Regulatory Arena with Jeff Wiese

00:00:00 Speaker 1
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00:00:27 Speaker 2
Welcome to the Energy Pipeline Podcast with your host, KC Yost. Tune in each week to learn more about industry issues, tools, and resources to streamline and modernize the future of the industry. Whether you work in oil and gas or bring a unique perspective, this podcast is your knowledge transfer hub. Welcome to the Energy Pipeline.

00:00:51 KC Yost
Hello, everyone, and welcome to this episode of the Energy Pipeline Podcast. Today, we're fortunate to have Jeff Wiese, past Associate Administrator for Pipeline Safety at the US Department of Transportation as our guest. Welcome to the Energy Pipeline Podcast, Jeff.

00:01:06 Jeff Wiese
Hey there, KC.

00:01:08 KC Yost
Thanks for being here. Appreciate it. So, before we start talking about today's topic, would you take a few minutes to share your background with our listeners please?

00:01:18 Jeff Wiese
Sure. So, I've been in the general oil and gas space for maybe... I hate to admit this publicly, but maybe about 40 years. I started my career in what used to be known as the Minerals Management Service and 15 years were offshore oil and gas regulation, largely in the safety sphere. Then I went onshore to pipelines with the USDOT and spent the rest of my federal career with USDOT doing safety again with pipelines. Then after that left and went to be a senior VP with a company called TRC Companies, serving oil and gas companies, pipeline companies, but all focused on oil and gas and energy.

00:02:08 KC Yost
Good. Very good. Very good. So, today's topic is essentially safety in general speaking terms. We were talking earlier, I remember as an ASCE member in college taking field trips to different massive civil engineering projects and works. Now, this was the early '70s, prior to OSHA and all getting strongly involved. I remember distinctly a field engineer looking at us at this massive project and saying that they calculated based on the cost of the project, that they would lose 12 workers. That is 12 workers would die during the construction of this project, but he was proud to that they were three quarters of the way done with the project and they had only lost four. Thank God, we've gotten to the point now with the work that the federal government done and frankly the energy industry has done to get to the point where zero is the number that you have, regardless of the size of the project. It doesn't matter whether we're talking 10 feet or 10,000 feet or 1, 000 miles of pipeline, zero incidence is the number that you want to have. So, anyway, I just wanted to share with you my experiences from 50 years ago and how things were in the civil engineering world and use that as a background to maybe you can talk a little bit about the shared goals that now government and industry have today compared to what it was in the early '70s.

00:04:00 Jeff Wiese
Yeah, sure. I share your horror in listening to anyone say that it's okay to lose four people on a job. I mean, I would've fainted and passed out, fallen on the ground I think at that point, but you don't have to be around that long and read international news before you see projects going on in other countries where they lose a lot more than that. So, I don't know how anybody accepts anything other than zero is the goal. We basically say everyone goes home safe, whether it's somebody working on the job, whether it's a customer, or whether it's the neighbor to the pipeline. But we'll get to that in a bit and talk about how, and I'll talk a little bit about safety management systems with you. I guess wrap up that part of it by saying, I think the other shared goal that everybody has, and I think it's pretty reasonable and accepted now, is like keep it in the pipe. We can't take leaks whether they be liquid, gas, or whatever anymore. There are a lot of reasons for that and I'll touch on a couple of them as we go along, but I think those are two pretty simple ones. I have worked a long time with the industry. I have a lot of friends in the industry. I have a lot of friends in the advocacy group. I was positioned in the middle and my job was to negotiate and having a lot of people talking around the table, talking to each other and sharing their views and seeing how a solution can come together by working together to something. Something we need to see more of in this country is people being willing to compromise with one another in the interest of moving forward. So, yeah, I do have a lot of years in. I have been blessed by being able to work on a lot of industry standards myself and learn so much in those things. I think they helped me a lot.

00:06:08 KC Yost
When we're talking about pipelines, we are talking about pipeline systems and the overall systems in the pipeline.

00:06:16 Jeff Wiese
Yeah, we're talking not just the linear pipe, but all the facilities that go with it and pumping stations and process, you name it, and whatever type of pipeline, whether it's distribution pipeline, transmission pipeline, gathering pipeline. So, yeah. Sorry about that. I should have made that clear. I'm talking about the entire inventory of pipelines in the US, which by the way-

00:06:42 KC Yost
Makes perfect sense.

