[Federal Register Volume 63, Number 169 (Tuesday, September 1, 1998)]
[Notices]
[Pages 46497-46506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23442]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
[Docket No. RSPA-98-4034; Notice 14]
Pipeline Safety: Intent To Approve Project and Environmental
Assessment for the Natural Gas Pipe Line Company of America 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.
-----------------------------------------------------------------------
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 Natural Gas Pipe Line
Company of America (NGPL) as a participant in the Pipeline Risk
Management Demonstration Program. This also provides an environmental
assessment of NGPL'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 that would go into
effect once OPS issues an order approving NGPL 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 NGPL 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 October 1, 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-98-4034. 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. Comments may also be
reviewed online at the DOT Docket Management System website at http://
dms.dot.gov/.
[[Page 46498]]
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 NGPL's
demonstration project, and evaluates the safety and environmental
impacts of this proposed project.
2. OPS Evaluation of NGPL'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 NGPL on the provisions for a demonstration project
covering NGPL's entire transmission pipeline system.
After addressing any public comment on this notice, OPS will
consider issuing an order approving NGPL as a Demonstration Program
participant. Although NGPL expects to request regulatory exemption as
its demonstration project matures, the focus in the first year would be
working with OPS to fully develop and document a formal risk management
program and set of implementing procedures that correspond to the Risk
Management Program Standard. Putting NGPL under a risk management order
at this time would give OPS the best opportunity to influence the
comprehensive development and uses of risk management in the company
and to better understand and address system unique risk issues. Working
closely with NGPL, OPS can observe quantitative risk assessment models
unique to this project, and review and expedite technical
justifications for risk control measures related to improved internal
inspection, repair procedures, and damage prevention. Once the Project
Review Team (PRT) is assured of the validity of NGPL's analyses, OPS
would consider approving activities likely to result in superior
safety. Section 5 of this notice describes some specific risk control
actions which NGPL is considering as regulatory alternatives and the
locations where they would be applied.
Company History and Record: NGPL is a subsidiary of MidCon
Corporation. It serves natural gas customers located primarily in the
Midwest. The company transports natural gas through about 13,000 miles
of pipeline and pipeline facilities, and provides approximately 68% of
the natural gas in the Northern Illinois, Chicago, Eastern Iowa and
Northwest Indiana market from supply regions in and around Texas,
Louisiana and Wyoming. NGPL also has pipelines in Arkansas, Kansas,
Nebraska, New Mexico, Oklahoma, Missouri, Colorado, and Wisconsin.
In January 1998, KN Energy, Inc. acquired MidCon Corporation.
Before the acquisition of MidCon, KN Energy operated over 4000 miles of
pipeline. It now controls the additional 13,000 miles of NGPL
pipelines. However, only the NGPL pipelines would comprise the
demonstration project.
Before entering into consultations with NGPL, OPS determined that
NGPL 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. KN Energy has
expressed the same management support for the project as demonstrated
by NGPL in the past, and realizes continued participation in the
Program depends on continued management commitment.
OPS records show that since 1984, NGPL has filed 49 reportable
incidents, which is typical for a company of its size. Causes include
corrosion (24), construction or material defects (8), outside forces
(8), and other miscellaneous or unknown causes (9). The most
significant accident, causing eleven deaths and three injuries,
occurred October 3, 1989, when a fishing boat in the Gulf of Mexico
near High Island, Texas, struck a sixteen inch diameter line about one
half mile offshore at a water depth of approximately ten feet. OPS
determined that NGPL violated no regulations in connection with this
incident, and no enforcement actions resulted. Following the incident,
OPS promulgated regulations to protect against future incidents
involving submerged pipelines. NGPL complied by instituting a regular
inspection program to assess the integrity of the pipelines in Gulf of
Mexico shallow waters, exceeding the inspection frequency required by
the regulations. The NGPL offshore damage protection program determines
the available soil backfill protection, identifies potential or actual
damage to the facilities, and makes repairs where needed. In addition,
NGPL co-chaired a task force that has resulted in several offshore
damage prevention/public awareness aids and initiatives, such as an
educational video, an annual luncheon and program for mariners,
development and installation of pictograph warning signs, and a
developing offshore one-call system.
On March 29, 1998, NGPL experienced a corrosion failure of a
thirty-six inch diameter pipeline approximately five miles south of
Corrigan, Texas, in a forested and relatively isolated part of Polk
County,
[[Page 46499]]
Texas. This failure resulted in some fire damage, but no harm to
people. In September 1998, NGPL will pressure test approximately 40
miles of pipeline in the area where the failure occurred to
specifically address the cause of this incident. Also in September,
NGPL will perform in-line inspections to provide integrity information
on pipe sections 55 miles upstream and 27 miles downstream from the
rupture site. Finally, NGPL will examine approximately 600 miles of
pipeline in the area to determine if the coatings and cathodic
protection are providing adequate protection to reduce the future
chance of this type of failure. OPS is monitoring NGPL's response to
this incident and is presently conducting an accident investigation in
conjunction with a standard audit of the affected pipeline.
