98-17493. Pipeline Safety: Intent To Approve Project and Environmental Assessment for the Phillips Pipe Line Company Pipeline Risk Management Demonstration Program  

  • [Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
    [Notices]
    [Pages 36024-36030]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-17493]
    
    
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    DEPARTMENT OF TRANSPORTATION
    
    Research and Special Programs Administration (RSPA), DOT.
    [Docket No. RSPA-98-3892; Notice 13]
    
    
    Pipeline Safety: Intent To Approve Project and Environmental 
    Assessment for the Phillips Pipe Line Company Pipeline Risk Management 
    Demonstration Program
    
    AGENCY: Office of Pipeline Safety, DOT.
    
    ACTION: Notice of Intent to Approve Project and Environmental 
    Assessment.
    
    -----------------------------------------------------------------------
    
    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 Phillips Pipe Line Company 
    (Phillips) as a participant in the Pipeline Risk Management 
    Demonstration Program. This also provides an environmental assessment 
    of Phillips'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 Phillips 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 
    Phillips 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 four 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-98-3892. 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 Phillips's 
    demonstration project, and evaluates the safety and environmental 
    impacts of this proposed project.
    
    2. OPS Evaluation of Phillips'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 Phillips Pipe Line Company on the provisions for a 
    demonstration project to be conducted along Phillips's Sweeny-Pasadena 
    system in Texas.
    
    Company History and Record
    
        Phillips Pipe Line Company is headquartered in Bartlesville,
    
    [[Page 36025]]
    
    Oklahoma, and employs over 580 people and operates and maintains 
    approximately 7500 miles of pipelines in 9 states. Phillips transports 
    approximately 750,000 barrels of crude oil, refined products, 
    petrochemicals, and natural gas liquids each day.
        Before entering into consultations with Phillips, OPS determined 
    that Phillips 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 Project goals.
        In December 1992, during an excavation project, a contract 
    equipment operator punctured a pipeline operated by Phillips in Aurora, 
    Colorado. This accident resulted in a release of 1,665 barrels of 
    natural gas liquids, injuring six people. Because of concerns raised by 
    OPS over company procedures, Phillips developed a risk based approach 
    to improve the safety of pipeline excavations and implemented an 
    Excavation Risk Assessment process. Lessons learned from this incident 
    as well as other company and industry incidents led Phillips to the 
    development and implementation of a formal risk management program. 
    This event was also a major driver behind the development of the 
    Phillips Excavation Risk Assessment Process which is a focal point of 
    its proposed demonstration project.
    
    Consultative Evaluation
    
        During the consultations, representatives from OPS headquarters and 
    Southwest Region, pipeline safety officials from Texas, and risk 
    management experts met with Phillips to discuss Phillips's overall risk 
    management process. This included discussion of Phillips's risk 
    assessment, risk analyses, and risk control processes and tools, its 
    performance measures, and the philosophy and administration of risk 
    management within the company. This also included a discussion of 
    Phillips's excavation risk assessment process, including a review of 
    the proposed demonstration project activities; population, terrain, and 
    infrastructure along the affected pipelines; 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 an Appendix to this 
    notice.
        The consultation process focused on three major review criteria:
        1. Whether Phillips's proposed risk management demonstration 
    project is consistent with the Risk Management Program Standard and 
    compatible with the Guiding Principles set forth in that Standard;
        2. Whether Phillips's proposed risk management demonstration 
    project is expected to produce superior safety, environmental 
    protection, and reliability of service;
        3. Whether Phillips's proposed risk management demonstration 
    project includes a company work plan and a performance monitoring plan 
    that will provide adequate assurance that superior safety, 
    environmental protection, and service reliability are being achieved.
        Once OPS and Phillips consider and address comments received on 
    this notice and environmental assessment, OPS plans to issue an Order 
    approving the Phillips demonstration project.
    