00:06:46 Jeff Wiese
Last time I counted by looking at the reports there, over 2. 6 million miles of linear pipe in the US. It's hard to believe until you see the underground. Go to New York City when they expose the street, it'll blow your mind. There are pipelines crossing everywhere.

00:07:12 KC Yost
Absolutely.

00:07:13 Jeff Wiese
It makes me nervous.

00:07:13 KC Yost
Absolutely. Absolutely. So, with this idea of everyone goes home safely and the need to keep it in the pipe, if you will, there's got to be some tremendous lessons learned that you've gone over your 40 years' experience that you can share with us and how we've gone from losing four people is okay to where we are today.

00:07:40 Jeff Wiese
It feeds well into the final discussion about pipeline safety management systems is I think we need to understand, first of all, in this country, in most countries, energy is critical and essential, whether it's for our comfort in our homes, whether it's for mobility, whether it's for prosperity. If you stop at any point in the day and look around you, you're being supplied with energy in one form or another. A lot of the stuff that moves in pipelines, by the way, like natural gas transmission lines, feed power stations, which themselves generate electricity. It goes out and fills up all the Teslas that are out there. I'd like to remind people, their friends that have Teslas, at least two-thirds of the energy in that Tesla came from oil and gas. So, we need to be mindful of it. So, what's amazing too is I guess during that time, these are things that they don't teach you. Security in this country, our security is tied closely to energy. During Katrina when that happened in 2005, as I recall, the whole East Coast was within days of a mass outage of all motor fuels. I was thinking about the chaos that would ensue following that. Trucks couldn't take groceries to grocery stores. You couldn't go down, fill up your car, and get out of town or do whatever. But national security was one of the ones that we really were worried about. I was in the command center for the federal response to Katrina. Again, lessons learned. I also wanted to say to people that I have a lot of friends in the industry, as I said, and they say, "Well, we haven't had an accident in like five or eight years or something like that." I said, "That's good. You should be proud, but you shouldn't get complacent." The public, the congress, the media, some of these other people that will talk about how they play into the regulatory sphere, they judge the industry. They're not judging your company per se unless you have a nasty accident. In the industry, I used to see every pipeline accident in America and sadly on my phone. It's amazing how many per day there are. So, I think that over time, that adds up and creates an impression.

00:10:25 KC Yost
Just to take you on a sidebar there, do you think the issue is complacency?

00:10:31 Jeff Wiese
I think people do. I've heard operators actually say, "Well, we seem to be doing really well. We haven't had any problems for X number of years." I would say, "Then you should knock on wood. Things are changing around you all the time, and if you are not adapting to that change, you become a dinosaur. Things happen, right?" What's the old saying is past performance is no guarantee of future success. So, I like to have operators who are running scared. They're asking, "What could happen here?" Before every startup, for example, you want people to stop and say, "What could happen here? Have we taken care of that? Is that good before we start it up? We don't want anybody getting hurt in this thing."

00:11:28 KC Yost
Well, HACCP analysis are really quite good for startup. I totally agree with what you're saying. Anyway, I didn't mean to take you on a tangent, but thank you.

00:11:37 Jeff Wiese
No, no, not at all. I guess the point that I would add onto that to say, I used to say the cost of failure is rising. There used to be accident and it would blow. I was always appalled, by the way, in the offshore world, where four guys could get killed in a crane accident on an offshore platform and it didn't make the front page of the New Orleans Times-Picayun. But I saw if somebody spilled 10 barrels of oil, which I don't like either, but if they did, it was covering every newspaper you could think of. So, environmental degradation has really played a big role in this stuff and the cost is growing. So, whether it's to the company's reputation or whether it's through the media who go feed the Congress, of course, and Congress will love nothing better than a soapbox to sand on and sometimes legitimately address their constituents' complaints. If it happened in their district, they're going to want to do something about it. It can also affect them financially. So, I would just say the cost of failure is growing, and this has brought a lot of attention to pipelines as you know and I think not for the right reasons. I would say that. It's done because the advocates who are really opposed to the use of fossil fuels figure, if you can stop it from going from point A to point B, then you can shut it down. They're addressing the use of fossil fuels, which none of us want to see climate change. None of us want to see the carbon being emitted into the atmosphere. But rather than attacking that problem, we're attacking something else. So, I would just say there's little room for error now, and it seems like it's getting smaller to me. So, the other thing I wanted to add in here is that if you think about it, and I have lived my life, I used to teach my kids all the time, is that when you make a mistake, it's important to own up to it and say, "You know what? I made a mistake. I apologize for that. I want to move forward." You've learned something when you own up to it. If you don't own up to your role in things, it's hard to learn from them, make changes to make sure it doesn't happen again. But the other thing to consider is that we know this in our daily lives, things are changing around us constantly, whether it's technology, whether it's the climate. It is. We're getting more intense, severe storms. Things are happening. Ironically, I'm going to talk about API's recommended practice, 1173 Pipeline Safety Management Systems in a bit. I was on that committee. We published that document in 2015. I don't know why, the accidental foresight to include preparation for pandemics. You need to think about as a company things like pandemics. Well, damn if we didn't have one. There was a lot of scrambling going on by companies to figure out how are we going to keep operational with our people. These are all lessons learned. I would just say the traditional approaches to solving problems like this, pipeline accidents or whatever, were a regulatory fix. So, with your permission, I'm going to talk a little bit about how regulations come into being these days and why, but I'll make it short.

