[Federal Register Volume 62, Number 143 (Friday, July 25, 1997)]
[Notices]
[Pages 40135-40137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19664]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration (RSPA), DOT
[Docket No. PS-142; Notice 6]


Candidates for the Pipeline Risk Management Demonstration Program

AGENCY: Office of Pipeline Safety, DOT.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Research and Special Programs Administration's (RSPA) 
Office of Pipeline Safety (OPS) has completed screening of three 
candidate companies for the Pipeline Risk Management Demonstration 
Program. They are Northwest Pipeline Corporation, Shell Pipe Line 
Corporation, and Tennessee Gas Pipeline Corporation/East Tennessee 
Natural Gas Company. OPS believes these companies' demonstration 
project proposals satisfy all eligibility and screening criteria, based 
on a Letter of Intent submitted by each company to OPS, a subsequent 
OPS screening, and examination of each company's safety and 
environmental compliance record. OPS is now engaging in consultations 
with these companies to clarify and refine demonstration project 
provisions. Once OPS and a company reach agreement, OPS will approve 
the company's proposal and the demonstration project can get underway. 
OPS invites public comment on any aspect of these companies' proposals.
    OPS may approve up to ten demonstration projects. OPS will screen 
additional candidate companies after the July 25, 1997, deadline for 
companies to submit Letters of Intent. Summaries of their Letters of 
Intent will be published in subsequent Federal Register notices.

DATES: OPS requests that comments to this notice be submitted on or 
before August 25, 1997 so that OPS can give the comments full 
consideration before deciding whether to approve a company's proposal. 
However, comments on any aspect of the Demonstration Program, including 
the individual projects, will be accepted in the Docket throughout the 
4-year demonstration period.

ADDRESSES: Send comments in duplicate to the Dockets Unit, Room 8421, 
Research and Special Programs Administration, U.S. Department of 
Transportation, 400 Seventh Street, SW, Washington, DC 20590. Identify 
the docket and notice number stated in the heading of this notice. All 
comments and docketed material will be available for inspection and 
copying in room 8421 between 8:30 a.m. and 5 p.m. each business day.

FOR FURTHER INFORMATION CONTACT: Eben Wyman, (202) 366-0918 regarding 
the subject matter of this notice. Contact the Dockets Unit, (202) 366-
5046, for docket material.

SUPPLEMENTARY INFORMATION:

I. Background

    Appendix A of The Requests for Applications for the Pipeline Risk 
Management Demonstration Program (62 FR 14719), published on March 27, 
1997, describes the processes by which OPS will receive, review, 
approve, monitor, modify, and terminate company risk management 
demonstration projects. Companies considering participating in a 
demonstration project must submit a Letter of Intent to OPS no later 
than July 25, 1997. Based on Letters of Intent and additional screening 
considerations, OPS will choose up to ten candidate companies whose 
project proposals merit further consideration. OPS will enter into 
consultations with candidate companies to clarify and refine 
demonstration project provisions. OPS may approve up to ten 
demonstration projects. If OPS approves a project, OPS will issue an 
order and begin auditing project performance.
    OPS expects the projects, and the Demonstration Program itself, to 
evolve from lessons learned during the four-year demonstration period. 
OPS hopes to learn whether and in what form risk management should be 
incorporated into the Federal pipeline safety program on a permanent 
basis.
    OPS is requesting public input through all stages of the 
demonstration projects, beginning with receipt of the Letters of 
Intent. Specific benefits of public involvement in the Demonstration 
Program for OPS, industry, State and community representatives include:
     Exchange of information about specific and relevant local 
factors during the decision-making process that may not be known at the 
Federal or State level; and
     Feedback regarding the success of the Demonstration 
Program in accomplishing the goals for which it was designed.
    OPS requests comments on safety, environmental, socioeconomic, land 
use, geographic and any other issues that relate to these demonstration 
project proposals. OPS will consider public input, as well as input 
from local, State, and other federal agencies, during its consultations 
with candidate companies to clarify and refine demonstration project 
provisions. OPS will publish the final provisions for each project and 
allow for additional public comment before issuing an order signifying 
project approval. OPS will continue to seek broadbased input on 
individual demonstration projects throughout the 4-year demonstration 
period. A Risk Management Communications Plan is being developed that 
will describe the mechanisms OPS intends to have in place for providing 
demonstration project status and accepting stakeholder input. This 
communications plan will be published in the Federal Register.
    OPS has screened the following three candidates, and has determined 
that they meet the criteria for participating with OPS in consultations 
about their proposals: Northwest Pipeline Corporation, Shell Pipe Line 
Corporation, and Tennessee Gas Pipeline Corporation/East Tennessee 
Natural Gas Company. Each company is working to develop an external

[[Page 40136]]

communication plan strategy that will ensure incorporation of input/
concerns from all stakeholders into its demonstration project, both 
initially and throughout the 4-year demonstration period. Section II of 
this notice provides a summary of these companies' Letters of Intent. 
OPS has begun consultations with these companies.
    Additional candidate companies will be screened after the July 25 
deadline for submission of Letters of Intent. Summaries of their 
Letters of Intent will be published in subsequent Federal Register 
notices. This phased approach to scheduling consultations allows OPS to 
better manage workload.

