98-17492. Pipeline Safety: Intent To Approve Project and Environmental Assessment for the Mobil Pipe Line Company Pipeline Risk Management Demonstration Program  

  • [Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
    [Notices]
    [Pages 36018-36024]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-17492]
    
    
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    DEPARTMENT OF TRANSPORTATION
    
    Research and Special Programs Administration
    [Docket No. RSPA-98-3891; Notice 12]
    
    
    Pipeline Safety: Intent To Approve Project and Environmental 
    Assessment for the Mobil Pipe Line Company Pipeline Risk Management 
    Demonstration Program
    
    AGENCY: Office of Pipeline Safety, Research and Special Programs 
    Administration, DOT.
    
    ACTION: Notice of Intent to Approve Project and Environmental 
    Assessment.
    
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    SUMMARY: As part of its Congressional mandate to conduct a Risk 
    Management Demonstration Program, the Office of Pipeline Safety (OPS) 
    has been authorized to conduct demonstration projects with pipeline 
    operators to determine how risk management might be used to complement 
    and improve the existing Federal pipeline safety regulatory process. 
    This is a notice that OPS intends to approve Mobil Pipe Line Company 
    (Mobil) as a participant in the Pipeline Risk Management Demonstration 
    Program. This also provides an environmental assessment of Mobil's 
    demonstration project. Based on this environmental assessment, OPS has 
    preliminarily concluded that this proposed project will not have 
    significant environmental impacts.
        This notice explains OPS's rationale for approving this project, 
    and summarizes the demonstration project provisions (including affected 
    locations, risk control and monitoring activities, and regulatory 
    exemptions) that would go into effect once OPS issues an order 
    approving Mobil as a Demonstration Program participant. OPS seeks 
    public comment on the proposed demonstration project so that it may 
    consider and address these comments before approving the project. The 
    Mobil demonstration project is one of several projects OPS plans to 
    approve and monitor in assessing risk management as a component of the 
    Federal pipeline safety regulatory program.
    
    ADDRESSES: OPS requests that comments to this notice or about this 
    environmental assessment be submitted on or before July 31, 1998 so 
    they can be considered before project approval. However, comments on 
    this or any other demonstration project will be accepted in the Docket 
    throughout the 4-year demonstration period. Comments should be sent to 
    the Dockets Facility, U.S. Department of Transportation, Plaza 401, 400 
    Seventh Street, SW, Washington, DC 20590-0001, or you can E-Mail your 
    comments to ops.comments@rspa.dot.gov. Comments should identify the 
    docket number RSPA-98-3891. Persons should submit the original comment 
    document and one (1) copy. Persons wishing to receive confirmation of 
    receipt of their comments must include a self-addressed stamped 
    postcard. The Dockets Facility is located on the plaza level of the 
    Nassif Building in Room 401, 400 Seventh Street, SW, Washington, DC. 
    The Dockets Facility is open from 10:00 a.m. to 5:00 p.m., Monday 
    through Friday, except on Federal holidays.
    
    FOR FURTHER INFORMATION CONTACT: Elizabeth Callsen, OPS, (202) 366-
    4572, regarding the subject matter of this notice. Contact the Dockets 
    Unit, (202) 366-5046, for docket material.
    
    SUPPLEMENTARY INFORMATION:
    
    1. Background
    
        The Office of Pipeline Safety (OPS) is the federal regulatory body 
    overseeing pipeline safety. As a critical component of its federal 
    mandate, OPS administers and enforces a broad range of regulations 
    governing safety and environmental protection of pipelines. These 
    regulations have contributed to a good pipeline industry safety record 
    by assuring that risks associated with pipeline design, construction, 
    operations, and maintenance are understood, managed, and reduced. 
    Preserving and improving this safety record is OPS's top priority. On 
    the basis of extensive research, and the experience of both government 
    and industry, OPS believes that a risk management approach, properly 
    implemented and monitored, offers opportunities to achieve:
        (1) Superior safety, environmental protection, and service 
    reliability;
        (2) Increased efficiency and reliability of pipeline operations; 
    and
        (3) Improved communication and dialogue among industry, the 
    government, and other stakeholders.
        A key benefit of this approach is the opportunity for greater 
    levels of public participation.
        As authorized by Congress, OPS is conducting a structured 
    Demonstration Program to evaluate the use of a comprehensive risk 
    management approach in the operations and regulation of interstate 
    pipeline facilities. This evaluation will be performed under strictly 
    controlled conditions through a set of Demonstration Projects to be 
    conducted with interstate pipeline operators. A Presidential Directive 
    to the Secretary of Transportation (October 16, 1996) stated that in 
    implementing the Pipeline Risk Management Demonstration Program: ``The 
    Secretary shall require each project to achieve superior levels of 
    public safety and environmental protection when compared with 
    regulatory requirements that otherwise would apply.'' Thus, the process 
    to select operators for this Demonstration Program involves a 
    comprehensive review to ensure that the proposed project will provide 
    the superior safety and environmental protection required by this 
    Directive. OPS may exempt a participating operator from particular 
    regulations if the operator needs such flexibility in implementing a 
    comprehensive risk management program; however, regulatory exemption is 
    neither a goal nor requirement of the Demonstration Program. This 
    document summarizes the key points of this review for Mobil's 
    demonstration project, and evaluates the safety and environmental 
    impacts of this proposed project.
    
