[Federal Register Volume 62, Number 249 (Tuesday, December 30, 1997)]
[Notices]
[Pages 67932-67936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33863]
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DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration (RSPA), DOT
[Docket No. RSPA-97-3224; Notice 10]
Pipeline Safety: Intent To Approve Shell Pipe Line Corporation
for the Pipeline Risk Management Demonstration Program
AGENCY: Office of Pipeline Safety, DOT.
ACTION: Notice.
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SUMMARY: The Research and Special Programs Administration's (RSPA)
Office of Pipeline Safety (OPS) plans to approve Shell Pipe Line
Corporation (SPLC) as a participant in the Pipeline Risk Management
Demonstration Program. OPS believes the SPLC demonstration project will
provide superior safety by applying numerous risk control measures
which exceed regulatory requirements, including increased right-of-way
surveillance; smart pig inspections; close interval cathodic protection
surveys; enhanced communications with One-Call, excavators, and the
public; additional overpressure protection; and selected depth-of-cover
surveys. 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 SPLC 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
SPLC demonstration project is the first 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 be submitted on or
before February 4, 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
[email protected]. Comments should identify the docket number
RSPA-97-3224. 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 mandate, OPS
administers and enforces a broad range of regulations governing safety
of pipelines and environmental protection. These regulations have
contributed to a good pipeline industry safety record by ensuring 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 through a formal risk management
regulatory framework, offers opportunities to achieve:
(1) Superior safety and environmental protection;
(2) Increased efficiency and service 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
[[Page 67933]]
with interstate pipeline operators. While OPS may exempt a
participating operator from particular regulations if the operator
needs such flexibility in implementing a comprehensive risk management
project, regulatory exemption is neither a goal nor requirement of the
Demonstration Program.
2. OPS Evaluation of SPLC 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 is prepared to
finalize the agreement with Shell Pipe Line Corporation (SPLC) on the
provisions for a demonstration project SPLC will conduct on two
pipeline segments it operates. The consultative review process ensures
that OPS considers and addresses comments on the SPLC proposal from all
stakeholders and interested parties.
Several means have been used to provide information on the proposed
project and solicit questions and concerns. These include: (1) Previous
notices in the Federal Register (62 FR 40136 (July 25, 1997) and 62 FR
53052 (October 10, 1997)); (2) an Internet Information System (PRIMIS)
available via the OPS Home Page; (3) broadcasts via the Federal
Emergency Management Agency's (FEMA) Emergency Education Network
(EENET) (OPS received over 2,000 ``hits'' on the website broadcast
featuring SPLC); (4) a prospectus and map that OPS and SPLC produced
and mailed to over 400 people, including representatives from Local
Emergency Planning Committees (LEPC) along affected pipeline routes;
and (5) a November 19, 1997, public meeting OPS hosted in Houston, TX.
OPS has also solicited comment on the SPLC proposal from other
federal agencies (including the Department of Justice and, via the
Regional Response Teams, the Environmental Protection Agency), state
and local government officials, public interest groups, and industry
and community representatives.
This notice is the last public comment opportunity prior to
approval of SPLC's demonstration project. OPS will address and resolve
any issues and concerns raised through the consultative process with
SPLC.
Company History and Record
SPLC is a wholly owned subsidiary of Shell Oil Products Company,
employing over 700 people, and operating approximately 8,000 miles of
pipelines in 18 states. Originally incorporated in 1919 (as the Ozark
Pipe Line Corporation), SPLC today transports approximately 4.0 million
barrels of crude oil, refined products, petrochemicals, carbon dioxide,
and natural gas daily.
SPLC is headquartered in Houston, Texas. SPLC's parent corporation,
Shell Oil Products Company, is currently seeking government approval to
merge its refining, transportation, and marketing operations with
Texaco and Saudi Refining Inc. The merger will affect SPLC, although
the details are not yet known. In its Order approving SPLC's
demonstration project, OPS would require that the merged company
demonstrate that it will continue to commit to the objectives of the
Demonstration Program, and to comply with the requirements of the
Order.
Before entering into consultations with SPLC, OPS determined that
SPLC was a favorable candidate for the Program, 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. Neither of the two
pipeline segments SPLC is proposing for its demonstration project has
experienced a release due to unsafe operation (Section 4 of this
document describes the demonstration sites and the releases in the
demonstration segments).