    3. Statement of Project Goals
    
        Phillips has been managing risk on its pipeline systems using a 
    combination of personnel knowledge and experience, as well as Phillips 
    and industry-wide operating data for many years. In 1995, Phillips 
    Petroleum Company (Phillips's corporate parent) created the Process for 
    Safety and Environmental Excellence (PSEE) to achieve a more 
    consistent, formalized approach to ensuring the safe and 
    environmentally responsible operation of its facilities. Within the 
    framework of the PSEE, Phillips has implemented a formal risk 
    management program. Formalizing Phillips's risk management program has 
    involved developing more sophisticated tools to comprehensively 
    identify and evaluate the most important risks associated with the 
    design, construction, operation, and maintenance of Phillips's pipeline 
    systems. Phillips is evaluating all of its pipelines using these tools, 
    to identify the nature and location of the most significant risks.
        During this demonstration project, Phillips will share information 
    about its evolving risk management program with OPS. This will enable 
    OPS to acquire an improved understanding of the methods and techniques 
    the company is using to manage risk on its system, and obtain far more 
    information about the company's management processes, pipeline 
    operations, and potential safety and environmental risks than is 
    normally observed during OPS inspections to ensure compliance with the 
    regulations.
        A key element of Phillips's risk management program is a risk-based 
    approach to managing the risks associated with pipeline excavations. 
    The Phillips Excavation Risk Assessment Process is a formal, ongoing 
    process that has been in use system-wide since 1993 to identify and 
    control the unique risks associated with each excavation on or near 
    Phillips's pipelines. The process goes beyond the existing pipeline 
    safety regulatory requirements for damage prevention.
        For its risk management demonstration project, Phillips proposes to 
    comprehensively evaluate the application and effectiveness of the 
    Excavation Risk Assessment Process to all company and third-party 
    excavations that occur on and across the pipeline segments included in 
    the project. Phillips's demonstration project will involve:
    
    --requirements that an excavation risk assessment be conducted prior to 
    each excavation project (whether the excavation is performed by 
    Phillips employees or outside parties proposing to dig near Phillips's 
    lines);
    --requirements that outside parties excavating along the Phillips 
    right-of-way prepare work plans and obtain Phillips's approval prior to 
    initiating excavation;
    --increased work plan formality, level of detail, and management 
    approval required for higher risk excavations, including where 
    appropriate, coordination with local emergency response personnel;
    --enhanced monitoring of excavation work;
    --gathering of performance measurement data and developing a more 
    quantitative assessment of the benefits of performing excavation risk 
    assessments; and,
    --enhanced communications with One-Call centers, excavators, and the 
    public.
    
        Phillips and OPS expect this project to demonstrate that risk 
    management techniques can be successfully applied toward improving 
    pipeline excavation safety.
    
    4. Demonstration Project Pipeline Segments
    
        Phillips has proposed a 60-mile segment of two pipelines for 
    inclusion in its demonstration project.
        Phillips's Sweeny-Pasadena products pipeline system consists of two 
    interstate pipelines, 12'' and 18'', that deliver refined products 
    (e.g., gasolines, distillates, and naphtha) from Phillips's Sweeny 
    Refinery in Sweeny, Texas, to Phillips's Pasadena Terminal in Pasadena 
    Texas. These products have varying properties and if released under 
    certain conditions are flammable. They could also affect human health 
    and the
    
    [[Page 36026]]
    
    environment if significant exposures occur.
        The 12'' and 18'' pipelines have been in operation since 1959 and 
    1979, respectively. This system runs roughly Northeast from the Sweeny 
    Refinery to the Pasadena Terminal, passing near the northern edge of 
    Friendswood, Texas. The two lines parallel each other over the entire 
    60-mile distance. The lines run through sparsely populated areas for 
    about the first 45 miles and through heavily populated areas for the 
    last 15 miles. The lines cross the Brazos and San Bernard rivers, 
    several major roadways and railroad lines, and pass underneath the 
    Texas State Department of Corrections' Ramsey facility.
        The 12'' line began service in 1956 and has a maximum operating 
    pressure (MOP) of 1270 psi. It has had two leaks: one in 1992 and 
    another in 1993. These leaks resulted in localized surface 
    contamination near the line. Phillips quickly detected the leaks and 
    stopped the release of product. The contaminated areas were 
    satisfactorily remediated. There were no fatalities, injuries or 
    adverse health effects to any member of the public or to any Phillips 
    employees from these events. Both of these leaks were associated with 
    material defects that developed because of the manufacturing process 
    used to bend sections of the pipe. As a result of these events, 
    Phillips conducted a comprehensive review of all pipe bends, that 
    included an internal inspection for geometric defects. All piping bends 
    with characteristics similar to those that had failed were replaced or 
    heat treated to eliminate the condition that created the leaks. The 
    12'' line also has some history of coating problems. To resolve this 
    problem, Phillips has placed additional rectifiers to provide enhanced 
    cathodic protection.
        The 18'' line was placed in service in 1979 and has a MOP of 680 
    psi. The 18'' line has not had any leaks.
    