    2. OPS Evaluation of Mobil's Demonstration Project Proposal
    
        Using the consultative process described in Appendix A of the 
    Requests for Application for the Pipeline Risk Management Demonstration 
    Program (62 FR 14719), published on March 27, 1997, OPS has reached 
    agreement with Mobil Pipe Line Company on the provisions for a 
    demonstration project to be conducted at a crude oil storage tank 
    facility in Patoka, Illinois.
    
    Company History and Record
    
        Mobil Pipe Line Company currently owns approximately 5409 miles of
    
    [[Page 36019]]
    
    hazardous liquid pipeline throughout nine states. The Patoka, Illinois 
    crude breakout facility is located within the city limits of Vernon, 
    Illinois, population about 150, in Mobil's East of the Rockies (EOR) 
    operating region.
        Before entering into consultations with Mobil, OPS determined that 
    Mobil was a good demonstration program candidate based on an 
    examination of the company's safety and environmental compliance 
    record, its accident history, and its commitment to working with OPS to 
    develop a project meeting the Demonstration Program goals.
        In considering the merits of Mobil's proposal, OPS undertook a 
    comprehensive review of the company's safety and compliance record for 
    the demonstration project location, as well as Mobil's entire East of 
    the Rockies (EOR) system. Mobil, like all operating companies, has 
    experienced incidents at its facilities within and outside the United 
    States. In the last five years, the only incident at Patoka of 
    sufficient impact that required reporting to OPS occurred on March 7, 
    1995. A roof drain hose failed due to ice formation during sub-zero 
    temperatures. This event resulted in no injuries, and the company 
    reported that 196 of the 200 barrels spilled were recovered.
        Considering the frequency, causes, and consequences of these 
    events, together with Mobil's response to these events, OPS has 
    concluded that Mobil has demonstrated the corporate commitment to 
    safety and environmental protection required of demonstration program 
    candidates.
        Mobil has also demonstrated a strong working relationship with 
    emergency response personnel from federal and state agencies. Mobil 
    recently participated in a successful emergency drill with 
    representatives from OPS, the Environmental Protection Agency (EPA), 
    and the Coast Guard. Local and state participants from Illinois and 
    Missouri played active roles in this exercise.
    
    Consultative Evaluation
    
        During the consultations, OPS headquarters and Central Region 
    representatives, an Illinois pipeline safety official, and risk 
    management experts, met with Mobil to discuss Mobil's Environment, 
    Health, and Safety Management System (EHSMS). These discussions 
    included the programmatic and technical processes associated with the 
    risk management element of the EHSMS, the specific risk assessments 
    that Mobil has or will perform as part of this program, other 
    supporting analyses Mobil performed, proposed risk control activities 
    to address identified risks, and proposed performance measures to 
    ensure superior performance is being achieved. The discussions 
    addressed the adequacy of Mobil's management systems and technical 
    processes, demographics near the demonstration facility, communications 
    with outside stakeholders, and monitoring and auditing of results once 
    the demonstration project is underway. The consultation process also 
    included an environmental assessment, which is described in the 
    appendix to this notice.
        The consultation process was structured around three major review 
    criteria:
        1. Whether Mobil's proposed risk management demonstration program 
    is consistent with the Risk Management Program Standard and compatible 
    with the Guiding Principles set forth in that Standard;
        2. Whether the specific risk control activities that will result 
    from Mobil's proposed risk management program are expected to produce 
    superior safety, environmental protection, and reliability of service 
    compared to that achieved from compliance with the current regulations;
        3. Whether Mobil's proposed risk management demonstration program 
    includes a company work plan and a performance monitoring plan that 
    will provide adequate assurance that the expectations for superior 
    safety, environmental protection, and service reliability are actually 
    being achieved during implementation.
        The demonstration project provisions described in this notice 
    evolved from these consultations, as well as any public comments 
    received to date. Once OPS and Mobil consider comments received on this 
    notice, OPS plans to issue an order approving the Mobil demonstration 
    project.
    