II. Letter of Intent Summaries

    1. Northwest Pipeline Corporation (Northwest): Northwest operates 
approximately 3,900 miles of interstate natural gas transmission line 
running through six western states, with endpoints at Ingacio, Colorado 
and the Canadian border at Sumas, Washington.
    The pipeline traverses the densely populated regions of western 
Washington and Oregon through the agricultural areas of eastern Oregon, 
Washington and Idaho into the isolated areas of southwest Wyoming, Utah 
and Colorado. The route covers a variety of terrains from mountains to 
deserts, crossing numerous rivers and lakes, encountering very moderate 
to very extreme climates, and crossing national parks, Indian nations, 
wilderness areas, and habitats of numerous threatened and some 
endangered species.
    While Northwest proposes to apply a risk management approach to its 
entire system, the company plans to limit regulatory exemptions to 
specified locations on the pipeline.
    OPS is interested in entering into consultations with Northwest 
because its risk management program has the potential to:
     Explore means of assessing and addressing risks presented 
by a pipeline in rugged terrain susceptible to land movement;
     Investigate the risk-reduction benefits of certain new 
technologies; and
     Investigate new means of industry/government partnering to 
conduct cooperative pipeline research.
    The proposed Northwest demonstration project also has the potential 
to help OPS examine the benefits of risk management as a regulatory 
alternative under a variety of conditions because of the following 
distinguishing features:
     A location with diverse geographic features (the 
demonstration site traverses six western states: Washington, Oregon, 
Idaho, Wyoming, Utah, and Colorado);
     The identification of land movement as a significant risk 
issue for Northwest; and
     The opportunity to explore various regulatory approaches, 
from item-by-item approvals to approvals of risk-based decision 
processes.
    Northwest's risk management program coordinator and point-of-
contact is Molly McAnally. She can be reached at Northwest Pipeline 
Corporation, PO Box 58900, Salt Lake City, UT, 84158-8800, or by 
calling (801) 584-6797.
    2. Shell Pipe Line Corporation (SPLC): SPLC operates nearly 8,000 
miles of pipelines, transporting over 4.0 million barrels of oil, oil 
products, and carbon dioxide daily and employing over 700 people in 16 
states.
    SPLC is proposing portions of two separate interstate pipeline 
systems with different yet very distinct risk characteristics as its 
demonstration project: one transporting ethylene, a flammable, highly 
volatile liquid (HVL) that becomes a slightly lighter-than-air gas when 
released to the atmosphere, and which, under certain conditions, could 
form an explosive vapor cloud until diluted/dispersed; the second 
transporting carbon dioxide, a non-flammable, inert, non-toxic liquid 
that becomes a heavier-than-air gas when released to the atmosphere, 
and which, under certain conditions, could become an asphyxiation 
hazard until diluted/dispersed. Both ethylene, a hazardous liquid, and 
carbon dioxide must comply with part 195 of the Code of Federal 
Regulations.
    The first part of SPLC's proposed demonstration project consists of 
nearly its entire Texas-Louisiana 12'' Ethylene Pipeline System 
(approximately 205 miles of 250 miles), which transports chemical-grade 
ethylene between Shell Oil Products Company's Deer Park (Texas) 
Manufacturing Complex and its Napoleonville (Louisiana) transfer 
facility. Ethylene is a chemical feed stock which is used in the 
manufacture of plastics, anti-freeze, detergents and other consumer 
products. This proposed test area addresses risks concerning the 
operation of a 12-inch, HVL pipeline (and related facilities) at 
pressures between 1000 and 1400 psig, in the proximity to, and 
sometimes traversing, five areas with large and growing industrial/
residential populations. SPLC has been the operator of the pipeline 
since its construction in 1979.
    The second part of SPLC's proposed demonstration project consists 
of the northwestern half (approximately 260 miles) of its Cortez 30'' 
Carbon Dioxide Pipeline System which transports merchantable-grade 
carbon dioxide from Cortez, Colorado across New Mexico to Denver City, 
Texas (the demonstration segment terminates near Albuquerque, New 
Mexico). This carbon dioxide, in turn, is then used for tertiary oil 
recovery in the Denver City area. This proposed test area will assess 
the risks surrounding the operation of a 30-inch, carbon dioxide 
pipeline (and related facilities) at pressures between 1300 and 2200 
psig, where it operates in proximity to five areas with small and 
growing residential populations. SPLC has been the operator of the 
pipeline since its construction in 1983.
    For the test area included in the demonstration program, SPLC 
proposes a comprehensive risk management program that will assess all 
hazards and risks associated with operation of these pipelines.
    OPS is interested in entering into consultations with SPLC because 
its risk management program has the potential to:
     Explore resource reallocation from lower-risk carbon 
dioxide pipeline to higher-risk ethylene;
     Evaluate the effect on public safety and environmental 
protection caused by resource reallocation within an individual 
pipeline system, based on the constantly changing set of internal (i.e. 
pressure) and external (i.e. population) conditions; and
     Employ the risk management communications initiative to 
improve third-party damage prevention and emergency response 
coordination.
    The proposed SPLC demonstration project also has the potential to 
help OPS examine the benefits of risk management as a regulatory 
alternative under a variety of conditions because of the following 
distinguishing features:
     The commodities (ethylene and carbon dioxide);
     The location (the demonstration sites cross several 
southwestern states, including Colorado, New Mexico, Texas, and 
Louisiana);
     Technical/regulatory issues (SPLC is considering operating 
a section of the carbon dioxide pipeline at a higher pressure than is 
currently allowed by the regulations); and
     Policy issues (the allocation of resources between high 
and low risk pipelines, and between high and low risk sections on the 
same pipeline).
    Fred Fischer, Manager, Technical Operations Support, leads SPLC's 
designated Risk Management team and serves as the central information 
contact for the program. He can be reached at Shell Pipe Line 
Corporation, Two Shell