00:15:45 KC Yost
You touched on the idea that an accident happens, then someone in that district complains to their congressman or senator or to member who then goes to the regulatory agency and says, "Tighten this up. We don't want this to happen again." It seems like we can go back to the '60s when 192, 195 started coming out and all of that. It always seems to be the trend, an accident and then a complaint and then the Congress telling the regulators to do something. So, maybe you can get into that background on regulation origins and that path that I'm so poorly describing.

00:16:33 Jeff Wiese
No, you did a great job. I would say what you introduced, by the way, is not common knowledge. The federal pipeline safety regulations really didn't come... They were worked on in the '60s, right? But right around 1970, they were coming into place, but they were dominantly industry standards, consensus standards. They were just incorporated. They were given very little time by Congress to get it done. A lot of the standards are very helpful, by the way. Having sat on a number of the standards and saying how much knowledge gets put into those things is amazing, but they were largely based on the standards. Prior to that time, pipeline safety in America was run state by state. Eventually, the Congress said, "Hey, if it's an interstate pipeline, meaning crossing state boundaries, it's going to have to be regulated by the feds, but we want you to let the states regulate that pipeline, which is just within a state, in trust state." But you feds have to set the minimum standard nationwide. Nobody should have multiple standards to deal with. So, that's how it got started. You also touched on what I call the vicious cycle. I've seen it so many times that I've come to believe in it. What we see is an accident, immediate blame pressure, whether it's brought by the media or whomever. Nowadays, by the way, the media, they sell digitally and they sell on clicks. So, sensationalism, not all sensationalism, but sensationalism does get a click and they get paid by clicks. So, they call it clickbait, right? But advocacy groups and everybody's spin up. Congress loves to fix problems, and they love the attention that comes with their role in providing solutions. So, they create mandates that go into law by the US Congress that tells the regulators you mentioned. Usually, they say, "Within one year, you'll have a final regulation out that will do X." Right. That's hilarious. They know it's hilarious, but they don't feel good about saying, "Hey, nowadays, to do a substantial regulation takes five plus years." Easy. When I first started, there were hardly any comments that would come in when you put out a proposed regulation, but now it's floodgates, that cost-benefit requirements, and everything. It'll take at least five years. The guy who used to head up OSHA told me... Yeah?

00:19:27 KC Yost
Oh, I'm sorry, go ahead. The guy with OSHA, go ahead.

00:19:30 Jeff Wiese
Dr. Michaels was the former head of OSHA, and I knew him and dealt with him a lot. Good guy. I was complaining to him one day and I go, "Man, I'm getting beaten up, because I can't get these regulations done that the Congress said to get done, but here's why." He goes, "Why are you complaining? I can't get them done in 10 years." So it's just people should know that there's a process underneath it. I'll go into a little bit in a second, but let me turn back to you.

00:20:02 KC Yost
Yeah. So, with that, everyone's been talking about the mega rule that's recently come out. How long did that process take? Wasn't that five plus years to go through?