    3. Statement of Project Goals
    
        OPS and Mobil believe Mobil's demonstration project will improve 
    safety and environmental protection through the application of the 
    Mobil EHSMS, which includes numerous hazard and risk assessments and 
    risk control activities beyond current regulatory requirements. 
    Specifically, the project will focus on safety and environmental issues 
    associated with breakout tanks and tank facilities, and will 
    demonstrate the adequacy of Mobil's release prevention and tank 
    integrity programs. The project will help demonstrate how Mobil's 
    release prevention activities will work in conjunction with proposed 
    American Petroleum Institute (API) aboveground storage tank standards 
    and National Fire Protection Association (NFPA) codes on flammable and 
    combustible liquids. OPS has issued a notice of proposed rulemaking 
    that would incorporate by reference selected industry standards for 
    breakout tanks into 49 CFR Part 195. (see Federal Register Notice 63 FR 
    27903, published 05/21/98.) Information and insights from the Mobil 
    project will help OPS determine if the proposed regulations effectively 
    address the most important risks at tank facilities, and help operators 
    define the most effective means of addressing these risks.
        The Patoka crude breakout tank facility will be the initial focus 
    of the Mobil demonstration project. Mobil has conducted a thorough and 
    systematic hazard analysis and risk assessment to identify hazards and 
    risks associated with operating the facility. Mobil invited OPS to 
    observe these assessments. Based on these risk assessments, Mobil has 
    identified potential corrective actions for various systems at the 
    facility, including piping, pumps, communications, fire water system, 
    utility/support systems, and cast iron valves. During the demonstration 
    project, Mobil will identify the specific risk control activities that 
    are expected to result in reduced risk and superior safety and 
    reliability at the facility. These risk control activities will exceed 
    the requirements of the current regulations.
        Through these activities at Patoka, both Mobil and OPS will improve 
    their understanding of risks associated with tanks and the most 
    effective risk control activities to manage these risks. Mobil will use 
    this information to assure superior performance at Patoka and, as 
    appropriate, at other Mobil tank facilities. OPS will use the 
    additional information to assure that Mobil and OPS fully understand 
    the major risks of the Patoka facility and that Mobil is implementing 
    effective risk control activities, specific to the Patoka facility.
        Mobil seeks no relief from current pipeline safety regulations 
    governing the operation of the Patoka facility. The Patoka facility 
    would be exempt from compliance with any new regulations that are not 
    consistent with the approved risk management activities and OPS would 
    continue to monitor Mobil's performance under the risk management order 
    to assure that superior performance is being achieved.
    
    4. Demonstration Project Facility:
    
        The Patoka facility is located within the city limits of Vernon, 
    Illinois, a town with a population of about 150. The surrounding area 
    is also low population density. The facility contains 22 vertical 
    aboveground crude
    
    [[Page 36020]]
    
    storage tanks, plant transfer piping, transfer pumps, crude oil 
    blenders, offices, a maintenance building, miscellaneous auxiliary 
    pipeline station equipment, and the station manager's personal 
    residence. Patoka is a self-contained facility, with no public roads 
    traversing the property. The North Fork Creek, which runs along the 
    south end of the Patoka facility, is a water supply for the city of 
    Patoka. Mobil protects the creek by maintaining a second physical 
    barrier surrounding each tank that is capable of holding more than the 
    entire contents of the tank. Mobil has provided additional 
    precautionary barriers to releases of product along the south end of 
    its Patoka facility.
        The facility is used as a common carrier crude pipeline handling 
    facility. Products handled at the facility include crudes of varying 
    sulphur content from the US Gulf Coast and Canada, and petroleum 
    condensate. The products include both ``sour'' crude (oil with a total 
    sulphur content above one percent), and ``sweet'' crude (oil with 
    little or no sulphur impurities).
    
    5. Project Description
    
        In 1996, Mobil updated its Corporate Policy on Environment, Health, 
    and Safety (EHS). To fulfill the commitments in the EHS Policy, Mobil 
    has adopted an Environmental, Health, and Safety Management System 
    (EHSMS). The EHSMS is the vehicle for institutionalizing a 
    comprehensive and integrated risk management program throughout Mobil. 
    The primary objective of the Mobil project is to demonstrate that 
    implementing the EHSMS will lead to superior performance, improved 
    safety and environmental protection.
        Mobil's environment, health, and safety program includes 11 key 
    elements and 56 specific management ``expectations''. An 
    ``expectation'' within the EHSMS is a well-defined objective and 
    includes identification of those accountable and responsible for 
    achieving the objective, the documentation required to demonstrate 
    achievement, performance indicators, and the key corporate resources 
    that will be used to achieve the objective.
        The 11 elements are:
        1. Policy and Leadership.
        2. Continuous Improvement.
        3. Safety and Health.
        4. Risk Management.
        5. Incident Reporting and Investigation.
        6. Crisis Preparedness.
        7. Environmental Protection.
        8. Product Stewardship.
        9. Training.
        10. Community Relations.
        11. Legal Requirements.
        The Risk Management element of the program (Element #4) has four 
    expectations:
        4.1  A system is in place to identify environment, health, and 
    safety hazards and their potential consequences.
        4.2  A system is in place to assess and prioritize risks and manage 
    them in a cost-effective manner.
        4.3  A system is in place to review the design of new and modified 
    facilities to ensure the incorporation of appropriate environment, 
    health, and safety protection measures.
        4.4  Risks associated with the acquisition, closure and divestment 
    of facilities and operations are assessed and managed.
        Mobil has structured and documented processes in place for 
    performing the hazards analyses, risk assessments, and job safety 
    analyses, prioritizing risks, defining risk control activities, and 
    evaluating and prioritizing risk control activities required to meet 
    the corporate expectations. These structured analytical and management 
    processes also satisfy the requirements of the Risk Management Program 
    Standard.
        The Mobil EHSMS also includes structured processes for qualifying 
    and training personnel in risk assessment, and integrating the risk 
    assessment program with other Mobil operating and business systems, 
    including those processes used by Mobil to ensure that proposed changes 
    to the physical design of the system or to the maintenance and 
    operating procedures of the system are carefully considered, 
    documented, and communicated.
        Mobil's East of the Rockies (EOR) business unit, which is 
    responsible for the Patoka facility, has defined the accountabilities, 
    responsibilities, documentation requirements, and performance 
    indicators for management expectations, including the four risk 
    management expectations. A business unit review of how Mobil's EOR 
    Business Unit is implementing the EHSMS was performed in the First 
    Quarter of 1998, and no significant deficiencies were reported. 
    Business unit reviews will occur annually.
        Mobil has performed the required hazards assessment, job safety 
    analyses, and risk assessment of its Patoka facility. Mobil has 
    identified a variety of potential risk control activities to address 
    the identified risks including improvements to piping, pumps, 
    communications, fire water system, utility/support systems, and cast 
    iron valves. During the demonstration project, Mobil will identify the 
    specific set of risk control activities that will best manage the risks 
    identified. Mobil will continue to perform all of the preventive 
    measures and risk control activities currently in effect. In addition, 
    through the EHSMS process, Mobil has identified facility-specific 
    hazards and concerns that were not specifically or adequately addressed 
    through compliance with current DOT regulations. The risk analyses that 
    Mobil has performed are beyond the requirements of the current 
    regulations.
        Mobil has defined performance indicators for management 
    expectations, including performance indicators for the four risk 
    management expectations discussed previously. Mobil tracks several high 
    level EHS performance indicators including the number of environmental 
    incidents, DOT and OSHA reportable incidents, and lost work days. The 
    financial compensation for Mobil employees is tied to these performance 
    measures. Ongoing audits and assessments, conducted as part of the 
    Continuous Improvement element (Element #2 of the EHSMS), assure that 
    all expectations have been met.
        The activities below would be included in an Order formally 
    approving the Mobil demonstration project:
         Share information with OPS concerning the use of hazards 
    analyses, risk screening tools, and other risk assessment and 
    prioritization tools;
         Share information with OPS concerning facility-specific 
    risks at Patoka;
         Share information with OPS concerning the preventive and 
    risk control activities Mobil has identified to address these risks and 
    their relative priority;
         Implement the risk control activities selected for Patoka;
         Share information with OPS concerning the lessons learned 
    on institutionalizing risk management programs to help OPS in 
    evaluating the effectiveness of risk management programs; and
         Track, monitor, and report performance measures selected 
    to determine the effectiveness of the risk control activities selected 
    for Patoka, and the Mobil risk management program in general.
    
