[Federal Register Volume 66, Number 129 (Thursday, July 5, 2001)]
[Notices]
[Pages 35505-35508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16782]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

[Docket No. RSPA-01-8972; Notice 1]


Pipeline Safety: Intent to Consider Waiver and Environmental 
Assessment of Waiver for Transwestern Pipeline Company

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 Enron 
Transportation Services Company/Transwestern Pipeline Company (ETS/TW) 
as a candidate for participation in the Demonstration Program; 
subsequently, OPS and ETS/TW held discussions as part of an approval 
process. OPS has not yet approved ETS/TW's application. ETS/TW 
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. At an intermediate stage in the project 
approval process, ETS/TW requested OPS waive certain regulatory 
requirements relating to class location changes for three pipeline 
segments. ETS/TW indicated that it would carry out the proposed 
alternative risk control activities in lieu of compliance with these 
regulations.
    This Notice announces OPS's intent to consider granting a waiver 
from 49 CFR 192.611 to allow ETS/TW to perform the proposed alternative 
risk control activities. Among the factors that are crucial to OPS's 
decision to consider granting the waiver are ETS/TW's selection as a 
candidate for the Risk Management Demonstration Program and ETS/TW's 
subsequent participation in a consultation process with OPS. In 
addition, OPS has found that the overall effect of the proposed waiver 
is consistent with pipeline safety, because ETS/TW's proposed 
activities achieve a margin of safety and environmental protection 
comparable to that achieved by compliance with 49 CFR 192.611. Within 
90 days of OPS's adoption of new rules related to integrity management 
of natural gas pipelines \1\, ETS/TW will be required to re-evaluate 
the effects of its proposed alternative risk control activities so that 
OPS can determine 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 ETS/TW's proposed alternative 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.
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    \1\ OPS is considering additional regulations to enhance 
pipeline integrity in high consequence areas 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.

ADDRESSES: OPS requests that comments to this Notice or about this 
environmental assessment be submitted on or before August 6, 2001 so 
they can be considered before a final determination is made whether to 
grant the waiver to ETS/TW. 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-01-8972. Persons should submit the 
original comment document and one (1) copy. Persons wishing to receive 
confirmation of

[[Page 35506]]

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 
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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/.

SUPPLEMENTAL INFORMATION:

1. Background

    In 1996, the Secretary of Transportation was authorized 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 Enron Transportation Services 
Company affiliate Florida Gas Transmission Company (FGTC) and eleven 
other pipeline companies would be candidates for participation in the 
Risk Management Demonstration Program.\2,3\ Subsequently, Enron 
Transportation Services Company (ETS) informed OPS that Transwestern 
Pipeline Company (TW) would replace FGTC as its candidate for the 
program.\4\ Following the selection of candidate companies, a 
consultation process commenced, in which an OPS Project Review Team 
(PRT) and ETS/TW held discussions regarding ETS/TW's participation in 
the Demonstration Program. The consultation process involved OPS's 
technical scrutiny of ETS/TW's safety practices and pipeline integrity.
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    \2\ Candidates for the Pipeline Risk Management Demonstration 
Program [62 Federal Register 143, July 25, 1997].
    \3\ Pipeline Safety: Remaining Candidates for the Pipeline Risk 
Management Demonstration Program [62 Federal Register 197, October 
10, 1997].
    \4\ Letter from William R. Cordes and Stanley C. Horton, 
Transwestern Pipeline Company to R.B. Felder, OPS, December 18, 
1998.
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    During the course of the consultation process, ETS/TW identified 
three pipeline segments in its system where it proposed to conduct risk 
control alternative activities (the ``Activities'') in lieu of the 
class location change requirements in 49 CFR 192.611. ETS/TW provided 
documents describing its proposed Activities for the three segments 
(the ``waiver segments''). The PRT and ETS/TW agreed that it would be 
appropriate to address the proposed substitution of the Activities for 
compliance with 49 CFR 192.611 via waiver.\5\ This document summarizes 
OPS's review of the proposed Activities and evaluates whether the terms 
of the waiver would be consistent with pipeline safety pursuant to 49 
U.S.C. 60118(c).
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    \5\ ETS/Transwestern Risk Management Demonstration Project, PRT 
Meeting Summary, March 9, 2000.
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2. OPS Evaluation of ETS/TW's Proposed Alternative Risk Control 
Activities

    Representatives from OPS Headquarters and Southwestern Region 
evaluated ETS/TW's proposed Activities. OPS met with ETS/TW to discuss 
the current risk assessment and risk control processes ETS/TW uses, how 
these processes were used to identify and define the Activities, and 
the analysis of the protection achieved by the Activities compared to 
the protection 49 CFR 192.611 provides. The evaluation also included an 
environmental assessment, which is described in Appendix A of this 
Notice.
    The ETS/TW 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. Protection of the public and environment by the prevention 
of pipeline leaks and ruptures is the highest priority for OPS and ETS/
TW. A major review criterion for this evaluation is whether the 
Activities ETS/TW has proposed 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 ETS/TW to allow implementation of the Activities in lieu of 
compliance with 49 CFR 192.611.

