[Federal Register Volume 65, Number 238 (Monday, December 11, 2000)]
[Notices]
[Pages 77419-77422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31340]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration (RSPA), DOT

[Docket No. RSPA-00-8452; Notice 1]


Pipeline Safety: Intent To Approve Waiver and Environmental 
Assessment of Waiver for Duke Energy

AGENCY: Office of Pipeline Safety, Research and Special Programs 
Administration, DOT.

ACTION: Notice of Intent to Consider Waiver and Environmental 
Assessment of Waiver.

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SUMMARY: The Office of Pipeline Safety (OPS) is conducting a Risk 
Management Demonstration Program with pipeline operators to determine 
how risk management might be used to complement and improve the 
existing Federal pipeline safety regulatory process. OPS selected Duke 
Energy (Duke) as a candidate for participation in the Demonstration 
Program; subsequently, OPS and Duke held discussions as part of a 
consultation process. During the consultation, Duke identified a 
portion of its system where it believed performing alternative risk 
control activities in lieu of compliance with current regulations would 
result in a comparable margin of safety and environmental protection. 
Duke submitted an application to OPS to temporarily waive certain 
regulatory requirements relating to class location changes for five 
locations in a 3-line system, ranging from 0.5 miles to 0.88 miles in 
length and totaling 12.2 miles in fifteen pipeline segments. Duke had 
previously reduced the operating pressure along the fifteen segments in 
accordance with these requirements and seeks to return the pipeline to 
its historical operating pressure. Duke has completed many of the 
proposed alternative risk control activities related to assuring 
integrity of the pipeline in the segments for which regulatory relief 
is sought. Discussions continue between OPS and Duke regarding 
programmatic aspects of the company's risk management demonstration 
project.
    This Notice announces OPS's intent to approve a waiver to allow 
Duke to increase the allowable operating pressure in these fifteen pipe 
segments. OPS has reviewed the terms of this waiver and found them to 
be appropriate. Among the terms of the waiver that were crucial to 
OPS's decision to consider granting the waiver were Duke's selection as 
a candidate for the Risk Management Demonstration Program, Duke's 
subsequent participation in the consultation process with an OPS 
Project Review Team (PRT), the comparable margin of safety and 
environmental protection provided by the proposed activities, and the 
expectation that the continuing discussions with Duke may result in 
approval of their risk management demonstration project. In addition, 
OPS has found that the overall effect of the waiver is not inconsistent 
with pipeline safety. If granted, this waiver would expire upon either 
the approval or disapproval of Duke's risk management demonstration 
project.
    OPS is considering whether or not additional regulations to enhance 
pipeline integrity in high consequence areas are warranted for natural 
gas transmission pipelines. Additional information on integrity 
management rule-related activities is available on the OPS web site at 
http://ops.dot.gov. Within 90 days of OPS's adoption of new rules 
related to integrity management of natural gas pipelines,

[[Page 77420]]

Duke will be required to re-evaluate the effects of this waiver and 
report to OPS on whether the terms of the waiver continue to be 
appropriate and whether the overall effect of the waiver remains 
consistent with pipeline safety.
    This Notice also provides an environmental assessment of Duke's 
Activities. Based on this environmental assessment, OPS has 
preliminarily concluded that this waiver will have no significant 
environmental impacts.
    OPS seeks public comment on the proposed waiver and the 
environmental assessment, so that it may consider and address these 
comments before making a final decision on this matter.

ADDRESSES: OPS requests that comments to this Notice or about this 
environmental assessment be submitted on or before January 10, 2001, so 
they can be considered before a final determination is made whether to 
grant the waiver to Duke. Written comments should be sent to the 
Dockets Facility, U.S. Department of Transportation, Plaza 401, 400 
Seventh Street, SW., Washington, DC 20590-0001. Comments should 
identify the docket number RSPA-00-8452. 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. You may also submit 
comments to the docket electronically. To do so, log on to the DMS Web 
at http://dms.dot.gov. Click on Help & Information to obtain 
instructions for filing a document electronically.

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/.

