Top Leaders Flee Pipeline Safety Agency as Trump Pushes to Build

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(Bloomberg) — An exodus of senior officials is adding pressure to the already strained agency that oversees millions of miles of US oil and gas pipelines. 

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Five senior leaders at the Pipeline and Hazardous Materials and Safety Administration (PHMSA), including the head of the Office of Pipeline Safety, accepted a buyout offer from Elon Musk’s Department of Government Efficiency, and two other staff members decided to retire, Bloomberg previously reported. 

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The exits, combined with Trump’s federal hiring freeze, will leave more than half of the senior executive roles at the agency empty. Pipeline inspectors are not eligible to take buyouts, but as DOGE and agencies lay off workers across the government, the regulator has dismissed some rank-and-file employees, including administrative assistants at its regional offices. The downsizing of PHMSA comes as the Trump administration aims to deregulate the energy industry and ramp up pipeline construction in North America. He has openly supported projects such as the Constitution Pipeline — which was previously cancelled — and the Alaska LNG project that will transport natural gas across the state.  PHMSA, which is part of the US Department of Transportation, had nearly 650 full-time employees as of May 2024.

“PHMSA is a notoriously under-funded, under-resourced agency as it is,” said Bill Caram, executive director of the watchdog group Pipeline Safety Trust. “We have new pipelines being built, we have a whole new class of pipelines being introduced,” he said, referring to the network of CO2 pipelines being built out for carbon capture and storage. “This is a time when we should be building up the agency to take on all these new challenges, and any reduction would definitely be a concern to us.”

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A PHMSA spokesperson said the agency “is proud of the work it does to protect the public from the transportation of energy and other hazardous materials, and that mission has not changed.”

Vacant positions could be particularly challenging to fill at PHMSA, which has historically struggled to compete with the private sector to attract and retain talent, said the agency’s former administrator, Cynthia Quarterman. And more staff could retire, given that a large share of the federal workforce is eligible. That would be “a huge hit to the agency,” she said. 

Those employees who stay could end up demoralized, said Richard Kuprewicz, a process safety engineer who has advised PHMSA on pipeline safety regulations. “I can see PHMSA taking stretched resources and becoming a lot worse,” he said.

The agency responds to about 600 incidents a year around the country. One well-publicized recent example is a jet fuel leak in Bucks County, Pennsylvania. A pipeline operated by Sunoco Pipeline LP — a unit of Energy Transfer – was likely leaking for at least 16 months, contaminating water wells in the Upper Makefield Township neighborhood, according to a preliminary report by PHMSA. About 156 barrels (6,550 gallons) of jet fuel seeped into the community according to initial estimates by Sunoco Pipeline, making it the largest refined fuel leak in the state since 2019. The Pennsylvania Attorney General’s Office is currently investigating whether Energy Transfer committed environmental crimes in relation to the leak, according to a spokesperson for the office.

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“We remain fully committed to working with PHMSA and all other applicable regulatory agencies, the Upper Makefield Township and impacted landowners to safely and swiftly resolve this situation,” a representative for Energy Transfer said.

Future Funding Cuts

PHMSA regulates interstate pipelines, and state agencies oversee intrastate pipelines, but most of states’ funding to hire inspectors comes from PHMSA grants. The agency is authorized to reimburse up to 80% of states’ pipeline inspection programs, but it has struggled to meet that threshold in recent years, according to Tristan Brown, who served as the agency’s deputy administrator under the Biden administration. Congress agreed to increase funding to the agency for fiscal year 2024 to help. But that funding remains up in the air with the agency’s reauthorization currently on the legislative agenda.

Congress has also consistently raised concerns that the agency is not implementing new rules fast enough, according to Brown. PHMSA attempted to finalize two new rules in the last days of the Biden administration, one concerning the regulation of carbon dioxide pipelines and the other regulating methane emissions. But the fates of both remain uncertain after plans were withdrawn from publication following a regulatory freeze signed by Trump on his first day in office.

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Rich Felder, the founder of Common Ground Alliance, a nonprofit trade group for protecting underground infrastructure, says the potential for cuts to state pipeline funding is his biggest concern.

“I think that the greatest vulnerability is if they get substantial budget cuts and they can’t sufficiently support the state partners who help them and do the lion’s share of the work in working with companies whose pipelines have significant environmental effects,” says Felder, who spearheaded an overhaul of the Office of Pipeline Safety following the disastrous 1994 Texas Eastern Transmission Corporation natural gas pipeline explosion. 

In Pennsylvania, Democratic Senator John Fetterman and Republican Representative Brian Fitzpatrick have called on PHMSA to shut the Energy Transfer pipeline’s operations entirely until investigations and remediation efforts are complete, joining similar calls from Bucks County’s elected officials in the statehouse.

“No one should have to worry if the water coming out of their tap is safe to drink,” Fetterman said in a statement to Bloomberg News.

Democratic State Senator Steve Santarsiero said he worries personnel cuts in US regulatory agencies could threaten public safety in Pennsylvania, the country’s second-largest net supplier of energy to other states. 

“When you start laying off as many people as the Trump administration has begun doing, it will have an impact on our ability to regulate industries, and that will impact safety and health for people,” he told Bloomberg. “I think we are kidding ourselves if we think those things aren’t connected.”

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