However, in December, 1988, another pipeline operated by SPLC
spilled 20,554 barrels of crude oil into the Gasconade River near
Vienna, Missouri. The cause of the spill was a manufacturing defect;
the consequences were aggravated by SPLC's failure to quickly stop the
pipeline flow. The subsequent OPS investigation of the spill found no
violations by SPLC of the pipeline safety regulations. Following this
spill, SPLC undertook a company-wide risk assessment and risk reduction
effort resulting in improved employee training, new or more aggressive
approaches to in-line inspection (smart pigging), hydrotesting,
hydraulic surge and spill volume analysis, and installation of
additional mainline block valves. Lessons learned from the December
1988, release and the subsequent company-wide assessments form the
foundation for SPLC's proposed risk management demonstration project.
With regard to employee safety, from among some fifteen other
candidates, SPLC was selected as the American Petroleum Institute (API)
``Safest Major Pipeline Operator'' in 1990, 1993, 1994, and 1995, and
was in second place in 1992 and 1996.
Consultative Evaluation
During the consultations, representatives from OPS headquarters and
Southwest Region, pipeline safety officials from Texas, Louisiana, and
Colorado, and risk management experts, met with SPLC to discuss SPLC's
risk assessment, supporting analyses, proposed risk control activities,
performance measures, and means of administering risk management within
the company. The discussions addressed technical validation of all
proposed activities, demographics and terrain along affected pipelines,
communications with outside stakeholders, and monitoring and auditing
of results once the demonstration project is underway. The
demonstration project provisions described in this notice evolved from
these consultations, as well as from any public comments received to
date. Once OPS and SPLC consider and address comments received on this
notice, OPS plans to issue an Order approving the SPLC demonstration
project.
3. Statement of Project Goals
OPS and SPLC believe SPLC's demonstration project will improve
safety through the application of numerous risk control measures that
exceed regulatory requirements on both pipeline segments, particularly
in the area of third party damage prevention. Increased right-of-way
surveillance; smart pig inspections; close interval cathodic protection
surveys; enhanced communications with One-Call, excavators, and the
public; additional overpressure protection; and selected depth-of-cover
surveys are some of the more significant activities that will be added
to existing measures to improve safety.
SPLC is proposing that segments of two pipeline systems (the Texas-
Louisiana System and the Cortez System) comprise its demonstration
project. SPLC conducted a thorough and systematic risk assessment to
identify hazards and risks associated with operating both of the
pipeline segments. SPLC then identified various activities that are
intended to result in reduced risk and superior safety and reliability
on both pipeline segments.
SPLC's risk assessment process relies heavily on the expertise of
people familiar with the operation, maintenance, construction, and
history of the pipeline. With an average length of service of over 25
years, several of the people who participated in SPLC's risk
assessments have worked on the
[[Page 67934]]
proposed demonstration segments since the segments were constructed.
The risk assessments confirmed expectations, outlined previously in
SPLC's Letter of Intent, that third-party damage (i.e., contractors,
landowners, or others who accidentally strike pipelines during
excavation and/or other activities) is the most significant risk posed
to either pipeline segment. Therefore, SPLC's highest priority for its
risk management demonstration project is to prevent this type of
damage.
For the Texas-Louisiana System, SPLC will supplement the required
activities it now performs with numerous new and additional risk
control activities based on SPLC's comprehensive risk assessment. SPLC
seeks no regulatory exemption on the Texas-Louisiana system. SPLC makes
a strong case that the risk of a release on this system will be
reduced, and superior safety will result. Releases from the Texas-
Louisiana System pose little, if any, risk to the environment due to
the volatile nature of the commodity transported (ethylene).
For the Cortez System, SPLC has also identified new and additional
risk control activities and has performed several technical validations
supporting a pressure increase beyond present regulatory limits at an
existing pump station in Cortez, CO. SPLC's assessment shows that a
combination of risk control activities, coupled with installation of
redundant overpressure protection systems, will offset any increase in
risk from the pressure increase that the company is requesting for the
Cortez segment. With the flexibility to raise pressure above regulatory
limits, SPLC can increase throughput (the amount of commodity
transported) without having to construct an intermediate pump station
in Blanco, NM. The Cortez System transports carbon dioxide
(CO2), which is a naturally occurring component of the air
and presents no environmental hazard. The regulatory exemption would
apply to a 25-mile segment of the pipeline located in a rural and
sparsely populated area in Colorado.