[[Page 40137]]

Plaza, PO Box 2648, Houston, Texas, 77252, or by calling 713-241-0461.
    5. Tennessee Gas Pipeline Corporation/East Tennessee Natural Gas 
Company (Tennessee/East Tennessee): Tennessee/East Tennessee are 
subsidiaries of El Paso Natural Gas Company of Houston, Texas. 
Tennessee Gas operates a total of 14,574 miles of both onshore and 
offshore pipeline, while East Tennessee Natural Gas operates 1,149 
miles of onshore pipeline.
    Tennessee/East Tennessee proposes to apply a risk management 
approach to its entire system. The company proposes modifying or 
eliminating compressor station relief valve testing and inspection 
under certain conditions, extending from 18 months to 24 months the 
time it is allowed to confirm or revise maximum allowable operating 
pressure due to class location changes, reducing the inspection 
frequency under certain conditions of certain emergency valves and 
regulators, and using new design criteria for increased system 
efficiency.
    Tennessee/East Tennessee has also specified locations in western 
Pennsylvania, central Tennessee, and offshore Louisiana where it 
proposes altering maximum allowable operating pressure to suit local 
conditions.
    The company believes superior safety can be achieved by enhanced 
damage prevention, increased patrolling, the use of internal inspection 
tools, and the reallocation of funds to re-habilitation projects on its 
higher risk pipeline segments.
    OPS is interested in entering into consultations with Tennessee/
East Tennessee because its risk management program has the potential 
to:
     Provide examples of data collection and analysis tools for 
supporting risk management; and
     Provide examples of how companies can use risk management 
to re-allocate resources to re-habilitation projects and other high 
value safety activities.
    The proposed Tennessee/East Tennessee demonstration project also 
has the potential to help OPS examine the benefits of risk management 
as a regulatory alternative under a variety of conditions because of 
the following distinguishing features:
     Consideration of worker safety as well as public safety in 
risk assessment;
     Examination of the risk control potential of a number of 
existing regulations;
     The use of risk-based arguments for establishing MAOP; and
     The breadth of the demonstration site (which includes four 
OPS regions: Southern, Eastern, Central, and Southwest; and 17 states).
    Tennessee/East Tennessee's risk management program coordinator and 
point-of-contact is Daron Moore. He can be reached at Tennessee Gas 
Pipeline Company, PO Box 2511, Houston, TX, 77252-2511, or by calling 
(713) 757-4023.

    Issued in Washington, DC on July 22, 1997.
Cesar De Leon,
Deputy Associate Administrator for Pipeline Safety.
[FR Doc. 97-19664 Filed 7-24-97; 8:45 am]
BILLING CODE 4910-60-P