[Federal Register Volume 66, Number 55 (Wednesday, March 21, 2001)]
[Proposed Rules]
[Pages 15821-15826]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6821]



[[Page 15821]]

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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Parts 195

[Docket No. RSPA-00-7408; Notice 1]
RIN 2137-AD49


Pipeline Safety: Pipeline Integrity Management in High 
Consequence Areas (Hazardous Liquid Operators With Less Than 500 Miles 
of Pipelines)

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule extends the requirements for protection of 
populated areas, commercially navigable waterways, and areas unusually 
sensitive to environmental damage from hazardous liquid pipeline spills 
to those regulated hazardous liquid pipeline operators who own or 
operate less than 500 miles of pipeline. This action is necessary 
because on December 01, 2000, RSPA's Office of Pipeline Safety (OPS) 
issued a final rule to establish new requirements for the protection of 
these areas. However, the published final rule applied only to 
hazardous liquid pipeline operators who own or operate 500 or more 
miles of pipeline. After further review, it was determined that the 
same requirements should be extended to the remaining regulated 
hazardous liquid pipeline operators.

DATES: Interested persons are invited to submit comments on this notice 
of proposed rulemaking (NPRM) by May 21, 2001. Late filed comments will 
be considered to the extent practicable.

ADDRESSES: You may submit written comments by mail or delivery to the 
Dockets Facility, U.S. Department of Transportation, Room PL-401, 400 
Seventh Street, SW, Washington, DC 20590-0001. It is open from 10:00 
a.m. to 5:00 p.m., Monday through Friday, except federal holidays. You 
also may submit written comments to the docket electronically. See the 
SUPPLEMENTARY INFORMATION section for additional filing information.

FOR FURTHER INFORMATION CONTACT: Mike Israni by phone at (202) 366-
4571, by fax at (202) 366-4566, or by e-mail at 
[email protected], regarding the subject matter of this proposed 
rule. See the SUPPLEMENTARY INFORMATION section for additional filing 
information.

SUPPLEMENTARY INFORMATION: Filing Information, Electronic Access and 
General Program Information.
    To submit comments electronically, log on to the following Internet 
Web address: http://dms.dot.gov. Click on ``Help & Information'' for 
instructions on how to file a document electronically. All written 
comments should identify the docket and notice numbers stated in the 
heading of this notice. Anyone desiring confirmation of mailed comments 
must include a self-addressed stamped postcard.
    You may contact the Dockets Facility by phone at (202) 366-9329, 
for copies of this proposed rule or other material in the docket. All 
materials in this docket may be accessed electronically at http://dms.dot.gov. General information about the RSPA Office of Pipeline 
Safety programs may be obtained by accessing OPS's Internet page at 
http://ops.dot.gov.

