SGA-OQ Portability White Paper-September 16 2016-Final

2016

Southern Gas Association

Operator Qualification Committee & Interest Group 8/31/2016

Portability of Contractor Operator Qualification Records

2 | P a g e S e p t e m b e r 1 6 , 2 0 1 6 , F i n a l

Table of Contents Recognition and Thanks ........................................................................................................................... 3

Introduction - Current State ...................................................................................................................... 4

Statement of the Concern ......................................................................................................................... 4

SGA Survey Results .................................................................................................................................. 5

Southern Gas Association and The INGAA Foundation Recommendations .................................... 8

Conclusions ................................................................................................................................................. 9

Generalized Qualification Process ........................................................................................................ 10

Portability Is Critical: Operations & Maintenance and New Construction ........................................ 10

Future State............................................................................................................................................... 10

Exhibit I - SGA Portability Issues and Questions ............................................................................ 12

Exhibit II - INGAA Comments to PHMSA ......................................................................................... 15

Exhibit III (a) and (b) - Written Plan Analysis Document ................................................................ 20

Record Keeping ................................................................................................................................. 22

Record Keeping ................................................................................................................................. 24

Exhibit IV - Pressure Testing Guideline - Example ......................................................................... 27


Recognition and Thanks

The Southern Gas Association is a member driven organization linking people, ideas,

and information. We would like to thank those individuals, both members and

contributors who committed their time, talent, and resources to create this document.

Larry Dodson, Co-Chair, Manager of Technical Training, LG&E & KU Energy

Steve Himmelfarb, Co-Chair, Manager, Technical Training & Development, Washington

Gas

Amy Livingston, Manager of Technical Training, Kinder-Morgan, Inc.

Jim Royal, Manager of Technical Training, EQT Corp.

Tony Segura, Manager of Training & Development, Spectra Energy

Roger Hoffhein, Technical Training Manager, CenterPoint Energy

Mike Burkhart, Program Manager, Operator Qualification Standards, AGL

Resources/Nicor

Scott Crider, Program Manager, Operator Qualification Standards, AGL Resources

J. P. Greenwell, Operator Qualification Compliance Supervisor, Vectren Energy

Brad Heck, Director of Corporate Compliance, Miller Pipeline Corp.

Steve Goodman, Compliance Consultant & Project Manager, ASTAR, Inc

Larry Madison, Senior Vice President of Sales, Veriforce, Inc.

Geoff Isbell, President, ENERGY worldnet, Inc.

Jim Webb, Senior Vice President, OverNite Software, Inc - eWebOQ

Ralph Webb, Vice President, OverNite Software, Inc - eWebOQ

Jason Garland, Executive Vice President, Industrial Training Services, Inc.

Robert G. Darden, Executive Vice President, Distribution Contractor Association

Gary Hines, Vice President, Southern Gas Association

Tom Pendleton, Director of Operations Support, Southern Gas Association


Introduction - Current State

Portability of Operator Qualification (OQ) records that support task qualifications, primarily for maintenance contractor personnel, has been an unresolved issue since the DOT 2001 promulgation of the 192 and 195 Qualification of Pipeline Personnel regulations. For both pipeline operators and contractors to have a meaningful discussion about OQ Portability, the issues impacting each party need to be identified and openly discussed with the goal of seeking resolution.

This document has been developed to outline OQ Portability issues. The conclusions and recommendations offered in this White Paper serve only as a beginning for this discussion.

The Southern Gas Association (SGA) Operator Qualification Committee & Interest Group is sponsoring this project. This SGA group is developing this document to outline key Portability issues from both the contractor and operator perspectives, to survey operating companies, and offer recommendations for organizations considering implementation of qualification Portability1 (see Exhibit I).

Statement of the Concern

Portability - or the lack thereof - is a long-standing issue which often requires contractors to qualify their employees for the same task separately for different Operators. These double (or more) qualifications provide limited gains in pipeline safety, but require a great deal of additional cost (dollars, time and effort) passed to the pipeline operators, hydrocarbon producers, marketers, and consumers.

The amount of additional work/cost created by the lack of Portability is likely to be exponentially increased based on PHMSA’s Notice of Proposed Rulemaking, Docket No. PHMSA-2013-0163 (NPRM)2 . First, this notice adds training as a requirement, without the qualifying “as applicable” statement previously included in the regulation. The addition of training to the OQ regulation may increase the requirement for operators and contractors, particularly where Portability is not in place. Furthermore, the addition of “new construction” tasks to the requirement creates additional compliance responsibilities. Portability has been a concern of contractors for the last 15 years. Historically, the majority of operation and maintenance (O&M) tasks were performed by operator's personnel. Now covered tasks for new construction are likely to be performed by contractor personnel.

