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Assessing Construction Compliance

Gas utilities can make better use of their inspection budgets.

Fortnightly Magazine - August 2009

drawing up procedures mirroring the federal act, and incorporating these in state regulatory law. Gas distribution utilities consequently have developed procedures responsive to those of their respective state commissions.

A recurring issue throughout the industry has been, and continues to be, how best to assess compliance with regulatory requirements and, in the event of reportable incidents, how best to show compliance in order to reduce liabilities and penalties.

Since the inception of the gas industry with manufactured gas before the turn of the last century, through the widespread growth and use of natural gas after World War II, to the enactment of the Pipeline Safety Act and up to today, gas-system managers have uniformly had as key objectives the provision of safe, reliable service at reasonable cost to their customers. Safety, as the paramount concern, continues to be monitored as always principally through inspections or field audits of system conditions, construction in progress, and ongoing operations.

The process of inspecting gas systems hasn’t changed fundamentally since the industry’s beginning. Inspectors and field auditors are trained in the system’s written procedures, provided with copies of those procedures, and dispatched to a field site to witness and record compliance or non-compliance for whatever activity is happening. Sometimes inspectors are given sections or regions to cover. Sometimes they focus on a particular aspect of construction or operations. Sometimes inspectors follow specific contractors and company crews. Some companies tout, “Every job site is inspected.”

The technology, however, has advanced through the use of hand-held computers to log pass-fail results on project work steps for transmittal to central data bases, which devices also provide on-site call-up of applicable procedures, past contractor or company crew performance on like installations, acceptable or approved variations on standards, and other useful information. Other examples of technology gain are so-called “smart pigs” propelled through cast iron or steel pipes to produce videos or photos to examine conditions, new systems to radiograph welds in search of flaws, and much improved leak detection or sniffing equipment.

Technology advances notwithstanding, the information gathered in traditional approaches to inspection is at best only descriptive of what part of installations occur most often, but not necessarily what is most important in the installation for measuring risk, nor is it inferential about the system-wide or regional compliance—or, most important, protection of people and property. Information collected, however more quickly, says nothing at all with any precision about risk or compliance. It provides no statistically valid measurement of meaningful risk factors, and thus no basis for demonstrating levels of confidence for the entire system.

This kind of inference is critical for executive management’s oversight responsibility and risk management roles.

Reducing Enterprise Risk

The objectives in designing and implementing an improved compliance-measurement system for the first endeavor of this kind were driven by most serious reportable incidents, and these have remained the objectives for subsequent client engagements.

These objectives are:

• Ensure, prospectively and with high levels of confidence, that actual construction performance from a system-wide point of view—for both company employees and outside contractors—is in compliance at all levels