At this time, OPS believes that the actions NGPL will take to
address the specific causes of the incident, together with the system-
wide application of NGPL's proposed Risk Management Program, are an
adequate response to the incident and demonstrate a continued
commitment to safety.
NGPL will incorporate information from all incidents into its
proposed Risk Management Program to further reduce the likelihood of
future incidents. NGPL's Program will also include frequent feedback
from field personnel on the condition of the pipeline, risk modeling of
the pipeline to provide faster and more thorough assessment of threats
to pipeline integrity, and application of new technology from recent
research to further reduce risk.
Consultative Evaluation: During the consultations, a Project Review
Team (PRT) consisting of representatives from OPS headquarters, Central
Region, Southwest Region, and Southern Region; pipeline safety
officials from Illinois and Ohio; and risk management experts met with
NGPL to discuss NGPL's existing Risk Management Program and the
expected development of this program during the course of the
demonstration project. These discussions included the current risk
assessment and risk control processes NGPL uses, planned expansion,
improvement, and integration of these processes during the
demonstration program, potential regulatory alternatives that will be
examined during the demonstration project, and proposed performance
measures to ensure superior performance is being achieved. The
discussions addressed the adequacy of NGPL's management systems and
technical processes, communications with outside stakeholders, and the
effect of NGPL's recent merger with KN Energy. The consultation process
also included an environmental assessment, which is described in
Appendix B of this notice.
The consultation process focused on three major review criteria:
1. Whether NGPL'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 any risk control activities that will be examined under
NGPL'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 NGPL'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 NGPL consider comments received on this
notice, OPS may issue an order approving the NGPL demonstration
project.
3. Statement of Project Goals
The NGPL System transports pressurized natural gas which, if
released in sufficient quantities in the presence of an ignition
source, can cause fires and explosions resulting in property damage,
injuries, and fatalities. Therefore, ensuring that pipeline leaks and
ruptures do not occur is the highest priority for OPS, state agencies,
and NGPL. Through risk management, NGPL intends to continuously improve
the level of safety associated with operating this line.
NGPL is in the early stages of integrating specific risk assessment
and prioritization processes required by the Risk Management Program
Standard with a variety of existing company programs and procedures to
identify the sources and causes of pipeline risks, to identify
effective risk control activities to address these risks, and to
monitor the effectiveness of these activities on system performance.
OPS believes that accepting NGPL into the risk management
demonstration program at this time gives OPS the best opportunity to
influence the continued comprehensive development and uses of risk
management in the company and to better understand and address system
unique risk issues. Through assessing the pipeline-specific risks and
determining the risk reduction potential of risk control alternatives
at specific locations, NGPL, OPS, and state agencies will improve their
understanding of the risks affecting pipeline safety and have a better
opportunity to evaluate the most effective risk control activities to
manage these risks.
A distinctive feature of the NGPL proposal is NGPL's commitment to
using quantitative models, where appropriate, to examine the relative
risks associated with alternative risk control practices. NGPL is also
willing to provide OPS access to company risk information, audit
findings, and project scheduling. NGPL will provide a means of sharing
company risk information directly with OPS and allowing immediate
performance monitoring of the project. All of these milestones and
commitments will be included in the OPS order authorizing the project.
NGPL has also identified several situations where it believes
certain alternatives to current regulation may allow a reallocation of
resources that would result in superior safety. (See Section 5 of this
notice.) OPS will not be allowing these alternatives in the initial
order. Once NGPL performs the necessary risk analyses to identify and
justify the superiority of these risk control alternatives, as
enhancing safety and environmental protection, OPS will consider
amending the order to allow them. Although NGPL plans to present OPS
with the final results of analyses supporting these alternatives in the
fourth quarter of 1999, OPS and affected states will be working with
NGPL to complete the risk analyses and begin implementing the
alternatives at the earliest possible time.
NGPL will not be exempted from any current pipeline safety
regulation until the company demonstrates to OPS and the affected
states that the proposed alternatives provide superior protection than
the current regulatory requirements. OPS will provide public notice of
any proposed exemptions and opportunity to comment.
4. Demonstration Project Locations
NGPL will include its entire gas transmission pipeline system in
the risk management demonstration project. However, later risk control
alternatives will focus on specific locations.
While the project is underway, NGPL will investigate the relative
risk-reduction of specific alternatives to the current regulations that
require the operator to make certain changes to the
[[Page 46500]]
design or operation of the pipeline when the population increases
around the pipeline. NGPL will investigate whether these proposed
alternatives can provide superior risk reduction at four specific
locations in which population around the pipeline is increasing. Two of
the locations are in Liberty County, Texas; one location is in Lamar
County, Texas; and one location is in Will County, Illinois.
