At the federal level, PHMSA is responsible for developing regulations for  domestic interstate and intrastate natural gas and hazardous liquid  pipelines. PHMSA reimburses certified state  agencies up to 80 percent of the total cost of operating their pipeline  safety program through an annual grant. PHMSA may permit certified states to participate in interstate inspections  through three types of agreements. Joint inspection: The Pipes Act of 2016 included a requirement for  PHMSA to allow certified states to participate in the inspection of an  interstate pipeline safety facility, if requested by the state pipeline  safety agency. State Involvement in Interstate Pipeline Inspections, While Not Extensive, Can Enhance Oversight Activities

		Interstate Agent Agreements Can Bolster Oversight in Participating States

According to PHMSA regional officials we met with, interstate agents  conduct high-quality inspections of interstate pipelines and provide an  important supplement to the federal inspection workforce. For  instance, in one region, PHMSA officials said that if interstate agent  agreements were discontinued, the region would need to hire 3 to 4  additional inspectors. As a result, PHMSA issued a civil penalty of  $61,900. PHMSA’s Other Means of State Participation in Interstate Inspections Have Not Been Used Extensively

			Temporary Interstate Agreements

While temporary interstate agreements provide an opportunity to  participate in interstate pipeline oversight, officials from some state  agencies told us that the agreement’s limited scope and ad hoc nature  can create obstacles to state participation. PHMSA officials emphasized that temporary interstate  agreements are not intended to replicate an interstate agent agreement;  instead, these agreements are designed to provide PHMSA the flexibility  to request targeted, short-term assistance from state pipeline safety  agencies with interstate pipeline inspections. PHMSA also requires state agencies to bear the cost of  participating in joint inspections—including travel and inspection time for  the state inspectors—rather than allowing states to include this activity in  their annual pipeline safety program grant reimbursement. PHMSA officials told us they intend to clarify this role for  states. PHMSA Used a Regional Workload Analysis to Allocate Inspection Resources, but Has Not Assessed Future Resource Needs

		PHMSA Has Allocated Increased Inspection Resources Based on Regional Workload

From fiscal year 2012 to 2017, PHMSA’s funding increased by nearly 40  percent, allowing the agency to hire additional pipeline inspectors. 2). Before 2014, PHMSA allocated inspectors evenly across the  agency’s five regions. For example,  PHMSA’s central region received a greater percentage of inspectors than  most other regions to help oversee a number of new pipeline construction  projects. PHMSA Lacks an Inspection Workforce Plan That Assesses Future Resource Needs for Interstate Pipeline Inspections

While PHMSA has improved how it allocates its current inspection staff  among the regions, the agency lacks a forward-looking workforce plan for  interstate pipeline inspections. In the absence of a workforce plan for  interstate inspections, PHMSA cannot proactively plan for future  inspection needs to ensure that federal and state resources are in place  to provide effective pipeline oversight. Recommendation

PHMSA should develop a workforce plan for interstate pipeline  inspections that is consistent with leading practices in workforce planning,  which should include a consideration of the additional resources and  safety oversight that state pipeline officials can provide. The Department of Transportation  also provided technical comments, which we incorporated as appropriate. To date,  PHMSA has not accepted the state agency’s annual applications for  interstate agent status citing an increase in the federal inspection  workforce, a preference for states to focus on intrastate pipeline  oversight, and the ability for state agencies to participate in interstate  inspections through other means, such as temporary interstate  agreements. According to state officials, they do not plan to  reapply.
Why GAO Did This Study

PHMSA oversees the safety of interstate and intrastate natural gas and hazardous liquid pipelines. PHMSA certifies states to oversee intrastate pipelines, and some states also act as PHMSA's “agents” to supplement the federal inspection workforce for interstate pipelines. In recent years PHMSA has signaled a move away from using interstate agent agreements. Recent funding increases have enabled PHMSA to hire additional federal inspectors. States may receive annual grants to reimburse up to 80 percent of the cost of their pipeline safety activities.
Congress included a provision in statute for GAO to review the federal and state responsibilities and resources used to inspect interstate pipelines. This report addresses (1) how state participation has affected interstate pipeline oversight and (2) PHMSA's assessment of the resources needed to conduct interstate pipeline inspections. GAO reviewed relevant laws and PHMSA guidance on state participation in these inspections; analyzed the most recent 6 years of PHMSA funding and inspector staffing data; and interviewed pipeline safety officials from PHMSA and 22 states selected based on level of participation in interstate inspections.

What GAO Found

State involvement in interstate pipeline inspections can enhance oversight, although the three types of agreements that the Pipeline and Hazardous Materials Safety Administration (PHMSA) uses to allow state participation are not used extensively. Annual interstate agent agreements —held by 9 states—allow states to participate in all inspection activities and can bolster interstate pipeline oversight. For instance, an inspection conducted in 2014 by New York state officials led to $61,900 in federal civil penalties. Temporary interstate agreements —used in 6 states to date—allow PHMSA to request states to participate in specific interstate pipeline inspections. PHMSA officials said these agreements provide the agency greater flexibility. Some current interstate agents GAO interviewed said that temporary interstate agreements are useful, but are not substitutes for interstate agent status because states do not participate in the full range of inspections. Finally, PHMSA as authorized by federal law recently established joint inspections allowing states to request to participate in interstate inspections. However, state officials were concerned that their role is limited and that they must bear the full cost to participate. PHMSA officials said they intend to clarify the state inspector role in joint inspections and acknowledged that federal grants cannot be used by states to support joint inspection activities.
PHMSA allocated recently hired inspectors based on regional workload, but has not assessed future resource needs. From fiscal years 2012 to 2017, PHMSA's appropriations increased over 40 percent, allowing the agency to expand its inspector workforce by about 25 percent. PHMSA allocated the additional inspectors across the agency's five regions based on workload. For example, PHMSA's central region received a greater percentage of inspectors than other regions to help oversee a number of new pipeline construction projects. However, PHMSA has not planned for future workforce needs for interstate pipeline inspections. In particular, it has not assessed the resources and benefits that states can provide through the three types of agreements. Leading practices for workforce planning indicate that such forward-looking analyses are essential for effective workforce planning. Without such analyses, PHMSA cannot proactively plan for future inspection needs to ensure that federal and state resources are in place to provide effective oversight of interstate pipelines.

What GAO Recommends

PHMSA should develop a workforce plan for interstate pipeline inspections, considering, among other things, the additional resources and safety oversight that state pipeline officials can provide. DOT concurred with our recommendation and provided technical comments, which we incorporated as appropriate.