there that I want to ask you about and dig in a little further. One is obviously, they did delete the grandfather clause that that was done explicitly. I thought it was a bit surprising because I have heard a lot about the grandfather clause and it seemed to me at the time that I was participating in discussions that it was a new argument. Or were you aware that this wasn't the first time the grandfather clause had been attacked? Christopher De Leon Yes. So, I'm going to this is a little plug for, this a personal plug for somebody that I know. So I believe we are easily influenced in your early days of your career. Rhett Dodson I agree. Christopher De Leon And I used to work at Panhandle Energy, now Energy Transfer. And there was a brilliant gentleman by the name of Marvin Hovis. So this is a big plug for Marvin. And I remember asking him a lot about this grandfather clause thing because back then some of my responsibilities were understanding was a good for pressure, class location changes, we had to look through all that stuff, right? So it wasn't TBC records per se, but it was as integrity response for these assets. Why do I think it's good for pressure? And he would go and look for gold sheets and all this other stuff. And I remember him mentioning to me that there was a point where grandfather clause was being considered being removed, but ultimately it ended up not being, but I don't remember all the details of it. Rhett Dodson Yeah, so I was really surprised. I'll give you the details. It was actually debated in 1987 and that honestly, really shocked me. So in the report, the NTSB, this is the second time the NTSB recommended its removal, in 1987 they recommended the elimination of the grandfather clause. And but based on public comments received on the 1989 AMPRM, the RSPA, which is the research group, decided not to eliminate the grandfather clause. That kind of surprised me Christopher De Leon So the industry won. Rhett Dodson That would be a controversial way to interpret that. I think the overwhelming, I think the industry got it wrong, might be how I would say it. Or maybe it wasn't clarified enough. Point is I think the industry put its, dug its heels in and maybe the NTSB or PHMSA relented and then ultimately you could say that was a contributing factor to what happened here. And now there is no more arguing on the grandfather clause, at least it's inclusion. That has been settled. Christopher De Leon And we need to be a little bit objective here right. So you would, a natural question would be, on what basis? Like why would we do this? Right? And prudent operators that are seasoned in pipeline integrity management will say that if you were to hydro test the pipeline, depending on how old the pipeline is, what's known and unknown about it, you could end up damaging it and not doing any justice. So why would I hydro? And that's a fair statement but that's often piggybacked with and that's why we have pipeline integrity management. Right. So the word to highlight there is integrity and so is it's through an analysis, through competent engineers, we should be able to understand and manage those risks. That's what we do as engineers, right? We use quantitative, qualitative and semi-quantitative methods to say we believe this is the condition of this pipeline with these bounds. And so we either accept that risk or we don't. And that's when we say pipeline integrity management, one of the major points is gathering information, understanding the threats, establishing the risk and then doing assessments. And so the argument there are ultimately, in some cases, not everybody's argument, but often what the argument can be is it's I don't have to hydro test to understand the risk of the pipeline and protect the safety of the environment, the security of the environment, the security of the asset and the asset’s performance. So, the question that we often they need to ask is, okay, that's fine, so we don't have to hydro test, but then what are you going to do? And we do find that in 624, right? So one method that you can do is hydro test, but another method that you could do is just reduce your risk by reducing pressure or replacing the line. So addressing that concept of risk. And so, I think that's why if you were to say, well, why don't we just hydro test everything? You'd say, well, because Cinderella’s glass slipper doesn't fit everybody. That glass slipper actually carries a lot of risk. It could break. And so, the idea is as we see other options and one of those being the ECA right, which is in this term, it's engineering critical assessment which leverages things like inline inspection to do what we believe to be really good at, and that's pipeline integrity management. Rhett Dodson We're going to see, I want to bring that concept up of ECA again later when we talk about my fourth point. Christopher De Leon I think the reason why I wanted to bring that up though right is it's just this idea you have this recommendation and industry already tried to address this and yet we're still not hydro testing pipelines. I think the point is it's like, well, we need to frame that a little bit, right? Rhett Dodson Let's say it this way. I want to say the different way. The recommendation was explicit. The recommendation said hydro testing. Christopher De Leon Absolutely. Rhett Dodson What we actually see making its way into regulations in 624 gave us two options outside of hydro testing and one being the ECA process you mentioned, the other being alternate technology, which was kind of an ambiguous catch-all for allowing future progression. Christopher De Leon In another little fact in here that I think is relevant, right. So you would say, man, this sounds complex about why can't we just hydro or why not, depending on what side of the argument you are on, I would say there's another fact that we need to consider here and it’s, you would