Background

    On December 1, 2000, OPS published a final rule (65 FR 75378) that 
imposed pipeline integrity management program requirements on hazardous 
liquid operators that own or operate 500 or more miles of pipeline. The 
requirements apply to those hazardous liquid pipeline owners and 
operators with pipelines that could affect areas we defined as high 
consequence areas--populated areas, areas unusually sensitive to 
environmental damage, and commercially navigable waterways.
    The final rule was the first in a series of rulemakings that 
require all regulated pipeline operators to have integrity management 
programs. OPS chose to start the series with hazardous liquid operators 
who own or operate 500 or more miles of pipelines because the pipelines 
they operate have the greatest potential to adversely affect the 
environment, based on the volume of product these pipelines transport. 
By focusing first on those liquid operators, OPS addressed requirements 
for an estimated 86.7 percent of hazardous liquid pipelines.
    In the NPRM and final rule for operators with 500 or more miles of 
pipeline, we explained that we needed to gather more information about 
smaller liquid operations before proposing integrity management program 
requirements for operators operating less than 500 miles of pipeline. 
We further stated that proposed regulatory requirements for all the 
remaining regulated hazardous liquid and gas operators would soon 
follow.
    Information that we collected revealed that many owners and 
operators of less than 500 miles of pipelines are to a large extent, 
companies with sufficient capabilities and resources, and are able to 
handle the same requirements imposed on operators of 500 miles or more 
of pipeline. These operators are well known names in the oil industry 
and are big utilities who also own or operate tank farms, terminals or 
production facilities. Such pipelines and facilities are mostly in the 
urban areas. The information gathered also revealed that more than 50% 
of such pipelines are capable of accommodating internal inspection 
devices and that operators of these pipelines have used internal 
inspection devices in the past. Furthermore, in discussions with some 
of the operators who operate less than 500 miles of pipeline, they 
indicated that they have capabilities and resources to meet the 
integrity management requirements proposed in this rulemaking.
    This proposed rule covers the remaining 13.3 percent of hazardous 
liquid pipelines. It is estimated that approximately 5,440 miles of 
pipeline (of the 157,000 miles of hazardous liquid pipeline in the 
U.S.) will be impacted by this proposed rule.
    As stated in the final rule for liquid operators with 500 and more 
miles of pipelines (65 FR 75378; December 1, 2000), many commenters, 
including NTSB, EPA, API, liquid operators and environmental advocacy 
groups, emphasized that the same requirements must apply to all the 
hazardous liquid pipeline operators regardless of the total mileage 
that they operate. Based on the information we have collected and 
comments we received, we have decided to propose the same requirements 
for operators with less than 500 miles of pipelines as RSPA required 
for operators with 500 or more miles of pipelines. The sole difference 
is in compliance dates which are linked to the effective date of this 
final rule. If comments to this proposed rule cause RSPA to impose 
different requirements on those regulated operators with less than 500 
miles of pipelines, we will distinguish those requirements in the final 
rule.
    See the final rule for hazardous liquid pipeline operators with 500 
or more miles of pipeline (65 FR 75378; December 1, 2000) for all of 
the background and analysis on the subject matter.

The Proposed Rule

    The proposed rule extends to regulated hazardous liquid pipeline 
operators with less than 500 miles of pipeline, all of the same 
requirements imposed on the hazardous liquid pipeline operators with 
500 or more miles of pipeline, as in the December 1,

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2000 final rule. However, because this proposed rule, and thus the 
eventual final rule, will be published at a later date, the compliance 
dates in this proposed rule will be accordingly shifted to give the 
operators with less than 500 miles of pipeline the same amount of time 
to comply with the requirements.
    The December 1, 2000 final rule proposed repair criteria that may 
be changed based on comments. Any changes to that proposal will also be 
reflected in the final rule to this action.
    Please refer to 65 FR 75378 for a discussion of all the proposed 
requirements.