For both pipeline segments, SPLC will improve emergency
preparedness through increased discussions with and the sharing of the
results of dispersion modeling with local emergency responders.
4. Demonstration Project Pipeline Segments
The Texas-Louisiana System
SPLC's 250-mile Texas-Louisiana Ethylene Pipeline System (the
Texas-Louisiana System) transports chemical-grade ethylene between
Shell Oil Product's Deer Park, TX, manufacturing complex and its
Napoleonville, LA, transfer facility. SPLC's customers use ethylene for
manufacturing plastics, detergents, antifreeze, and other consumer
products. Ethylene is a flammable, highly volatile liquid that becomes
a slightly lighter-than-air gas when released to the atmosphere. Under
certain conditions, it could form an explosive vapor cloud until
diluted or dispersed. SPLC proposes to include 205 miles of this
system--from its Mont Belvieu, TX, compressor station to a block valve
at the western edge of the Atchafalaya Basin east of New Iberia, LA--in
its risk management demonstration project. Although routed mostly
through rural areas, the line passes near five large industrial and
developing residential areas, and includes more than 40 road crossings
and 12 water crossings. Due to its volatile nature, ethylene is not
considered a water pollutant.
The Texas-Louisiana line has experienced 2 reportable releases
since it was commissioned in 1979, both the result of third party
damage. These two releases resulted in no fatalities or injuries,
although a fire and explosion did occur during the latter of these
releases (1981). There was no fire or explosion associated with the
first release (1979). The total volume of ethylene released to the
atmosphere in these two events was the equivalent of approximately
14,000 barrels of liquid. Neither event affected the environment. There
have been six minor, unreportable releases totalling the equivalent of
approximately 220 barrels of liquid, caused by miscellaneous mechanical
failures. Four additional ``near miss'' events of third party damage to
the pipeline system (one in the past few months) have also occurred,
none of which resulted in a release.
The Cortez System
The 502-mile Cortez carbon dioxide (CO2) Pipeline System
(the Cortez System) carries naturally-occurring commercial-grade CO2
from Cortez, CO, across New Mexico to Denver City, TX. CO2
is injected into oil wells to aid in the production of crude oil.
CO2 is a nonflammable, inert, non-toxic liquid that, when
released to the atmosphere, becomes a heavier-than-air gas. Although
CO2 is a naturally occurring component of air and presents
no environmental hazard, at high concentrations in confined, low lying
areas, it can present an asphyxiation hazard until it is dispersed or
diluted. The operating pressures on this line presently range from 2147
pounds per square inch gauge (psig) to 2999 psig. These pressures are
high compared to pipelines in general, but are typical for pipelines
transporting CO2.
SPLC proposes to include the northwestern half of the Cortez System
(roughly 260 miles), from the Cortez pump station to the inlet of its
pressure-reducing station at Edgewood, NM (east of Albuquerque). The
line traverses rolling hills, mountainous areas, and sandy soils,
passing near five small communities. The route crosses four major
rivers and about 15 major roads. The segment of the Cortez line in the
demonstration project is located mostly in sparsely populated, rural
areas.
The Cortez line has experienced no releases since it was
commissioned in 1984. There have been four ``near miss'' events of
third-party damage to the pipeline system. OPS databases have no
records of any releases from CO2 pipelines that have
resulted in injury or death.
Neither demonstration segment is likely to impact the environment.
5. Project Description
The following risk control and monitoring activities would be
included in the Order OPS issues formally approving the SPLC
demonstration project.
Risk Control Activities
The company proposes using inspection techniques on both
demonstration pipelines to determine if there has been any past,
unknown damage while simultaneously applying a combination of risk
control activities and risk communications to reduce the likelihood and
the consequences of future third-party damage. In addition, the company
believes that several of these risk control activities will help
prevent third party damage on its newly constructed propylene pipeline,
which runs parallel to parts of the Texas-Louisiana line. The
activities proposed by SPLC to address damage from outside parties go
beyond the minimum requirements in the existing Federal Pipeline Safety
Regulations.