    5. Project Description
    
        In 1995, the Phillips Petroleum Company (Phillips Corporate) 
    created the Process for Safety and Environmental Excellence (PSEE) to 
    achieve a more consistent, formalized approach to ensuring safe and 
    environmentally responsible operation of its facilities. The PSEE is 
    designed to manage environmental, safety and health risks in a manner 
    that is integral to and not separate from the overall business process. 
    The Phillips Corporate PSEE is a comprehensive business process 
    applicable to every Phillips Corporate business unit (e.g., Phillips 
    Pipe Line Company). Within this framework, each business unit is 
    required to implement a formal risk management program.
        As part of formalizing its risk management program for pipelines, 
    Phillips has identified and uses a variety of tools to identify and 
    manage pipeline risks. These include: hazards analysis, environmental 
    impact reviews, internal (pipeline) inspection tools, incident 
    investigations, safety, health and environmental audits, contractor 
    assessments, design reviews and others. To support a more integrated 
    evaluation of the potential risks represented by its pipelines, the 
    company also developed the Phillips Pipeline Risk Assessment System 
    (PRAS). PRAS is a computerized indexing model that predicts the 
    relative risk different pipe segments represent based on numerous 
    factors that influence the likelihood and consequences of pipeline 
    failure. The model synthesizes data and information on pipe design, 
    operation, maintenance, pipe condition, population and activity near 
    the line, and external environmental conditions. PRAS has been in use 
    since 1995 and has been applied to all of Phillips's regulated pipeline 
    systems (approximately 5500 miles of pipe). During the course of the 
    demonstration project, Phillips will be enhancing PRAS, and evaluating 
    improved approaches to integrate the PRAS results with the output from 
    the other tools noted previously to comprehensively and consistently 
    assess risks across its pipeline.
        During this demonstration project, Phillips will share information 
    about its evolving risk management program with OPS.
        This will enable OPS to improve its understanding of the methods 
    and techniques the company is using to manage risk on its system, and 
    obtain far more information about the company's management processes, 
    pipeline operations, and potential safety and environmental risks than 
    is normally observed during OPS regulatory compliance inspections.
        The primary focus of Phillips's proposed demonstration project is 
    to reduce pipeline risks resulting from excavations on or near 
    Phillips's pipelines. Phillips hopes to demonstrate superior risk 
    control and risk reduction mechanisms by applying its Excavation Risk 
    Assessment Process. This process includes specific procedures relative 
    to pipeline excavations and requires that an excavation site inspection 
    and risk assessment be conducted prior to each excavation project. A 
    risk assessment matrix is used to assess the potential risks associated 
    with each excavation project. This matrix examines various risk factors 
    for each excavation, including nearby population density, the presence 
    of roads and railways, the existence of other utilities in the vicinity 
    of the pipeline, the type of excavation equipment being used, and the 
    properties of the product in the pipeline.
        Phillips uses a graded approach based on combinations of risk 
    factors to evaluate the level of Phillips's project review and 
    approvals required for the excavation plan.
        Phillips plans to communicate the details, progress, and results of 
    the demonstration project, both externally and internally. Internally, 
    Phillips will implement a formal communication program for company 
    personnel involved with the demonstration project. Phillips will also 
    implement excavation risk assessment refresher training prior to the 
    start of the project, that will include the demonstration project 
    communication plans and performance measures to be monitored and 
    tracked during the project.
        Externally, Phillips will contact the affected local emergency 
    planning committees (LEPCs) at the beginning of the demonstration 
    project to communicate the details of the project and to identify how 
    Phillips will communicate progress and results during the project. 
    Phillips will also contact city and county planning committees for the 
    towns that the demonstration segments cross to communicate Phillips's 
    excavation requirements. Phillips will conduct surveys regarding the 
    effectiveness and benefits of its excavation risk management process. 
    Phillips also plans to seek input from contractors and developers 
    involved during the demonstration project to help determine the cost 
    effectiveness for the level of safety achieved. They plan to 
    communicate throughout the project with OPS, the Texas Railroad 
    Commission, city and county planning committees, affected LEPCs, and 
    contractors and developers.
        Phillips's intended approach to performance monitoring of the 
    project will include formal data collection and performance measures 
    related to excavations along the demonstration segments. Phillips has 
    proposed an initial set of performance metrics for the project and has 
    an excavation risk assessment data collection worksheet to generate 
    data and information relative to these metrics. Phillips's proposed 
    performance metrics include:
    
     total number of one-call requests
     total number of excavation projects broken down by
      --Phillips's excavation projects (planned and unplanned),
    
    [[Page 36027]]
    
      --third party excavations planned, and
      --other, unplanned excavation activities.
     initial and final risk ranking of each excavation that 
    required a formal risk assessment
     level of approval obtained to complete the excavation
     number and type of risk control activities implemented
     number of excavations completed, changed, or terminated
     categorization and characterization of the number of 
    excavations by
      --successful excavation (i.e., no damage)
      --damage incurred,
      --damage resulting in a leak, and
      --effectiveness of emergency response plans to a leak.
    
