The Senate Commerce Committee held a markup today where Senator John McCain's 
(R-AZ) pipeline safety legislation, S. 2438, was approved.  The overall 
outcome was not unexpected -- the final legislation contained several 
provisions that went a little bit further than Enron and INGAA would have 
liked, but there was rigorous debate over issues like States' role and 
mandated integrity measures, and close votes on several amendments.  Senator 
McCain and other bill proponents like Senator Slade Gorton realize those 
issues will need to be addressed before the legislation proceeds to the 
Senate floor.

The Committee considered several amendments to the legislation:

1)  McCain substitute amendment -- Approved by voice vote.   The amendment 
substituted the revised "Chairman's mark" text that was developed over the 
last several days in place of the original version of S. 2438.  All further 
amendments at the markup were in the context of this substitute text.

2) McCain amendment to Section 13 (b) (on operator assistance investigations) 
-- Approved by voice vote.  This amendment attempts to fix language in the 
substitute text that was problematic to just about everyone in industry and 
on the Hill because it unconstitutionally forced an operator to choose 
between exercising constitutional rights to protect himself in a criminal 
investigation or keeping his job.   The McCain amendment did not seem to 
improve things much, and many Senators could not understand it.  Senator John 
Breaux (D-LA) objected to it, and asked that the entire section be deleted, 
and there was some good debate on both sides of the issue.   In the end, 
McCain asked that the amendment be passed with a promise that he would work 
with Breaux and others to fix it before Senate floor consideration.

3)  Sen. John Kerry (D-MA) Amendment on Enforcement -- Approved by voice 
vote.  Another confusing vote, in which many members did not understand the 
changes being made, but agreed to it on the condition that clarifications be 
made before Senate floor action.  Late last night, Enron led a group 
including companies from INGAA and AGA in providing comments to Senator Kerry 
which caused him to make substantial changes to his amendment before it was 
voted on at markup, including dropping provisions allowing citizen suits and 
other troubling issues.   In the end, the amendment that passed was 
acceptable to industry.

4)  Sen. Sam Brownback (R-KS) amendment on Advisory Council Pilot Program -- 
Rejected 12 to 4.   Brownback's amendment would have replaced the Advisory 
Council Pilot Program as proposed in the substitute text with a requirement 
that already existing technical advisory committees to OPS be required to 
meet regionally.   There was a good debate on the issue, but Senator Gorton 
made a strong plea to members that the new Advisory Councils would only be a 
pilot program and would not have any binding role.   He also agreed to work 
with industry on improvements, such as representation of pipelines on the 
councils, before Senate floor action.

5)  Brownback amendment on State Role -- Rejected 10 to 9.   This amendment 
was written by Enron and El Paso, striking language from the bill that was 
overly broad in suggesting that a State had oversight authority over "other 
activities" beyond proper areas like accident investigation, 
construction-related activities, and inspection.   There was a heated debate, 
with Brownback and Breaux making excellent arguments for us, but in the end 
we were 1 vote short.  In fact 2 Democrats switched their votes at the last 
minute to tip the balance.   I have already had discussions with Senate staff 
after the markup indicating that this language will need to be fixed to our 
satisfaction before Senate floor action.

6)  Sen. Ron Wyden (D-OR) amendment increasing public right-to-know 
requirements -- Approved by voice vote.   This amendment increases the kinds 
of information that need to be made widely available to the public.    
Because of a state of confusion in which many of the Senators left the room 
to go vote on the Senate floor, there was no opposition voiced to the 
amendment and it passed without much discussion.

7)  Breaux amendment on Integrity Inspection Program -- Rejected by voice 
vote.  This was another written by Enron and El Paso that would have removed 
the bias of substitute text language toward internal inspections and pressure 
testing and broadened the range of tools that a pipeline could include in an 
integrity management plan.  It also would have removed a requirement that any 
state and local official would have the chance to comment on the plan and 
receive a response.   The debate was heated over this amendment, with Senator 
Gorton indicating that he could accept the first part of the amendment 
(removing the bias toward internal inspection/pressure testing) but not the 
second, which he felt weakened state and local opportunity to comment on 
pipleines' integrity plans.   The committee agreed to reject the amendment, 
but work to fix the second part before Senate floor action.

Procedurally, it was a strange markup session.  A quorum of the Committee (11 
members) needs to be present to vote on final passage of the bill.  A vote on 
the Senate floor came up as Senator Kerry was explaining his amendment (#3), 
and as Senators were leaving, Senator McCain very quickly asked that the 
entire bill be passed on voice vote before a quorum left the room, subject to 
consideration of amendments when they returned.   The bill was passed before 
many knew what was happening.  Of course, only about 7 members came back to 
the room for the rest of the markup, so much of the voting was done without 
full everyone's participation, or by proxy -- which had serious effects on 
the outcome of several amendments.

As you can see from the notes on many of the amendments, there will be an 
opportunity to fix the legislation before it moves any further.  Several 
Senators indicated after the markup that they had voted with Senator Gorton 
on several of the amendments as a courtesy to him, but would not support the 
bill's movement to the Senate floor without serious changes being made.  One 
key ally is Senator Trent Lott (R-MS), who supported all industry 
amendments.  His control of the Senate floor schedule as Senate Majority 
Leader will be key in driving changes to the legislation.   If satisfactory 
changes are not made, the bill will move no further.

There will also be an opportunity to provide comments for Committee Report 
language that will accompany the final bill that was passed.  The report will 
give explanations of several of the concerns that were raised, and provide 
legislative history that will help clarify areas where there is uncertainty 
about the real effect of some of the provisions.

We did have several victories.  Many of the amendments that were expected -- 
worse language from the Administration or Patty Murray legislation -- were 
not even offered because of the advance work we were able to do with 
Republican and Democratic Commerce Committee members and staff.   We were 
able to affect a number of changes to the "Chairman's mark" or substitute 
amendment before the markup even occured.

Another interesting note:  Senator Kay Bailey Hutchison was a complete 
non-factor in the markup.  She is the Subcommittee chair responsible for this 
issue, yet she did not make an opening statement and she did not vote at all 
on several key amendments of concern to industry.   

We will be working on the "where do we go from here" strategy in the coming 
weeks, and will report as developments occur.  Thanks again to all who helped 
out in preparation for the markup in what was an amazing team effort.  The 
technical support of Dave Johnson, Colleen Raker and Lou Soldano was 
extremely valuable.  Phil Lowry's and Dave Johnson's availability to do key 
meetings with Senators and staff was critical in our efforts.   And Dave and 
I can attest to the fact that Enron was in a leadership role leading up to 
the markup, guiding the efforts of INGAA and others and directly influencing 
the direction this legislation will take in the coming weeks and months.

Jeff Keeler
(202) 466-9157