    Monitoring Demonstration Project Effectiveness
    
        The Mobil Demonstration Project includes a comprehensive approach 
    to performance monitoring that assures the superior protection of 
    public safety and the environment, and achieves other project 
    objectives. A key element of this monitoring plan is a set of 
    programmatic performance measures that would track the growth and 
    institutionalization of
    
    [[Page 36021]]
    
    risk management within the company, measure the effectiveness of the 
    EHSMS in achieving stated expectations, and measure the effectiveness 
    of specific risk control activities. Mobil uses a simple, three point 
    scale to score performance in implementing the Mobil EHSMS:
    
    0=No Evidence That Expectation is Being Met
    1=Expectation is Partially Met
    2=Expectation is Fully Met
    B=Best Practice (equivalent to a ``2'' for roll-up purposes)
    
        Mobil will report performance measurement data and project progress 
    quarterly to OPS throughout the four year demonstration period. This 
    information, as well as periodic OPS audits, will assure accountability 
    for improved performance.
    
    6. Regulatory Perspective
    
    Why Is OPS Considering This Project?
    
        OPS is considering Mobil's proposed project for the Demonstration 
    Program because, after extensive review, OPS is satisfied that the 
    proposal:
        1. Provides superior safety and environmental protection for the 
    Patoka facility. Mobil has adequately demonstrated that the risk 
    control activities it will perform at Patoka go beyond current pipeline 
    safety regulatory requirements and, thus, provide a higher level of 
    public safety and environmental protection than exists today.
        2. Offers a good opportunity to evaluate risk management as a 
    component of the Federal pipeline safety regulatory program. OPS 
    believes the Demonstration Program could benefit from Mobil's 
    participation, given some of the distinguishing features of its 
    proposed demonstration project, including:
         A fully-institutionalized, integrated, corporate-wide risk 
    management program with documented roles, responsibilities, and 
    accountabilities;
         Comprehensive evaluation of the hazards and risks of the 
    facility;
         A structured and documented approach for identifying and 
    evaluating the relative merits of risk control activities through a 
    multi-attribute decision process;
         A good illustration of how companies can use risk 
    management to improve safety and environmental protection over and 
    above current regulatory requirements;
         Willingness to share information with OPS and state 
    pipeline safety agencies on the specific risks associated with the 
    facility, as well as its risk management program and processes.
        3. Provides valuable information about the risks and effective risk 
    control activities for aboveground storage tanks. This additional 
    information will allow OPS to more effectively ensure
        4. Safe operation of Patoka, and be better able to develop, apply, 
    and enforce regulations related to aboveground storage tanks.
    
    How Will OPS Oversee This Project?
    