As experience is gained from the initial set of population class
change locations, and as risks are assessed for other portions of the
NGPL gas transmission system, additional class change locations may be
included in the demonstration project. OPS and NGPL will work together
to establish criteria and a process for demonstrating when regulatory
alternatives can provide superior protection at additional class change
locations. (See Section 6 of this notice for a description of how OPS
will oversee this project.)
5. Project Description
NGPL is in the early stages of integrating specific components of
the OPS Demonstration Program with a variety of company programs,
practices, and procedures to identify the sources and causes of
pipeline risks, to identify effective risk control activities to
address these risks, and to monitor the effectiveness of these
activities on system performance. Senior level managers are responsible
for administering and refining the processes that form the foundation
of NGPL's risk assessment, risk control and decision-making, and
performance monitoring functions. Appendix A is the company's work plan
describing tasks to more fully develop its Risk Management Program.
Current risk control activities build on full compliance with
current pipeline safety regulations and company and industry knowledge,
experience, and research. Since 1990, NGPL has made extensive
improvements to its risk management processes to better manage risks.
These processes consist of four major components: a Pipeline Integrity
Process, Management of Change Process, Modification of Standards
Procedure, and Compliance Assessment Procedures. Currently, the NGPL
Risk Management Program is reflected in operating and maintenance
procedures; environment, safety, and health practices; engineering and
design standards; and internal and external communications. During the
demonstration project, the company will refine, enhance, further
integrate, and document these processes in a Risk Management Program
Manual. NGPL is committed to building on its current risk management
system, and will continue to improve the ways in which the company:
Actively investigates potential sources of risk in its
operations;
Integrates information from the various components of its
system to produce a comprehensive understanding of the risk associated
with NGPL operations;
Identifies and allocates resources to effectively and
efficiently manage these risks;
Institutionalizes the Risk Management Program company-
wide, with explicit identification of roles, responsibilities, and
accountabilities; and
Seeks input from and provides information to company
employees, OPS, and other stakeholders.
NGPL's work plan, submitted as part of its application, includes
these activities as specific milestones. These activities will be
included in the Order authorizing the project. OPS and the states who
participated in the consultative evaluation of the NGPL project will
closely observe and interact with NGPL throughout these program
development activities.
NGPL has also identified several situations where it believes
certain alternatives to current regulations may allow a reallocation of
resources that would result in superior performance. OPS will not be
allowing these alternatives in the initial order. However, once NGPL
performs the necessary risk analyses to identify and justify the
superiority of these risk control alternatives, as enhancing safety and
environmental protection, OPS will consider amending the order to allow
them. Although the work plan in Appendix A shows that NGPL will present
OPS with the final results of analyses supporting these alternatives in
the fourth quarter of 1999, OPS and the affected states will be working
with NGPL to complete the risk analyses and begin implementing the
alternatives at the earliest possible time.
Alternatives to Regulations Covering Class Location Changes (192.609/
611)
OPS categorizes all locations along the pipeline according to the
size of the population near the pipeline. Locations with the smallest
population (fewer than 10 buildings intended for human occupancy within
220 yards on either side of the pipeline) are designated Class 1. As
the population along the pipeline increases, the class location
changes. For example, Class 2 locations have more than 10, but fewer
than 46 buildings intended for human occupancy; Class 3 locations have
46 or more buildings. The highest class, Class 4, involves locations in
which buildings with four or more stories above ground (e.g., large
apartment buildings) are prevalent. Ninety-two percent of NGPL's system
is Class 1; three percent is Class 2; five percent is Class 3. NGPL
does not operate any facilities within Class 4 areas.
When the population surrounding the pipeline increases
sufficiently, the class location of the pipeline may change. When the
class location of a pipeline segment changes, the current regulations
require an operator to confirm or revise the maximum allowable
operating pressure. This could require such actions as replacing the
pipe, lowering the operating pressure, or performing additional
pressure tests of the line. NGPL will examine the potential risk
reduction of an alternative set of risk control activities when a
pipeline segment changes class. NGPL recognizes that a population
increase along the pipeline increases risk due to the potentially
larger consequences associated with a pipeline leak or rupture, and the
possible increase in third-party excavations. NGPL will examine a set
of risk control activities that includes but is not limited to:
Internally inspecting class change segments which they
would not otherwise be required to perform under current regulations;
Internally inspecting an extended length of pipe on either
side of each class change segment will further extend the benefits of
better integrity analysis;
Repairing anomalies in accordance with an NGPL-specified
procedure;
Performing enhanced third party damage prevention
activities along the extended segment of pipeline;
Performing enhanced third party damage prevention
activities at other locations identified by NGPL to be the most
susceptible to third party damage due to increasing population or
construction; and
Performing in-line inspections and repair of other
pipeline segments identified by NGPL as having high relative risk,
beyond those where population has increased.
