[Federal Register Volume 63, Number 239 (Monday, December 14, 1998)]
[Notices]
[Pages 68819-68826]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33099]
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DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
[Docket No. RSPA-98-4523; Notice 1]
Pipeline Safety: Request for System Integrity Inspection Pilot
Program Applications
AGENCY: Office of Pipeline Safety, DOT.
ACTION: Notice of Request for Letters of Application.
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SUMMARY: The Office of Pipeline Safety (OPS) is initiating a new
program with interstate pipeline operators to evaluate an approach to
improve the effectiveness of the inspection process. The System
Integrity Inspection Pilot Program is designed to enhance the
inspection practices currently in use by focusing on a broad set of
pipeline integrity issues instead of conducting inspections only from a
regulatory compliance perspective. OPS invites eligible pipeline
operators to submit Letters of Application expressing interest in
participating in the Pilot Program. This notice begins the solicitation
process by specifying a deadline and address for Letters of Application
and by providing guidance for operators interested in participating.
DATES: Letters of application will be accepted until February 12, 1999.
ADDRESSES: Interstate pipeline operators interested in participating in
the System Integrity Inspection Pilot Program should send their letters
of application to Richard B. Felder, Associate Administrator for
Pipeline Safety, Research and Special Programs Administration,
Department of Transportation, Room 7128, 400 7th Street, SW,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: Donald Moore (816) 426-2654 or any of
the five OPS Regional Directors: William Gute (202) 366-4580, Frederick
Joyner (405) 562-3530, Ivan Huntoon (816) 426-2654, Rodrick Seeley
(713) 718-3746, or Christopher Hoidal (303) 231-5701.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Office of Pipeline Safety (OPS) is in the process of improving
its regulatory programs to assure greater levels of safety,
environmental protection, and service reliability. An important part of
this effort is re-examining the approach OPS uses to conduct
inspections of interstate pipeline operators and searching for more
effective processes. Traditionally, OPS inspections have focused
strongly
[[Page 68820]]
on ensuring compliance with applicable pipeline safety regulations
using a checklist approach. While this resource-intensive effort
provides assurance that operators are complying with all regulatory
requirements, it may not be the most effective approach to improving
safety.
The System Integrity Inspection (SII) Pilot Program is designed to
test whether a more broad-based examination of an operator's safety and
pipeline integrity programs, including many areas not currently
considered during a typical inspection, will result in improved
performance. Instead of OPS or state inspectors conducting
comprehensive compliance-based inspections, the SII Team, composed of
OPS and active interstate agents, will work cooperatively with the
operator to address the most significant pipeline system integrity
issues, addressing areas that may not be explicitly or completely
addressed by the regulations. To ensure continued regulatory compliance
with parts 191, and 192 or 195, the SII Team will require participating
operators to conduct comprehensive self-audits for compliance. To
accept a company into the program, the SII Team must see evidence that
the company has a formal self-audit process in place; that audits are
being conducted, audit findings are being documented and communicated,
corrective actions are being defined and implemented, and status is
being tracked and communicated. During subsequent meetings with the
company, the SII Team will conduct spot checks of self-audit records
and perform field verifications to ensure that the company's Self-Audit
Plan is being effectively implemented. This enhancement of current
inspection practices is intended to result in improved communication
and information sharing between operators and government, and focus
resources on the most important risks to pipeline safety.
OPS believes this approach will improve the utilization of company,
OPS, and state pipeline safety agency resources in addressing the most
significant and potentially high impact safety, environmental, and
regulatory issues. After three years, OPS will determine whether and in
what form the SII approach should be incorporated into the Federal
pipeline safety program on a permanent basis.
A. Goals
The SII Pilot Program has the following goals:
1. Enhance public safety and environmental protection by
concentrating the deployment of operator and OPS inspection resources
to areas of greatest safety and environmental risk, and by addressing
issues of mutual concern and resolving problems under a consultative
resolution process.
2. Provide OPS and active interstate agents with an enhanced
understanding of the operator's entire system, including pipeline
operation, maintenance, and emergency response programs. A more broad-
based understanding of the operator's integrity issues enables OPS to
better consider and review with the operator the range of available
integrity enhancements.