say, well, why didn't firms have just put in hydro testing if that's what the NTSB recommended? And you would say the NTSB reports to Congress. And so Congress ultimately should be able to tell PHMSA what to do. Here's something that I think is another fun fact, right. So PHMSA has to get reauthorized by Congress to function. And so often Congress will issue mandates and say, hey, PHMSA, we're going to reauthorize you, and these are the things you need to do under this reauthorization. And back in 2011, after Marshall, Michigan and after San Bruno, Congress spoke and said, hey, here are the things we want you to do. And in 2011, Congress targeted establishment of MAOP and MAOP reconfirmation. But in that, I think what people need to recognize is that Congress specifically included in that mandate considerations, you know, and one of the considerations that Congress put on PHMSA was they needed to consider alternate approaches to hydro testing. And so it's just important for us to understand as an industry it's not like, well, why didn't the NTSB just do that? Well, industry reports to Congress and Congress tells and establishes constraints and expectations on PHMSA and Congress allowed for there to be an alternate to hydro testing, specifically in their 2011 mandate. So it's under the considerations I know a lot of people don't often look at that, but it just, it kind of helps things go full circle there, right? It's not just PHMSA. There is there is a process and there's other stakeholders. Congress being the authority ultimately. Rhett Dodson All right. 624. Done. Thank you. I'm going to move on a point two. The producer is looking at me and she's telling me that you have gone on too long on 624. I don't know how we're going to just, we have a new producer now and she's much more hands on and I feel like we're going to have less freedom to just take the show wherever we want. Christopher De Leon I think she’s gonna reign us in. Rhett Dodson I feel like she’s going to throw things at us, man. Christopher De Leon Dude, she's going to corral us. Rhett Dodson I will not be corralled. Christopher De Leon Dude, have you seen Yellowstone? Rhett Dodson You ever try to corral cats? Do you know how that works? Christopher De Leon I'm not a cat. No. Although U of H are the cougars, and that’s kind of a cat. Rhett Dodson It's true. You need to think about that. Christopher De Leon I don't know if I want to. Rhett Dodson Alright so a second factor that contributed to San Bruno was obviously the complete misinformation surrounding the six pups in the ground, one of which where the failure originated. And they basically cited them for saying, hey, you had wrong, you have incorrect information on your pipe that was in the ground. There's some rather striking statistics in here. So what's surprising to me again about that is I feel like the conversations around GIFs and what we call materials property verification were new conversations, but PG&E claimed that its GIS program was implemented in the nineties and finished in 1998. I'll give you again just some surprising statistics from the report. For a fully populated GIS system, the wall thickness was assumed for 41.7%. The pipe manufacturer was unknown for 78.8%. The depth of cover was unknown for 82.8%. Those are all things that are relative to identifying threats. So I think the report was dead on in saying, Hey, you had incorrect information. You couldn't have properly identified your threats or address them in the system. As a result of that, the NTSB recommended that PHMSA actually revise its protocol to require auditors to have a procedure in place for ensuring the completeness and accuracy of the underlying information. And another little tidbit here, Chris, because it's something that bothers me. The report cited that these deficiencies were also factors in the 1981 PG&E gas pipeline leak in San Francisco, which involved inaccurate record keeping nearly 30 years earlier. So, what are your reactions to hearing that being listed as a completed GIS program, the fact that it was a factor 30 years earlier and overall, some of the challenges we as an industry still face today on GIS’s. Christopher De Leon This could be a whole, it could be a whole episode, man. Rhett Dodson It could, it could be a whole episode. Give me the Reader's Digest version. Christopher De Leon So, here’s my reaction. This is this is these are my opinions based on my experience over the last 13 years or so working for operators and consultants. Right. And technology providers. I'm going to use specific language. You need to understand what your system of record is, right? So, system of record is the place that you go to to get information so you can make educated and competent decisions. Right? And so, when you tell me that they had a complete GIS, one interpretation that I would have in that is it's that they have information for the pipe that's in the ground. But we need to understand what that process of verification is in that process of accuracy, because as a common individual, as a pipeline operator, you understand that again, there's only so many resources that you have. And so if you have these vintage assets where records naturally and organically have been lost or there is some uncertainty in them, how do you go about verifying them? And so, a lot of times you could imagine that a prudent operator will have this process of saying, look, we need to get a baseline of information. And to be honest, that baseline information doesn't just have to be pipe attributes of pipe properties. It could also be based on threats. It can be based on anomaly densities, anomaly populations, anomaly types. You need a baseline information. So, they could be saying, look, we have a baseline GIS, it's complete. But now we also have this other process which is about updating and maintaining that GIS with actual and relevant information. Rhett