With the addition to the OQ requirements of training and new construction tasks (which are performed substantially by contractors), lack of Portability will not only continue to

1 SGA conducted a May 2016 Survey of OQ portability concerns and questions. The survey universe included both

gas distribution and transmissions companies representing an estimated 53,000 company and contractor personnel. 2 Pipeline and Hazardous Materials Safety Administration. 49 CFR Parts 190, 191, 192, 195, and 199

Docket No. PHMSA-2013-0163 - RIN 2137–AE94; Pipeline Safety: Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes - ACTION: Notice of Proposed Rulemaking.


be an industry concern, but may become critical in terms of cost and adequately trained personnel. Add to the growing requirements a dwindling workforce of experienced personnel, and the industry is faced with a growing number of new workers who require training and qualification. This adds to the potential benefits of Portability of training and qualification in our industry’s workforce3.

SGA Survey Results

The SGA Survey of Portability Issues and questions is not intended to be a complete list of possible OQ Portability issues/questions. It is intended to start the conversation and search for resolution to the portability question. If there is a middle-ground resolution for Portability, it can only be found if Operators and Contractors know the issues and can discuss them openly.

In May 2016, members of SGA's Operator Qualification Committee & Interest Group were surveyed on the subject of OQ Portability. The summary below is a compilation of all responses by issues and questions.

Existing Support for OQ Portability

Do Operators support OQ Portability for contractors? Explain. Response: As a whole, surveyed companies support OQ portability. However, the current compliments of OQ vendors/databases vary and may not be universally accepted by operators.

Explain why Operators do not support Contractor OQ Portability? Response: Most common concerns are potential inconsistencies in the

evaluation process and/or not matching knowledge and skill assessments

to specific company procedures.

Do Operators allow departing employees to take their qualification records? Response: Most operators see this as a potential liability. There is

agreement that allowing the employee to have a transcript listing their

completed OQ’s would be acceptable.

Do Contractors allow departing employees to take their qualification records? Response: The operators are split on this issue. For example, a contractor leaving to work for another contractor for the same operator vs. a contractor leaving to work for an entirely new operator.

3 Aging workforce threatens US energy industry. The anticipated great crew change has been lurking on the

horizon for many years now. A recent Platts Energy Week interview with an energy sector employment specialist reinforced that the US oil and gas industry’s shale-driven prosperity is being threatened by an aging workforce and a lack of skilled workers to replace those who retire. Oil Online Press - January 8th, 2014


Understanding of the Operator’s role and the Contractor’s role in Portability

Do Contractors clearly understand the Operator’s responsibilities for PHMSA's OQ Compliance? Response: Yes, operators believe they have effectively communicated the role OQ compliance to their contractors.

Do Operators clearly understand the Contractors’ rationale for wanting to implement Portability? Response: Yes, operators understand that contractors are working for multiple operators across the country. As a result they have an administrative hardship of adopting and tracking multiple OQ programs. However, as mentioned previously, it is imperative that contractors understand the operator’s specific system and procedures.

Expectation that Contractors follow Operator’s Operating Procedures

What steps would be necessity for Operators to accept OQ Portability for Contractors?

Response: The operators would need to agree on a common task list,

approved vendors, and confirmation that specific O&M procedures are

understood.

Are Operators willing to take a stand against inspection protocols that are beyond the written regulation? Response: Consensus is that each regulator has specific protocols and expectations of their operators. As this is unlikely to change, this issue will need to be addressed case by case with each operator and their regulator(s).

What would it take for State and Federal Regulators to accept the 80/20 rule where a qualification represents the base knowledge, skills, and abilities to perform a task (80%), and the fine details required by an Operator (20%) are covered otherwise in the scope of work or pre-job meetings? Response: Much uncertainty on this issue. Operators state that each regulator enforces specific issues/regulations, and OQ is no different. Would be difficult for all regulators to agree on a universal OQ program.

Will PHMSA respond positively to INGAA’s comment/suggestion to the NPRM of “Generalized Qualification” and “Job-Specific Qualification” which is essentially the 80/20 rule? Response: The consensus was it is unknown how PHMSA will respond.


Is “Generalized Qualification” and “Job-Specific Qualification” (i.e., 80/20) a recommendation Operators would support? Response: Operators feel supportive of this approach but will need more specific information.

What steps would be necessary for Operators to accept OQ Portability in cases of emergencies or Mutual Assistance? Response: Responding companies have agreements in place with “neighboring” utilities. Even with a “portable” plan, operators agree they would still have agreements in place but recognize that portability would make the process easier.

With INGAA’s support of PHMSA’s NPRM to include incorporating the ASME B31Q Task List

Is this a recommendation Operators would support? Response: Yes, companies support cross-referencing a B31Q task list.

Would Operators be willing to support one specific task list (e.g., API, B31Q) even if it is not required by PHMSA? Response: Operators are in support of a specific task list, with little to no reservations.

Competition

Given the competitive nature of their business, and the fact that as many employees may come to the employment of a Contractor from another Contractor as may leave, does it really provide a competitive advantage to refuse Portability? Response: No clear consensus on this question. Some concerns about liability as to who performed the evaluations. The real value is when the individual employee realizes their OQ transcript is a tangible skill set which they can leverage. The average worker does not have this realization.