3. Harmonize interpretation of regulations and safety concerns
among OPS regions by utilizing an OPS team approach comprised of one
inspector from each of the five OPS regions and one state
representative from each involved state with an active interstate agent
agreement.
4. Provide opportunity for pipeline operators to achieve a high
level of recognition as industry leaders in pipeline safety.
5. Provide an opportunity for more efficient inspection planning
and staff allocation for both operators and OPS, and provide operators
with designated contact people for inspection coordination within OPS.
6. Assure operator compliance with parts 191, and 192 or 195 using
an operator's Self-Audit Plan and OPS spot checks instead of standard
OPS inspections. Early in the program, the SII Team and the company
will address comprehensiveness and completeness of the company's Self-
Audit Plan, and various means of monitoring and improving the Plan's
effectiveness. The SII Team will periodically spot check to ensure that
field data supports company records and that the Plan's implementation
results in regulatory compliance.
B. Program Key Features
In order to achieve these goals, OPS has developed the SII Pilot
Program described in this Notice. This new approach is based on a
philosophy of open communication and mutual trust which compels OPS and
the operator to move beyond the basic requirements of the regulations
in a total effort to prevent pipeline accidents. Some of the key SII
Pilot Program features are summarized below:
1. Participation in the SII Pilot Program is strictly voluntary.
SII Pilot Program companies voluntarily enter the program to improve
pipeline safety and integrity, and to share with OPS their analysis and
plans for addressing the highest priority safety issues.
2. OPS will use a SII Team to manage and conduct the SII Pilot
Program. The SII Team will usually be comprised of one inspector from
each of the five OPS regions and one state representative from each
involved state with an active interstate agent agreement. The SII Team
and participating operators will work together to resolve any problems
or regulatory issues that may arise during the Pilot Program.
3. OPS will provide the public the opportunity to comment on the
appropriateness of companies OPS is considering for candidates for the
SII program. OPS will publish a Federal Register notice of its intent
to select an operator at least 60 days prior to issuing the operator a
Letter of Acceptance. These notices will be posted on the SII Web Site
to enable all interested parties to comment. OPS will also notify
national organizations representing public, safety, and environmental
interests of candidate companies under consideration. These national
organizations would include, but not be limited to, the Environmental
Defense Fund, the International Association of Fire Chiefs, the
National League of Cities, the National Governors Association, and the
National Association of Towns and Townships.
4. Participation in the SII Pilot Program does not diminish the
operator's rights or responsibilities under the Federal Pipeline Safety
Regulations. Pipeline operators participating in the SII program are
still required to comply fully with all applicable regulatory
requirements. Only the approach used to inspect operators will be
modified.
5. The SII approach is structured around two basic operator plans.
The operator's Self-Audit Plan (described in Exhibit A) focuses on
assuring operator compliance with the applicable requirements in parts
191, and 192 or 195 of the Federal Pipeline Safety Regulations. The
operator's System Integrity Plan (see Exhibit B) addresses the
activities and programs the operator implements to monitor, maintain,
and improve the integrity of the pipeline system, over and above those
actions specified in the regulations. OPS recognizes that these two
aspects of maintaining system integrity may be managed within a single
program by some operators. They are described separately in this Notice
to differentiate the OPS approach to addressing regulatory compliance
versus exceeding compliance requirements through integrity-focused
discussions with SII Pilot Program participants.
6. Companies participating in the SII Pilot Program must have clear
and
[[Page 68821]]
established records of compliance with applicable pipeline safety
regulations. In making this determination, the SII Team will review its
records to determine if candidate companies have historically met
requirements of applicable pipeline safety regulations and have
demonstrated a willing attitude to respond to any OPS concerns.
Operators should have addressed all safety and environmental protection
actions prescribed by existing regulations and orders, including
consent orders and commitments for corrective action made to OPS. OPS
will also consult with other agencies about their knowledge of the
company's safety and environmental compliance record. The determination
will be a joint OPS Regional, OPS Headquarters, and SII Team decision.
7. If, during the course of the SII Pilot Program, any compliance
concerns are identified, SII Pilot Program participants must take
actions necessary to remedy the concern as soon as possible. This would
include addressing any management system issues that might be the root
cause of safety problems or contributor to repetitive concerns.