    6. Regulatory Perspective
    
    Why Is OPS Considering This Project?
    
        The OPS Project Review Team evaluated Phillips's proposed project 
    according to review protocols and criteria. OPS has concluded the 
    Phillips project will:
        1. Provide superior safety and environmental protection for the 
    pipeline segments proposed for the demonstration project; and
        2. Offer a good opportunity to evaluate risk management as a 
    component of the Federal pipeline safety regulatory program.
        Phillips is not proposing any alternative to or requesting any 
    regulatory exemption from existing pipeline safety regulations in this 
    demonstration project. Rather, Phillips's proposed project goes beyond 
    the regulations and is considered to provide superior protection.
        Phillips's proposed project offers a good opportunity to evaluate 
    risk management as a component of the Federal pipeline safety 
    regulatory program. It also provides an opportunity to evaluate a risk-
    based pipeline damage prevention methodology that could have broad 
    potential application. The damage prevention focus could also offer 
    benefits to the current joint government/industry initiative on damage 
    prevention education.
        While the overall safety record for pipeline transportation is 
    excellent, third party damage still presents a significant problem. 
    Education on damage prevention is essential to reducing the incidence 
    of third-party damage to underground facilities. OPS is currently 
    sponsoring a joint government and industry Damage Prevention Quality 
    Action Team to evaluate how to best utilize education resources to 
    prevent pipeline damage. Phillips's proposed demonstration project is 
    consistent with OPS's goals concerning pipeline damage prevention. The 
    potential synergies between the Phillips project and the Damage 
    Prevention Quality Action Team should enhance the benefits from both 
    efforts.
        OPS believes the Demonstration Program could benefit from 
    Phillips's participation, given some of the distinguishing features of 
    its proposed demonstration project, including:
    
    --An emphasis on improving damage prevention and emergency response 
    coordination;
    --Plans for concentrated public outreach and risk communications 
    efforts;
    --A good illustration of how companies can use excavation risk 
    management to improve safety without seeking to reduce costs incurred 
    by existing regulations;
    --Phillips's willingness to share information with OPS and state 
    pipeline safety agencies on the specific risks associated with the 
    demonstration line segments and the Company's overall risk management 
    program and processes. This additional information will allow OPS to 
    more effectively ensure safe operation, and help OPS understand how 
    risk management might be employed to supplement the existing regulatory 
    framework.
    
    How Will OPS Oversee This Project?
    
        The demonstration segments will be subject to routine OPS 
    inspection to ensure compliance with the applicable Federal pipeline 
    safety regulations. Additionally, the Demonstration Project will be 
    monitored by a Project Review Team (PRT) consisting of OPS headquarters 
    and regional staff, and state pipeline safety officials. The PRT is 
    designed to implement 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 PRT's primary functions will be to conduct periodic risk 
    management audits. These audits will ensure Phillips's compliance with 
    the specific terms and conditions of the OPS Order authorizing 
    Phillips's demonstration project, and will be performed in addition to 
    the normal OPS inspections. OPS is developing a detailed audit plan, 
    tailored to the unique requirements of Phillips's demonstration 
    project. This plan will describe the audit process (e.g., types of 
    inspections, methods, and their frequency), as well as the specific 
    requirements for reporting information and performance measure data to 
    OPS.
        Phillips is not requesting any regulatory exemptions, and OPS 
    retains full authority to administer and enforce all regulations 
    governing pipeline safety.
    
    Information Provided to the Public
    
        OPS has previously provided information to the public about the 
    Phillips project, and has requested public comment, using many 
    different sources. OPS aired several electronic ``town meetings'' 
    enabling viewers of the two-way live broadcasts to pose questions and 
    voice concerns about candidate companies (including Phillips). An 
    earlier Federal Register notice (62 FR 53052; October 10, 1997) 
    informed the public that Phillips 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, 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 Phillips.
        At a November 19, 1997, public meeting OPS hosted in Houston, TX, 
    Phillips 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, and March 26, 1998.)
        OPS has provided a prospectus, which includes a map of the 
    demonstration segments, to State officials and community 
    representatives who may be interested in reviewing project information, 
    providing input, or monitoring the progress of the project. At this 
    point, OPS has received no public comment on the Phillips's proposal.
        This notice is the last public comment opportunity prior to 
    approval of Phillips's demonstration project.
    