NGPL will determine if performing these alternative risk control
activities will reduce risk and produce superior performance than
complying with the regulations. NGPL will design the internal
inspection and associated repair activities to verify the condition of
the pipe, and reduce the likelihood of pipe failure due to loss of wall
thickness resulting from corrosion or other damage to the pipe. It will
design the
[[Page 46501]]
enhanced third-party damage prevention activities to directly address
the source of increased risk due to the population expansion, and to
address one of the largest contributors to risk on the pipeline. NGPL
believes that pipe replacement alternatives may reduce risks to the
public, to workers removing and replacing pipe, and to the environment.
Other relatively higher risk segments of the pipeline could benefit
from resources that would otherwise be allocated to pipe replacement.
NGPL will consider the risks and risk reduction associated with all
possible approaches before proposing the best approach at any given
location.
NGPL will work with OPS, the states, and other stakeholders during
the demonstration project to confirm that these alternative activities
will achieve superior protection beyond what is achievable through
compliance with the current regulations.
Alternatives to Currently Allowed Options for In-Service Repair of
Pipes (192.711/713/715/717/719)
The current regulations define a set of acceptable ways of
repairing defects in pipelines. Considerable research has been
performed over the last decade to investigate, test, and demonstrate
other means of repair.
NGPL will investigate an alternative in-service repair technique
based on the most recent research in this area. This technique,
referred to as direct weld deposition repair, directly deposits weld
metal on the pipeline damage or corrosion. This technique can be used
on sections of the pipe (e.g. bends in the pipe) and on pipeline
components (e.g. pipe fittings), where other current in-service repair
techniques cannot be used. NGPL will work with OPS, the states, and
other stakeholders to define the specific conditions and procedures
under which this alternative repair technique can produce superior
performance.
Monitoring Demonstration Project Effectiveness
The NGPL Demonstration Project includes a comprehensive approach to
performance monitoring that OPS believes will provide superior
protection of public safety and the environment, and achieve other
project objectives. A key element of this monitoring plan is a set of
programmatic performance measures to track the growth and
institutionalization of risk management within the company, measure the
effectiveness of the NGPL Risk Management Program and Process in
achieving stated expectations, and measure the effectiveness of
specific risk control activities. NGPL will report performance
measurement data and project progress regularly to OPS throughout the
demonstration period. This information, as well as periodic OPS audits,
will assure accountability for improved performance.
NGPL has provided a work plan for completing the steps of this
project. This work plan includes scheduled interaction between NGPL and
OPS, such as NGPL's sharing with OPS appropriate project information
through Intranet/Internet access on its risk management program, and
OPS and affected states observing internal company assessment
activities. OPS will audit NGPL's progress throughout the project to
verify that key milestones are completed.
OPS believes this interaction will help confirm the continuing
improvement in NGPL's Risk Management Program, and help OPS review and
confirm NGPL's analysis of the expected risk-reduction from the
proposed risk control alternatives. OPS will also be able to verify the
technical basis for concluding that these alternatives will provide
superior safety.
6. Regulatory Perspective
Why is OPS Considering This Project?
OPS has carefully and extensively reviewed NGPL's proposed Risk
Management Demonstration Project. OPS believes that NGPL is committed
to building on its current risk management system to develop and
document a formal risk management program and set of implementing
procedures corresponding to the requirements of the Risk Management
Program Standard. NGPL senior management has demonstrated its
commitment to improved safety and environmental protection through risk
management. OPS believes that the technical and managerial processes
included in the NGPL Risk Management Program will allow risk control
alternatives to be defined that can provide superior performance.
OPS also believes that the NGPL demonstration project will help OPS
achieve the overall goals of the Risk Management Demonstration Program.
In particular, this project will provide OPS with increased and better
quality data about potential pipeline risks and activities to address
those risks. These previously unavailable data will increase OPS's
knowledge and awareness about potential pipeline threats, provide
earlier opportunity to consider appropriate risk control options, and
thereby support a more effective regulatory role in improving safety
and environmental protection. Further, OPS believes that NGPL's
proposal indicates the potential of developing and demonstrating
systematic processes to both quantitatively and qualitatively determine
the relative risk-reduction benefits of alternative safety practices so
that the effect of one set of risk control activities can be compared
with another.
NGPL has demonstrated a strong commitment to the use of
quantitative models, where appropriate, to examine the relative risks
associated with alternative risk control practices. Including NGPL in
the risk management demonstration program will allow OPS to gain
further insights on using such models in developing the technical
justification for risk control alternatives that achieve superior risk
reduction. Use of these models will help to evaluate the results of
other company risk management projects and solidify the demonstration
of superior safety results from company risk management programs.