OPS expects that the operator will identify such noncompliance
issues and conditions in its Self-Audit report, and identify the
corrective actions taken to restore compliance, or the corrective
action plan to address concerns that are still open. During the spot
check and validation reviews, these findings will be reviewed and
discussed with the SII Team. Such issues will be dealt with in a
consultative interaction with both the company and the SII Team
exchanging their perspectives to understand the true safety
significance of the occurrence, the extent of the problem, and the
effectiveness of the corrective action plan. This interaction will
provide assurance that the corrective actions are appropriate, and
effectively address any significant safety concerns that might have
been present.
It is expected that operators in the SII Program can resolve safety
and compliance issues without civil penalties, as long as the following
conditions occur:
The Self-Audit identifies noncompliance situations and the
operator corrects the problem to the SII Team's satisfaction.
System or organizational problems that lead to
noncompliances are corrected.
The operator's program prevents repetitive violations.
Only operators with good compliance histories and a willingness to
partner with OPS will be considered for the SII Program. Should
uncorrected compliance issues persist, the operator would be terminated
from the program.
8. OPS expects SII Program participants to be on the leading edge
of risk reduction and show continuous improvement in managing overall
pipeline system integrity.
9. The SII Team may need to review on-site an operator's documents
that may contain business sensitive or confidential information while
it conducts inspections and reviews company compliance and integrity
programs. OPS will explore access to this information through other
means such as the operator's Intranet.
C. Operator Benefits
OPS expects the SII approach will offer substantial benefits to the
operator as well as to OPS. Some of the important operator benefits
include:
1. Improved Coordination of Inspection Activities. Reducing the
number of inspections on an operator's system to spot checks of their
self-audit process and integrity program validation inspections will
simplify the coordination of inspection support from the company side.
Furthermore, because there will be an identified point-of-contact with
OPS, the logistics of inspection planning and support should also be
simplified.
2. Focus on Important Integrity Issues. In addition to refocusing
resources, the scope of inspections will shift from a comprehensive
checklist of each regulatory requirement to an emphasis on the most
important integrity issues. Both OPS, interstate agents, and the
operator will be investing more efforts in addressing the most
important safety issues, and less time looking at low safety impact
and/or administrative compliance items, while still ensuring the
operator is fully compliant with parts 191, and 192 or 195.
3. Consultative Interaction with OPS. OPS and participating
interstate agents intend to work with the company to address and
resolve important integrity issues on the operator's system. OPS
believes the exchange of ideas and information on the most important
integrity issues, and what can be done to address them will benefit
both the operator and government. OPS will gain an improved
understanding about key system integrity issues, including condition,
leak history, and remedial activities. The participating companies will
benefit from the broad national regulatory perspective that OPS will
bring to discussions at the early stages of considering potential
safety alternatives.
In the event that a noncompliance is discovered during the pilot
program, OPS intends to work in a consultative fashion with the company
to remedy the problem in the most effective and meaningful manner. It
is expected that operators in the SII Program can resolve safety and
compliance issues without civil penalties, as long as the conditions
listed previously are satisfied.
4. Consistent System-wide Feedback. By using the multi-Region SII
Team in conducting inspections, the SII approach will result in more
consistent interpretation of compliance requirements and feedback to
the operator. It will minimize opportunities for varying
interpretations of regulatory requirements among OPS Regions.
5. Support Improvements to Inspection Process. By participating in
the SII Pilot Program, companies will be afforded the opportunity to
provide input to OPS in developing and refining an improved SII
process. Participating operators will be directly involved in
developing integrity-based inspection approaches that cost-effectively
reduce risk.
II. SII Pilot Program Process
Through interactions with industry, its state pipeline safety
representative partners, and its technical advisory committees, OPS has
established a process to implement the SII Pilot Program. Through the
steps shown in the accompanying figure, OPS seeks to produce the
results that will demonstrate achievement of the program goals. Each of
these steps is discussed in detail in subsequent sections of this
Notice.
BILLING CODE 4910-60-P
[[Page 68822]]
[GRAPHIC] [TIFF OMITTED] TN14DE98.035
BILLING CODE 4910-60-C
[[Page 68823]]
III. Application Process
A. Criteria for Participation
OPS has established the several criteria that will be used to
govern operator eligibility to participate in the SII Pilot Program.