Dodson And you know what’s interesting because you mentioned that the report specifically cited them for not incorporating information from the ECA digs they were doing that was readily available. Yeah, I can make the same, I can make the same jump today, Chris, where we often receive ILI reports that are in contradiction to the pipe book information. But the process of updating those is often, unfortunately, sometimes several years behind that discrepancy. Christopher De Leon And it's confusing what industry stances on it, right? We're not doing ourselves any favors here, right. So what do you mean by that, Chris? I mean, you get source data and you want to have a process to update your system of record, the problem is that it's incredibly difficult to do that with any sense of defining defend confidence, right? It's like, okay, if I go dig the pipe and I do a straight wall thickness measurement, it's not going to be exactly what’s in my GIS. So how do I define what the wall thickness is? What needs to be based on the expectation that you have? Right? So you need a competent person to make that decision. You cannot rely simply on direct measurements or historical records. You need a competent person to integrate information and say, based on the information I have, my system of records should indicate this. I'll take another example. ILI looks at every single join of a pipe that it's inspecting. Same thing, you would say, well, why can’t I use ILI? Related to the gas rule, you have FAQs and FAQ 2021 said, hey, you can use ILI to establish populations in some of my properties, but you need to get me to approve it. Well, what does that process look like? And so again, we get very complicated in we have all this data and we need to be efficient, but that can be kind of complicated. So I would just say as an industry, we're just not doing ourselves any favors, whether it be investing dollars and taking advantage of that. But it's like, Oh, hold on. If you invest dollars, well, we kind of need to police that or we need to be careful about the uncertainty. What's my response to that? Make sure you have competent individuals in your organization, have defined processes and move forward because otherwise we're just going to end up in this trap of, well, that's not good enough and this isn't good enough, and we're not taking advantage of the investments we're making. Rhett Dodson So obviously, out of that NTSB recommendation, we know that gave way to 192607. That's a whole separate conversation. I think of all the regulations, 607 was probably the one most acted on even before it was officially put in the regulation. Operators knew what was coming. They were taking steps to address it shortly after. So and there's still a lot of questions around the one per mile, all that I really don't want to get into in this episode. The one thing that strikes me the most about 607, and its implementation of the updated gas rule and again, maybe this is just, I'm going to ask you, you like to speculate. Christopher De Leon I do. We're paid to speculate. Rhett Dodson You say that so often. I've never defined my career that way. But that's cool. You define yours that way. You go for it. Christopher De Leon I speculated on you buddy. Rhett Dodson Me? Yeah. I wasn't. I wasn't. I wasn't Johnny Football for sure. I did better than that. Oh, I just finished watching The Untold Story. The Untold Story episode on Johnny Football is really good Netflix. Christopher De Leon I need to watch that one on Netflix where is has Paxton Mahomes on it. I need to watch that before I watch Johnny Football. Rhett Dodson No I’m telling you, you might have a very different opinion is the only. Christopher De Leon Isn’t he is the restaurant industry or hospitality now? Rhett Dodson It doesn't go into that by the end of it, but I don’t believe he is. Christopher De Leon They’re still trying to ream the towel Rhett Dodson I don't believe. No, I don't think so. Look, you’re judging, you need to watch episode, all right? I want you, I want you to opine slash speculate. Chris, why didn't 607 immediately appear in the liquid rule in any form or fashion? And do you think 607 is coming for liquid operators? Christopher De Leon In my opinion? Yes. Rhett Dodson Yeah, this is Chris's opinion. This is our show. Christopher De Leon I'm probably pretty on target though. This is easy. There is a regulatory rulemaking process, period, right? There are only very certain circumstances where PHMSA can just change regulations, right. There have to be and we won't get into what those criteria are or under what authority. But under the normal rulemaking process, there is at minimum a notification to allow for public comment. And so just the fact that I said that there's a rulemaking process means that that requires resources and it requires time. And so I'm not saying it would take ten years, but how long did it take for us to see the NTSB recommendations that we're talking about now manifest itself in any type of regulation? Rhett Dodson Yeah, that process from AMPRAM all the way through was over, was it a decade? Christopher De Leon So, the point is this, for there to be changes in liquid rule, you have to go through some rule process. Now, then you don’t need an advanced notice, but you at least need a notice. Then you need public comment whether it goes through the LPAC or not. Rhett Dodson Well see, that's why I'm surprised we say that. Why? Christopher De Leon There’s only finite resources bro. The government has finite resources. Rhett Dodson We're going to we're going to get a fight. Fundamentally, though. Christopher De Leon We will see how arm wrestling is. Rhett Dodson Well, let me ask you a question. Fundamentally, why would MPV and 607 look any different in the liquids? Christopher De Leon Yeah, so... Rhett Dodson Can you think of a reason? I honestly can't. That's why I'm asking