NGPL will develop and use company Intranet-based systems to promote
communication within the company about its risk management program and
the results of its risk analysis and risk-based decision making. NGPL
is willing to provide OPS access to a company-operated intranet site
containing risk information, audit findings, and project scheduling.
This provides a means of sharing NGPL risk information directly with
OPS and allowing immediate performance monitoring of the project. This
is an innovative feature of the NGPL risk management project that may
contribute to the success of the entire pipeline risk management
program through developing enhanced systems and methods to report and
share risk information and monitor performance.
NGPL has also included in its work plan, development of an External
Communications Plan that defines planned information exchange with
contractors, land owners, local safety officials, local emergency
planning groups, and other stakeholders.
How Will OPS Oversee This Project?
After NGPL's Risk Management Demonstration Project is approved, the
PRT consisting of OPS headquarters and regional staff and state
pipeline safety officials who have been reviewing the proposal, will
monitor the project. The PRT is designed to be a more comprehensive
oversight process that draws maximum technical experience and
perspective from all affected OPS regional and headquarters offices,
and from any affected state agencies that
[[Page 46502]]
would not normally provide oversight on interstate transmission
projects.
The PRT will conduct periodic risk management audits to observe
company performance of 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 NGPL
Demonstration Project. This plan will describe the audit process (e.g.,
types of inspections, methods, observation of company review of risks
and risk control options, frequency of audit), as well as the specific
requirements for reporting information and performance measurement data
to OPS.
OPS retains its full authority to administer and enforce all
regulations governing pipeline safety. As previously discussed, NGPL
may later be exempted from particular regulations if it demonstrates
that specific risk control alternatives provide superior levels of
safety to regulatory compliance. (Such alternatives would become part
of the Order and would be monitored.) Should Demonstration Project
performance or other subsequent information indicate that superior
levels of safety have not been achieved or are unlikely to continue to
be achieved, then OPS may require NGPL to modify the alternative or
return to complying with the previously exempted regulation.
Information Provided to the Public
OPS has previously provided information to the public about the
NGPL project, and has requested public comment, using many different
sources.
1. OPS aired several electronic ``town meetings'' enabling viewers
of the two-way live broadcasts to pose questions and voice concerns
about candidate companies (including NGPL).
2. An earlier Federal Register notice (62 FR 53052; October 10,
1997) informed the public that NGPL 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.
3. Since August 1997, OPS has used an Internet-accessible data
system called the Pipeline Risk Management Information System (PRIMIS),
available via the OPS Home Page at http://ops.dot.gov, to collect,
update, and exchange information about all demonstration candidates,
including NGPL.
4. At a November 19, 1997, public meeting OPS hosted in Houston,
TX, NGPL 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.)
5. OPS will provide 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.
At this point, OPS has received no public comment on NGPL's
proposal. This notice is OPS's final request for public comment before
OPS intends to approve NGPL's participation in the Demonstration
Program under the terms of the work plan.
Issued in Washington, DC on August 26, 1998.
Richard B. Felder,
Associate Administrator, Office of Pipeline Safety.
Appendix A: NGPL Work Plan
Implementation Schedule with Key Milestones
------------------------------------------------------------------------
# Milestone description Date
------------------------------------------------------------------------
1............ Program Development..
1.1.......... Complete development 4th Quarter 1998.
and description of
investigative risk
identification and
assessment processes.
1.2.......... Complete development 4th Quarter 1998.
and description of
processes for
integrating risk
information from
various sources into
linked risk database.
1.3.......... Complete development 4th Quarter 1998.
and description of
processes for
identifying and
selecting risk
control activities.
1.4.......... Complete development 1st Quarter 1999.
of NGPL Risk
Management Program
Manual which
describes processes
and assigns
responsibilities.
2............ Assurance of Superior
Performance for
Phase 1 Projects.
2.1.......... Describe the 4th Quarter 1998.
technical approach
(including a
description of the
models, algorithms,
data sources, and
expert processes)
that will be used to
assess and compare
the risk reduction
expected from the
proposed class
location change
alternatives and
compliance with
current regulations.
2.2.......... Describe the 4th Quarter 1998.
technical approach
(including a
description of the
models, algorithms,
data sources, and
expert processes)
that will be used to
assess and compare
the risk reduction
expected from the
proposed welding
repair alternatives
and compliance with
current regulations.
2.3.......... Present the 2nd Quarter 1999.
preliminary results
of the analyses that
lead to the
conclusion that
superior performance
will result from the
proposed class
location risk
control alternatives.
2.4.......... Present the 2nd Quarter 1999.
preliminary results
of the analyses that
lead to the
conclusion that
superior performance
will result from the
proposed welding
repair alternatives.
2.5.......... Complete initial 2nd Quarter 1999.
enhancements to Risk
and Environmental
Management (REM)
database.