Does the competitive advantage keep employees employed with the same Contractor? Response: Probably not, the employee will be qualified to the appropriate level no matter which contractor he works for.

Does the competitive advantage outweigh the cost benefit of allowing Portability for those who come in? Response: Little to no comment on this question. Not sure if it was fully

understood by respondents.


Liability

What can be done to mitigate liability issues? Response: Most agree a national program that was fully recognized and supported by all regulators would be needed to mitigate liability. This will be difficult in that each regulator may have requirements above and beyond the scope of 192….

Common resources

Do you think Service Providers (eWebOQ, Veriforce, EWN, MEA, ITS, NCCER, etc.) can be helpful in addressing Portability? Response: Operators believe service providers can help with both Contractor and Operator portability issues.

How can they become agents of Portability? Response: Develop standardized approved training and testing protocols.

Create a fully validated testing process.

Southern Gas Association and The INGAA Foundation Recommendations

The Southern Gas Association (SGA) is in agreement with the Interstate Natural Gas Association of America (INGAA) Foundation’s support of PHMSA’s inclusion of new construction tasks in operator qualification (see Exhibit II). Further, SGA supports the INGAA Foundation’s comments regarding incorporation of portions of ASME B31Q. The Foundation recommends that PHMSA incorporates by reference the new construction-related task list included in the Non-Mandatory Appendix 5A (Integrated Task Lists: Definitions) of ASME B31Q4. SGA and Foundation members have increased their reliance on ASME B31Q as a model to develop operator qualification procedures. The use of its common task list simplifies administration of the program. Use of the standardized list will also facilitate strengthening OQ program evaluation, a point that PHMSA has highlighted in the Notice. Use of this portion of the ASME B31Q standard will aid PHMSA in meeting its goals and yet reduce the anticipated costs of PHMSA’s proposal by using a standard familiar to industry5.

4 THE INGAA FOUNDATION, INC. -5900-FAX

(202) 216-0878 [www.ingaa.org]. Pipeline Safety: Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes; Proposed Rule, Docket No. PHMSA-2013-0163. September 8, 2015 5 Ibid, THE INGAA FOUNDATION, INC


Conclusions

Do operators understand the impact of a lack of Portability on the construction community and the rationale for wanting to implement Portability? Responses to our survey suggest that operators understand the issue of continual OQ requalification per operator faced by the construction community. The survey also suggests operators believe they have effectively communicated the importance of OQ compliance to their contractors.

Operators are required by PHMSA to develop an Operator Qualification program that documents the operator’s method(s) of compliance with the OQ regulations. Content requirements include elements such as the operator’s covered tasks, initial and subsequent evaluation processes, procedures to allow individuals who are not qualified to work under the direction and observation of qualified individuals, processes to evaluate individuals whose performance may have contributed to an incident or may no longer be qualified, processes for communicating the program and changes, and address other, operator specific issues.

On an industry basis (not an individual company) there is general support for Portability. What is not supported by operators is a wholesale re-tooling of company written OQ Plans. Operators have spent millions of dollars developing and implementing OQ Plans. They have hired and trained administrative and training personnel to implement these plans and qualify their personnel. Operators have experienced the trials imposed by regulators vetting their respective OQ Plans. So changing a long standing OQ Plan is a difficult proposition.

Although contractors are not required to have Written OQ Plans, the survey indicates contractors should be self-reliant in their approach to qualifying their personnel and create creditable and auditable Training and Qualification Programs. This title, "Training and Qualification Programs" is intended to limit confusion when discussing a Written OQ Program required of Operators by PHMSA versus a creditable and auditable program voluntarily created by contractors (Exhibit III (a) - Written Plan Analysis Document - Operator and Exhibit III (b) - Written Plan Analysis Document - Contractor). To state it again, there is general support for Portability. However, some survey responders point to a lack of OQ vendors/databases (curriculum) that are universally accepted by operators; inconsistencies in the evaluation process and/or not matching knowledge and skill assessments to specific company procedures; and potential liability as primary concerns. Survey responders also indicate a lack of a federal or state regulatory mandate to support Portability has impacted progress.

Yet supporting efforts by organizations such as the INGAA Foundation and ASME, through their standards and industry recommendations, may potentially become part of a longer term solution. Of course, the key is for federal and state regulators, operators and supporting organizations to work together to craft this solution. In the interim, the survey points to possible solutions. A nationwide initiative at this point seems unlikely. A state or regional approach may be more achievable.


Based on the SGA Survey results and The INGAA Foundation recommendations, finding a middle ground approach for Portability of Operator Qualifications would benefit the industry.

Generalized Qualification Process

A generalized qualification process could serve as a methodology for portability. This generalized portability process, sometimes referred to as the 80/20 process, is based on rationale cited by the Foundation and recent SGA OQ Portability survey of member companies. An example of the 80/20 process is the DOT driver license. For drivers there is supplement knowledge when a driver crosses a state or county line. The driver’s existing license (KSA evaluation) regardless of the state issued carries the 80% portability and the specific operating requirements are supplemented by knowledge (signs along the roadside).