Operators interested in participating should have a:
Clear and established compliance record as evidenced by a
history of meeting regulatory requirements and responding to safety
concerns raised by OPS;
Existing, continuing, system-wide evaluation process
directed towards safety and operational reliability;
Commitment to information sharing to support decisions
concerning system integrity;
Defined organizational structure to resolve safety,
environmental, and compliance issues;
Management that emphasizes comprehensive two-way internal
communications;
History of cooperation and open communication with OPS;
and
Centralized record keeping location (preferred).
The pipeline system proposed for the SII Pilot Program must be an
Interstate pipeline which falls under the requirements of 49 CFR part
191, and 49 CFR part 192 or 195. The operator must also propose a
comprehensive well-defined pipeline system and provide a description of
the system's elements and characteristics, including products shipped,
size, and geographic location.
B. The Application
An operator will submit an Application Letter indicating its intent
to participate in the SII Pilot Program. The Application Letter must
include a statement signed by the president or senior company official
attesting to their willingness to enter into a partnership with OPS and
active interstate agents to meet the terms of the program.
The following information, at a minimum, shall be included in the
application in order for the SII Team and OPS management staff to begin
the screening process:
1. General Information:
Operator Name, Address, Contact Person (including title),
Phone Number.
Pipeline System Description: Brief overall description;
Total number of pipeline miles; States traversed; Commodity transported
(Natural Gas, Refined Products, etc.).
2. Brief explanation of management commitment to pipeline system
integrity.
3. Operator's commitment and willingness to share integrity program
information such as described in Exhibit B and cooperate with OPS.
4. Brief Explanation of the operator's Self-Audit and System
Integrity Programs (see Exhibits A and B).
The Application Letter shall be mailed to: Richard B. Felder,
Associate Administrator for Pipeline Safety, Research and Special
Programs Administration, Department of Transportation, Room 7128, 400
7th Street, SW., Washington, DC 20590.
C. Screening Process
After receiving the Application Letters from interested companies,
OPS will screen the companies to identify potential candidates for the
SII Pilot Program. As part of the screening process, OPS will look for
companies with a demonstrated commitment to system integrity. A company
must present documentation of an existing system integrity process and
evidence that it is willing to work with OPS in defining a program that
achieves superior performance. Company openness and a willingness to
work in partnership with OPS are important qualities in this regard.
OPS will favor operators that have or intend to have a strong integrity
management program as indicated by:
A method of thorough assessment of system integrity so
that improved safety is being achieved;
A good opportunity to evaluate the SII approach as an
inspection program alternative; and
Distinguishing features, such as risk-based engineering
evaluations, innovative and unique maintenance or replacement projects,
or the use of new technologies for integrity monitoring that benefit
the operator, OPS, industry and enhance public safety.
OPS will screen Application Letters to identify no more than five
operators for selection into the SII Pilot Program. Five is the maximum
number OPS can reasonably expect to evaluate and, if selected, to
monitor.
The candidates who offer the best opportunity to test the SII Pilot
Program under a broad range of conditions will be selected. A notice of
the selection will be published in the Federal Register and on the web.
OPS will receive comments on the selection for consideration during the
presentation review process. In addition to the factors listed
previously, several other considerations will go into evaluating the
relative merit of operator proposals. OPS desires to include both gas
and liquid pipeline systems in different geographical regions. In
addition, OPS is looking for diversity in the system integrity program
scope, tools, and processes from the operators selected to participate.
OPS is also looking for operators that want to expand the scope of
their integrity efforts over the three-year period. Expanding projects
will add to the information base necessary to evaluate the SII Pilot
Program. The need for diversity in the Pilot Program and the limit of
five operators may result in some operators with good system integrity
programs not being accepted into the SII Pilot Program.
D. Operator's Presentation
Operators that pass through the screening step will be invited to
give more detailed presentations of their approach to the SII Team and
OPS Regional Directors. This presentation will give the operator a
chance to describe in more detail various aspects of its program, and
allow OPS to better understand features that may be important to SII
Program success. The presentation should:
Discuss the historical performance of the company from a
safety, environment, and regulatory perspective.
