U' S' Department of Transportation

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U. S. Department of Transportation Pipeline
and Hazardous Materials Safety Administration Stac
ey Gerard Assistant Administrator/Chief Safety
Officer Safety Culture Moving From Good to
Great American Gas Association September 10, 2007
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Why Talk About Safety Culture?

• Responsibility of Leadership to Assess Adequacy
  of Safety Performance
• If There Is An Inadequacy Do We Wish to Raise
  the Bar
• If So, Is There Any Opportunity to Benefit
• Even If Safety Performance Is Adequate, Are We
  Maintaining Our Vigilance Continuously
  Improving
• Are We Doing This In An Enterprise Fashion
• Can We Agree We Are Part of One System of Checks
  and Balances?

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Next Generation Safety Beginning Now?

• Passage of Legislation Often Signals Era
• Once Again, Driven By Events of Past Year?
• Past Eras Events Drivers
• Mounds View 88 Mandates
• Exxon Valdez OPA 90
• Reston 96 Risk Management
• Bellingham PSIA 02 IMP
• 9-11 New Security Focus
• Hurricane Katrina/BP PIPEs Act Reliability
  Focus

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Q Why is A Good Safety Culture Important?A To
be Able to Anticipate Events

• Where is the potential for risk always present
  and high consequence
• How can we make better use of information to
  control these risk
• How can we instill in  employees
• consciousness of , and alignment with, our values
  
• in safety, reliability and protecting the
  environment and
• keep the consciousness up
• How can we motivate continuous improvement
• many at the top of safety performance lose it.

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Hypothesis We Seek To Improve Our Performance

• Are We There Yet Question Being Frequently
  Asked
• We Will Always Seek to Eliminate Events Zero
  Goal
• While IMP is a Great Foundation, is There an
  Organizational Framework Out There?
• Beyond IMP
• That could guide our improving performance
• Without benefit of an event driver

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Q What Information Is Most Useful to Having a
Great Safety Culture?

• Is the company
• Well Informed
• Risk based
• Data driven
• Transparent?
• By the way, is the regulator?

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Premise

• Accidents are often caused by factors that
  regulations do not address many aspects of
  management systems are not regulated.
• We have no standard for a good safety culture
• When PHMSA has a safety concern, whether or not a
  regulatory matter, we will step up and call
  the question
• Recent events contain lessons related to
  management systems , safety culture and High
  Reliability Organizations.
• Process Safety Management comparisons being made
• IM is based on PSM principles, but not all of PSM
  
• Opportunities for improvement exist

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Recent Reports In the News Address PSM/Safety
Culture

• CSB identified issues following BP Texas City
  Refinery Explosion
• Baker Panel identified issues following BP Texas
  City Refinery Explosion
• Booz Allen identified issues in BPXA management
  of North Slope pipelines

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The CSB Investigation of Texas City Explosion

• Cost cutting, failure to invest and production
  pressure impaired safety
• The Board of Directors did not oversee safety or
  accident prevention
• Procedural check off occurred when procedural
  requirements not met
• Lack of a reporting and learning culture
• Management failed to respond adequately to safety
  studies audits
• Safety significant changes (people, policies,
  organization) were not effectively managed (MOC)
• Lack of supervisory oversight during especially
  hazardous activities
• Communication poor between supervisors and
  operators as well as during shift turnover
• Operators were fatigued (12 hour shifts for 29
  consecutive days)

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The Baker Panel Investigation of Texas City
Explosion

• Significant process safety issues exist at all
  five U.S. BP refineries, not just Texas City,
• BP had not instilled a common unifying process
  safety culture .
• Instances of a lack of operating discipline,
  toleration of serious deviations from safe
  operating practices, and an apparent complacency
  toward serious process safety risk existed.
• BPs corporate safety management system does not
  effectively measure and monitor process safety
  performance .
• BPs Board of Directors has not ensured, as a
  best practice, that BPs management has
  implemented an integrated, comprehensive, and
  effective process safety management system .