For OQ Portability, an individual’s qualification would be based on 80% of the task requirements, those requirements that are generalized. For company procedural requirements, the other 20%, contractor personnel, at a maintenance or new construction job site, could be briefed on company specific procedures for each task. The review would track with the steps used in the generalized qualification and enable a person to understand what is to be done using the procedures and why. The briefing would be documented for the person for those specific procedures. The following Exhibits are included as guidelines for organizations seeking methods of Portability implementation. Exhibit III (a) - Written Plan Analysis Document - Operator

Exhibit III (b) - Training and Qualification Program - Contractor

Exhibit IV - Pressure Testing Guideline - Example

Portability Is Critical: Operations & Maintenance and New Construction

SGA OQ Committee and Interest Group are of the opinion that portability is needed for current covered operations and Maintenance tasks and even more critical to effective implementation for new construction. It is potentially an effective tool in managing the administrative costs of operator qualification. Portability is important in two contexts. First, a qualified person must be able to move from one owner/operator to another owner and carry their generalized qualification with them. Second, personnel must be able to take their generalized qualification from one contractor to another.

Future State Although recommendations regarding Portability are offered in this White Paper, the future of Portability may look very different. Several responders commented on the potential inconsistencies in the evaluation process and/or not matching knowledge and skill assessments to specific company procedures. They cite steps that would be necessary for Operators to accept OQ Portability for Contractors. This specifically


includes operators needing to agree on a common task list, approved vendors, and confirmation that specific O&M procedures are understood to address state and federal regulator audit protocols. This provides for the concept of Portability on a partial basis, perhaps regionally, developing a qualification process created specifically for qualifying contractor personnel on a specific set of covered tasks (i.e., new construction, corrosion, pipe repair, etc.) that cover an important segment of our collective industry. As we stated at the beginning of this White Paper, the comments and recommendations are not meant to be a "final process" for Portability, but a tool to begin the discussion.


Exhibit I - SGA Portability Issues and Questions

The Southern Gas Association (SGA) Operator Qualification Committee & Interest Group has been collecting comments from their organizations and others in the industry to document key Portability issues and concerns for discussion. Additionally, a draft of this document was reviewed and discussed during SGA’s June 2016 - Environmental, Safety & Training Conference. The Portability discussion included the following issues/questions:

Existing support for OQ Portability. o Do Operators support OQ Portability for contractors? Explain. o Explain why Operators do not support Contractor OQ Portability? o Do Operators allow departing employees to take their qualification

records? o Do Contractors allow departing employees to take their qualification

records?

Understanding of the Operator’s role and the Contractor’s role in Portability. o Do Contractors clearly understand the Operator’s responsibilities for

PHMSA's OQ Compliance? o Do Operators clearly understand the Contractors rationale for wanting to

implement Portability?

Expectation that Contractors follow Operator’s Operating Procedures. Written Plans are mandated by PHMSA regulations for Operators to implement their OQ programs, including a list of Covered Tasks and evaluations for qualification. The regulation itself doesn’t mention Operating Procedures, but there is a perception by many Operators that the evaluations must be based on their specific Operating Procedures. This perception probably comes from PHMSA’s Inspection Protocols that were released in 2003. For example, Protocol #1.02, Provision #2 states, “Provisions have been established and documented to ensure contractors are required to perform covered tasks consistent with the operator’s requirements.” The expectation is that failure of the Operators (and Contractors on their behalf) to follow their specific written Operating Procedures will result in fines and continued review by PHMSA. Many Operators are reluctant to push back on inspection protocols that are not directly required by the regulation for fear of these fines and additional scrutiny.

o What steps would be necessity for Operators to accept OQ Portability for Contractors?

o Are Operators willing to take a stand against inspection protocols that are beyond the written regulation?

o What would it take for State and Federal Regulators to accept the 80/20 rule where a qualification represents the base knowledge, skills, and abilities to perform a task (80%), and the fine details required by an


Operator (20%) are covered otherwise in the scope of work or pre-job meetings?

o Will PHMSA respond positively to INGAA’s comment/suggestion to the NPRM of “Generalized Qualification” and “Job-Specific Qualification” which is essentially the 80/20 rule?

o Is “Generalized Qualification” and “Job-Specific Qualification” (i.e., 80/20) a recommendation Operators would support?

o What steps would be necessary for Operators and regulators to accept OQ Portability in cases of emergencies or Mutual Assistance?

With INGAA’s support of PHMSA’s NPRM to include new construction tasks in

the operator qualification requirements, INGGA also recommends that PHMSA ease implementation and administration as well as reducing the anticipated costs while still addressing the agency’s concerns by incorporating the ASME B31Q Task List.

o Is this a recommendation Operators would support? o Would Operators be willing to support one specific task list (e.g., API,

B31Q) even if it is not required by PHMSA?