you. I can't come up with a justification why I'd say, Hey, REN MPV would look different in the liquids realm than it would in the gas realm because, blank. Christopher De Leon So here's how I'll answer that. Audience, our liquid operators. Are you a prudent operator? And then I'm going ask a second question because you're all going to say well, obviously, and I'm a BA engineer too. I'm an awesome engineer and I'm very competent. So the second thing I would ask you is I’d say, it seems that if PHMSA issued an advisory bulletin and said, guys, this is a problem. You as operators need to go out there and understand your material records so that you understand how to read your pipeline. And that happened literally years ago. It's incumbent on you as a liquid operator say, Hey, I am a prudent operator. This is obviously a situation that needs to address. PHMSA believes and industry believes and we as operators believe this is important. What am I doing about it? And I would say that's kind of the first way I would answer that is saying that we know this is an issue and you know that there is a regulatory process that has to happen. And you said earlier that I think we have to have prescriptive measures in order to drive success. And I would say our liquid operators that are listening to us, would say, I they disagree with you because I'm a prudent operator, I'm a good engineer, and I'm going to do what's right. So I would say that's why it gets complicated, right? Because every operator would say, I have a FERC license, because I understand my social license and I'm for profit. So but back to the original question, I would say... Rhett Dodson Well the for profit when there’s only so much time, resources.... dang it. That’s a bad comment. Edit. Edit that comment. Christopher De Leon So what I would say is, you asked me to speculate. I would say that in probably in the somewhat near future, I wouldn't say near, but maybe mid-range, say 3 to 5 years, we'll probably see the liquid code, see a revision. But here's another answer. There's a bunch of CO2 pipelines getting built and there's a lot of lack regulation on CO2 pipelines. And so you have to think again, I have so many governmental resources, I have a rulemaking process. You have to understand where your priorities go. So is it CO2 or is it liquids? Rhett Dodson You know what, it’s a good point to take a break. So we're going to take a break before we jump into the questions of stable manufacturing defects. Christopher De Leon Let's do it. Rhett Dodson So hang on and come right back. We have two more topics to cover. All right. Welcome back from the break. And I look exceptionally good on Tuesday afternoons. Christopher De Leon I feel like every episode we get further and further away. Rhett Dodson No, I'm actually you know, I was down with this couch, so this was the same couch that we used for Alex and I’s Clarion promo video with counseling. I like it because I can kind of turn and talk at you, and a lot of times I want to talk at you. Christopher De Leon It has this little corner. Rhett Dodson It does, I don't know how it's working for the you too, but it's working for me to be able to talk at you. Christopher De Leon But the point is still true. I feel like we're getting further and further away. Rhett Dodson Oh, no. We just, in this particular setting. Christopher De Leon To have to fill a little space at some point. Rhett Dodson I think that was a country song. We could sing that as like a duet. You don't bring me flowers anymore or something like. Christopher De Leon I thought you were going to say Carrie Underwood might be an inspiration there. Rhett Dodson Oh, were you going to like... Christopher De Leon Jesus take the wheel. Rhett Dodson No I was like, more of, next time he cheats. Like slash my tires. Christopher De Leon No, I’m thinking Jesus take the wheel. Do you see the perspective here? Geez Louise. Rhett Dodson I’m just saying what's really good is that my kids run around singing that song and there's nothing like listening to an eight-year-old singing next time he cheats. Christopher De Leon So if you want to timestamp this for future reference, it's all, it's swifty season right now. Swift like Taylor Swift's tour is literally taking over the world. And you know, you might be able to ask me about this later. So we got tickets to the Miami show. We got four tickets for October of next year. So that would be fun to talk about in a year. So we'll see. Rhett Dodson I'm just running a separate scam on the side where I'm selling bottles of regular water as the rainwater that was collected over one of the eras concerts and they sell for like 85 bucks on eBay. Christopher De Leon Yeah. So I'm not, anyways, point is, that’s kind of a time stamp. Rhett Dodson All right, back to the discussions on the NTSB report from San Bruno. So, we finished the first two discussions which were around 607 and 624, namely material properties verification and MAOP reconfirmation. The third one, Chris, the NTSB recommendation and I'm going to read it, has to do with how stable manufacturing defects are considered. So going back, the failure occurred at a two-inch-long flaw. And if you remember, I told you, was a single sided submerge, should have been a D-cell weld, but only one side of it was made from the outside. The flaw originally would have been about half of the wall thickness. Yeah, about 30% of what remained grew by basically a ductile tearing mechanism. And then there was a fatigue growth component that took away about another 10% of what remained. I'm going to read it straight from the NTSB report. “In summary, under 49 CFR 192 917 E3, as it existed at the time of the failure, operators are entitled to consider known manufacturing and construction related defects to be stable, even if a line has not been pressured, tested to at least 1.25 times MAOP. However, such defects may not