        OPS retains its full authority to administer and enforce all 
    regulations governing pipeline safety. Mobil is not requesting any 
    regulatory exemptions. The Patoka facility will be subject to the 
    routine OPS inspection to ensure compliance with the applicable Federal 
    Pipeline Safety Regulations. In addition, subsequent to approval, a 
    Project Review Team (PRT) consisting of OPS headquarters and regional 
    staff and state pipeline safety officials who have been reviewing the 
    proposal, will continue to monitor the project. The PRT is designed to 
    be a more comprehensive oversight process which draws maximum technical 
    experience and perspective from all affected OPS regional and 
    headquarters offices as well as any affected state agencies that would 
    not normally provide oversight on interstate transmission projects.
        One of the primary functions of this Team will be to conduct 
    periodic risk management audits. These risk management audits will be 
    used to ensure company compliance with the specific terms and 
    conditions of the OPS Order authorizing this Demonstration Project. OPS 
    is developing a detailed audit plan, tailored to the unique 
    requirements of the Mobil Demonstration Project. This plan will 
    describe the audit process (e.g., types of inspections, methods, points 
    of disclosure of risk assessment information, frequency of audit), as 
    well as the specific requirements for reporting information and 
    performance measurement data to OPS.
    
    Information Provided to the Public
    
        OPS has previously provided information to the public about the 
    Mobil project, and has requested public comment, using many different 
    sources. OPS aired an electronic town meeting on September 17, 1997 
    that enabled viewers of the two-way live broadcasts to pose questions 
    and voice concerns about candidate companies (including Mobil). An 
    earlier Federal Register notice (62 FR 53052; October 10, 1997) 
    informed the public that Mobil was interested in participating in the 
    Demonstration Program, provided general information about technical 
    issues and risk control alternatives to be explored, and identified the 
    geographic areas the demonstration project would traverse.
        Since August 1997, OPS has used an Internet-accessible data system 
    called the Pipeline Risk Management Information System (PRIMIS) at 
    http://www.cycla.com/opsdemo to collect, update, and exchange 
    information about all demonstration candidates, including Mobil.
        At a November 19, 1997, public meeting hosted by OPS in Houston, 
    TX, Mobil officials presented a summary of the proposed demonstration 
    project and answered questions from meeting attendees. (Portions of 
    this meeting were broadcast on January 15, 1998, 2:00 p.m. Eastern 
    Standard Time, via satellite to locations nationwide and via Internet 
    to individuals at their personal computers). OPS featured members of 
    the Patoka community on a satellite/Internet nationwide broadcast which 
    aired March 26, 1998. The school superintendent, fire chief, and mayor 
    were among the citizens who remarked on community relations, training 
    programs, exercises, spill drills, and other interactions between the 
    company and citizens. In addition to viewers of the live broadcast at 
    sites throughout the nation, the Internet broadcast received over 4300 
    hits.
        OPS has provided a prospectus, which includes a map of the 
    demonstration sites, to State officials and community representatives 
    who may be interested in reviewing project information, providing 
    input, or monitoring the progress of the project. This notice is OPS's 
    final request for public comment before OPS intends to approve Mobil's 
    demonstration project. So far, the public has not raised any issues or 
    concerns related to the Mobil proposal.
    
        Issued in Washington, DC on June 25, 1998.
    Richard B. Felder,
    Associate Administrator for Pipeline Safety.
    
    Appendix--Environmental Assessment
    
    A. Background and Purpose
    
        A Presidential Directive to the Secretary of Transportation 
    (October 16, 1996) stated that in implementing the Pipeline Risk 
    Management Demonstration Program: ``The Secretary shall require each 
    project to achieve superior levels of public safety and 
    environmental protection when compared with regulatory requirements 
    that otherwise would apply.'' Thus, the process to select operators 
    for this Demonstration Program involves a comprehensive review to 
    ensure that the proposed project will provide the superior safety 
    and environmental protection required by this Directive. This 
    document summarizes the key points of this review for Mobil Pipe 
    Line Company's (Mobil)
    
    [[Page 36022]]
    
    demonstration project, and evaluates the safety and environmental 
    impacts of this proposed project.
        This document was prepared in accordance with section 102(2)(c) 
    of the National Environmental Policy Act (42 U.S.C. Section 4332), 
    the Council on Environmental Quality regulations (40 CFR Sections 
    1500-1508), and Department of Transportation Order 5610.1c, 
    Procedures for Considering Environmental Impacts.
    