SUPPLEMENTARY INFORMATION:

1. Background

    The Accountable Pipeline Safety and Partnership Act of 1996 
authorizes the Secretary of Transportation to establish risk management 
demonstration projects in partnership with operators of gas and liquid 
pipeline facilities, pursuant to U.S.C. Sec. 60126. In 1997, OPS 
announced that Duke Energy (Duke) and eleven other pipeline companies 
would be candidates for participation in the Risk Management 
Demonstration Program.\1\ \2\ Following this announcement, a 
consultation process commenced, in which an OPS Project Review Team 
(PRT) and Duke held discussions on the potential participation of Duke 
in the Demonstration Program. The consultation process involved 
technical scrutiny by OPS of Duke's safety practices and pipeline 
integrity.\3\
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    \1\ Candidates for the Pipeline Risk Management Demonstration 
Program (62 FR 40135, July 25, 1997).
    \2\ Pipeline Safety: Remaining Candidates for the Pipeline Risk 
Management Demonstration Program (62 FR 53052, October 10, 1997).
    \3\ The consultation process is in its final stages and the 
proposed Duke Energy Risk Demonstration Project has been approved by 
the PRT. Documentation that will formally accept Duke Energy into 
the Risk Management Demonstration Program is currently being 
prepared. That documentation will include an order requiring 
completion of all proposed risk control activities and 
implementation of measures to evaluate their continued 
effectiveness.
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    During the course of the consultation process, Duke identified 
seven new Class 2 sites on their 3-line system, comprising twenty-one 
pipeline segments ranging from 0.5 to 2.7 miles in length where it 
proposed to conduct risk control alternative activities (the 
``Activities '') in lieu of the class location change requirements in 
49 CFR 192.611. Fifteen of these segments are located in Tennessee and 
six are in Kentucky. Operating pressure has already been reduced for 
the fifteen Tennessee segments, from 1000 psig to 936 psig, pursuant to 
the requirements of 49 CFR 192.611. Duke submitted an application on 
October 5, 2000, for a waiver of the requirements of 49 CFR 192.611 for 
the fifteen Tennessee segments (the ``waiver segments'') while 
consultative discussions regarding Duke's proposed risk management 
demonstration project continue. If the waiver is approved, Duke will 
return the operating pressure along the waiver segments, for which most 
of the proposed Activities have already been completed, to 1000 psig. 
This document summarizes OPS's review of the Activities and evaluates 
the extent to which the terms of this waiver are appropriate and the 
overall effect of the waiver is not inconsistent with pipeline safety, 
pursuant to 49 U.S.C. 60118(c).

2. OPS Evaluation of Duke's Proposed Alternative Risk Control 
Activities

    Representatives from OPS Headquarters, OPS Southern Region, and the 
State of Tennessee evaluated Duke's proposed Activities. OPS has 
evaluated Duke's current risk assessment and risk control processes, 
the method Duke used to identify and define the Activities, and the 
analysis Duke performed when comparing the protection provided by 49 
CFR 192.611 to the Activities. The OPS evaluation also included an 
environmental assessment, which is described in Appendix A of this 
Notice.
    The Duke System transports pressurized natural gas, which is 
lighter than air and flammable. If released as a result of a pipeline 
leak or rupture, natural gas can potentially ignite causing fires or 
explosions, loss of life, and/or damage to property or the environment. 
Protecting the public and environment through the prevention of 
pipeline leaks and ruptures is the highest priority for OPS and Duke. A 
major review criterion for this evaluation was whether the Activities 
Duke proposes will achieve a margin of safety and environmental 
protection comparable to that achieved through compliance with 49 CFR 
192.611. It is the preliminary opinion of OPS that implementing the 
proposed Activities will result in a comparable margin of safety and 
environmental protection.
    Once OPS has considered comments it receives in response to this 
Notice, OPS will make a final determination regarding whether to grant 
a waiver to Duke to return the operating pressure along the waiver 
segments to 1000 psig and implement any remaining Activities in lieu of 
compliance with 49 CFR 192.611.

3. Alternative Risk Control Activity Locations

    The proposed Activities focus on controlling risks along fifteen 
pipeline segments in Tennessee. These waiver segments are located on 
the three parallel lines 10, 15, and 25, downstream from the Mt. 
Pleasant Compressor Station. The waiver segments lie in Maury and 
Williamson Counties, Tennessee. The waiver segments are located at the 
following specific milepost (M.P.) locations on Line 10, and include 
the adjacent sections of Lines 15 and 25 in each location:

In Maury County, 1.2 miles southwest of Hollywood, TN--From M.P. 226.47 
to M.P. 227.50
In Maury County, one-half mile north of Hollywood, TN--From M.P. 228.49 
to M.P. 229.21
In Maury County, one mile east of Union Grove, TN--From M.P. 238.00 to 
M.P. 238.65
In Maury County, 2.5 miles northwest of Rally Hill, TN--From M.P. 
247.78 to M.P. 248.27
In Williamson County, 3.5 miles east-northeast of Arrington, TN--From 
M.P. 264.03 to M.P. 265.42

[[Page 77421]]