be, in actuality, stable. The NTSB concludes that the premise and 49 CFR 192 of the federal pipeline safety regulations that manufacturing and construction related defects can be considered stable even when a gas pipeline has not been subjected to a pressure test of at least 1.25 times the MAOP is not supported by scientific studies. Therefore, the NTSB recommends that PHMSA amend 49 CFR Part 192 of the Federal pipeline safety regulations, so that manufacturing and construction related defects can only be considered stable if the pipeline has been subjected to a post-construction hydrostatic pressure test of at least 1.25 times MAOP. The first question is where do we see that regulation addressed in the updated rule? Or that I'm sorry, that recommendation addressed in the updated rule. Christopher De Leon So it all starts in subpart O of 192. So code is broken into subparts, maintenance, operations, integrity, etc. and it's a 900 series and in the 900 series we find 917. So 917 is where you identify threats and there how you address them in your integrity management plan. So there was a reference to leveraging information from covered and uncovered segments to identify threats. And they talk about manufacturing threats can be considered stable, as said, if there is a separate test. So you would say, well, after this, what happened? What we find is that in 917 there is a new what I'll call paragraph, we're going to call it paragraph E. And paragraph E, the objective of it is to highlight specific threats to pipeline integrity. So you see third party damage. You see corrosion, you see cyclic fatigue, you see they call it cracks. What's interesting, they call manufacturing flaws. They also call and I always like to highlight this one, they call it ERW, which is kind of it kind of throws you off because they call a specific manufacturing type versus say pipe type or something of the sort. So we now have this paragraph E and they specifically address manufacturing flaws in the third section of paragraph E. So 192 917 E3 is where we find this very specifically. If you were trying to say 1 to 1, where do we see this recommendation in code? That's where we find it. Rhett Dodson And they did specifically do that. They specifically implemented the regulation. But as you mentioned, 917 is bigger now. There are more threats. So what types of additional regulations appear with regards, particularly things like cyclic fatigue, As you mentioned, you know, again, like expand a little more. I mean, I'm trying to set this up for you, Chris. What else appears in 917? Christopher De Leon If we're going to focus on the manufacturing, say, the thing is like there are just a lot of things in here that we could unwrap. Like, for example, there is a fatigue component to this, right? So there was a stable defect theoretically, that had a ductal crack of whatever it was, about 30%ish and then there was about a 10% growth in fatigue. And so what you find is it's you now have fatigue in there as well, right? So the idea is it's if you remember our discussion about hydro test plus integrity management, that's kind of what you're requiring here, right? Is it's you can call a manufacturing flaw stable. That doesn't mean you forget about it. Rhett Dodson Yeah. Christopher De Leon That's right. So integrity management is a loop, right? And that reminds me of a movie where they talk about a circle, you know. Rhett Dodson It's a sort of butterfly effect circle. No, I think that's wrong, I don’t think you were looking for that. Christopher De Leon It’s like that. And so the point is it’s right. You’re in this continuous process, right, of gather information, identify your risk, perform a risk assessment, and then perform an assessment and then do some kind of repair. And then you offer some kind of continuous improvement, right. Or continuous evaluation. So we see that here. That kind of manifested a little bit more clearly in 917, right? Title is threats in how they're in integrity management. Now they say, hey, for manufacturing flaws, they can only be considered stable if you have a subpart J test. They're explicit and say you need to look at like type pipes for conditions of how you're operating the line, pipe properties for both covered and uncovered segments to understand if this is an integrity threat or not, because that's the goal, right? It's not just say, is it stable? You're supposed to integrate data to say, is it stable? And if you do dub it stable, then you have to look at things like fatigue, right. Which they then further, you know, make a focus as a particular threat where you need to understand this the way you're operating, the line is going to potentially turn a stable flaw, I won't call it a defect, but a stable flaw into something that's now time dependent that may no longer be stable and you need to address it, which kind of what we saw in the PG&E situation. Rhett Dodson There's another component to this discussion of stable manufacturing defects, Chris. Which is related to covered and uncovered segments. I was a bit surprised in the report that there's some mention of uncovered segments, and I'm going to read you two statements. And I want to get your reactions to them. So the first one is that the original 917 said that manufacturing and construction defects, that was the title, this is 917 at the time of failure, if an operator identifies the threat of manufacturing and construction defects, including seam defects in the covered segment, the operator must analyze the covered segment to determine the risk of failure from those defects. The analysis must consider the results of prior assessments on the covered segment. All language in 917 A, that's kind of the intro part as it existed prior to the failure, all addressing covered segments. Then in 917 B, what it says is that operators are required to identify and evaluate potential threat to a covered