Regulatory Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    The Department of Transportation (DOT) considers this action to be 
a non-significant regulatory action under section 3(f) of Executive 
Order 12866 (58 FR 51735; October 4,1993). Therefore, it was not 
forwarded to the Office of Management and Budget. This proposed rule is 
non-significant under DOT's regulatory policies and procedures (44 FR 
11034; February 26, 1979).
    On December 01, 2000, RSPA's Office of Pipeline Safety (OPS) issued 
a final rule to establish new requirements for additional protection of 
populated areas, commercially navigable waterways, and areas unusually 
sensitive to environmental damage from hazardous liquid pipeline 
spills. The published final rule applies to hazardous liquid pipeline 
operators who own or operate 500 or more miles of pipeline. Through 
this document, OPS is proposing to extend the same requirements to the 
remaining regulated hazardous liquid pipelines.
    A copy of the draft regulatory evaluation has been placed in the 
docket for this proposed rule. The following section summarizes the 
draft regulatory evaluation's findings.
    Hazardous liquid pipeline spills can adversely affect human health 
and the environment. However, the magnitude of this impact differs from 
area to area. There are some areas in which the impact of a spill will 
be more significant than it would be in others due to concentrations of 
people who could be affected or to the presence of environmental 
resources that are unusually sensitive to damage. Because of the 
potential for dire consequences of pipeline failures in certain areas, 
these areas merit a higher level of protection. OPS is proposing this 
regulation to afford the necessary additional protection to these high 
consequence areas.
    Numerous investigations by OPS and the National Transportation 
Safety Board (NTSB) have highlighted the importance of protecting the 
public and environmentally sensitive areas from pipeline failures. NTSB 
has made several recommendations to ensure the integrity of pipelines 
near populated and environmentally sensitive areas. These 
recommendations included requiring periodic testing and inspection to 
identify corrosion and other damage, establishing criteria to determine 
appropriate intervals for inspections and tests, determining hazards to 
public safety from electric resistance welded pipe and requiring 
installation of automatic or remotely-operated mainline valves on high-
pressure lines to provide for rapid shutdown of failed pipelines.
    Congress also directed OPS to undertake additional safety measures 
in areas that are densely populated or unusually sensitive to 
environmental damage. These statutory requirements included having OPS 
prescribe standards for identifying pipelines in high density 
population areas, unusually sensitive environmental areas, and 
commercially navigable waters; issue standards requiring periodic 
inspections using internal inspection devices on pipelines in densely-
populated and environmentally sensitive areas; and survey and assess 
the effectiveness of emergency flow restricting devices, and prescribe 
regulations on circumstances where an operator must use the devices.
    This proposed rulemaking addresses the target problem described 
above, and is a comprehensive approach to certain NTSB recommendations 
and Congressional mandates, as well as pipeline safety and 
environmental issues raised over the years.
    This proposed rule focuses on a systematic approach to integrity 
management to reduce the potential for hazardous liquid pipeline 
failures that could affect populated and unusually sensitive 
environmental areas, and commercially navigable waterways. This 
proposed rulemaking requires pipeline operators to develop and follow 
an integrity management program that continually assesses, through 
internal inspection, pressure testing, or equivalent alternative 
technology, the integrity of those pipeline segments that could affect 
areas we have defined as high consequence areas i.e., populated areas, 
areas unusually sensitive to environmental damage, and commercially 
navigable waterways. The program must also evaluate the segments 
through comprehensive information analysis, remediate integrity 
problems and provide additional protection through preventive and 
mitigative measures.
    This proposed rule (the second in a series of integrity management 
program regulations) covers hazardous liquid pipeline operators that 
own or operate less than 500 miles of pipeline used in transportation. 
OPS intends to soon propose integrity management program requirements 
for natural gas transmission operators. OPS chose to start the series 
with hazardous liquid operators who own or operate 500 or more miles of 
pipelines because the pipelines they operate have the greatest 
potential to adversely affect the environment, based on the volume of 
product these pipelines transport. Further, by focusing first on those 
liquid operators, OPS addressed requirements for an estimated 86.7 
percent of hazardous liquid pipelines. This proposed rule covers the 
remaining 13.3 percent of hazardous liquid pipelines. It is estimated 
that approximately 5,440 miles (of the 157,000 miles of hazardous 
liquid pipeline in the U.S.) will be impacted by this proposed rule.
    We have estimated the cost to develop the necessary program at 
approximately $9.64 million, with an additional annual cost for program 
upkeep and reporting of $1.8 million. An operator's program begins with 
a baseline assessment plan and a framework that addresses each required 
program element. The framework indicates how decisions will be made to 
implement each element. As decisions are made and operators evaluate 
the effectiveness of the program in protecting high consequence areas, 
the program will be updated and improved, as needed.
    The proposed rule requires a baseline assessment of covered 
pipeline segments through internal inspection, pressure test, or use of 
other technology capable of equivalent performance. The baseline 
assessment must be completed within seven years after the final rule 
becomes effective. After this baseline assessment, the rule further 
proposes that an operator be required to periodically re-assess and 
evaluate the pipeline segment to ensure its integrity within a five 
year interval. It is estimated that the cost of periodic reassessment 
will generally not occur until the sixth year unless the baseline 
assessment indicates significant defects that would require earlier 
reassessment. Integrating information related to the pipeline's 
integrity is a key element of the integrity management program. Costs 
will be incurred in realigning existing data systems to permit