        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
    
    [[Page 36028]]
    
    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 Phillips Pipe Line Company's (Phillips) proposed 
    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
    
        OPS intends to approve Phillips as a participant in the Pipeline 
    Risk Management Demonstration Program. Phillips has proposed a 60-
    mile segment of two pipelines for inclusion in its demonstration 
    project. Phillips's Sweeny--Pasadena products pipeline system 
    consists of two interstate pipelines, 12'' and 18'', that deliver 
    refined products (e.g., gasolines, distillates, and naphtha) from 
    Phillips's Sweeny Refinery in Sweeny, Texas, to Phillips's Pasadena 
    Terminal in Pasadena Texas. As the primary focus of its risk 
    management demonstration project, Phillips proposes to 
    comprehensively evaluate the application and effectiveness of its 
    Excavation Risk Assessment Process to all company and third-party 
    excavations that occur on and across the pipeline segments included 
    in the project. OPS believes the Phillips demonstration project will 
    provide superior safety and environmental protection by applying 
    excavation risk control measures that exceed regulatory 
    requirements.
        In 1995, the Phillips Petroleum Company (Phillips Corporate) 
    created the Process for Safety and Environmental Excellence (PSEE) 
    to achieve a more consistent, formalized approach to ensuring safe 
    and environmentally responsible operation of its facilities. The 
    PSEE is designed to manage environmental, safety and health risks in 
    a manner that is integral to and not separate from the overall 
    business process. The Phillips Corporate PSEE is a comprehensive 
    business process applicable to every Phillips Corporate business 
    unit (e.g., Phillips Pipe Line Company). Within this framework, each 
    business unit is required to implement a formal risk management 
    program.
        As part of formalizing its risk management program for 
    pipelines, Phillips has identified and uses a variety of tools to 
    identify and manage pipeline risks. These include: hazards analysis, 
    environmental impact reviews, internal (pipeline) inspection tools, 
    incident investigations, safety, health and environmental audits, 
    contractor assessments, design reviews and others. To support a more 
    integrated evaluation of the potential risks represented by its 
    pipelines, the company also developed the Phillips Pipeline Risk 
    Assessment System (PRAS). PRAS is a computerized indexing model that 
    predicts the relative risk different pipe segments represent based 
    on numerous factors that influence the likelihood and consequences 
    of pipeline failure. The model synthesizes data and information on 
    pipe design, operation, maintenance, pipe condition, population and 
    activity near the line, and external environmental conditions. PRAS 
    has been in use since 1995 and has been applied to all of Phillips's 
    regulated pipeline systems (approximately 5500 miles of pipe). 
    During the course of the demonstration project, Phillips will be 
    enhancing PRAS and evaluating improved approaches to integrate the 
    PRAS results with the output from the other tools noted previously 
    to comprehensively and consistently assess risks across its 
    pipeline.
        During this demonstration project, Phillips will share 
    information about its evolving risk management program with OPS. 
    This will enable OPS to improve its understanding of the methods and 
    techniques the company is using to manage risk on its system, and to 
    obtain far more information about the company's management 
    processes, pipeline operations, and potential safety and 
    environmental risks than is normally observed during OPS regulatory 
    compliance inspections.
        A key element of Phillips's risk management program, and the 
    primary focus of Phillips's proposed demonstration project, is a 
    risk-based approach to managing the risks associated with pipeline 
    excavations. The Phillips Excavation Risk Assessment Process is a 
    formal, ongoing process that has been in use system-wide since 1993 
    to identify and control the unique risks associated with each 
    excavation on or near Phillips's pipelines. The process goes beyond 
    the existing pipeline safety regulatory requirements for damage 
    prevention.
        The Phillips Excavation Risk Assessment Process includes 
    specific procedures relative to pipeline excavations and requires 
    that an excavation site inspection and risk assessment be conducted 
    prior to each excavation project. A risk assessment matrix is used 
    to assess the potential risks associated with each excavation 
    project. This matrix examines various risk factors for each 
    excavation, including nearby population density, the presence of 
    roads and railways, the existence of other utilities in the vicinity 
    of the pipeline, the type of excavation equipment being used, and 
    the properties of the product in the pipeline. Phillips uses a 
    graded approach based on combinations of risk factors to evaluate 
    the level of Phillips's project review and approvals required for 
    the excavation plan.
        For its risk management demonstration project, Phillips proposes 
    to comprehensively evaluate the application and effectiveness of the 
    Excavation Risk Assessment Process to all company and third-party 
    excavations that occur on and across the pipeline segments included 
    in the project. Phillips's demonstration project will involve:
    