Identify how maintenance and replacement projects are
prioritized and factored into annual and long term plans;
Describe the engineering evaluations conducted as part of
the company's integrity program, including input sources used,
documentation, and the relationship of any research activities to the
company's program;
Provide examples demonstrating the company's historical
pro-active approach to safety (public and environmental), operational
reliability and training; and
Describe the company's current self-auditing program to
ensure compliance with the pipeline safety regulations.
The presentation should adequately reflect and build upon the
operator's Application Letter. The presentation should reflect the
spirit of openness and mutual trust that is essential for success of
the SII approach, and reinforce the operator's intent to become a full
partner with the SII Team for the duration of the pilot program.
The operator can address these salient features by making an all-
inclusive presentation that is attended by key company personnel from
the engineering, operations, and maintenance departments. This will
best exhibit the company's commitment to system integrity and to
working with SII Team in the Pilot Program.
E. OPS Letter of Acceptance
OPS will consider information in the operator's presentation, as
well as any public comment received, before
[[Page 68824]]
approving the operator for participation in the SII Pilot Program. The
Associate Administrator of OPS will issue a Letter of Acceptance to the
official whose signature appears on the Application Letter. It is
possible that OPS will employ a phased approach to the evaluation and
acceptance of SII Pilot Program participants, resulting in operators
entering into the Pilot Program at different times.
IV. Program Formalization and Execution
For the three-year duration of the pilot program, ``standard OPS
inspections'' will be replaced with spot-checks and validation
inspections. The duration, extent and comprehensiveness of these
inspections will depend on the operator's performance in the past year.
It is expected that OPS and the operator will work collaboratively to
establish an inspection process that is appropriate and tailored for
the operator's specific pipeline system and integrity program. The
basic steps leading to this point are summarized below.
A. Program Formalization
Prior to beginning the SII Pilot Program with an operator, the SII
Team will check to see if a Joint Inter-Regional Operations and
Maintenance (O&M) Manual review has been recently performed. If an O&M
Manual review has not been completed, then one will be scheduled, or
performed as part of the SII Pilot Program Process.
As currently required, the operator must document all O&M Manual
revisions and additions whenever they occur. These revisions and
additions may be reviewed during the spot checks and validation
reviews. A primary purpose of these annual validation reviews is to
address and share information on new and significant safety and
compliance issues. Hence, it is expected that how the operator complies
with important, new regulatory requirements, particularly those where
interpretations might vary, will be addressed during these sessions.
Upon conclusion of the O&M Manual inspection (if needed), the first
SII Team/operator meeting will be conducted. During this session the
SII Team and the operator will:
Establish points of contact and protocols for
communication and information sharing during the pilot project.
Note: Any construction inspections, response to local government
or public complaints, and accident investigations would continue to
be conducted in the routine manner with results shared with the SII
Team.
Discuss safety and integrity issues of concern to both the
operator and OPS. These might include:
--Current areas of emphasis in operator's integrity program;
--OPS concerns from prior inspections;
--Operator accident and leak history;
--Appropriate data from the Federal Emergency Management Agency on
natural disaster history that may affect the pipeline;
--Oil Pollution Act Spill Response Plans and related issues for
hazardous liquid operators;
--Current industry-wide integrity issues and initiatives.
Review company operations, system and local maps, and
procedures, policies, or guidelines currently used to assure compliance
with Federal Pipeline Safety Regulations.
Discuss the company's record keeping system and interest
in exploring other avenues for sharing information and records without
compromising the confidentiality of sensitive, proprietary information.
Establish protocols for information exchange.
Review of Self-Audit Plan (see Exhibit A) and System
Integrity Program (see Exhibit B).
Establish how the self-audit spot checks and integrity
program validation reviews will be conducted, including how any
deficiencies or issues will be resolved.
Identify all new construction or major rehabilitation
projects planned for the upcoming year. While the SII Pilot Program
scope includes construction activities, new construction inspections
will be performed by the OPS Region. They will determine the
appropriate level of inspection for the new construction projects. The
OPS Regions will keep the SII Team and the company apprised of any
issues they identify when inspecting new construction.
Agree on a plan of action and time line for initiating the
SII Pilot Program.
Either at this initial session or shortly thereafter, the SII Team
will conduct the initial field spot check to validate and enhance the
operator's System Integrity and Self-Audit Plans. In this review,
emphasis will be placed on the operator's engineering evaluations and
correlation with operating data and field observations. As part of this
review process, the SII Team will review and discuss the effectiveness
of the operator's assessment of integrity issues identified on the
pipeline system.