Competition. Some contractors refuse to make OQ records portable for employees exiting their company because of the competitive nature of their business. For example, an employee who gains work experience and OQ qualifications paid for by Contractor A leaves Contractor A to take a job with Contractor B for a pay and benefit increase. Contractor A refuses to give the departing employee his OQ records because they are considered Contract Company A’s asset (no Portability).

o Given the competitive nature of their business, and the fact that as many employees may come to the employment of a Contractor from another Contractor as may leave, does it really provide a competitive advantage to refuse Portability?

o Does the competitive advantage keep employees employed with the same Contractor?

o Does the competitive advantage outweigh the cost benefit of allowing Portability for those who come in?

Liability. Some Contractors and Operators refuse to make OQ records for employees exiting their companies portable because of the potential for liability. For example, if an employee who was qualified by another Operator or Contractor performed a covered task in a manner that caused an incident, would the company who qualified the person be liable?

o What can be done to mitigate liability issues?


Common resources. Do you think Service Providers (eWebOQ, Veriforce, EWN, NCCER, etc.) can be helpful in addressing Portability?

o For the Contractors? o For Operators facing a reduced workforce? o How can they become agents of Portability?


Exhibit II - INGAA Comments to PHMSA

THE INGAA FOUNDATION, INC. 20 (202) 216-5900 - FAX (202) 216-0878 [www.ingaa.org] September 8, 2015 Via www.regulations.gov and email Mr. Jeff Wiese Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, D.C. 20590 Re: Pipeline Safety: Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes; Proposed Rule, Docket No. PHMSA-2013-0163. Dear Jeff: The Foundation respectfully submits these comments in response to the Pipeline and Hazardous Materials Safety Administration (PHMSA)’s Notice of Proposed Rulemaking entitled “Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes (the Notice). The INGAA Foundation, formed in 1990 by the Interstate Natural Gas Association of America (INGAA), advances the use of natural gas for the benefit of the environment and the consuming public. Members of the Foundation represent all facets of the natural gas transmission value chain, including operators, engineering, environmental and construction firms, legal and finance. The Foundation works to facilitate the efficient construction and safe, reliable operation of the North American natural gas pipeline system, and promotes natural gas infrastructure development worldwide. Specifically, the Foundation is commenting on the proposed changes to operator qualification. The Foundation appreciates your consideration of these comments. Operator Qualification Requirements. The Foundation supports PHMSA’s inclusion of new construction tasks in the operator qualification requirements. Some of our members have firsthand experience in applying operator qualification for new construction working with PHMSA under Alternative Maximum Allowable Operating Pressure (AMAOP) Special Permits while other have elected to do so on their own to gain experience and evaluate the benefits. The Foundation has undertaken multiple initiatives to improve the quality of construction and our members embrace the value of operator qualification as one element of a broader, more comprehensive construction quality management system. The Foundation makes several suggestions to ease implementation and administration as well as reducing the anticipated costs while still addressing the agency’s concerns.


PHMSA Should Consider Incorporating Portions of ASME B31Q The Foundation supports INGAA comments regarding incorporation of portions of ASME B31Q. The Foundation recommends that PHMSA incorporate by reference the new construction-related task list included in the Non-Mandatory Appendix 5A (Integrated Task Lists: Definitions) of ASME B31Q. Foundation members have increased their reliance on ASME B31Q as a model to develop operator qualification procedures. The use of its common task list simplifies administration of the program. Use of the standardized list will also facilitate strengthening OQ program evaluation, a point that PHMSA has highlighted in the Notice. Use of this portion of the ASME B31Q standard will aid PHMSA in meeting its goals and yet reduce the anticipated costs of PHMSA’s proposal by using a standard familiar to industry. 2 Generalized Qualification PHMSA should consider a generalized qualification process to serve as the platform upon which to demonstrate qualification for each new construction work site. A person entering the new construction work force would be given training related to specific tasks for which they are to be qualified. After completing training, the person would go through an evaluation to demonstrate proficiency. A record of the training, evaluation and qualification would be maintained as other OQ records are currently maintained. For example, a person to be qualified for applying field coatings would be trained and evaluated on surface preparation, anchor pattern testing, storage and mixing of coating compounds, pre-heating, application methods, measurements of coating quality, among other specific steps. Upon completion of training and subsequent evaluation, a record of the person’s qualification would be maintained, including a card, which the person would hold. Job-Specific Qualification The Foundation recommends that a generalized qualification be enhanced at a specific job site. Specifically, when persons arrive at a new construction job, they would be briefed on company specific procedures for each task. Drawing upon the example above of a coating applicator, persons seeking to be qualified as a coating applicator, would undergo a briefing on the specifics of the company’s coating procedure. The review would track the steps used in generalized training and enable a person to understand what is to be done using the procedures and why. The briefing, a subsequent evaluation and the resulting qualification would be documented to apply for the person for those specific procedures. Portability Is Critical The Foundation believes that portability is critical to effective implementation for new construction. It is also critical in managing the administrative costs of operator qualification for new construction. Portability is important in two contexts, first, a qualified person must be able to move from new construction for one owner/operator to a construction job for another owner and carry their generalized qualification with them.