4. Description of Waiver: Alternative Risk Control Activities 
Designed To Provide Comparable Margin of Safety

4.1  Current Regulatory Requirements

    This section describes the current regulatory requirements in 49 
CFR 192.611 governing actions that must be taken by a pipeline operator 
when population density increases along a pipeline.
    OPS categorizes all locations along natural gas pipelines according 
to the population densities near the pipelines (see 49 CFR 192.5). 
Locations with the lowest population density (10 or fewer buildings 
intended for human occupancy within an area that extends 220 yards on 
either side of the centerline of any continuous one mile length of 
pipeline) are designated as Class 1. As the population along a pipeline 
increases, the class location increases. 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 intended for 
human occupancy, or are areas where a pipeline lies within 100 yards of 
either a building or small, well-defined outside area (such as a 
playground, recreation area, outdoor theater, or other place of public 
assembly) that is occupied by 20 or more persons on at least 5 days a 
week for 10 weeks in any 12 month period. Class 4 locations are any 
class location unit where buildings with four or more stories above 
ground are prevalent (e.g. large office buildings).
    All of the Duke waiver pipe segments (identified in Section 3) have 
changed from Class 1 to Class 2.
    Pipeline safety regulations impose more stringent design and 
operational requirements as the class location increases. When a class 
location changes to a higher class (e.g., from class 1 to class 2), the 
operator must reduce the operating pressure on the pipeline to provide 
an additional margin of safety. The operator may be able to avoid a 
pressure reduction, in some cases, if a pressure test on the pipe has 
confirmed that a prescribed safety margin exists. In these cases, if a 
previous pressure test has not confirmed the prescribed safety margin, 
then the operator must test the pipe to confirm the margin. In other 
cases, the operator must reduce the pressure or replace the pipe with 
new pipe. In the case of the waiver segments, Duke has lowered the 
operating pressure from 1000 psig to 936 psig.
    Duke has stated that in order to provide reliable natural gas 
service to its customers, it cannot maintain the current pressure 
reduction along the waiver segments. Consequently, in order to increase 
pressure and provide reliable service, Duke would be required to 
replace the pipe in the fifteen waiver segments. By replacing the 
existing pipe with new pipe that has the prescribed design factor, Duke 
could eliminate the possibility that defects in the original materials 
and construction, as well as corrosion that may have occurred since 
installation, would result in a failure.

4.2  Duke's Proposed Alternative Risk Control Activities

    For each waiver segment, Duke proposes to perform the following 
alternative risk control activities, with the objective of providing a 
margin of safety and environmental protection comparable to pipe 
replacement:
    1. Internally inspect the waiver segments using geometry and 
magnetic flux leakage in-line inspection tools, which are not required 
under current regulations. These tools identify indications of wall 
loss (e.g. corrosion), as well as dents and gouges from initial 
construction damage or third party excavators working along the 
pipeline right-of-way. These internal inspections have been performed 
and the OPS Southern Region has reviewed the inspection results.
    2. Internally inspect approximately 166 miles of additional pipe on 
the three parallel lines in the Mt. Pleasant Discharge. These internal 
inspections have been performed and the OPS Southern Region has 
reviewed the inspection results.
    3. Investigate dents upon completion of the dent inspections for an 
extended length of pipe (the ``extended segments'') bordering and 
including each waiver segment to further extend the benefits of the 
integrity analysis. The extended segments cover a length of pipe 
totaling 660 feet on both ends of each waiver segment. These internal 
inspections have been performed and the OPS Southern Region has 
reviewed the inspection results.
    4. Repair indications of corrosion, existing construction damage, 
and existing outside force damage identified by the internal inspection 
using conservative investigation and repair criteria. The criteria used 
by Duke calls for investigation and repairs of small dents and 
anomalies that are well below the threshold where pipeline integrity 
might be compromised.
    5. Perform hydrostatic tests of the portions of Line 10 which have 
not previously been tested to 100 percent (SMYS). This includes two of 
the waiver segments, 2.5 miles northwest of Rally Hill in Maury County 
and 3.5 miles east-northeast of Arrington in Williamson County. These 
hydrostatic tests have been completed.
    6. Implement a Communications Plan designed to inform and educate 
appropriate stakeholders and Duke Energy employees about risk 
management concepts and the purposes and expected benefits of the Duke 
Energy Demonstration Project.
    7. Perform enhanced damage prevention activities including 
implementing selected recommendations from a recent study of one-call 
systems and damage prevention programs best practice, ``Common 
Ground''. Duke will also install, for a trial period, the TransWave 
monitoring system covering all of the waiver segments. This system will 
be tested to determine its reliability and usefulness for detecting 
third-party encroachments (construction, excavation, etc.) in the 
pipeline right-of-way.
    As part of the company's risk evaluation, Duke has compared the 
expected risk reduction produced by increasing the operating pressure 
and implementing the Activities to that which would be achieved by 
compliance with the current regulations. OPS has reviewed this 
evaluation and concluded that the Activities will likely achieve a 
margin of safety and environmental protection comparable to the margin 
which would be achieved through compliance with 49 CFR 192.611.