    --requirements that an excavation risk assessment be conducted prior 
    to each excavation project (whether the excavation is performed by 
    Phillips's employees or outside parties proposing to dig near 
    Phillips's lines);
    --requirements that outside parties excavating along the Phillips 
    right-of-way prepare work plans and obtain Phillips's approval prior 
    to initiating excavation;
    --increased work plan formality, level of detail, and management 
    approval required for higher risk excavations, including where 
    appropriate, coordination with local emergency response personnel;
    --enhanced monitoring of excavation work;
    --gathering of performance measurement data and developing a more 
    quantitative assessment of the benefits of performing excavation 
    risk assessments; and,
    --enhanced communications with One-Call centers, excavators, and the 
    public.
    
        Phillips plans to communicate the details, progress, and results 
    of the demonstration project, both externally and internally. 
    Internally, Phillips will implement a formal communication program 
    for company personnel involved with the demonstration project. 
    Phillips will also implement excavation risk assessment refresher 
    training prior to the start of the project, that will include the 
    demonstration project communication plans and performance measures 
    to be monitored and tracked during the project.
        Externally, Phillips will contact the affected local emergency 
    planning committees (LEPCs) to communicate the details of the 
    project and to identify how Phillips will communicate progress and 
    results during the project. Phillips will also contact city and 
    county planning committees for the towns that the demonstration 
    segments cross to communicate Phillips's excavation requirements. 
    Phillips will conduct surveys on the excavation risk management 
    process effectiveness. Phillips plans to communicate throughout the 
    project with OPS, the Texas Railroad Commission, city and county 
    planning committees, affected LEPCs, and contractors and developers.
        Phillips's intended approach to performance monitoring of the 
    project will include formal data collection and performance measures 
    related to excavations along the demonstration segments. Phillips 
    has proposed an initial set of performance metrics for the project 
    and has an excavation risk assessment data collection worksheet to 
    generate data and information relative to these metrics. Phillips's 
    proposed performance metrics include:
    
     total number of one-call requests
     total number of excavation projects broken down by
      --Phillips excavation projects (planned and unplanned),
      --third-party excavations planned, and
      --other, unplanned excavation activities.
     initial and final risk ranking of each excavation that 
    required a formal risk assessment
     level of approval obtained to complete the excavation
     number and type of risk control activities implemented
    
    [[Page 36029]]
    
     number of excavations completed, changed, or terminated
     categorization and characterization of the number of 
    excavations by
      --successful excavation (i.e., no damage),
      --damage incurred,
      --damage resulting in a leak, and
      --effectiveness of emergency response plans to a leak.
        Phillips and OPS expect this project to demonstrate that risk 
    management techniques can be successfully applied toward improving 
    pipeline excavation safety. During this demonstration project, 
    Phillips will share information about its evolving risk management 
    program with OPS. This will enable OPS to acquire an improved 
    understanding of the methods and techniques the company is using to 
    manage risk on its system, and obtain far more information about the 
    company's management processes, pipeline operations, and potential 
    safety and environmental risks than is normally observed during OPS 
    regulatory compliance inspections.
        OPS intends to approve Phillips as a participant in the Pipeline 
    Risk Management Demonstration Program. OPS believes the Phillips 
    demonstration project will provide superior safety by applying 
    excavation risk control measures that exceed regulatory 
    requirements.
        Phillips is not requesting any regulatory exemptions, and OPS 
    retains full authority to administer and enforce all regulations 
    governing pipeline safety. The demonstration segments will be 
    subject to routine OPS inspection to ensure compliance with the 
    applicable Federal Pipeline Safety Regulations. Additionally, the 
    Demonstration Project will be monitored by a Project Review Team 
    (PRT) consisting of OPS headquarters and regional staff and state 
    pipeline safety officials. The PRT is designed to implement 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 PRT's primary functions will be to conduct periodic 
    risk management audits. These audits will ensure Phillips's 
    compliance with the specific terms and conditions of the OPS Order 
    authorizing Phillips's demonstration project, and will be performed 
    in addition to the normal OPS inspections. OPS is developing a 
    detailed audit plan, tailored to the unique requirements of 
    Phillips's demonstration project. This plan will describe the audit 
    process (e.g., types of inspections, methods, and their frequency), 
    as well as the specific requirements for reporting information and 
    performance measure data to OPS.
    