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integration and in analysis of the integrated data by knowledgeable 
pipeline safety professionals. The total costs for the information 
integration requirements in this proposed rule are $6.4 million in the 
first year and $3.2 million annually thereafter.
    The proposed rule requires operators to identify and take 
preventive or mitigative measures that would enhance public safety or 
environmental protection based on a risk analysis of the pipeline 
segment. One of the many preventive or mitigative actions that the 
notice proposes that an operator may take is to install an EFRD on the 
pipeline segment, as determined necessary. OPS could not estimate the 
total cost of installing EFRDs because OPS does not know how many 
operators will install them. Additionally, requirements have been 
proposed for an operator to evaluate its leak detection capability and 
modify that capability, if necessary. OPS does not know how many 
operators currently have leak detection systems or how many will be 
installed or upgraded as a result of this proposed rule. OPS was 
therefore also unable to estimate the total costs of the proposed leak 
detection requirements.
    Affected operators will be required to assess more line pipe in 
segments that could affect high consequence areas as a result of this 
proposed rule than they would have been expected to assess if the 
proposed rule had not been issued. Integrity assessment consists of a 
baseline assessment, to be conducted over the first seven years after 
the effective date of the final rule, and subsequent re-assessment at 
intervals not to exceed every five years.
    OPS has estimated the annual cost of additional baseline assessment 
that will be required by this proposed rule as $377 thousand annually. 
The cost for additional re-assessment that will be required to meet the 
five-year re-assessment requirement is also $377 thousand per year. 
Cost impact will be greater in the sixth and seventh years after the 
effective date of the final rule due to an overlap between baseline 
inspection and the initial subsequent testing. The additional costs in 
these two years are estimated at $5.26 million. The subsequent cost of 
testing will be $531 thousand every year thereafter.
    The benefits of this proposed rule can not easily be quantified but 
can be described in qualitative terms. Issuance of this proposed rule 
ensures that all operators will perform at least to a baseline safety 
level and will contribute to an overall higher level of safety and 
environmental performance nationwide. It will lead to greater 
uniformity in how risk is evaluated and addressed and will provide more 
clarity in discussion by government, industry and the public about 
safety and environmental concerns and how they can be resolved.
    Much of the proposed rule is written in performance-based language. 
A performance-based approach provides several advantages: encouraging 
development and use of new technologies; supporting operators' 
development of more formal, structured risk evaluation programs and 
OPS's evaluation of the programs; and providing greater ability for 
operators to customize their long-term maintenance programs.
    The proposed rule has also stimulated the pipeline industry to 
begin developing a supplemental consensus standard to support risk-
based approaches to integrity management. The proposed rule has further 
fostered development of industry-wide technical standards, such as 
repair criteria to use following an internal inspection.
    Our emphasis on an integrity-based approach encourages a balanced 
program, addressing the range of prevention and mitigation needs and 
avoiding reliance on any single tool or overemphasis on any single 
cause of failure. This orientation will lead to addressing the most 