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The Booz Allen Investigation of BPXA North Slope

• Accountability divided geographically among the
  six managers, leading to inconsistent corrosion
  management
• Key assurance processes not "closed loop" to
  ensure required change implemented
• IT infrastructure fragmented , making data
  integration, analysis, and work flow difficult
  and infrastructure status opaque
• Cost management ethic adversely influenced
  decisions on corrosion management
• Corrosion management group too isolated so
  communications with senior management very
  filtered
• Vertical silos inhibited cross-functional
  communication
• Little sharing of technical knowledge
• Senior management tenure short -- lack of
  continuity led to disconnection between
  management operating staff
• BPXA senior management did not attend to
  operations

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What is Process Safety Management (PSM)?

• PSM is a chemical safety standard issued by OSHA
• PSM involves the proactive identification,
  evaluation, and prevention or mitigation of
  chemical releases that could occur as the result
  of failures in process, procedures, or equipment
• PSM Standard is intended to eliminate or mitigate
  the consequences of releases of highly hazardous
  chemicals (HHC) which may be toxic, reactive,
  flammable, or explosive
• A process is any activity or combination of
  activities including the use, storage,
  manufacturing, handling, or on-site movement of
  highly hazardous chemicals
• OSHAs PSM is focused on employee safety within
  the facility while EPAs Risk Management Program
  (RMP) addresses releases affecting public safety
  and the environment

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How do PSM and IMP compare?
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How do PSM IMP elements align?
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What gaps exist in PSM and IMP?

• Largest gap in both PSM and IMP, emphasized in
  the Baker Report, is safety culture.
• A partial gap in IMP is extent to which
  management systems, are regulated.
• Safety culture is a set of clearly defined
  values, communicated and demonstrated by top
  management, shared throughout the organization
  on importance of safety to the organization --
  how safety and production are both important.
• A good safety culture promotes a trusting and
  open environment for discovery and resolution of
  safety problems.

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PSM and Pipelines
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PSM and Pipelines
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PSM and Pipelines
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PSM and Pipelines
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PSM and Pipelines
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Candidate Approach to Dealing with Performance
Problems

• Operator Performance needs improvement
• Serious event occurs
• Major corporate restructuring
• Operator overall performance graded weak

• Decides on Nature of Intervention
• Executive Performance Conference
• Comprehensive rule-based inspection linked
• to a Corrective Action Order
• Root cause analysis

Operator Agrees to an Executive
Performance Review, or Commits to Undertake an
Outside Management Assessment
Following or in Conjunction with Intervention,
Determine if Management Systems or Culture are
Underlying Causes
Evaluates Findings from own EPR or Outside
Management Assessment and Identifies Major
Systems Cultural Issues
Develop Agreement Dealing with the Major Issues
Monitors Progress Performance
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Elements of Pipeline Safety Management
Safety Culture
Not Addressed by Regulations
Management Systems
Addressed, but not Completely by IMP Regulations
Risk Analysis
Incorporated in IMP Regulations
Design, Operational Maintenance Practices
Focus of Historic Regulations
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PHMSA Approach to Pipeline Safety
Elements of Pipeline Safety Management
Effective Pipeline Safety Management through
Regulation
Engagement Beyond the Regulations, Emphasizing an
Enterprise Approach, to Develop, Recognize
Promote Means to Improve Safety
Regulations on the Design, Operation,
Maintenance, Construction Integrity of the
Pipeline
Safety Culture
Characterize Promote Safety Culture
Regulations on the Effectiveness of People
Management Systems
Ensure the Effectiveness of People
Regulations on the Effectiveness of Management
Processes
Risk Analysis
Ensure Management Process Effectiveness
Design, Operational Maintenance Practices
Inspection Enforcement of Compliance with
Regulations
Technology Development, Demonstration Transfer
Corrective Action Consent Orders to Address
Unregulated Underlying Event Causes
Understand Event Causes and Act on Implications
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Safety Culture ImprovementProgram Logic within
PHMSA
Inspection Enforcement (Region-Driven)
Beyond Traditional Compliance (Headquarters-Drive
n)
Enterprise Knowledge Development, Collaboration
Sharing (Headquarters-Driven)
Organization Development (Headquarters-Driven)