pipeline segment. The operator must gather and integrate existing data on the entire pipeline that could be relevant to the covered segment. This is 917 as it existed at the time of failure, including at a minimum, the information specified in ASMB 838 2004 and consider on both the covered segment and similar non-covered segments past incident history. There are a whole bunch of other things they list out, conditions specific to each pipeline. The reason I'm asking you that is I found it kind of striking that even prior to the failure there was in regulations mentioned to gathering data from uncovered segments and incorporating it into your integrity management practice. I think that's been significantly expanded. Let me say this much. I’m going to ask you a question. Actually, go ahead. Give me give me your reaction. Christopher De Leon My initial reaction. So, you remember that whole prudent operator thing that we went through before the break? Rhett Dodson I try to I'm trying to remember. Christopher De Leon You know, where it's like, well, if I ask the audience if they're a prudent operator, they would say of course. Yeah. So, it's fair, I'm going to say this is my opinion. Again, I think it's fair to say that PHMSA had to do this because I'll say I have witnessed where they have operators that say the code is focused on ECAs. And so that's what I'm using to make decisions related for top line integrity and it's period. And so what happens kind of like what you said, well you need prescriptive regulations to enforce the actions, the behaviors that we want. And so what's happening now, you're saying, well, since you're only looking at HCAs that's not fair because you just had an incident related to this that you could learn from in a non-HCA because you have the same type pipe, same environment, same behaviors, what are you doing in a covered segment? And so what they're doing is saying in this section of 917, which is identification of threats, they're saying basically you can't just look at HCAs. You have to look at your historical information for the system. Right. So that we can understand if it impacted one part of your pipeline. The pipeline doesn't care if they're structures there or not intended for human occupancy or in environments, in sensitive environments, you need to pay attention to here. So that's my first reaction, is saying that's a that's an obvious reason why they had to put it in. These are the behaviors they want and the second thing I would say is it's we see a little bit of difference of I'm going to use the word philosophy or management practice in 917. So again, it's not just identification of threats but also, how do you incorporate them into your IMP or what role do they have? And what we see is in manufacturing threats, even in the new the new language, it highlights that you need to integrate the information from covered and non-covered segments, but its target still appears to be covered segments for manufacturing threats. However, but we don't see that tendency in how they manage corrosion or cracks in that same pattern. Rhett Dodson That’s what I was going to ask you, so where I wanted to go with this topic. PHMSA has stated, because I've heard them say that in a presentation, our intent with the rule was that you would take the requirements for covered segments and treat non-covered the same way. PHMSA has said that, that was their intent, regardless whether it was written that way. I'm saying that is their stated intent, which we know has not happened yet. Christopher De Leon It’s complicated. Rhett Dodson Only what I believe we see is I'm not even going to address that, you're not going to get me there. What I believe we see is we see a subtle expansion, let's call it creep. Let's call it pushing the boundaries of covered and non-covered segments in the new 917. So you said in the realms of cracks and corrosion, I brought this up when I did a webinar on long seams because I felt it was pretty significant. Christopher De Leon I think you did a great job on the webinar, by the way. Rhett Dodson I don’t remember whose idea it was for me to do it. That person probably should have gotten a raise, so my point is. Christopher De Leon You have to have ideas in this world. Even if they’re bad ones. Rhett Dodson My point is, Chris, help the audience understand or let me ask you a question. Do you believe in the updated gas rule that there is an intentional expansion into non-covered segments? Christopher De Leon Absolutely 100%. Rhett Dodson Why? Christopher De Leon Because I think that at the end of the day, if you get pulled over by the police officer, Rhett Dodson In regulation. Christopher De Leon No, I'm doing it. I'm giving you the analogy, right. I'm giving you a basis to think about what I'm about to say. If the police officer pulls you over there, they can give you a ticket or not, whether you think it's legal or not, and then there is a process for you to determine through courts, through attorneys, to say, was he right or wrong? At the end of the day, there is enough material in the updated regs that allow a PHMSA inspector or state inspector to have interpretations of how it's been written, whether they read the preamble and use the preamble as a basis or not, whether they read FAQs and interpret the FAQs properly or not where they can say the intent here was for you to consider covered and non-covered segments. And there's at least two places where we see that. Number one is you see that on the crack and corrosion it's very explicit, and that’s what I’m leading to. It says if you have this in covered segments and it's a problem, you need to consider your whole system parentheses covered and non-covered segments. And you would say and then it says and you need it within it, it says you need to establish a schedule for remediating as appropriately all of these assets. So, they're charging you