significant risks in populated areas, unusually sensitive environmental 
areas, and commercially navigable waterways. This integrity-based 
approach provides a good opportunity to improve industry performance 
and assure that these high consequence areas get the protection they 
need. It also addresses the interrelationships among different causes 
of failure, and aids in the coordination of risk control actions, 
beyond what a solely compliance-based approach would achieve.
    The proposed rule provides for a verification process, which gives 
the regulator a better opportunity to influence the methods of 
assessment and the interpretation of results. OPS will provide a 
beneficial challenge to the adequacy of an operator's decision process. 
Requiring operators to use the integrity management process, and having 
regulators validate the adequacy and implementation of this process, 
should expedite the operators' rates of remedial action, thereby 
strengthening the pipeline system and reducing the public's exposure to 
risk.
    A particularly significant benefit is the quality of information 
that will be gathered as a result of this proposal to aid operators' 
decisions about providing additional protections. Two essential 
elements of the integrity management program are that an operator 
continually assess and evaluate the pipeline's integrity, and perform 
an analysis that integrates all available information about the 
pipeline's integrity. The process of planning, assessment and 
evaluation will provide operators with better data on which to judge a 
pipeline's condition and the location of potential problems that must 
be addressed.
    Integrating this data with the environmental and safety concerns 
associated with high consequence areas will help prompt operators and 
the Federal and state governments to focus time and resources on 
potential risks and consequences that require greater scrutiny and the 
need for more intensive preventive and mitigation measures. If baseline 
and periodic assessment data is not evaluated in the proper context, it 
is of little or no value. It is imperative that the information an 
operator gathers is assessed in a systematic way as part of the 
operator's ongoing examination of all threats to the pipeline 
integrity. The proposed rule is intended to accomplish that.
    The public has expressed concern about the danger hazardous liquid 
pipelines may pose to their neighborhoods. The integrity management 
process leads to greater accountability to the public for both the 
operator and the regulator. This accountability is enhanced through our 
choice of a map-based approach to defining the areas most in need of 
additional protection--the visual depiction of the populated areas, 
unusually sensitive environmental areas, and commercially navigable 
waterways in need of protection focuses on the safety and environmental 
issues in a manner that will be easily understandable to everyone. The 
system integrity requirements and the sharing of information about 
their implementation and effectiveness will assure the public that 
operators are continually inspecting and evaluating the threats to 
pipelines that pass through or close to populated areas to better 
ensure that the pipelines are safe.
    OPS has not provided quantitative benefits for the continual 
integrity management evaluation required in this proposed rule. OPS 
does not believe, however, that requiring this comprehensive process, 
including the re-assessment of pipelines in high consequence areas at a 
minimum of once every five years, will be an undue burden on hazardous 
liquid operators covered by this proposal. OPS believes the added 
security this assessment will provide and the generally expedited rate 
of strengthening the pipeline system in populated and important 
environmental areas and commercially navigable