B. Program Execution
This phase of the program will be conducted one year after the
formalization and implementation of the Self-Audit and System Integrity
Plans. The SII Team will conduct annual on-site sessions with each
company to discuss program progress and integrity issues. During this
visit, it is expected that information shared will be integrity-based
and will go beyond the scope of the ``minimum'' Pipeline Safety
Regulations. This session will include a review of the company's
implementation and results of their Self-Audit and System Integrity
Plans. Any mutually agreed adjustments to the Plans will also be
reviewed.
SII team members will also perform spot checks in the field to
verify compliance with the regulations and validate implementation of
the operator's integrity program. A field validation plan will be
jointly developed with the operator. The areas selected for the spot
checks will be based on a number of factors including the operator's
self-audit results, prior OPS inspection results, incident and leak
information, and other system performance information. Other areas to
be reviewed include locations on the system where integrity is
especially crucial to the protection of the public and the environment,
and to service reliability. The field inspections will also include
examining any areas of concern identified by the SII Team, following up
on any corrective actions that may have been defined to address
compliance or integrity problems, and examining any new technological
applications.
The SII Team will produce an annual Summary Report that summarizes
the on-site information exchange meetings and field validation reviews.
This report will include a synopsis of the key integrity issues and
improvements discussed, performance measures, new or proposed program
enhancements, lessons learned, and the status of compliance with the
Self-Audit Plan. Any noncompliance conditions that have a significant
safety impact or require long term corrective actions will be discussed
in the Summary Report. OPS will make a general summary report, as well
as periodic updates on each pilot, available to the public via the
System Integrity web page at http: //ops.dot.gov.
All compliance concerns will be discussed directly with the
operator during the annual visit. As noted earlier, it is expected that
the operator will have identified and corrected these items as a result
of implementing its Self-Audit Plan. In the event new compliance issues
are discovered by the SII Team during its spot check, or the SII Team
has concerns with how the operator has addressed any compliance
problem, every attempt will be made to resolve
[[Page 68825]]
any outstanding issues in a consultative fashion.
Following resolution, compliance actions will be documented as
follows:
1. All issues found as a result of the Operator's Self-Audit Plan
will be reviewed with the operator. Significant safety implications and
their corrective actions will be incorporated into the SII Team Summary
Report.
2. Issues found as a result of the SII Team spot check inspections
will also be reviewed with the operator and will be included in the
Summary Report.
3. Concerns that have no safety implications will be monitored by
OPS to assure issues are resolved and that information is distributed
to appropriate personnel throughout the company to prevent recurrence.
As noted previously, it is expected that participants in the SII
Pilot Program will be in a civil penalty-free environment as long as
the following conditions are met:
Operator's Self-Audit identifies noncompliance situations
and the operator corrects the problem to the SII Team's satisfaction;
System or organizational problems that lead to
noncompliances are corrected; and
Operator's program prevents repetitive noncompliance
situations.
If these conditions are not satisfied, OPS will attempt to resolve
the outstanding issues through a consultative interaction with the
operator. If an issue that has significant safety implications cannot
be resolved to the SII Team's and operator's satisfaction, the operator
may appeal to the Associate Administrator for OPS. If the issue can not
be mutually resolved at that point, the operator and/or OPS can
terminate participation in the SII Pilot Program.
OPS reserves the right to issue a Corrective Action Order if the
Associate Administrator for Pipeline Safety determines that a
particular pipeline facility is hazardous to life, property, or the
environment. (For example, after an accident, where a Corrective Action
Order is issued requiring an inspection and/or testing program to
assure pipeline integrity and to restore public confidence.)