with establishing a schedule to you would say, Oh, but I could establish a schedule of let's call it, I'm going to pick something, 30 years. Are you being a prudent operator if you do that or being facetious? Right. That's the question. But then if you look at Section 700 series, you see that they have the extension of integrity management practices in the assessment of assets through 710. Pretty sure it's 710 and 710 is basically where you have to establish a schedule of assessments for pipelines, for example MCAs. So if you have a pipeline that has an MCA, you have to assess the threats for it based on whatever threats you found. So again, there's enough there to where you could say they absolutely are using practices in subpart O and for covered segments and clearly expanding them to whether it's MCA covered segments or non-covered segments. Rhett Dodson It’s really interesting you mentioned MCAs, that topic is to come up in a future episode. I know because I read ahead into the next one. I think what if I want to be provocative to the audience, I'm going to make a provocative statement. Will it require another failure before we see all pipelines just enveloped as covered segments in our lifetime? And again, I think it took San Bruno to push covered segments into this, covered and non-covered. It's going to take another failure to push us into what we're going to call MCAs. It's going to be an interesting conversation in the next episode. Will we eventually just see in our lifetime be like, what are we doing with covered and non-covered pipelines? And treat them all the same. Provocative food for thought. Probably some people out there right now that just threw something at the radio. Christopher De Leon I think the next recommendation might be kind of leading towards a potential mitigation for that. Rhett Dodson And that fourth point, Chris, you bring up and it's what we're going to we're going to tie up our episode today. The NTSB recommendation, I thought it was interesting is the NTSB require that all natural gas transmission pipelines be configured so as to accommodate in-line inspection tools with priority given to older pipelines. Obviously, the segment that failed in line 132 was not pickable. We mentioned that. It had not been picked before. It would have been difficult to make it pickable. The NTSB has a lot of language, even in 2011, with the state of ILI as it was then, which I'd say it's advanced, particularly in the realm of cracks for gas pipelines, but they do specifically mention the advantages of ILI over pressure testing and the advantages of ILI over ECDA. So where do we see the NTSB recommendation reflected in the updated gas regulations, the recommendation that pipelines be made pickable or where do we see ILI appearing more pronounced? Christopher De Leon So it's kind of both of those, right? So the first one is it's now regulation that if you're going install a new pipe has to be considered pickable. Right. Rhett Dodson Yeah, they made that regulatory change very quicky. Christopher De Leon Good. So that's the first one, right? If you're going to put a new pipe in the ground, it has to be pickable, per se. And you could argue what does pickable mean? Does that mean simply it does or doesn't have a launch and receiver, or does it mean that its geometry is such that there is a commercially available tool? Does that mean it's bi-robotic versus free swimming? There's a lot of caveats to what does it can accommodate an in-line inspection tool, but we won't get into that. The point is there is a reg that says, Hey, if you're going to put new pipe in, if it's a replacement or new construction, it needs to be pickable. So that's the first part. The second part we see it is kind of the section that I mentioned earlier around the expansion of assessment techniques to non-HCA or covered segments. Right. And that was something that that as I mentioned earlier, Congress had kind of imposed on PHMSA as well and said, hey, we want to start seeing assessments outside of HCAs. And so that's where we see 710 come in, where basically operators have to identify where they have MCAs. Again, we'll talk about this more and you basically see that that that's one place. So if you have an MCA, that's pickable, there are additional regulatory requirements. Rhett Dodson I was trying to set you up for the, I really think again, I want to go back to the 624 discussion. The NTSB’s recommendation was everything will be hydro tested. We know that 624 as it actually appeared allowed for the ECA process, which is based on ILI as it's presented in code. So I think it was one way where the recommend, the implementation of the recommendation actually took into account the use of ILI by the time the recommendation had dropped. Christopher De Leon Yeah. Rhett Dodson Chris, is there tension between integrity management via hydro test and integrity management via ILI? Would the NTSB have been aware that recommending that all pipelines be made pickable and recommending it be hydro tested create some tension? Christopher De Leon Yeah, the thing is it's complicated right? Like when you're an operator, there are things that aren't so straightforward, right? I would say you have to understand the asset. You have to understand the volumes that it's moving. You have to understand the product. You have to understand what historical data you have. It's hard, right? I mean, I'm going to call it what it is. I mean, there are some pipelines where you're not sure if it will pass a hydro test, but it doesn't need to operate at 125% SMIS, it needs to operate exactly where it's been operating with little change. Rhett Dodson There's other pipelines, right where you have a hydro test, you’ve been managing it via a hydro test, and there's a clear benefit to running ILI, but what if you get features you're now required to respond to? Christopher De Leon Yeah. And