Second, personnel must be able to take their generalized qualification from one construction contractor to another. The alternative, a system without portability, would require qualification each time a person was selected for a new construction project. Conceivably this would require training each time to achieve the general qualification, as well as project specific – project-specific procedure training, followed by evaluation. This would not yield any benefit in terms of knowledge, skills and abilities and the costs world be astronomical. Of equal importance, it would keep personnel off the right-of-way and conducting their qualified tasks as they went through the extended training with no perceivable benefit to quality. In supporting portability, the Foundation does so knowing that qualification alone is not the sole ingredient to quality construction. The Foundation, in concert with API and CEPA, is developing a construction inspection certification program. The Foundation is undertaking this to enable its members to have certified construction inspectors on projects. The program design entails a general certification for all construction inspectors, with additional specialized certifications offered for particular elements of construction such as welding and coating, among others. Inspection is a critical part of a quality management system for construction, ensuring that qualified persons are implementing procedures and using materials properly. Definition of Covered Task The Foundation supports the comments provided by INGAA regarding the definition of a covered task. The Foundation agrees with INGAA’s proposed revisions to the definition of a covered task: Covered task means an activity identified by the operator that is an operations, maintenance, construction or emergency response task and affects the safety or integrity of the pipeline facility. 3 The Foundation recommends these changes for clarity purposes and to ensure that any changes to Subpart N of the pipeline safety regulations (Qualification of Pipeline Personnel) ultimately focus on the safety and integrity of the pipeline. Time Horizon for Implementation The time provided for in the final rule should recognize that while many of the new construction tasks are similar to operations, maintenance and integrity tasks, development of the administrative infrastructure to support new construction tasks will be more significant than implementation of the original rule. Modifying current systems to administer the two types of portability will be significant. In addition, there are large numbers of people that will require qualification for new construction. Additional implementation time such as five years should be allowed.


PHMSA Has Underestimated the Cost of Implementation PHMSA significantly underestimates the costs and number of individuals affected by this proposal. The costs involved to comply with changes proposed to operator qualification for new construction alone could easily exceed $ 322 million, as detailed below. INGAA Foundation believes the number of affected contractors for new construction alone could exceed 60,000. The costs basis presumes that new construction, including inspection, is done by contractors and not pipeline operator employees. PHMSA included several changes to the operator qualification requirements but failed to include the impacts of these changes in its analysis of costs. For instance, PHMSA did not include the number of contractors affected by these changes, the costs involved with updating each operator qualification program, or the new training requirements. PHMSA also modified its definition of ‘qualified’ which now includes a demonstration of knowledge of the variations in procedures due to equipment, new operations, and conditions. All of these proposed changes would dramatically affect the true costs of this proposal. PHMSA should make the following modifications to reduce the anticipated costs and yet still address the agency’s concerns. INGAA Foundation members estimate approximately 60,000 merit shop personnel and an equal number of open shop personnel totaling 120,000 people will be engaged in new construction in 2016. Experience in recent years indicates that approximately half of these people are already qualified under tasks designed to cover both new and existing construction. This yields 60,000 personnel that will need to newly qualified for new construction. Recent experience also indicates that there is approximately a 15% turnover rate of personnel, which increases the number of individuals that will require qualification to 69,000. The amount of time involved and therefore the associated costs will depend on the number of tasks the person is undergoing the qualification process. Based on project specific training conducted as part of applying OQ for new construction on alternate MAOP projects, three days on average will be required. This yields approximately $224 million for the initial general qualification and evaluation of these personnel. Pipeline operators will need to provide project specific training each time a person is hired to work on a specific project. Recent experience indicates that most contractor personnel work on three different projects within any calendar year. INGAA Foundation members estimate approximately one day of project specific training for each person. The amount will depend on the number of tasks the person is being qualified for but based on project specific training conducted as part of applying OQ for new construction on Alternate MAOP projects, one day on average will be required. As such the cost of project specific training for new construction will be approximately $69 million. In addition, there will be incremental costs for administration of these new tasks. This is generally done by a third party contractor and will be essential for new construction to enable portability. The estimated incremental cost for administration for the additional personnel is $28.9 million.