    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.
        On July 21, 1997, Phillips Pipe Line Company 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 Phillips's proposal will provide superior 
    safety and environmental protection, and is prepared to finalize the 
    agreement with Phillips on the provisions for the demonstration 
    project.
    
    D. Alternatives Considered
    
        OPS has considered three alternatives: approval of the Phillips 
    risk management demonstration project as proposed in Phillips's 
    application; denial of the Phillips demonstration project; or 
    approval of the project with certain modifications to Phillips's 
    application.
        OPS's preferred alternative is to approve the Phillips 
    demonstration project as proposed in Phillips's application. OPS is 
    satisfied that the proposal provides superior protection for the 
    demonstration project segments and the surrounding environment. The 
    Phillips Excavation Risk Assessment Process provides a higher level 
    of protection than exists under the current regulatory requirements. 
    Phillips is not requesting any regulatory exemptions and OPS retains 
    full authority to administer and enforce all regulations governing 
    pipeline safety. The demonstration segments will be subject to 
    routine OPS inspection to ensure compliance with the applicable 
    Federal Pipeline Safety Regulations. OPS and Phillips will monitor 
    and, if necessary, improve the effectiveness of the risk control 
    activities throughout the demonstration period.
        Denial of the project would result in OPS's considerable loss of 
    valuable information concerning the effectiveness of the proposed 
    methodology for assessing and controlling excavation risks and 
    reducing third-party damage. 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 aforementioned 
    Presidential Directive.
        All of the issues raised by OPS, state pipeline safety 
    officials, stakeholders, and the public about Phillips's proposed 
    project have been discussed within the consultative process, 
    resolved to OPS's satisfaction, and reflected in Phillips's 
    application. Therefore, OPS does not believe that modifications to 
    Phillips's application are required.
    
    E. Affected Environment and Environmental Consequences
    
        The 12'' and 18'' Sweeny--Pasadena pipelines proposed for this 
    demonstration project transport refined products (e.g., gasolines, 
    distillates, and naphtha) from Phillips's Sweeny Refinery to 
    Phillips's Pasadena Terminal in Pasadena, Texas. These products are 
    stable, flammable liquids. Product spills could result in the 
    accumulation of highly flammable, heavier than air vapors in low 
    areas. These vapors could also spread along the ground away from the 
    spill site and could ignite. The resulting fire could create 
    localized damage in the vicinity of the release. These products form 
    carbon oxides and various hydrocarbons which are dispersed into the 
    atmosphere when burned. These products will float on water (their 
    solubility in water is negligible), and large spills have been known 
    to result in kills of fish and other aquatic life.
        However, it should be noted that the transport of these products 
    is already protected by all existing, applicable pipeline safety 
    regulations and safe industry practices, which have contributed to a 
    good pipeline industry safety record. The proposed risk management 
    measures are intended to improve upon this safety record.
        The Sweeny-Pasadena system pipelines have been in operation 
    since 1959 and 1979, respectively. This system runs roughly 
    Northeast from the Sweeny Refinery to the Pasadena Terminal, passing 
    near the northern edge of Friendswood, Texas. The lines parallel 
    each other over the entire 60-mile distance to be included in the 
    demonstration project. The lines run through sparsely populated 
    areas for about the first 45 miles and through heavily populated 
    areas for the last 15 miles. The lines cross the Brazos and San 
    Bernard rivers, several major roadways and railroad lines, and pass 
    underneath the Texas State Department of Corrections' Ramsey 
    facility.
        Both of these lines have a good leak history. The 12'' line 
    began service in 1956 and has a maximum operating pressure (MOP) of 
    1270 psi. It has had two leaks: one in 1992 and another in 1993. 
    These leaks resulted in localized surface contamination near the 
    line. Phillips quickly detected the leaks and stopped the release of 
    product. The contaminated areas were satisfactorily remediated. 
    There were no fatalities, injuries or adverse health effects to any 
    member of the public or to any Phillips employee from these events. 
    Both of these leaks were associated with material defects that 
    developed because of the manufacturing process used to bend sections 
    of the pipe. As a result of these events, Phillips conducted a 
    comprehensive review of all pipe bends, that included an internal 
    inspection for geometric defects. All piping bends with 
    characteristics similar to those that had failed were replaced or 
    heat treated to eliminate the condition that created the leaks. The 
    12'' line also has some history of coating problems. To resolve this 
    problem, Phillips has placed additional rectifiers to provide 
    enhanced cathodic protection.
        The 18'' line was placed in service in 1979 and has a MOP of 680 
    psi. The 18'' line has not had any leaks.
    