• Improve inspections
• Focus on underperforming
• Operators
• Risk-Focused
• Inspections
• Inspection
• Integration
• Impact of non-
• compliance on
• incidents
• CAOs monitoring
• conformance

• Improve implement other
• Intervention practices
• Executive
• Performance
• Conferences
• Incident
• investigations
• Post-incident
• task forces (Rt Cs)
• HQ-focused
• process culture
• assessments
• Safety mgmt.
• Diagnostic
• Consent Agreements
• monitoring
• conformance

• Collaborate in evaluating
• improving industry
• performance
• Strengthen communication
• with stakeholders
• Strengthen State program
• Develop, demonstrate and
• make technology accessible
• Promote leadership
• development
• Improve data quality,
• utility accessibility
• Recognize address issues
• related to the transport
• of alternative fuels
• Identify implement
• measures to increase
• capacity of the current system

• Strengthen the organization
• Build Federal State staff
• capabilities
• Develop tools
• Improve transparency
• Implement regulatory agenda

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PHMSA Safety Culture Program Logic
Our Role in Improving Operator Performance
Inspection Enforcement (Region-Driven)
Beyond Traditional Compliance (Headquarters-Drive
n)
Enterprise Knowledge Development, Collaboration
Sharing (Headquarters-Driven)
Organization Development (Headquarters-Driven)
Regulations on the Design, Operation,
Maintenance, Construction Integrity of the
Pipeline
Corrective Action Consent Orders to Address
Unregulated Underlying Event Causes
Ensure Management Process Effectiveness
Understand Event Causes and Act on Implications
Technology Development, Demonstration Transfer
Regulations on the Effectiveness of People
Characterize Promote Safety Culture
Regulations on the Effectiveness of Management
Processes
Ensure the Effectiveness of People
Inspection Enforcement of Compliance with
Regulations
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Ideas for YouCharacteristics of Performance
Environment
People
Pipeline
Performance Culture
Process
Leadership Executives Knowledgeable Involved
Compliance Status Understood Maintained
System Characteristics Understood
Clear Responsibility Accountability
Qualified Staff (Knowledge, Skills, Ability)
Risks Understood Managed
Individual Performance Monitored Addressed
System Maintained
Climate Free from Fear of Reprisal (Reporting
Culture)
Commitments Understood Managed
Resourced Staff (Tools, Information, Funding)
Pipeline Periodically Assessed
Resources Adequate To Address Risks
Effective Communication of Concerns (upward) and
Decisions Implications (Downward)
Defects Fixed
Construction, Operations Maintenance Compliant
Changes in People, Pipe Practices Managed
Experience Mined for Lessons - Acted Upon
Change in Environment Anticipated Addressed
People Vigilant, Inquisitive Communicative
Regulated Factors
Partially Regulated
Beyond Traditional Compliance
System Performance Monitored Addressed
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Key Issues for Best Practices

• Learning From Events and Near Misses
• What didnt work?
• What did work?
• Comprehensiveness In Review of Problems
• Do small problems become routine
• Do we have checks and balances
• Objective auditing
• Perspective of all individuals
• Transparency

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Key Issues for Best Practices

• Focus on Operations
• Is there situational awareness,
• Are personnel alert to small events
• Understanding them and projecting what could
  happen
• Do personnel feel free to report problems, and
• Do they believe they will be assessed fairly?

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Key Issues for Best Practices

• Is the Organization Resilient
• Ready to act
• Able to quickly assess a problem
• Employees empowered to react
• Relate to past experience
• Does Your Organization Listen and Heed Technical
  Expertise?

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Questions for AGA

• Would Assessing This Information Be Useful?
• Should We Create A Plan to Develop Safety Culture
  Issues Across the Industry?