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waterways, is benefit enough to promulgate these requirements.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). OPS 
must consider whether a rulemaking would have a significant impact on a 
substantial number of small entities. This proposed rulemaking was 
designed to impact only those hazardous liquid operators that own or 
operate less than 500 miles of pipeline. Because of this limitation on 
pipeline mileage, only 128 hazardous liquid pipeline operators (large 
national energy companies) covering 13.3 percent of regulated liquid 
transmission lines are impacted by this proposed rule.
    The costs of the testing are proportionate to the number of miles 
of hazardous liquid pipeline that an operator owns or operates. The 
testing costs and the planning costs should be a function of the length 
of the pipeline. Information that we collected revealed that many 
owners and operators of less than 500 miles of pipelines are to a large 
extent, companies with sufficient capabilities and resources, and are 
able to handle the same requirements imposed on operators of 500 miles 
or more of pipeline. These operators are well known names in the oil 
industry and are big utilities who also own or operate tank farms, 
terminals or production facilities. The information gathered also 
revealed that more than 50% of such pipelines are capable of 
accommodating internal inspection devices and that operators of these 
pipelines have used internal inspection devices in the past. Based on 
this, and the evidence discussed above, I certify that this proposed 
rule will not have a significant impact on a substantial number of 
small entities.

Paperwork Reduction Act

    This proposed rule contains information collection requirements. As 
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), 
the Department of Transportation has submitted a copy of the Paperwork 
Reduction Act Analysis to the Office of Management and Budget for its 
review. The name of the information collection is ``Pipeline Integrity 
Management in High Consequence Areas for Operators with less than 500 
miles of pipeline.'' The purpose of this information collection is 
designed to require operators of hazardous liquid pipelines to develop 
a program to provide direct integrity testing and evaluation of 
hazardous liquid pipelines in high consequence areas.
    One hundred and twenty-eight (128) hazardous liquid operators will 
be subject to this proposed rule. It is estimated that those operators 
will have to develop integrity management programs taking approximately 
2,800 hours per program. Each of the operators would also have to 
devote 1,000 hours in the first year to integrate this data into 
current management information systems.
    Additionally, under the proposals, operators would have to update 
their programs on a continual basis. This will take approximately 330 
hours per program annually. An additional 500 hours per operator will 
be needed for the proposed requirement to annually integrate the data 
into the operator's current management information systems.
    Under the proposal, operators could use either hydrostatic testing 
or an internal inspection tool as a method to assess their pipelines. 
However, operators could use another technology if they could 
demonstrate it provides an equivalent understanding of the condition of 
the line pipe as the other two assessment methods. Operators have to 
provide OPS 90-days notice (by mail or facsimile) before using the 
other technology. OPS believes that few operators will choose this 
option. If they do choose an alternate technology, notice preparation 
should take approximately one hour. Because OPS believes few if any 
operators will elect to use other technologies, the burden was 
considered minimal and therefore not calculated.
    Additionally, the proposed rule allows operators to seek a variance 
in limited situations from the required five-year continual re-
assessment interval if they can provide the necessary justification and 
supporting documentation. Notice would have to be provided to OPS when 
an operator seeks a variance. OPS believes that approximately 10% of 
operators may request a variance. This is approximately 13 operators. 
The advance notification can be in the form of letter or fax. OPS 
believes the burden of a letter or fax is minimal and therefore did not 
add it to the overall burden hours discussed above.
    Organizations and individuals desiring to submit comments on the 
information collection should direct them to U.S. Department of 
Transportation, Room PL-401, 400 Seventh Street, SW., Washington, DC 
20590-0001 or by e-mail to www.dms.dot.gov. Please provide the docket 
number of this proposal. Comments must be sent within 60 days of the 
publication of this proposed rule.
    The Office of Management and Budget is specifically interested in 
the following issues concerning the information collection:

    1. Evaluating whether the collection is necessary for the proper 
performance of the functions of the Department, including whether 
the information would have a practical use;
    2. Evaluating the accuracy of the Department's estimate of the 
burden of the collection of information, including the validity of 
assumptions used;
    3. Enhancing the quality, usefulness and clarity of the 
information to be collected; and minimizing the burden of collection 
of information on those who are to respond, including through the 
use of appropriate automated electronic, mechanical, or other 
technological collection techniques or other forms of information 
technology; e.g., permitting electronic submission of responses.

    According to the Paperwork Reduction Act of 1995, no persons are 
required to respond to a collection of information unless a valid OMB 
control number is displayed. The valid OMB control number for this 
information collection will be published in the Federal Register after 
it is approved by the OMB. For more details, see the Paperwork 
Reduction Analysis available for copying and review in the public 
docket.

Executive Order 13084

    This proposed rule has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13084 
(``Consultation and Coordination with Indian Tribal Governments''). 
Because this proposed rule does not significantly or uniquely affect 
the communities of the Indian tribal governments and does not impose 
substantial direct compliance costs, the funding and consultation 
requirements of Executive Order 13084 do not apply.

Executive Order 13132

    This proposed rule has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13132 
(``Federalism''). This proposed rule does not adopt any regulation 
that:
    (1) Has substantial direct effects on the States, the relationship 
between the national government and the States, or the distribution of 
power and responsibilities among the various levels of government;
    (2) Imposes substantial direct compliance costs on States and local 
governments; or
    (3) Preempts state law.
    Therefore, the consultation and funding requirements of Executive 
Order 13132 (64 FR 43255, August 10, 1999) do not apply. Nevertheless, 
in a

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November 18-19, 1999 public meeting, OPS invited National Association 
of Pipeline Safety Representatives (NAPSR), which includes State 
pipeline safety regulators, to participate in a general discussion on 
pipeline integrity. Again in January, and February 2000, OPS held 
conference calls with NAPSR, to receive their input before proposing an 
integrity management rule.

