There are three major types of underground geologic formations where  natural gas storage sites are found: (1) underground salt caverns,  (2) depleted aquifers, and (3) depleted oil and gas reservoirs. Further,  DOE has reported that operators can sustain safety by regularly  maintaining site equipment, monitoring and repairing leaks, keeping  records about the site, and planning for possible emergencies, among  other things. According to  the private operator, it temporarily relocated about 8,000 neighboring  families until the leak was abated. Moreover, because interstate sites were under  federal jurisdiction, state safety standards could not be applied to such  sites. PHMSA sets and enforces these standards. PHMSA is now considering public  comments on its interim standards, and it plans to finalize them by issuing  a final rule by January 2018. PHMSA Has Issued Minimum Standards in an Interim Final Rule

To meet the requirement under the PIPES Act, PHMSA issued minimum  safety standards for natural gas storage through an interim final rule in  December 2016, which took effect in January 2017. As a result, all  415 natural gas storage sites are for the first time subject to federal  regulation, including minimum safety standards as set forth in the interim  final rule, and subject to revision in a final rule. PHMSA Has Taken Steps to Establish an Enforcement Program but Has Not Yet Followed Certain Leading Practices of Strategic Planning

To enforce PHMSA’s safety standards, the agency’s officials have taken  a variety of steps to establish a safety enforcement program for natural  gas storage sites, but they have not yet followed certain leading practices  of strategic planning in starting PHMSA’s natural gas storage program. For example, PHMSA’s training performance goal  does not define the level of performance officials hope to achieve or  address all core program activities, such as conducting effective  inspections. For example, PHMSA officials have  started developing a training program for natural gas storage inspectors. Specifically, PHMSA officials told us that their  new enforcement program will be guided by one of PHMSA’s existing  strategic goals—to promote continuous improvement in safety  performance. PHMSA has not yet followed certain leading practices for strategic  planning, as it has not: (1) defined the level of performance or fully  addressed core program activities with its existing performance goal; or  (2) used baseline data and other data or budget information to inform and  refine performance goals. Defining Level of Performance and Addressing All Core Program Activities

Our prior work has identified several leading practices for strategic  planning that PHMSA has not yet followed, such as setting goals that  define a certain level of performance and address all core program  activities. GPRA, which was  significantly enhanced by the GPRA Modernization Act of 2010, requires  agencies to develop annual performance plans that, among other things,  establish performance goals to define the level of performance to be  achieved. An  example of a performance goal that could indicate whether PHMSA’s  inspections are effective could be to annually reduce, by a certain  percentage, the number of operators that do not meet the well monitoring  requirements of Recommended Practice 1171. As they do so, ensuring that their performance goals define the  level of performance to be achieved and address core program activities  could help them ensure that they effectively track progress toward their  strategic goal and make adjustments to activities and resources, if  needed, to better meet the goal. As  evidenced by the large-scale leak of natural gas outside Los Angeles that  started in 2015 and extended into 2016, leaks from these sites can cause  economic disruptions and environmental damage. PHMSA also has not yet used the  baseline data it is collecting to develop its performance goals. The Administrator of PHMSA should ensure that PHMSA defines levels of  performance, addresses core program activities, and uses baseline data  as it continues developing performance goals for its natural gas storage  program. Appendix I: Objectives, Scope, and Methodology

In this report, we examine (1) the status of the Pipeline and Hazardous  Materials Administration’s (PHMSA) efforts to implement the requirement  under the Protecting Our Infrastructure of Pipelines and Enhancing Safety  (PIPES) Act of 2016 to issue minimum safety standards for natural gas  storage sites, and (2) the extent to which PHMSA has planned  strategically to enforce its safety standards for natural gas storage sites.
Why GAO Did This Study

Natural gas storage is important for ensuring that natural gas is available when demand increases. There are 415 storage sites—including underground caverns and depleted aquifers and oil and gas reservoirs—located in 31 states, often near population centers (see fig.). Leaks from these sites, such as one near Los Angeles that led to the temporary relocation of about 8,000 families in 2015, can result in environmental and economic damage. Until 2016, states set standards for 211 sites, but there were no standards for 204 sites connected to interstate pipelines subject to federal jurisdiction. With passage of the PIPES Act of 2016, PHMSA, an agency within DOT that sets and enforces standards for energy pipelines, among other things, was tasked with issuing minimum standards for all gas storage sites.
GAO was asked to review natural gas storage safety standards. This report examines (1) PHMSA's efforts to implement the requirement to issue minimum safety standards for natural gas storage sites and (2) the extent to which PHMSA has planned strategically to enforce its safety standards for these sites. GAO reviewed PHMSA documents and plans, compared them to leading planning practices, and interviewed PHMSA officials.

What GAO Found

To meet its requirement under the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016, the Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA) issued minimum safety standards in an interim rule and plans to finalize them by January 2018. Under the interim standards, site operators are to follow industry-developed best practices to detect and prevent leaks and plan for emergencies, among other things. Since the interim rule went into effect in January 2017, the minimum safety standards apply to all 415 natural gas storage sites, and the rule will be subject to further revision before it is final.
To enforce its safety standards, PHMSA has taken steps to establish a natural gas storage safety enforcement program. For example, PHMSA has started developing a training program for its inspectors. PHMSA also has identified a strategic goal for its program—to promote continuous improvement in safety performance—and is developing a performance goal for its training program.
However, PHMSA has not yet followed certain leading strategic planning practices. For example, PHMSA has not yet defined the level of performance to be achieved, fully addressed all core program activities, or used baseline data to develop its performance goal. GAO has previously reported that requirements under the Government Performance and Results Act (GPRA) and GPRA Modernization Act of 2010—which include establishing performance goals to define the level of performance—can serve as leading practices for lower levels of an agency, such as PHMSA. GAO also has found that successful performance goals address all core program activities. PHMSA's goal focuses on training and does not address other core program activities, such as conducting effective inspections. For example, a goal to evaluate whether PHMSA's inspections are effective could be to annually reduce, by a certain percentage, the number of sites not meeting minimum standards. PHMSA officials told GAO that they will strive to add and refine performance goals as the program evolves. As they do so, ensuring that these goals define the level of performance, address all core program activities, and use baseline data could help PHMSA better track progress toward its strategic goal.

What GAO Recommends

GAO is making two recommendations, which are that PHMSA (1) define levels of performance and address all core program activities and (2) use budget data to refine performance goals for its gas storage program. DOT concurred with GAO's recommendations.