00:20:16 Jeff Wiese
Yeah, just getting to a proposed rule was five years. I literally quit working at DOT as that rule was being published as a proposed rule. Alan Mayberry, who was my deputy at the time, is now in charge of pipelines, and he signed the final rule only a couple of years ago. So, it was again near close to 10 years in getting that one out. Again, I am leery of going too much detail for chewing up your time and boring people, but it's just amazing that it would take that long. But the process, just so people know, a congressional mandate comes along. An agency has to develop, first of all, a proposed rule, publish it, solicit comments from everyone. Then in the case of PHMSA, Pipeline Hazardous Material Safety Administration, which writes those regulations in DOT, they have an advisory committee member that are made up of five public, five industry, and five government people for gas, another one just like that for liquid. Those groups have to meet and basically say whether they deem it to be a cost-effective, practical, and beneficial, a cost-benefit analysis. If they don't, they're going to recommend changes to that rule. You're going to make all those. Each time you go through the USDOT, which has, by the way, bigger agencies in PHMSA, they have FAA in there for aviation. They have motor carriers in there for trucks. It's just hard to get their attention. There's only so many of them. Once they approve what you're doing, it goes to the Office of Management and Budget that works in the White House. Same thing there. I mean, they're taking requests from all these agencies, so there's only so many people to go around. So, a rule can sit anywhere for six months or a year before you hear back from these people. So, eventually, it comes out. You give people an effective date, but you also have to train federal and state inspectors on how they would do the inspection. The industry has to adjust to that rule. I guess I'll stop, but I'll say that I really think this vicious cycle I was talking to is more than not, it's driven by a bad accident in the industry and somebody says, "Hey, I've got to fix that problem." So, you, PHMSA, write a rule to do this, but it will take 5 or 10 years. All that time, PHMSA is getting beaten up for not getting the rule out within a year or two, but it's totally impractical to suggest that they get it done in a year or two.

00:23:23 KC Yost
Got you. So, we've started at the big end of the funnel and we've worked our way down. We've talked about these regulatory issues. So, now we start getting into the current focus, if you will, the approach to safety and energy reliability, and as you mentioned earlier, security and API RP 1173. So, can you talk a little bit about safety management systems in that regard?

00:23:51 Jeff Wiese
Right. I will, happily. This is really my passion. So, this is the part I really like about, so you'll have to give me the time if I start going long on it. But I started this in the offshore world. There was RP 75, which was an analogous document on systems management in the offshore oil and gas sector. I was the only government person on it, but a 20-person committee. The rest of the people were from industry. We built the first edition of RP 75. That was, "How do you take a systems approach to your operations?" It's worth knowing that it's not new for any kind of an operation to do that. It's done in nuclear for sure. It's done surprisingly in things like chemical processing, and in medicine, it's done. There are systems in how you manage systems and how you etch knowledge as you learn. So, any rate, it was after yet another accident, Marshall, Michigan. There was a large hazardous liquid oil spill, crude oil spill in a river up there. I flew it, by the way, with the Coast Guard. It was 10 miles bank to bank on this river with a sheen and got a lot of attention, as you can imagine. National Transportation Safety Board, which are really accident investigators, they're very good accident investigators, but they also come up with lots of ideas. FAA, the aviation group, and DOT had been messing around with safety management systems for a while. TSB came back and made a recommendation, which the regulator has to listen to. It recommended to API that it build an SMS, safety management system for pipelines. So, again, pipelines including the whole system, not just the linear pipe.

00:25:55 KC Yost
Got it.

00:25:56 Jeff Wiese
So industry asked me to be on that committee. I was joined by about 20 other people, took us two years to build the document, and we generated a document called, you can look it up, it's called API's Recommended Practice 1173. There's even a pipelinesms. org that API maintains that gives you everything you want to know about pipeline safety management systems. So, by the way, after reporting for 10 years directly to the political appointees, both parties, I decided that enough's enough. It's different working in a political environment than it is in industry environment. So, I quit and went and began doing some work on SMS as well as managing a group of people in several offices on pipeline services. So, we've been evolving 1173 ever since. Right now, it's been out published since 2015. It's been confirmed once, reconfirmed. So, it was able to get another two years, and now we're working on the second edition of RP73. I think the first lesson I learned in DOT on safety management systems was from the FAA, and they said, "The first thing you should do is keep it voluntary for at least 10 years, because the regulator in the industry can work together in a no harm, no foul setting. They both learn." Then eventually the implementation, the oversight improved, thanks to that. So, I maintained as long as I was there that it would be voluntary and Alan Mayberry has maintained voluntary since, but I am telling you we're one bad accident away from a congressional mandate. It almost happened after an explosion up in Massachusetts around Boston, but there wasn't enough support on the hill for that member to drive it through. So, I think the industry knows this, and they've got to offer up something to a member who needs to be satisfied. Eventually, on a really bad accident, they're going to go, "Okay, if you want to make improvements, require RP 1173." So I'm here to urge all operators that they really should be taking this business-like window to explore, adopt, conform to that, and they'll find actually that it has a lot of benefits to it. I believe you were a contractor too, weren't you, KC?