SPLC has committed to:
Increasing scheduled air patrol of the lines from every
two weeks to weekly;
Improving air patrol effectiveness through enhanced staff
training, including techniques for more immediate reporting and
evaluation of potential instances of third party encroachment to
responsible SPLC personnel in the vicinity;
Adding traffic barriers to aboveground equipment near
roadways
[[Page 67935]]
to reduce the likelihood of vehicle accidents impacting the pipeline;
Reviewing locations of and supplementing where appropriate
existing right-of-way markers that identify the presence of a pipeline,
including adding Global Positioning System (GPS) locating information
on markers;
Increasing ground surveillance of the lines in densely
populated areas;
Enhancing company sponsorship of the local One-Call system
(the system in which excavators provide notification of their intent to
dig so that underground utilities like pipelines can be located and
protected prior to digging);
Significantly upgrading public/neighbor education and
awareness efforts (including media usage);
Conducting community-based emergency planning, training,
and drills, so that both the company and local officials will be better
prepared in the event of an accident;
Using a warning ``mesh'' for backfilling during new
construction or significant repairs (excavators digging near a line
would encounter this mesh before hitting the pipe);
Running in-line inspection device(s) on the Texas-
Louisiana demonstration segment to determine if there is any existing
mechanical damage to the pipeline from prior third party encroachments;
and
Assessing other risk control measures and staffing
requirements.
SPLC will also perform dispersion analyses for the Texas-Louisiana
ethylene demonstration segment to better understand the potential
consequences of a release, and thus help improve emergency response
planning and communications with local responders.
Increased Throughput on the Cortez System
With implementation of the above activities to control the causes
of the most significant risks to both of the demonstration segments,
SPLC believes it can then proceed with a plan to increase the Cortez
System's throughput (the amount of product transported) while still
delivering superior safety. This plan calls for increasing the maximum
operating pressure by up to 11 percent beyond what is allowed by the
regulations on the 25-miles of pipeline immediately downstream of the
Cortez pump station. In the Order authorizing SPLC to commence its
demonstration project, OPS will exempt SPLC from 49 CFR 195.406(a)(1-
3), which addresses the maximum operating pressure for pipelines
transporting hazardous liquids.
To support its evaluation of risk associated with increased
operating pressure on the Cortez line, SPLC conducted several technical
analyses. These include:
A comprehensive review of the original pipe
specifications; actual materials' properties; pipemill manufacture,
inspection, and testing procedures; and field construction and
inspection techniques that demonstrated the pipe's safety margin
exceeds regulatory requirements, and thus can safely handle the
proposed increase in operating pressure;
Steady state transthermal hydraulic analysis and computer
modeling to determine the actual pressure and corresponding safety
factors at any point in the pipeline under normal and worst case
operating conditions;
Surge analyses and modeling to determine the pressure at
any point in the pipeline under abnormal or unexpected operating
events; and
Dispersion analyses to better understand the potential
consequences of a release, and thus help improve emergency response
planning and communications with local responders.
Additional Risk Control Activities on the Cortez Line
In addition, prior to any increase in operating pressure on the
Cortez segment (expected to occur in August-September, 1998), SPLC's
plan also calls for:
Conducting a Close Interval Survey, which involves
inspection and electrical testing every two to three feet along the
pipeline to confirm the ability of protection systems to mitigate
corrosion, and to help detect if there is any coating damage that might
indicate the presence of mechanical damage to the pipeline from
possible prior third party encroachments.
Performing a Depth-of-Cover Survey (from the Cortez
Station to the 25-mile mark) to ensure adequate protection from
external mechanical damage and loading.
Developing a Geographic Information System (GIS) Data Base
(from the Cortez Station to the 25-mile mark) to test its applicability
and usefulness for pipeline operations, including emergency response.
Installing additional equipment at the Cortez Station
beyond that currently required by the regulations to provide four
levels of redundant protection against overpressure situations. This
will provide additional assurance that the pressures in the pipe will
not exceed the safe levels determined from the system review noted
above.
Doubling the inspection frequency from once per year to
every six months for the overpressure protection devices mentioned
above.