    [[Page 36030]]
    
        The OPS Project Review Team carefully reviewed Phillips's 
    proposed excavation risk management activities and concluded that 
    superior protection would be provided for the pipeline systems 
    during the demonstration project. The Phillips Excavation Risk 
    Assessment Process goes beyond the existing regulations in providing 
    additional assurance of safety. OPS has concluded that the enhanced 
    risk control activities will reduce the likelihood of pipeline 
    accidents and leaks, especially those resulting from third party 
    damage. Should a leak or rupture occur, the enhanced communication 
    efforts should improve the responsiveness of company and local 
    officials to an event, and diminish the consequences of any such 
    leak or rupture. In summary, based on expected reductions in both 
    the likelihood and consequences of leaks and ruptures, OPS has 
    concluded that the proposed risk control activities will clearly 
    reduce safety and environmental risks.
    
    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 along the demonstration project lines. The 
    pipeline segments proposed for the project are routed mostly through 
    rural, sparsely populated areas, but include about 15 miles of 
    pipeline which runs through industrial and developing residential 
    areas. A mixture of income levels resides along the segments.
        The risk control activities provide greater protection than mere 
    compliance with existing regulations. Because the proposed risk 
    management activities will be applied uniformly along the lines, 
    residents and communities near the lines will be afforded greater 
    protection, 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 along the demonstration 
    segments.
    
    G. Information Made Available to States, Local Governments, (and) 
    Individuals
    
        OPS has recently (in January and February 1998) made the 
    following documents publicly available, and incorporates them by 
    reference into this environmental assessment:
        (1) ``Demonstration Project Prospectus: Phillips Pipe Line 
    Company'', June, 1998, available by contacting Elizabeth M. Callsen 
    at 202-366-4572. Includes maps of the demonstration segments. 
    Purpose is to reach the public, local officials, and other 
    stakeholders, and to solicit their input about the proposed project. 
    Mailed to over 500 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) ``Phillips Pipe Line Company--Application for DOT-OPS Risk 
    Management Demonstration Program'', available in Docket No. RSPA-98-
    3982 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 Phillips 
    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 
    Phillips project, and has requested public comment, using many 
    different sources. OPS aired several electronic broadcasts reporting 
    on demonstration project proposals, including Phillips's proposal. 
    An earlier Federal Register notice (62 FR 53052; October 10, 1997) 
    informed the public that Phillips 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 project candidates, 
    including Phillips.
        At a November 19, 1997, public meeting OPS hosted in Houston, 
    TX, Phillips 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, and on 
    March 26, 1998. This broadcast is available on demand via the OPS 
    website at http://ops.dot.gov/tmvid.htm.) No issues or concerns 
    about Phillips's proposal have been raised.
    
    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
    James C. Thomas (retired), OPS/U.S. Department of Transportation
    Linda Daugherty, OPS/U.S. Department of Transportation
    Carl Griffis, OPS/U.S. Department of Transportation
    Anne Marie Joseph, OPS/U.S. Department of Transportation
    Rod Seeley, OPS/U.S. Department of Transportation
    Bruce Hansen, OPS/U.S. Department of Transportation
    Elizabeth Callsen, OPS/U.S. Department of Transportation
    Mary McDaniel, Gas Services Division, Railroad Commission of Texas
    Jim vonHerrmann, Cycla Corporation (consultant)
    Robert Brown, Cycla Corporation (consultant)
    Herb Wilhite, Cycla Corporation (consultant)
    
    Persons/Agencies Receiving Briefings/Project Prospectus/Requests 
    for Comment
    
        Regional Response Team (RRT), Region 6, 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: Charles Gazda, EPA Region 6 and Cdr. Ed Stanton, Coast Guard 
    8th District).
    
    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. 98-17493 Filed 6-30-98; 8:45 am]
    BILLING CODE 4910-60-P
    
    
    

Document Information

Published:
07/01/1998
Department:
Transportation Department
Entry Type:
Notice
Action:
Notice of Intent to Approve Project and Environmental Assessment.
Document Number:
98-17493
Pages:
36024-36030 (7 pages)
Docket Numbers:
Docket No. RSPA-98-3892, Notice 13
PDF File:
98-17493.pdf