In summary, the cost of operator qualification for new construction alone could easily exceed $322 million. 4 The Role of Quality Management Systems Implementing a quality management system (QMS) on pipeline construction projects improves material and construction quality by providing a structured approach to quality management. The Foundation has worked to clarify and improve application of QMS. Through effective QMS, pipeline construction project sponsors can improve their conformance to project specifications and standards and their regulatory compliance. All industry sectors (operators, contractors and suppliers) need to work together to embrace higher standards of quality through the application of QMS principles. The INGAA Foundation has and will continue to sponsor workshops aimed at achieving a consistent and uniform level of quality management across the pipeline construction industry. The INGAA Foundation has proven to be an effective forum to tackle these challenges because all key industry sectors are represented. In 2012, The Foundation produced a white paper entitled, “Overview of Quality Management Systems – Principles and Practices for Pipeline Construction”, http://www.ingaa.org/Foundation/18011.aspx, to assist members in understanding the fundamentals and benefits of a QMS. Members expressed the need for guidance in implementing and improving a QMS, and in July 2014, the Foundation published Guidelines for Practical Implementation of a Construction Quality Management System. http://www.ingaa.org/Foundation/Foundation-Reports/constructionqualityreport.aspx The INGAA Foundation has successfully addressed similar challenges in other areas, including environmental construction requirements promulgated by the Federal Energy Regulatory Commission, project permitting and pipe quality. The INGAA Foundation published four white papers related to QMS, each addressing different elements of improved construction practices. These INGAA Foundation white papers are: • Training Guidance for Construction Workers and Inspectors for Welding and Coating • Field Applied Coatings Best Practices • Best Practices in Applying API 1104, Appendix A • Standards for Procurement and Installation of Field Segmented Bends Conclusion We request that PHMSA revise its proposed regulations to incorporate the ASME B31Q task list, to endorse use of a generalized qualification platform that can be enhanced at specific job sites, and that builds portability into the regulations. The proposed rule should account for significant implementation timeframes and PHMSA should recognize and account for the fact that its cost estimate significantly underestimates the true cost of this program’s implementation.


Exhibit III (a) and (b) - Written Plan Analysis Document

Exhibit III (a) - Compatibility Analysis - Operator Program

49 CFR 192, Subpart N

Name of Operator:

Date plan submitted:

Operator representative responsible

for the plan:

Plan reviewed by:

Signature (s):

Date:

Have the following sections been

addressed?

Yes No Comments

Do they have a Written Plan in

place?

Covered tasks: Have they adopted

a task list:

Operator (four part test)

Nationally Recognized (MEA, eWebOQ, EWN, Veriforce. B31Q, Etc.)

Other

Evaluation process: Ensure,

through knowledge, skills & ability

evaluation, that individuals

performing the covered tasks are

qualified

Written exam Oral exam Observation of performance on the job

(cannot be the sole method of evaluation) Simulations

Other forms of assessment

Initial qualification – Did not perform covered task prior to August 27, 1999


Non-qualified individuals: Allow

non-qualified individuals to perform

a covered task if:

a qualified individual is assigned to direct and observe during the task

a qualified individual is able to take immediate corrective actions

the qualified individual is responsible for the performance of the task

Span-of-Control (SOC) - Ratio of non-qualified individuals to qualified individuals identified for each task.

Performance contributing to an

incident:

Evaluate an individual if the Operator has reason to believe that the individual’s performance of a covered task contributed to an incident

Identify how qualifications are treated during an incident investigation (e.g., qualifications suspended during investigation, qualifications revoked if actions contributed, qualifications reinstated if performance did not contribute to the incident)

Reasonable cause to verify

qualification: Evaluate an individual if

there is reason to believe that the individual is no

longer qualified to perform the covered task

Loss of motor skills, vision, impairment, etc Statement from the individual Prolonged period since performance of the

covered task Unsatisfactory performance Employee may have been evaluated

improperly

Communicate Changes: Communicate changes that affect covered

tasks to individuals performing that task.

Changes could be, but not limited to:

Significant changes in policies or procedures Changes in state or federal regulations Use of new equipment/technology that affects

task New information from equipment or product

manufacturers that significantly affects the task

The Management of Change process defines communication requirements based on the level of change. For example, changes may have limited impact (no communication), moderate impact (communication only), or significant impact (communication and modification of the qualification process)


Subsequent Qualification

intervals:

The program defines a process used to identify the intervals at which evaluation of the individual’s qualification is needed. Considerations may include complexity, critical nature and/or frequency of performance.

Adopted the B31Q qualification intervals.

Record Keeping

Verify a record keeping system is

consistent with Program

Requirements: Identification of the covered tasks and related

subsequent qualification interval(s) Evaluation method(s) used Identification of the individual being qualified Date(s) on which qualification was completed Qualification method(s)

Training as appropriate is consistent

with the Program Requirements Training required for new employees Training for employees taking on new task(s) Training for employees who fail evaluation(s) Training as required for new technology,

equipment, materials, statutory requirement, etc.


Exhibit III (b) - Compatibility Analysis-Contractor Program

Training & Qualification Program – 49 CFR 192, Subpart N

Name of Contractor:

Date plan submitted:

Contractor representative

responsible for the plan:

Plan reviewed by:

Signature (s):

Date:

Have the following sections been

addressed?

Yes No Comments

Do they have a Training and

Qualification Program in place?

Covered tasks: Have they adopted

a task list:

Operator (four part test)

Nationally Recognized (MEA, eWebOQ, EWN, Veriforce. B31Q, Etc.)