V. Performance Measurement of the SII Program
The SII Team will evaluate the individual pilot projects annually,
and will document the results in its post-inspection Summary Report to
ascertain the effectiveness of the SII approach. In measuring
performance of the Pilot Program, the following factors will be
examined:
Understanding of pipeline system-wide condition, including
identifying potential risks and risk reduction opportunities to address
the most significant risks;
Familiarity with approaches, technologies, research
activities, and processes available to identify and remedy potential
safety problems;
Use of safety approaches (e.g., risk assessment
processes), and risk control and reduction activities commensurate with
the level of risk;
Integration and communication of system integrity-related
information and improved practices throughout the company (e.g.,
systematically institutionalizing good ideas);
Effectiveness of the Self-Audit Plan and its
implementation in assuring compliance with the Federal Pipeline Safety
Regulations (i.e., regulatory compliance is achieved and maintained;
and newly identified noncompliance conditions are corrected and not
repeated);
Performance assessment, feedback, and results orientation
of operators and OPS; and
Visibility of company management commitment to safety.
At the conclusion of the three-year SII Pilot Program, OPS and
participating operators hope to be able to answer the following
questions through the performance measurement process:
1. What measures best capture the expected outcomes?
How has the organization demonstrated increased safety and
environmental protection?
2. Are the selected system integrity activities having the intended
effects?
Does actual experience confirm predictions?
3. How can the overall system integrity process be improved?
Given actual experience, does the organization need to
change its decisions?
How should the risk assessment and risk control processes
be updated to reflect new experience?
What modifications need to be done to improve the
effectiveness and efficiency of the SII Pilot Program?
4. Do OPS and affected state agencies know more about the integrity
of the pipeline system than it did when the operator entered the SII
Pilot Program?
Has mutual confidence between OPS, the interstate agents,
and the operators increased on system integrity issues?
5. Is the usage of Self-Audit Plans effective in assuring
compliance with the Pipeline Safety Regulations?
Is regulatory compliance being achieved and maintained?
6. Has the SII approach enhanced the inspection process?
7. Have state and Federal resources been optimized to improve
efficiency and consistency, and enhance protection of the public and
the environment?
Exhibit A--Operator's Self-Audit Plan
Purpose
An operator participating in the SII Pilot Program must have a
Self-Audit Plan. A participant's self-audit should establish the
following:
Baseline measurement to demonstrate compliance with CFR
Parts 191 and 192 or 195.
Target areas for corrective action.
Corrective action follow-up.
The operator must implement the plan to assure the success of
the SII Pilot Program. As described previously, the operator will
perform and report the results of its self-audit annually. These
results will be reviewed by the SII Team. This process will enable
both the operator and the SII Team, to identify strengths and
weaknesses of the company's Self-Audit Plan. It will also ensure
that all operational, maintenance, inspection, etc., programs
required to maintain compliance with the regulations are in
compliance and operating satisfactorily. This review will also
ensure that the program elements of the Self-Audit Plan are
operating as initially agreed upon, and procedures are in place for
a thorough follow-up of any accidents/incidents.
Features
The key parts of an effective Self-Audit Plan are Implementation
and Operation, Checking and Corrective Action, and Management
Review. The operator will use its existing Self-Audit Plan, or
develop a plan that satisfactorily addresses the intent of the
features identified below. The SII Team will accept the Self-Audit
Plan at the Pilot Program inception, and whenever new regulations or
other factors require modification of the Plan.
Implementation and Operation
Structure and Responsibility:
Roles, responsibilities and authorities must be
defined, documented and communicated.
Resources essential to its implementation must be
provided. Specific resources are human and technology.
A company officer must appoint a management
representative to: Ensure the Self-Audit Plan requirements
previously established are implemented and maintained; and report on
the performance of the Self-Audit Plan to management.
Training, Awareness and Competence:
The organization must:
Identify training needs for personnel executing the
self-audit to ensure delivery of uniform results; and
Establish procedures to ensure employees are aware of:
The importance of conformance with the SII Program; the significant
actual or potential impacts of their activities; and the potential
consequences of departures from the procedures.
[[Page 68826]]
Checking and Corrective Action
The organization must:
Establish documented procedures to monitor and measure
characteristics of its facilities that can have an impact on its
operations and compliance;
Prepare a procedure to periodically evaluate compliance
with the regulations;
Establish procedures for defining responsibility and
authority for handling, investigating and taking actions on
nonconformance which must be reported to the SII Team as agreed
upon;
Record and implement changes resulting from corrective
and preventive actions; and
Schedule audits based on the importance of the activity
and the result of previous audits.