Unfunded Mandates

    This proposed rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$100 million or more to either State, local, or tribal governments, in 
the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objective of the proposed rule.

National Environmental Policy Act

    We have analyzed the proposed rule 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 DOT Order 5610.1D, and have preliminarily 
determined that this action would not significantly affect the quality 
of the human environment.
    The Environmental Assessment (available in the Docket) determined 
that the combined impacts of the initial baseline assessment (pressure 
testing or internal inspection), the subsequent periodic assessments, 
and additional preventive and mitigative measures that may be 
implemented to protect high consequence areas will result in positive 
environmental impacts. The number of incidents and the environmental 
damage from failures in and near high consequence areas are likely to 
be reduced. However, from a national perspective, the impact is not 
expected to be significant for the pipeline operators covered by the 
proposed rule. The following discussion summarizes the analysis 
provided in the Environmental Assessment.
    Many operators covered by the proposed rule (those operating less 
than 500 miles of pipeline) already have internal inspection and 
pressure testing programs that cover most, if not all, of their 
pipeline systems. These operators typically place a high priority on 
the pipeline's proximity to populated areas, commercially navigable 
waterways, and environmental resources when making decisions about 
where and when to inspect and test pipelines. As a result, some high 
consequence areas have already been recently assessed, and a large 
fraction of remaining locations would probably have been assessed in 
the next several years without the provisions of the proposed rule. The 
most tangible impact of the proposed rule will be to ensure assessments 
are performed for those line segments that could affect a high 
consequence area that are not currently being internally inspected or 
pressure tested, and ensuring that integrity is maintained through an 
integrity management program that requires periodic assessments in 
these locations. Because pipeline failure rates are low, and because 
the total pipeline mileage operated by operators with less than 500 
miles of pipeline that could affect high consequence areas is small 
(estimated to be approximately 5440 miles), the proposed rule has only 
a small effect on the likelihood of pipeline failure in these 
locations.
    The proposed rule will result in more frequent integrity 
assessments of line segments that could affect high consequence areas 
than most operators are currently conducting (due to the five year 
interval required for periodic assessment). However, if the operator 
identifies and repairs significant problems discovered during the 
baseline inspection, and has in place solid risk controls to prevent 
corrosion and other threats (as required by the proposed rule), the 
benefits of testing every five years versus the longer intervals 
operators more typically employ are not expected to be significant.
    The proposed rule requires operators to conduct an integrated 
evaluation of all potential threats to pipeline integrity, and to 
consider and take preventive or mitigative risk control measures to 
provide enhanced protection. If there is a vulnerability to a 
particular failure cause--like third party damage--these evaluations 
should identify additional risk controls to address these threats. Some 
of the liquid operators covered by the proposed rule already perform 
integrity evaluations or formal risk assessments that consider the 
environmental sensitivity and impacts on population. These evaluations 
have already led to additional risk controls beyond existing 
requirements to improve protection for these locations. For these 
operators, it is expected that additional risk controls will be limited 
and customized to site-specific conditions that the operator may not 
have previously recognized.
    Finally, an important, although less tangible, benefit of the 
proposed rule will be to establish requirements for operator integrity 
management programs that assure a more comprehensive and integrated 
evaluation of pipeline system integrity in high consequence areas. In 
effect, this will codify and bring an appropriate level of uniformity 
to the integrity management programs some operators are currently 
implementing. It will also require operators who have limited, or no, 
integrity management programs to raise their level of performance. 
Thus, the proposed rule is expected to provide a more consistent, and 
overall, a higher level of protection for high consequence areas across 
the industry.