Other

Evaluation process: Ensure,

through knowledge, skills & ability

evaluation, that individuals

performing the covered tasks are

qualified

Written exam

Oral exam Observation of performance on the job

(cannot be the sole method of evaluation) Simulations

Other forms of assessment

Initial qualification – Did not perform covered task prior to August 27, 1999


Record Keeping

Verify a record keeping system is

consistent with Program

Requirements: Identification of the covered tasks and related

subsequent qualification interval(s) Evaluation method(s) used Identification of the individual being qualified Date(s) on which qualification was completed Qualification method(s) Qualified Evaluator(s) [credentials] Assessment Methods Used [include passing

score] Records and Documentation

Training as appropriate is consistent

with the Program Requirements

Training required for new employees Training for employees taking on new task(s) Training for employees who fail evaluation(s) Training as required for new technology,

equipment, materials, statutory requirement, etc.


Non-Binding Reference Materials: 80/20 OQ Portability Process

These Guidelines are intended to be used to verify that another Operator or Contractor has

met the minimum requirements for Operator Qualification. The process outlined in this

document has been proven in State and Federal audits as providing 80% portability. 80%

Portability is an arbitrary number but it identifies that the general requirements are met and

that you as the Operator will only supplement the remaining 20% with what is unique to

your company or state requirements during a pre-job meeting, “tailgate” meeting,

supplemental CBT, or by another communication process.

1. Request the Written OQ Plan or documented process to comply with DOT 192

Subpart N

o For Operators it is a written Plan

o For a Contractor either a written Training and Qualification Program or a

written documented process outlining compliance with Subpart N qualification

and documentation requirements

DOT 192 Subpart N does not require Contactors to have a written OQ

Plan.

2. Once received, perform a review analysis of the written plan or documented process

to verify compliance all of DOT 192 subpart N against your written plan.

o For portability the written plan or documented process must meet or exceed

your OQ program requirements.

o Apply the Written Plan Analysis Document by doing a section by section

review. (Exhibits 1a and 1b)

3. Request the evaluation / training as appropriate syllabus per task.

o Method that training is administered.

Classroom

On the Job training (only under the observation of a qualified

individual)

o Evaluation

Knowledge, Skills & Ability

Knowledge

o Written

o Oral

o Computer based

o Are evaluations proctored?

o What is a passing score?

o How are incorrect responses addressed prior to the

individual performing the covered task in the field?

o Verify task specific identified Abnormal Operating

Conditions are addressed during the knowledge portion

of the evaluation.

Skills & Ability

o Simulation or performance evaluation


o Review performance checklist for completeness

(e.g., inclusion of task-specific AOCs).

o Observation of performance on the job

o Cannot be the sole method of evaluation.

4. Verify the use of non-qualified individuals is consistent with your OQ Program.

o Verify the span of control is identified per task.

o Verify tasks identified that only qualified individuals can perform (i.e. Welding,

non-destructive testing, plastic fusion, etc.)

5. Performance contributing to an incident.

o Verify that the OQ Program has identified a process that is consistent with the

Operators.

Operator to Operator for Mutual Assistance, verify that there is an

agreement that they will partner in any investigations.

6. Reasonable cause to verify qualifications.

o Unsatisfactory performance in the field

o Prolonged time period since performance of a task.

7. Verification of communication of change process.

o Is it consistent with the Operators?

Editorial changes – no impact to the way a task in performed.

Low to moderate change – communication only.

Significant change – requiring training / evaluation.

8. Record Keeping

o Meet the minimum DOT requirements

o Consistent with the Operator

9. Verification that training as required has been addressed in a consistent manner.

o New hires

o Taking on new tasks

o New technologies or equipment

o Failures


Exhibit IV - Pressure Testing Guideline - Example

Pressure Testing

ASME B31Q: 0561, 0571, 0581, 0591

DOT: 192.503, 192.504, 192.505, 192.509, 192.511, 192.513, 192.515, 192.517, 192.553, 192.555,

192.557

Items to identify during a base-line DOT compliant OQ program analysis may include but are not

limited to the following:

General pressure testing requirements

Steel pipelines 30 percent or more of SMYS

Pipelines less than 30 percent of SMYS or 100 psig or above

Pipelines less than 100 psig

Service line testing requirements

Plastic pipeline test requirements

Safety requirements

Test record requirements and information

Testing during an up-rating

Verification of the items identified above allow an Operator to award 80% OQ portability credit to any

Operator, Contractor or Sub-contractor performing pressure testing.

Examples of Operator specific operating standards, policy and/or procedure requirements, state tariff

regulations, local gas safety regulations may include but are not limited to:

Operator specific (What, When and How):

Test Medium; air, gas, water, inert gas, etc…...

Test pressure requirements; transmission class, main line, service line, diameter, steel, plastic, cast iron, bare steel, disconnected, etc……..

Test duration requirements; transmission class, main line, service line, diameter, steel, plastic, cast iron, bare steel, disconnected, etc……..

Method of recording pressure readings and/or test results

Method to address leaks and/or failures identified during pressure test

Specific method to complete and maintain test records

Any other Operator specific pressure testing information required of your employees

Supplementing an existing DOT compliant OQ qualification with the Operator specific information

identified above completes the 20% knowledge evaluation requirement.

Date post:	25-Jan-2017
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