that's where it gets complicated. And so again, what I'll speak to is it's unfortunately, operators can find themselves in a situation where they're almost penalized if you have ILI data and that's something that as an industry we need to get better at, right? It's you can't tell industry, you need to run ILI to get more data, but then getting the data becomes unmanageable because there's no engineering basis behind what you do with the data. That does not work, right? The point of having a congressional mandate to have an equivalent to a hydro test is because, I used this earlier, you want a baseline of anomaly information on your pipeline and I use anomaly, not defect. Right. Because you want to understand what could be there. And then as a prudent operator being competent, we then address those anomalies and we use the engineering tools that we have. And if we're competent in what we do, we'll know what those risk tolerance is. If I have something that I don't know what it is and it’s next to a home, what do you do? You go find out what it is, right? We have enough tools now in our GIS that allow us to use geospatial analysis where I can plot these anomalies with whatever level of confidence of certainty you have in sensitive environments where you have elevated risk and you can make an educated decision on an anomaly basis. The problem is, is that if you give me a report that I may or may not have a hard spot, but I'm not sure, but I don't want to get a hard spot report because I'm not sure if I'll have the resource to respond to it or a regulator or a police officer is going to pull me over and I won't be able to manage the consequences, then why would I run a hard spot tool? I have no incentive. Yet, the regs are being postured in such a way that we want to run more ILI, so we have more data to make educated decisions. The problem is that as an industry, we're really struggling with this collaboration between regulators and operators and there's some gray space that's being formed. And by gray, that doesn't mean bad. It means it's the realm where engineers can be competent and operators can be prudent. And so that's my response, right? Is it's it gets kind of complicated. It's not easy. I'll make two other points that I think maybe could be helpful to the audience. Rhett Dodson I was going to say my name is Christopher De Leon and I support this message to run for president. That was really good. Christopher De Leon No, but what I will say is there's two other things I think are relevant to this discussion. So you would say, hey, you know, the NTSB said, you know, we need to use ILI more. What happened over the last decade? I think something that's cool for the industry to know is it's the industry did respond, right. Industry responded and formed a research organization to investigate how do you inspect difficult to inspect pipelines? It's hard to say unpickables because unpickables, you can’t pick it. Right. So you'd probably use something like challenging to inspect or difficult to inspect. So they developed, industry, came together, industry funded it again with other partners and research was was born and they came up with a couple of robots and these robots were to inspect pipelines and that turned into a company called Pipe Tell. So a lot of you may or may not be aware of Pipe Tell. So there was a direct impact on available tools in the market to begin to start getting this baseline data. And if you're like, Oh, where is Pipe Tell? I think, somebody can fact check me, I think Pipe Tell is now Intero. So if you were wondering like, Hey, where are these tools? I think now it's called Intero, but that was one of the two comments I wanted to make. And the other one is it's I think the liquid regs have already some language that talk about making lines pickable over the course of 20 years, but that would be a subject for a different podcast. Rhett Dodson Well, we have gone, this has been, I’ve really enjoyed tackling the four bullet points as a separate episode. It's been fun. I think what's so interesting about this particular set of requirements is there's so much weight there. I honestly feel like you could take San Bruno alone and we could have done a series. We could’ve done an arc on San Bruno alone. I really want to encourage all of our listeners out there. I know all of us are busy. Find the time to read the NTSB reports. There's some information that you’ll find striking, and I really found it educational myself to be going through the San Bruno report. So, Chris, do you have anything else you want to say on this episode? Christopher De Leon Yeah, I'll just remind everybody why we're doing this. Our goal is we can't let history keep repeating itself. And I know we have a lot of people who listen to our podcast who are directly responsible for assets, and our goal is it's for us to try to point you in a direction. Obviously, you won't get all the all the answers from us. A lot of this stuff is opinion and some of even conjecture. But the idea is it's... Rhett Dodson Don't let history repeat itself. Christopher De Leon Yeah, don't let history repeat itself. We're taking the time to resurface these older reports. It's to highlight them and hopefully make you curious right. You know I really appreciate Ted Lasso and he's like be curious, you know/ Rhett Dodson Don’t be a goldfish. Christopher De Leon Don't be a goldfish. Right. And eat a lot of barbeque. But the point is, it's we bring this up to highlight certain topics and help you understand kind of why the regs are the way they are. But ultimately, it's like, you know, let's continue this journey to zero incidents. Rhett Dodson And on that note, we’re going to wrap it up. Be sure to join us again in two more weeks where we can talk about where MCAs come from. Thanks for joining us. I'm your host, Rhett Dotson, my co-host, Christopher De Leon. We’ll see you in two weeks.