    B. Description of Proposed Action
    
        Mobil will conduct its demonstration project at its crude oil 
    breakout storage tank facility in Patoka, Illinois. Mobil has 
    adopted an Environment, Health, and Safety Management System (EHSMS) 
    to institutionalize a comprehensive and integrated risk management 
    program throughout the company. The proposed project's primary 
    objective is to demonstrate that implementing the Mobil EHSMS will 
    lead to superior performance, improved safety and environmental 
    protection. The project will focus on safety and environmental 
    issues associated with breakout tanks and tank facilities, and will 
    demonstrate the adequacy of Mobil's release prevention and tank 
    integrity programs.
        As a result of a comprehensive review of Mobil's risk management 
    demonstration project, the Office of Pipeline Safety (OPS) proposes 
    to approve this project for participation in the Demonstration 
    Program.
        The Risk Management element of Mobil's EHSMS (Element #4) 
    contains four expectations:
        4.1  A system is in place to identify environment, health, and 
    safety hazards and their potential consequences.
        4.2  A system is in place to assess and prioritize risks and 
    manage them in a cost-effective manner.
        4.3  A system is in place to review the design of new and 
    modified facilities to ensure the incorporation of appropriate 
    environment, health, and safety protection measures.
        4.4  Risks associated with the acquisition, closure and 
    divestment of facilities and operations are assessed and managed.
        Each ``expectation'' within the EHSMS contains a well-defined 
    objective and includes identification of those accountable and 
    responsible for achieving the objective, the documentation required 
    to demonstrate achievement, performance indicators, and the key 
    corporate resources that will be used to achieve the objective.
        Mobil has structured and documented processes in place for 
    performing the hazards analyses, risk assessments, job safety 
    analyses, prioritizing risks, defining risk control activities, and 
    evaluating and prioritizing risk control activities required to meet 
    the corporate expectations. These structured analytical and 
    management processes also satisfy the requirements of the Risk 
    Management Program Standard.
        The Mobil EHSMS also includes structured processes for 
    qualifying and training personnel in risk assessment, and 
    integrating the risk assessment program with other Mobil operating 
    and business systems, including those processes used by Mobil to 
    ensure that proposed changes to the physical design of the system, 
    or to the maintenance and operating procedures of the system, are 
    carefully considered, documented, and communicated.
        Mobil is performing the required hazards assessment, job safety 
    analyses, and risk assessment of its Patoka facility and will 
    identify a set of risk control activities to effectively manage the 
    risks identified. Mobil requests no exemptions from the current 
    pipeline safety regulations. Mobil will continue to perform all of 
    the preventive measures and risk control activities that are 
    presently in effect. In addition, through the EHSMS process, Mobil 
    has identified facility-specific hazards and concerns that were not 
    specifically or adequately addressed through compliance with current 
    pipeline safety regulations. The analyses that Mobil has performed 
    and the risk control activities that Mobil will perform are beyond 
    the requirements of the current regulations.
        Mobil will define performance indicators for each of the 56 
    management objectives in the EHSMS. The financial compensation for 
    Mobil employees is tied to these performance measures. Ongoing 
    audits and assessments, conducted as part of the Continuous 
    Improvement element of EHSMS (Element #2), will assure that all 
    expectations are being met.
        The activities below would be included in an Order formally 
    approving the Mobil demonstration project:
         Share information with OPS concerning the use of 
    hazards analyses, risk screening tools, and other risk assessment 
    and prioritization tools;
         Share information with OPS concerning the facility-
    specific risks at Patoka;
         Share information with OPS concerning the preventive 
    and risk control activities Mobil has identified to address these 
    risks and their relative priority;
         Implement the risk control activities selected for 
    Patoka;
         Share information with OPS concerning the lessons 
    learned on institutionalizing risk management programs to help OPS 
    in evaluating the effectiveness of risk management programs;
         Track, monitor, and report performance measures 
    selected to determine the effectiveness of the risk control 
    activities selected for Patoka, and the Mobil risk management 
    program in general.
    
    Monitoring Demonstration Project Effectiveness
    
        The Mobil Demonstration Project includes a comprehensive 
    approach to performance monitoring that assures the superior 
    protection of public safety and the environment, and achieves other 
    project objectives. A key element of this monitoring plan is a set 
    of programmatic performance measures that would track the growth and 
    institutionalization of risk management within the company, measure 
    the effectiveness of the EHSMS in achieving stated expectations, and 
    measure the effectiveness of specific risk control activities.
        Mobil will report performance measurement data and project 
    progress regularly to OPS throughout the four year demonstration 
    period. This information, as well as periodic OPS audits, will 
    assure accountability for improved performance.
        More detailed descriptions of all aspects of the Mobil proposal 
    and OPS rationale for approving the project are available to the 
    public via the Pipeline Risk Management Information System (PRIMIS), 
    at http://www.cycla.com/opsdemo.
    
    C. Purpose and Need for Action
    
        As authorized by Congress, OPS is conducting a structured 
    Demonstration Program to evaluate the use of a comprehensive risk 
    management approach in the operations and regulation of interstate 
    pipeline facilities. This evaluation is being performed under 
    strictly controlled conditions through a set of demonstration 
    projects being conducted with interstate pipeline operators. Through 
    the Demonstration Program, OPS will determine whether a risk 
    management approach, properly implemented and monitored through a 
    formal risk management regulatory framework, achieves:
        (1) Superior safety and environmental protection; and
        (2) Increased efficiency and service reliability of pipeline 
    operations.
        In June, 1997, Mobil submitted a Letter of Intent to OPS, asking 
    to be considered as a Demonstration Program candidate. Using the 
    consultative process described in Appendix A of the Requests for 
    Application for the Pipeline Risk Management Demonstration Program 
    (62 FR 14719), published on March 27, 1997, OPS is satisfied that 
    Mobil's proposal will provide superior safety and environmental 
    protection, and is prepared to finalize the agreement with Mobil on 
    the provisions for the demonstration project.
    