Management Review
Management must:
Periodically review the self-audit procedures and
documentation to ensure continuing suitability, adequacy and
effectiveness;
Evaluate the need for changes to policy, objectives and
other elements as it relates to continuing progress to the plan; and
Appraise the need for additional training and
communications to remain in conformance and plan for personnel
changes.
Documentation
The Self-Audit Plan must be conducted by implementing a
structured process for documentation. The organization must
establish and maintain information, in paper or electronic form, the
description of core elements of the Self-Audit Plan.
Audit Cycle
In summary, the SII Pilot Program self-audit process is expected
to proceed as follows:
1. Operator conducts the self-audit, collecting evidence and
reporting findings;
2. Operator prepares the self-audit report;
3. Operator and SII Team discuss self-audit results during
annual site information exchange;
4. SII Team conducts spot-inspection to validate the report;
5. SII Team evaluates self-audit, discusses findings with
operator and makes recommendations for improvements. Operator fine
tunes Self-Audit Plan as necessary;
6. Operator addresses recommendations and corrects mutually
agreed on deficiencies; and
7. Operator begins next cycle.
Exhibit B--Operator's System Integrity Plan
The System Integrity Plan shall address key elements of pipeline
system integrity issues that are not explicitly or completely
addressed in the current pipeline safety regulations. This plan will
enable both the operator and SII Team to cooperate and share
information on strengths and weaknesses of the operator's pipeline
system in a partnering, problem-solving, and consultative
environment. Input to the System Integrity Plan typically includes
data and information about the design and age of the pipe, external
factors, operational and maintenance practices, operating history,
test history, inspection findings, and the proximity and
distribution of population, third party construction activities,
environmentally sensitive areas, and unusually sensitive areas. The
operator's System Integrity Plan should include the following:
An ongoing system-wide engineering analysis,
Feedback to management,
Implementation of activities to address the most
significant threats to integrity, and
Continuous improvement.
Diligently applied, this plan should result in:
A benchmark for evaluating the SII Program
effectiveness,
Evidence of a documented system integrity system,
Documented and implemented integrity improvement ideas,
Enhanced employee involvement, and
Targeted training resulting in a better informed
workforce.
Some examples of an operator's system integrity program key
elements that may be included in the Plan are listed below:
A. SCADA
Design parameters and limitations.
Operational logistics.
B. Corrosion Control
External.
Internal.
Atmospheric.
C. Operational Integrity
Hydrostatic testing, close interval surveys, internal
inspection, or other integrity assessments:
--How does the Operator determine where and when to apply these
tools which are above the minimum Federal regulations?
--What determines the choice of a method?
--What determines the interval or frequency?
--Who reviews the summary?
--Are the reports used for long-term planning? How?
D. Pipeline Incidents and Accidents
All leak/spill history (Reportable and Non-reportable).
Repair reports.
Operator errors.
Equipment failure/malfunction.
Natural causes (landslide, earthquake, flood, etc.).
Third party damage.
Near miss reporting.
Abnormal operations.
Exhibit C--Spot Checks for Validation of Operator Self-Audit Plans
Some key areas will be randomly selected for field inspection by
the SII Team at various points along the system considering operator
self-audit exception data, system performance data, and accident/
incident information. Other portions in the system that are crucial
for public and environmental safety and operational reliability may
also be reviewed. Some of the areas that could be covered in the
validation check include the following:
Pipe in, across, or over bridges, streams, national
parks, wild and scenic rivers, cultural areas, populated areas,
unusually sensitive areas (proposed USA's), large reservoirs and
aquifers with water for human consumption, high hazard and high
consequence areas (as identified in FEMA reports);
Pipe at supports;
Marginal cathodic potential readings;
Patrolling records/ROW issues;
SCADA system;
Ongoing operation/maintenance activities;
Pressure settings on regulator or relief valves;
Internal inspection device operations and results;
Close interval surveys;
Rehabilitation projects, condition of rehabilitated
pipe and coatings;
Class location changes;
Overpressure device settings;
Maintenance Repair practices (lowering in-service
lines, reduction in MAOP or MOP due to anomalies); and
Pipe replacement practices.
Issued in Washington, DC, on December 8, 1998.
Richard B. Felder,
Associate Administrator, Office of Pipeline Safety.
[FR Doc. 98-33099 Filed 12-11-98; 8:45 am]
BILLING CODE 4910-60-P