2.6.......... Present the final 4th Quarter 1999.
results of the
analyses that lead
to the conclusion
that superior
performance will
result from the
proposed class
location risk
control alternatives.
2.7.......... Present the final 4th Quarter 1999.
results of the
analyses that lead
to the conclusion
that superior
performance will
result from the
proposed welding
repair alternatives.
3............ Performance Measures.
3.1.......... Develop performance 4th Quarter 1998.
measures to monitor
the effectiveness of
the overall NGPL
Risk Management
Program.
3.2.......... Develop performance 4th Quarter 1998.
measures to monitor
the effectiveness of
proposed risk
control activities
to produce superior
performance
(including baseline
levels, and expected
levels).
3.3.......... Produce a Performance 1st quarter 1999.
Monitoring Plan that
incorporates the
selected performance
measures, and
defines the
processes and
responsibilities for
collecting,
analyzing, and
reporting
performance data.
3.4.......... Produce and provide 1st Quarter 2000 and as needed
OPS and other thereafter, but not to exceed 18
stakeholders a months through demo phase.
Performance
Monitoring report
that documents the
status and progress
of the program.
4............ Communication &
Information Exchange.
[[Page 46503]]
4.1.......... Complete External 4th Quarter 1998.
Communications Plan
that defines planned
information exchange
with contractors,
land owners, the
public, local safety
officials, local
emergency planning
groups, and other
stakeholders.
4.2.......... Conduct Risk 1st Quarter 1999 and as needed
Management thereafter, but not to exceed 18
information meetings months through demo phase.
with affected local
emergency planning
committees, local
officials, and land
owners.
4.3.......... Meet with OPS to 1st Quarter 1999 and as needed
discuss program thereafter, but not to exceed 18
progress and status. months through demo phase.
4.4.......... Provide OPS summary 4th Quarter 1999.
of consolidated risk
information
indicating the major
sources of risk on
the NGPL pipelines
and actions being
taken or planned by
NGPL to address
these risks.
4.5.......... Develop internal 4th Quarter 1999.
electronic
information and
communication system
that will provide
all employees easy
access to key risk
management
information
(including
information in
NGPL's Computer
Action Tracking and
Trending System, the
Risk and
Environmental
Management database,
and other risk-
related databases).
4.6.......... Provide OPS 1st Quarter 2000.
controlled Internet
access to relevant
portions of the NGPL
electronic
information system
to facilitate
reporting and
information exchange.
5............ Selection of Phase 2
Projects.
5.1.......... Develop and present 2nd Quarter 1999.
to OPS an analysis/
review/approval
process for
expanding Phase 1
projects to other
portions of the NGPL
system.
5.2.......... Submit list of 3rd Quarter 1999.
additional Phase 2
projects to OPS,
including the
anticipated
technical approach
for establishing
superior performance.
6............ Assurance of Superior
Performance for
Phase 2 Projects.
6.1.......... Present results of 3rd Quarter 1999.
analyses to expand
Phase 1 alternatives
to other portions of
the NGPL system.
6.2.......... Present results of 1st Quarter 2000.
analyses
demonstrating
superior performance
for other selected
Phase 2 alternatives.
------------------------------------------------------------------------
Appendix B: 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 Natural Gas Pipe Line Company's (NGPL)
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
NGPL will conduct a demonstration project encompassing its entire
pipeline system. Specific risk control activities will be investigated
for four locations in the NGPL system: two locations in Liberty County,
Texas; one location in Lamar County, Texas; and one location in Will
County, Illinois. NGPL has adopted a Risk Management Program and
Process to institutionalize risk management throughout the company. The
proposed project's primary objective is to demonstrate that
implementation of NGPL's Risk Management Program and Process will lead
to superior performance, improved safety and environmental protection.
NGPL's Risk Management Program integrates four major components:
the company Pipeline Integrity Process, Management of Change Process,
Modification of Standards Procedure, and Compliance Assessment
Procedures. The formalized NGPL Risk Management Program will be
documented in the course of the demonstration project and will fully
conform to the Risk Management Program Standard. During the
demonstration project, NGPL will continue to:
actively investigate potential risk sources in pipeline
operations;
integrate information from the four components listed
above to form a comprehensive understanding of risk associated with
operation of the NGPL system and allocate resources to determine
effective and efficient risk control alternatives;
institutionalize NGPL's Risk Management Program company-
wide with specific roles, responsibilities, accountabilities, and
effective documentation; and
seek input from and provide information to company
employees, OPS, and stakeholders to continually improve NGPL's Risk
Management Program and the understanding of the risk management/
engineering process.
As a result of a comprehensive review of NGPL's risk management
demonstration project, the Office of Pipeline Safety (OPS) proposes to
approve this project for participation in the Demonstration Program.