    D. Alternatives Considered
    
        OPS has considered three alternatives: approval of the Mobil 
    risk management demonstration project as proposed in Mobil's 
    application; denial of the Mobil demonstration project; or approval 
    of the project with certain modifications to Mobil's application.
        OPS's preferred alternative is to approve the Mobil 
    demonstration project. OPS is satisfied that the proposal protects 
    the Patoka facility and surrounding environment. The risk assessment 
    findings disclosed from Mobil's hazard and risk analyses already 
    exceed the information that would have been available to OPS through 
    the current regulatory process. As a result of the assessments, 
    Mobil is considering potential corrective actions for various 
    systems at the facility, including piping, pumps, communications, 
    fire water system, utility/support systems, and cast iron valves. 
    Because Mobil will continue to perform the activities currently 
    required by the regulations, the set of proposed risk control 
    activities will go beyond the current regulatory requirements to 
    provide a higher level of protection than exists today. OPS and 
    Mobil will monitor and, if necessary, improve the effectiveness of 
    the risk control activities throughout the demonstration period.
    
    [[Page 36023]]
    
        Denial of the project would result in OPS's considerable loss of 
    valuable information concerning the sources of risks at Patoka and 
    other similar breakout tank facilities and the most effective means 
    of managing these risks. Denial would also significantly diminish 
    OPS's ability to evaluate the effectiveness of an institutionalized, 
    integrated, and comprehensive risk management program in producing 
    superior performance, and would hinder OPS's ability to satisfy the 
    objectives of the Risk management Demonstration Program, and the 
    requirements of the previously-mentioned Presidential Directive.
        All of the issues raised by OPS, state regulators, stakeholders, 
    and the public about Mobil's proposed project have been discussed 
    within the consultative process, resolved to OPS's satisfaction, and 
    reflected in Mobil's application. Therefore, OPS does not believe 
    that modifications to Mobil's application are required.
    
    E. Affected Environment and Environmental Consequences
    
        The Patoka facility is located within the city limits of Vernon, 
    Illinois, a town with a population of about 150. The area around the 
    facility is low population density. The facility contains 22 
    vertical aboveground crude storage tanks, plant transfer piping, 
    transfer pumps, crude oil blenders, offices, a maintenance building, 
    miscellaneous auxiliary pipeline station equipment, and the station 
    manager's personal residence. Patoka is a self-contained facility, 
    with no public roads traversing the property.
        The North Fork Creek, which runs along the south end of the 
    Patoka facility, is a water supply for the city of Patoka. Mobil 
    protects the creek by maintaining a second physical barrier 
    surrounding each tank that is capable of holding more than the 
    entire contents of the tank. Mobil has provided additional 
    precautionary barriers to releases of product along the south end of 
    its Patoka facility.
        The facility is used as a common carrier crude pipeline handling 
    facility. Products handled at the facility include crudes of varying 
    sulphur content from the U.S. Gulf Coast and Canada, and petroleum 
    condensate. The products include both ``sour'' crude (oil with a 
    total sulphur content above one percent), and ``sweet'' crude (oil 
    with little or no sulphur impurities). If a tank leak or rupture 
    were to occur, the crude product could possibly spill into the 
    immediate surrounding area within the facility, and in the presence 
    of an ignition source, could ignite releasing fumes into the air. 
    The likelihood of such spills and the levels of associated 
    environmental consequences are already very low, as evidenced by 
    both Patoka-specific and industry-wide operating history. The 
    performance of the risk demonstration project will result in 
    additional risk control activities over those currently required, 
    reducing even further the likelihood of events that could impact the 
    environment and the potential levels of those impacts.
        In considering the merits of Mobil's proposal, OPS undertook a 
    comprehensive review of the company's safety and compliance record 
    for the demonstration project location, as well as Mobil's entire 
    East of the Rockies (EOR) system. Mobil, like all operating 
    companies, has experienced incidents at its facilities within and 
    outside the United States. In the last five years, the only incident 
    at Patoka of sufficient impact that required reporting to OPS 
    occurred on March 7, 1995. A roof drain hose failed due to ice 
    formation during sub-zero temperatures. This event resulted in no 
    injuries and the company reported that 196 of the 200 barrels 
    spilled were recovered.
        Considering the frequency, causes, and consequences of these 
    events, together with Mobil's response to these events, OPS has 
    concluded that Mobil has demonstrated the corporate commitment to 
    safety and environmental protection required of demonstration 
    program candidates.
        Mobil has also demonstrated a strong working relationship with 
    emergency response personnel from federal and state agencies. Mobil 
    recently participated in a successful emergency drill with 
    representatives from OPS, the Environmental Protection Agency (EPA), 
    and the Coast Guard. Local and state participants from Illinois and 
    Missouri played active roles in this exercise.
    
    F. Environmental Justice Considerations
    
        In accordance with Executive Order 12898 (Federal Actions to 
    Address Environmental Justice in Minority and Low-Income 
    Populations), OPS has considered the effects of the demonstration 
    project on minority and low-income populations. As explained above, 
    OPS believes this project will provide superior safety and 
    environmental protection at the Patoka facility. The risk control 
    activities will provide greater protection than compliance with 
    existing regulations. The Patoka facility is located within the city 
    limits of Vernon, Illinois, population about 150. Residents of 
    Vernon will be afforded greater protection than they presently have, 
    regardless of the residents' income level or minority status. 
    Therefore, the proposed project does not have any disproportionately 
    high or adverse health or environmental effects on any minority or 
    low-income populations near the demonstration facility.
    