00:28:48 KC Yost
I was. Yes.

00:28:50 Jeff Wiese
So what's happening now is that particularly in the construction industry, the contractors are getting together and they're saying, "Hey, this needs to work for us as well. So, let's do a contractor's version of it," which they have put out now. That also should be available on that pipelinesms. org site. So, a lot of spreading. I think the last things I wanted to say to you about it, and I'll stop, sorry, I promise. It's widely supported by anyone who knows it. All the federal and state government support it. Every trade association associated with pipelines supports it and promotes it, including contractor trade associations. I was used to getting criticized by the NTSB as the regulator at the time. When we put out 1173, they came out and say, it not only met their expectations, which is high praise from them if they say, you met what their expectation was, they said that document exceeded their recommendations and their expectations, because it introduced things as different for all of us, I think, in the industry. Things about the role of culture and hitting that target of zero, having people committed to that, asking that question, "Hey, what's wrong here? What could go wrong here? Have we really addressed that and thought it through?" It's like speaking up to one of your colleagues if you see them without their hard hat on somewhere, and we all know that's got to be pretty performing now. Somebody goes, "Hey, time to put your hat on." Just not being afraid to speak up and point out things and make recommendations in for the management of the company, not to shrink away from that. In fact, in a lot of ways, to encourage it. Yeah, we want you looking for risk, because you're the ones in the field on the job. You're at risk. We want you to let us know about those things. But anyway, KC, I'm sorry. I went on for a long time on that, but it is my passion.

00:31:19 KC Yost
No, no, it's all good. At the end of the day, what you're saying is everyone needs to go home safely, including customers and neighbors, and you need to keep it in the pipe. I mean, that's essentially what you've done. We've started the big end in funnel, and we've come back down to everyone needs to take the time to read API RP 1173, because it is coming. You're probably already implementing most of what's in there, but at some point in time, someone in Washington is going to say, "Thou shalt do this." So you might as well do this. Not only because the regulators are going to come to you about it, because it's good business practice to make sure that you, your contractors, and your family go home safe, right?

00:32:13 Jeff Wiese
Yeah. Contractors in a lot of parts of the business can constitute up to 80% of the workforce. So, you have to have the contractors involved in that as well. Yeah, and I think we just should all stop to think about, "Why would nuclear do this, why would chemical do it, why would medical do it if these weren't good ideas? Did they deserve your attention and consideration?" So I'll stop with that, KC.

00:32:41 KC Yost
Okay. All right. Well, I just wanted to give you one more chance. Is there anything else you'd like to add? Are we good?

00:32:46 Jeff Wiese
No, like I say, I think there's insistence on the regulator. You'll see this from politicals to punish when things go wrong. I personally am not a big fan of that and I never was, because I think people start hiding information you need to know to fix problems when there's punishment involved. So, it's something worth thinking about even in our own life. As long as they up and admit their role and take responsibility for that, I think we need to learn from it and not punish.

00:33:27 KC Yost
Got it. Got it. Well, just again, API RP 1173.

00:33:32 Jeff Wiese
Yup.

00:33:33 KC Yost
All right. So, thanks, Jeff, for taking the time to visit with us today. Great topic. I really enjoyed the conversation.

00:33:40 Jeff Wiese
Thank you.

00:33:40 KC Yost
I want to thank everyone for tuning into this episode of the Energy Pipeline Podcast, sponsored by Caterpillar Oil and Gas. If you have any questions, comments, or ideas for podcast topics, feel free to email me at kc.yost@oggn.com. I also want to thank my producer, Anastasia Willison-Duff and everyone at the Oil and Gas Global Network for making this podcast possible. Find out more about other OGGN podcasts at OGGN.com. This is KC Yost saying goodbye for now. Have a great week and keep that energy flowing through the pipeline.

00:34:20 Speaker 2
Come back next week for another episode of the Energy Pipeline, a production of the Oil and Gas Global Network. To learn more, go to OGGN.com.