The activities below would be included in an Order formally
approving the NGPL demonstration project:
Share information with OPS concerning the specific risks
identified for NGPL pipeline segments;
Share information with OPS concerning the preventive and
risk control activities NGPL has identified and analyzed to address
these risks and their relative priority;
Share information with OPS concerning the technical basis
for establishing alternative risk control
[[Page 46504]]
activities that achieve superior safety and environmental protection;
Share information with OPS concerning the lessons learned
on institutionalizing risk management programs to help OPS in
evaluating the effectiveness of risk management programs, including
information on the use of quantitative risk assessment and
prioritization models where appropriate;
Track, monitor, and report performance measures selected
to determine the effectiveness of the NGPL risk management program; and
Provide OPS access to risk management information through
the NGPL company intranet-based information systems.
Monitoring Demonstration Project Effectiveness
The NGPL 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 to track the growth and institutionalization of
risk management within the company, and measure the effectiveness of
the NGPL Risk Management Program and Process in achieving stated
expectations.
NGPL will report performance measurement data and project progress
regularly to OPS throughout the demonstration period. This information,
as well as periodic OPS audits, will assure accountability for improved
performance. More detailed descriptions of all aspects of the NGPL
proposal and OPS rationale for approving the project are provided in
the Internet-accessible data system called the Pipeline Risk Management
Information System (PRIMIS), available to the public via the OPS Home
Page, at http://ops.dot.gov.
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, NGPL 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 NGPL's
proposal will provide superior safety and environmental protection, and
is prepared to finalize the agreement with NGPL on the provisions for
the demonstration project.
D. Alternatives Considered
OPS has considered three alternatives: approval of the NGPL risk
management demonstration project as proposed in NGPL's application;
denial of the NGPL demonstration project; or approval of the project
with certain modifications to NGPL's application.
OPS's preferred alternative is to approve the NGPL demonstration
project. OPS is satisfied that the proposal will not significantly
affect the surrounding environment. By approving the NGPL demonstration
program, OPS is not approving the implementation of any risk control
alternatives or exemptions from regulations at this time. However,
later during the demonstration project, NGPL may propose, and OPS may
approve, alternatives to the current regulations. NGPL will need to
demonstrate that any alternatives provide superior safety and
environmental protection to the current regulations. We will amend this
environmental assessment to consider the impact of any such
alternatives on the environment.
With approval of this project, NGPL will provide OPS with risk
assessment information on the pipeline system exceeding that available
through the current regulatory process. OPS's access to NGPL's company
Intranet-based risk information system provides a high level of
information sharing and provides OPS an opportunity to investigate new,
efficient tools for obtaining information and communicating with
pipeline companies.
The project is expected to lead to superior levels of safety and
environmental protection than provided under current regulatory
requirements, because of the identification and analysis of effective
risk control alternatives that may be approved for future
implementation. In the meantime, increased sharing between OPS and NGPL
about potential pipeline risks will increase OPS's knowledge and
awareness about potential pipeline threats, provide earlier opportunity
to consider appropriate risk control options, and thereby support a
more effective regulatory role in improving safety and environmental
protection.
NGPL's use of quantitative models in its analysis of alternatives
will also provide OPS practical insights concerning the usefulness of
quantitative tools and methods that are applicable to the entire risk
management demonstration program.
OPS and NGPL will carefully monitor and, if necessary, improve the
effectiveness of the risk control program and processes throughout the
demonstration period.
If OPS denied the project, it would lose valuable information
concerning the sources of risks to NGPL's pipeline system 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. Denial would also result in the loss of insights regarding
the use of quantitative models and the loss of opportunities to
investigate new methods of obtaining information from pipeline
companies through Intranet-based information systems.
All of the issues raised by OPS, state regulators, and other
stakeholders about NGPL's proposed project have been discussed within
the consultative process, resolved to OPS's satisfaction, and reflected
in NGPL's application. Thus, we do not see any need to modify NGPL's
proposal.
E. Affected Environment and Environmental Consequences
The NGPL gas transmission pipeline system covers approximately
13,000 miles in 14 states. The product transported in the NGPL system
is pressurized natural gas, a flammable gas. If a pipeline leaks or
ruptures, the product could be released to the surrounding area and, in
the presence of an ignition source, could be ignited, causing fire or
explosion. The likelihood of such occurrences leading to environmental
damage is currently very low, as evidenced by NGPL-specific and
industry-wide operating history.
[[Page 46505]]
OPS, at this time, is not approving any exemptions to the current
regulations. During the course of the project, NGPL will examine the
risk-reduction benefits of specific risk control activities that may
improve safety and environmental protection. NGPL is focusing on two
locations in Liberty County, Texas; one location in Lamar County,
Texas; and one location in Will County, Illinois. If and when NGPL
demonstrates to OPS's satisfaction that such activities can be expected
to result in improved safety and environmental protection compared to
the current regulations, then OPS will amend the risk management Order
to allow NGPL to implement these alternatives. OPS will also make an
environmental assessment of any proposed alternatives, to determine
their environmental impact.