    G. Information Made Available to States, Local Governments, and 
    Individuals
    
        OPS has made the following documents publicly available, and 
    incorporates them by reference into this environmental assessment:
        (1) ``Demonstration Project Prospectus: Mobil Pipe Line 
    Corporation'', June 1998, available by contacting Elizabeth M. 
    Callsen at 202-366-4572. Includes a map showing the location of the 
    demonstration project site. Purpose is to reach the public, local 
    officials, and other stakeholders, and to solicit their input about 
    the proposed project. Mailed to several hundred individuals, 
    including Local Emergency Planning Committees (LEPC) and other local 
    safety officials, Regional Response Teams (RRT) representing other 
    federal agencies, state pipeline safety officials, conference 
    attendees, and members of public interest groups.
        (2) ``Mobil Pipe Line Company--Application for DOT-OPS Risk 
    Management Demonstration Program'', available in Docket No. RSPA-98-
    3891 at the Dockets Facility, U.S. Department of Transportation, 
    Plaza 401, 400 Seventh Street, SW, Washington, DC 20590-0001, (202) 
    366-5046.
        (3) ``OPS Project Review Team Evaluation of the Mobil 
    Demonstration Project''.
        (4) ``Notice of Intent to Approve Project'', published 
    concurrently with this Environmental Assessment.
        OPS has previously provided information to the public about the 
    Mobil project, and has requested public comment, using many 
    different sources. OPS aired four electronic broadcasts (June 5, 
    1997; September 17, 1997; and December 4, 1997; and March 26, 1998.) 
    reporting on demonstration project proposals (the last three of 
    which provided specific information on Mobil's proposal). An earlier 
    Federal Register notice (62 FR 53052; October 10, 1997) informed the 
    public that Mobil was interested in participating in the 
    Demonstration Program, provided general information about technical 
    issues and risk control alternatives to be explored, and identified 
    the geographic areas the demonstration project would traverse.
        Since August, 1997 OPS has used an Internet-accessible data 
    system called the Pipeline Risk Management Information System 
    (PRIMIS) at http://www.cycla.com/opsdemo to collect, update, and 
    exchange information about all demonstration candidates, including 
    Mobil.
        At a November 19, 1997, public meeting OPS hosted in Houston, 
    TX, Mobil officials presented a summary of the proposed 
    demonstration project and answered questions from meeting attendees. 
    (Portions of this meeting were broadcast on December 4, 1997.) OPS 
    featured members of the Patoka community on a satellite/Internet 
    nationwide broadcast which aired March 26, 1998. The school 
    superintendent, fire chief, and mayor were among the citizens who 
    remarked on community relations, training programs, exercises, spill 
    drills, and other interactions between the company and citizens. In 
    addition to viewers of the live broadcast at sites throughout the 
    nation, the Internet broadcast received over 4300 hits. This 
    broadcast is available on demand via the OPS website ops.dot.gov/
    tmvid.htm. So far, the public has not raised any issues or concerns 
    related to the Mobil proposal.
    
    H. Listing of the Agencies and Persons Consulted, Including Any 
    Consultants
    
    Persons/Agencies Directly Involved in Project Evaluation
    
    Stacey Gerard, OPS/U.S. Department of Transportation
    Tom Fortner, OPS/U.S. Department of Transportation
    Ivan Huntoon, OPS/U.S. Department of Transportation
    Donald Moore, OPS/U.S. Department of Transportation
    Linda Daugherty, OPS/U.S. Department of Transportation
    Bruce Hansen, OPS/U.S. Department of Transportation
    Elizabeth Callsen, OPS/U.S. Department of Transportation
    Steve Smock, Illinois Commerce Commission
    Mary McDaniel, Railroad Commission of Texas
    
    [[Page 36024]]
    
    Jim vonHerrmann, Cycla Corporation (consultant)
    Andrew McClymont, Cycla Corporation (consultant)
    
    Persons/Agencies Receiving Briefings/Project Prospectus/Requests 
    for Comment
    
        Regional Response Team (RRT), Region 5, representing the 
    Environmental Protection Agency; the Coast Guard; the U.S. 
    Departments of Interior, Commerce, Justice, Transportation, 
    Agriculture, Defense, State, Energy, Labor; Health and Human 
    Services; the Nuclear Regulatory Commission; the General Services 
    Administration; and the Federal Emergency Management Agency (RRT Co-
    Chairs: Richard Karl, EPA and Captain Gregory Cope, Coast Guard).
    
     I. Conclusion
    
        Based on the above-described analysis of the proposed 
    demonstration project, OPS has determined that there are no 
    significant impacts associated with this action.
    
    [FR Doc. 98-17492 Filed 6-30-98; 8:45 am]
    BILLING CODE 4910-60-P
    
    
    

Document Information

Published:
07/01/1998
Department:
Research and Special Programs Administration
Entry Type:
Notice
Action:
Notice of Intent to Approve Project and Environmental Assessment.
Document Number:
98-17492
Pages:
36018-36024 (7 pages)
Docket Numbers:
Docket No. RSPA-98-3891, Notice 12
PDF File:
98-17492.pdf