5. OPS's Proposed Action

    Based on OPS's evaluation of Duke's proposed Activities, OPS is 
considering granting Duke a waiver from the pressure confirmation and 
pipe replacement requirements of 49 CFR 192.611. This waiver would 
accept Duke's implementation of the Activities in lieu of compliance 
with this requirement and will allow Duke to return the operating 
pressure in the waiver segments to 1000 psig. In addition, Duke along 
with OPS, would be required to monitor the Activities' effectiveness.
    OPS is considering whether or not additional regulations to enhance 
pipeline integrity in high consequence areas are warranted for natural 
gas transmission pipelines. Additional information on integrity 
management rule-related activities is available on the OPS web site at 
http://ops.dot.gov. No more than 90 days after OPS adopts new rules 
related to integrity management of natural gas pipelines, Duke will be 
required to re-evaluate the terms and effects of this waiver and report 
to OPS on whether the terms of the waiver continue to be appropriate 
and whether

[[Page 77422]]

the overall effect of the waiver remains consistent with pipeline 
safety. If, after reviewing the Duke evaluation and report, OPS 
determines that the terms of the terms of the waiver are no longer 
appropriate or that the overall effect of the waiver is inconsistent 
with pipeline safety, OPS will revoke the waiver and require Duke to 
comply with 49 CFR 192.611 and all other applicable regulations. This 
waiver will expire upon approval of Duke's risk management 
demonstration project or in the event that the Duke risk management 
demonstration project is disapproved. If either of these actions occur 
earlier than 90 days after OPS adopts new rules related to integrity 
management of natural gas pipelines, then this re-evaluation will not 
be required.

6. Regulatory Perspective

Why is OPS Considering This Waiver?

    OPS has determined that the terms of the waiver are appropriate and 
that the overall effect of the waiver is not inconsistent with pipeline 
safety. The following factors were considered when making this 
determination:
    1. The proposed Activities will provide a comparable margin of 
safety and protection for the environment and the communities in the 
vicinity of Duke's pipelines.
    2. Duke's risk-based justification of the alternatives to the class 
location change regulations is technically sound.
    3. The fifteen waiver segments have a good integrity history, with 
no leaks recorded during operation or hydrostatic testing.
    4. Duke has internally inspected a total of 191 miles of pipe on 
the three parallel lines in the Mt. Pleasant discharge, including all 
of the waiver segments. These inspections provide added protection 
against pipeline failures from corrosion, manufacturing and 
construction defects, and outside third-party damage along the full 191 
mile length. Compliance with 49 CFR 192.611 would require replacement 
of pipe within the waiver segments only (approximately 12 miles of 
pipe) with no added protection for the extended segments (approximately 
181 miles of pipe). The proposed Activities provide added protection by 
including the additional pipe. Duke also conducted hydrostatic tests to 
100% SMYS on Line 10. In addition, Duke has installed the TransWave 
system and will be evaluating it over the coming year.
    5. Duke was selected as a candidate for the Risk Management 
Demonstration Program and has participated in a rigorous consultation 
process with OPS, which included an enhanced sharing with OPS of 
information related to the integrity Duke's pipeline. The consultation 
process is nearly complete and may result in acceptance of Duke into 
the Risk Management Demonstration Program including enforceable 
commitments for the additional risk control activities.

How Will OPS Oversee the Activities?

    OPS retains its authority to enforce Duke's compliance with the 
pipeline safety regulations. OPS is only considering whether to grant a 
waiver from compliance with 49 CFR 192.611 at those fifteen segments 
where Duke has demonstrated that its proposed Activities achieve a 
comparable margin of safety and environmental protection. Should any 
information subsequently indicate that the terms of the waiver are no 
longer appropriate or that the overall effect of the waiver is 
inconsistent with pipeline safety, then OPS retains its authority to 
revoke the waiver and require Duke to again comply with 49 CFR 192.611 
and all other applicable regulations.
    This Notice is OPS's final request for public comment before OPS 
makes a final decision on granting the waiver to Duke.

    Issued in Washington, DC, on December 5, 2000.
Stacey L. Gerard,
Associate Administrator for Pipeline Safety.
[FR Doc. 00-31340 Filed 12-8-00; 8:45 am]
BILLING CODE 4910-60-P