List of Subjects in 49 CFR Part 195

    Carbon dioxide, Petroleum, Pipeline safety, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, OPS proposes to amend part 195 
of title 49 of the Code of Federal Regulations as follows:

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

    1. The authority citation for part 195 continues to read as 
follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60118; 
and 49 CFR 1.53.

Subpart F--Operation and Maintenance

    2. Amend Sec. 195.452 to revise paragraphs (a), (b), (b)(1) 
introductory text, (b)(1)(i), (d)(1), (d)(2) and (h)(3) to read as 
follows:


Sec. 195.452  Pipeline integrity management in high consequence areas.

    (a) Which operators must comply? This section applies to each 
operator covered by this part.
    (b) What must an operator do? (1) An operator must develop a 
written integrity management program that addresses the risks on each 
pipeline segment that could affect a high consequence area. For an 
operator who owns or operates a total of 500 or more miles of pipeline, 
this program must be developed no later than March 31, 2002. For an 
operator who owns or operates less than 500 miles of pipeline, this 
program must be developed no later than (one year after the effective 
date of the final rule). An operator must include in the program:
    (i) An identification of all pipeline segments that could affect a 
high consequence area. A pipeline segment in a high consequence area is 
presumed to affect that area unless the operator's risk assessment 
effectively demonstrates otherwise. (See Appendix C of this part for 
guidance on identifying pipeline segments.) For an operator who owns or 
operates a total of 500 or more miles of pipeline, the identification 
must be completed no later than December 31, 2001. For an operator who 
owns or

[[Page 15826]]

operates less than 500 miles of pipeline, the identification must be 
completed no later than (nine months after the effective date of the 
final rule).
* * * * *
    (d) When must the baseline assessment be completed?
    (1) Time period. An operator must establish a baseline assessment 
schedule to determine the priority for assessing the pipeline segments. 
For an operator who owns or operates a total of 500 or more miles of 
pipeline, the baseline assessment must be completed by March 31, 2008. 
For an operator who owns or operates less than 500 miles of pipeline, 
the baseline assessment must be completed by (seven years after the 
effective date of the final rule). An operator must assess at least 50% 
of the line pipe subject to the requirements of this section, on an 
expedited basis, beginning with the highest risk pipe. For an operator 
who owns or operates a total of 500 or more miles of pipeline, the 
assessment of the initial 50% of the line pipe must by completed by 
September 30, 2004. For an operator who owns or operates less than 500 
miles of pipeline, the assessment of the initial 50% of the line pipe 
must be completed by (42 months after the effective date of the final 
rule).
    (2) Prior assessment. To satisfy the requirements of paragraph 
(c)(1)(i) of this section, and if the integrity assessment method meets 
the requirements of this section, an operator may use an integrity 
assessment conducted after--January 1, 1996 for an operator who owns or 
operates a total of 500 or more miles of pipeline, or after (five years 
prior to the effective date of the final rule) for an operator who owns 
or operates less than 500 miles of pipeline. However, if an operator 
uses this prior assessment as its baseline assessment, the operator 
must re-assess the line pipe according to the requirements of paragraph 
(j)(3) of this section.
* * * * *
    (h) What actions must be taken to address integrity issues? * * *
    (3) Review of integrity assessment. An operator must include in its 
schedule for evaluation and repair (as required by paragraph (h)(4) of 
this section), a schedule for promptly reviewing and analyzing the 
integrity assessment results. After March 31, 2004 for an operator who 
owns or operates a total of 500 or more miles of pipeline, or after 
(three years after the effective date of the final rule) for an 
operator who owns or operates less than 500 miles of pipeline--an 
operator's schedule must provide for review of the integrity assessment 
results within 120 days of conducting each assessment. The operator 
must obtain and assess a final report within an additional 90 days.
* * * * *

    Issued in Washington DC on January 17, 2001.
Stacey L. Gerard,
Associate Administrator, Office of Pipeline Safety.
[FR Doc. 01-6821 Filed 3-20-01; 8:45 am]
BILLING CODE 4910-60-P