Monitoring Demonstration Project Effectiveness
The SPLC Demonstration Project includes a comprehensive approach to
performance monitoring that assures the superior protection of public
safety, and achieves other project objectives. A key element of this
monitoring plan is a set of performance measures that would track the
growth and institutionalization of risk management within the company,
measure the effectiveness of SPLC's risk control activities, validate
analyses supporting current safety activities, and provide a basis for
future improvement. Examples include: The number of SPLC-operated
pipeline systems under risk management (should increase if risk
management is feasible); the number of unmonitored encroachments on the
pipeline right-of-way (should decrease due to improved communications);
accuracy of One-Call reports (should improve due to improved pipeline
markers); employee awareness of risk management process (should improve
through training and participation in process); quantity/accessibility
of data to support risk assessment (should improve as performance
measure data accumulates). SPLC will report performance measure data
and project progress regularly to OPS throughout the four year
demonstration period. This information, as well as periodic OPS audits,
will assure accountability for improved performance.
6. Regulatory Perspective
Why OPS Plans To Approve This Project
OPS is considering SPLC's proposed project for the Demonstration
Program because, after extensive review, OPS is satisfied that the
proposal:
A. Provides superior safety for both of the demonstration segments.
For the Cortez line, OPS is satisfied that the safety margin in the
pipe can accommodate the proposed increase in pressure without adding
significant additional risk to the public. Furthermore, SPLC has
adequately demonstrated that the combination of third party damage and
other risk control activities described earlier more than offset any
increase in risk associated with the higher operating pressure in the
first 25-miles of the line. For the Texas-Louisiana ethylene line, all
of the proposed risk control activities go beyond the current
regulatory
[[Page 67936]]
requirements and thus provide a higher level of public protection than
exists today.
B. Offers a good opportunity to evaluate risk management as a
component of the Federal pipeline safety regulatory program. OPS
believes the Demonstration Program could benefit from SPLC's
participation, given some of the distinguishing features of its
proposed demonstration project, including:
Comprehensive evaluation of two distinctly different
pipeline systems transporting different products, in different
locations with substantially different surroundings, representing
significantly different risks;
Emphasis on improving damage prevention and emergency
response coordination;
Concentrated public outreach and risk communications
efforts;
A good illustration (on the Texas-Louisiana line) of how
companies can use risk management to improve safety without seeking to
reduce costs incurred by existing regulations;
Willingness to share information with OPS and state
pipeline safety agencies on the specific risks associated with the
demonstration line segments, as well as its risk management program and
processes (which is far more information than is typically provided in
the existing compliance process). This additional information allows
OPS to more effectively ensure safe operation, as well as helps OPS
understand how risk management might be employed to supplement the
existing regulatory framework; and
Systematic allocation of resources to potentially higher-
risk operations.
How Will OPS Oversee This Project?
OPS retains its full authority to administer and enforce all
regulations governing pipeline safety. Except for the increase in
maximum operating pressure over the initial 25-mile segment of the
Cortez line, SPLC is not requesting any regulatory relief or
exemptions. Both of these lines will be subject to routine OPS
inspection to ensure compliance with the applicable Federal Pipeline
Safety Regulations. In addition, subsequent to approval, 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 be a more comprehensive
oversight process, which draws maximum technical experience and
perspective from all affected OPS regional and headquarters offices as
well as any affected state agencies that would not normally provide
oversight on interstate transmission projects. One of the primary
functions of this Team will be to conduct periodic risk management
audits, which will be performed in addition to the normal OPS
inspections. These risk management audits will be used to ensure
company compliance with the specific terms and conditions of the OPS
Order authorizing this Demonstration Project. OPS is developing a
detailed audit plan, tailored to the unique requirements of the SPLC
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.
Information Provided to the Public
OPS has previously provided information to the public about the
SPLC project, and has requested public comment, using many different
sources. OPS aired two electronic ``town meetings'' (June 5, 1997, and
September 17, 1997) enabling viewers of the two-way live broadcasts to
pose questions and voice concerns about candidate companies (including
SPLC). Two earlier Federal Register notices (62 FR 40135; July 25, 1997
and 62 FR 53052; October 10, 1997) informed the public that SPLC 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 SPLC.
At a November 19, 1997, public meeting OPS hosted in Houston, TX,
SPLC 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. This broadcast is
available on demand via our OPS website ops.dot.gov/tmvid.htm.)
OPS has provided a prospectus, which includes a map of the
demonstration sites, to State officials and community representatives
who may be interested in reviewing project information, providing
input, or monitoring the progress of the project. This notice is the
last public comment opportunity prior to approval of SPLC's
demonstration project.
Issued in Washington, DC on December 23, 1997.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 97-33863 Filed 12-29-97; 8:45 am]
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