Before entering into consultations with NGPL, OPS determined that
NGPL 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.
OPS records show that since 1984, NGPL has filed 49 reportable
incidents, which is typical for a company of its size. Causes include
corrosion (24), construction or material defects (8), outside forces
(8), and other miscellaneous or unknown causes (9). The most
significant accident, causing eleven deaths and three injuries,
occurred October 3, 1989, when a fishing boat in the Gulf of Mexico
near High Island, Texas, struck a sixteen inch diameter line about one
half mile offshore at a water depth of approximately ten feet. OPS
determined that NGPL violated no regulations in connection with this
incident, and no enforcement actions resulted. Following the incident,
OPS promulgated regulations to protect against future incidents
involving submerged pipelines. NGPL complied by instituting a regular
inspection program to assess the integrity of the pipelines in Gulf of
Mexico shallow waters, exceeding the inspection frequency required by
the regulations. The NGPL offshore damage protection program determines
the available soil backfill protection, identifies potential or actual
damage to the facilities, and makes repairs where needed. In addition,
NGPL co-chaired a task force that has resulted in several offshore
damage prevention/public awareness aids and initiatives, such as an
educational video, an annual luncheon and program for mariners,
development and installation of pictograph warning signs, and a
developing offshore one-call system.
On March 29, 1998, NGPL experienced a corrosion failure of a
thirty-six inch diameter pipeline approximately five miles south of
Corrigan, Texas, in a forested and relatively isolated part of Polk
County, Texas. This failure resulted in some fire damage, but no harm
to people. NGPL will pressure test approximately 36 miles of pipeline
in the area where the failure occurred to specifically address the
cause of this incident. NGPL also will examine approximately 600 miles
of pipeline in the area to determine if the coatings and cathodic
protection are providing adequate protection to reduce the future
chance of this type of failure. OPS is monitoring NGPL's response to
this incident and is presently conducting an accident investigation in
conjunction with a standard audit of the affected pipeline.
At this time, OPS believes that the actions NGPL will take to
address the specific causes of the incident, together with the system-
wide application of their proposed Risk Management Program, are an
adequate response to the incident and demonstrate a continued
commitment to safety.
NGPL will incorporate information from all incidents into its
proposed Risk Management Program to further reduce the likelihood of
future incidents. NGPL's Program will also include frequent feedback
from field personnel on the condition of the pipeline, risk modeling of
the pipeline to provide faster and more thorough assessment of threats
to pipeline integrity, and application of new technology from recent
research to further reduce risk.
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, this project,
initially, will not result in any significant environmental impacts,
because NGPL will be complying with current applicable pipeline safety
regulations. Residents near the facility will have the same level of
protection that 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. OPS will only approve any proposed alternative
risk control activities if NGPL can demonstrate that these alternatives
provide greater safety and environmental protection than compliance
with existing regulations.
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: Natural Gas Pipe Line
Corporation'', August 1998, available by contacting Elizabeth M.
Callsen at 202-366-4572. Purpose is to reach the public, local
officials, and other stakeholders, and to solicit their input about the
proposed project. Will be mailed to over 300 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) NGPL ``Application and Work Plan for DOT-OPS Risk Management
Demonstration Program'', available in Docket No. RSPA-98-3893 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 NGPL Demonstration
Project''.
(4) Notice of intent to approve the NGPL Demonstration Project
(published concurrently with this environmental assessment).
OPS has previously provided information to the public about the
NGPL 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 1998) reporting on
demonstration project proposals (the last three of which provided
specific information on NGPL's proposal). An earlier Federal Register
notice (62 FR 53052; October 10, 1997) informed the public that NGPL
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),
available
[[Page 46506]]
via the OPS Home Page at http://ops.dot.gov, to collect, update, and
exchange information about all demonstration candidates, including
NGPL.
At a November 19, 1997, public meeting OPS hosted in Houston, TX,
NGPL 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.) No
issues or concerns about NGPL'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
Tom Fortner, OPS/U.S. Department of Transportation
Ivan Huntoon, OPS/U.S. Department of Transportation
Donald Moore, OPS/U.S. Department of Transportation
Rodrick Seeley, OPS/U.S. Department of Transportation
Dallas Rea, 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
Edward Steele, Ohio Public Utilities Commission
Mary McDaniel, Railroad Commission of Texas
Jim vonHerrmann, Cycla Corporation (consultant)
Andrew McClymont, Cycla Corporation (consultant)
Persons/Agencies Receiving Briefings/Project Prospectus/Requests for
Comment
Regional Response Team (RRT), Regions 5 and 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: Richard Karl and Charles
Gazda, EPA, and Capt. Christopher Desmond and Capt. 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. 98-23442 Filed 8-31-98; 8:45 am]
BILLING CODE 4910-60-P