3. Alternative Risk Control Activity Locations

    The proposed Activities focus on controlling the risks in three 
pipeline segments located near Church Rock, NM, in the northwest corner 
of the state not far from the Arizona border. These waiver segments are 
located on the main transmission line in segment L-154 and on a 
parallel loop line in segment L-254. The waiver segments lie in 
McKinley County, New Mexico. The stationing and lengths of the three 
segments are:

Main line L-154: From M.P. 1173+06 to M.P. 1195+94 (2,288 feet)
Main line L-154: From M.P. 1226+92 to M.P. 1232+-5 (513 feet)
Loop line L-254: From M.P. 1247+47 to M.P. 1261+12 (1365 feet)

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 Sec. 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 
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 three of the ETS/TW waiver segments (identified in Section 3) 
have changed from Class 1 to Class 3 due to the addition and clustering 
of mobile homes in the area.
    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 2 to class 3), the 
operator must reduce the operating pressure on the pipeline to provide 
an additional margin of safety. The operator may be

[[Page 35507]]

able to avoid reducing pressure, 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.
    ETS/TW has stated that in order to provide reliable natural gas 
service to its customers, it cannot permanently reduce the operating 
pressure along the waiver segments. Consequently, in order to meet 
pipeline safety regulations, ETS/TW would be required to replace the 
pipe in the three waiver segments. By replacing the existing pipe with 
new pipe that has the prescribed design factor, ETS/TW 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  ETS/TW's Proposed Alternative Risk Control Activities

    For each waiver segment, ETS/TW 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. (Current regulations do 
not require internal inspection). These tools reliably identify most 
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. ETS/TW has performed these internal 
inspections and the OPS Southwestern region has reviewed the inspection 
results.
    2. Internally inspect an extended length of pipe (the ``extended 
segments'') bordering each waiver segment to further extend the 
benefits of the integrity analysis. The extended segments cover the 
distance between Compressor Stations 5 and 4 on both the main line and 
the loop line, a distance of approximately 129.5 miles.
    3. Repair indications of corrosion, existing construction damage, 
and existing outside force damage identified by the internal 
inspection. ETS/TW used more conservative investigation and repair 
criteria in the waiver segments than is currently required by the 
regulations. The criteria call for investigation and repairs of small 
dents and anomalies that are well below the size at which a challenge 
to pipeline integrity might be expected.
    4. Implement improved measures to prevent third-party damage to the 
pipelines in the waiver segments. These measures include installation 
of a new style of right-of-way marker at closer intervals, increasing 
vehicular and aerial surveillance from monthly to semi-monthly, and 
increased interaction with local contractors who would be most likely 
to dig in the area of the pipeline.
    5. Perform monitoring of the waiver segments using portable 
waveform monitoring instrumentation that supplements and enhances the 
monitoring now required by regulation. These surveys will be compared 
with the results of the internal inspection of the lines.
    In addition, ETS/TW proposes to conduct the following risk control 
activities on portions of its pipeline outside the waiver segments to 
supplement protection provided by the pipeline safety regulations:
    6. Conduct a corrosion technology evaluation project comparing 
various corrosion monitoring technologies. This project will provide 
information to ETS/TW, and to OPS, regarding the relative effectiveness 
of different monitoring techniques on conditions endemic to line pipe 
in the Southwest. ETS/TW will survey additional portions of its 
pipeline using techniques shown by the corrosion technology evaluation 
project to be most effective.
    7. Internally inspect an additional length of pipe on the main line 
between compressor stations 6 and 8, a distance of approximately 143.5 
miles. These segments contain pipe known to have lower toughness. 
Current regulations do not require inspection of these segments, pipe 
replacement, or pressure reduction. These internal inspections are to 
be conducted by Fall 2001.
    8. Repair indications of corrosion, existing construction damage, 
and existing outside force damage identified by the internal inspection 
based upon ETS/TW procedures. The criteria call for investigation and 
repairs of small dents and anomalies that are well below the size at 
which a challenge to pipeline integrity might be expected.
    9. Install subsidence monitoring equipment at each main line valve 
and pigtrap assembly from Compressor station #6 to Compressor station 
#8, an area where possible subsidence contributes to the risk from the 
pipeline. Subsidence will be monitored in these locations for a minimum 
of two years.
    Many of these Activities have been completed. OPS will condition 
any waiver to require completion of Activities that have not been 
completed at the time the waiver is issued.
    OPS has compared the expected risk reduction produced by the 
Activities to that which would be achieved by compliance with 49 CFR 
192.611 and has concluded that in the waiver segments the Activities 
will likely achieve a margin of safety and environmental protection 
comparable to that which would be achieved through compliance with 49 
CFR 192.611. Furthermore, because of the resources saved by not having 
to replace pipe in the waiver segments, ETS/TW will be able to assess 
the integrity of additional portions of its system, which reduces the 
overall risks along the ETS/TW pipeline system. This will result in 
superior safety performance overall.

5. OPS's Proposed Action

    Based on OPS's evaluation of ETS/TW's proposed Activities, OPS is 
considering granting ETS/TW a waiver from the pressure confirmation and 
pipe replacement requirements of 49 CFR 192.611. A waiver would require 
ETS/TW to implement the proposed Activities in lieu of compliance with 
this requirement. In addition, ETS/TW along with OPS, would monitor the 
Activities' effectiveness.
    No more than 90 days after OPS adopts new rules related to 
integrity management of natural gas pipelines, ETS/TW will be required 
to re-evaluate the rule's effect on this waiver so that OPS can 
determine whether the terms of the waiver continue to be appropriate 
and the overall effect of the waiver remains consistent with pipeline 
safety. If OPS determines that 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 ETS/TW to 
comply with 49 CFR 192.611.

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 consistent 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 ETS/TW's pipelines;
    2. The three waiver segments have a good integrity history, with no 
leaks recorded during operation or hydrostatic testing.
    3. ETS/TW has internally inspected a total of 129.5 miles of pipe, 
including the waiver segments. ETS/TW will additionally inspect a total 
of 143.5

[[Page 35508]]

miles. These activities add protection against pipeline failures from 
corrosion, manufacturing and construction defects, and outside third-
party damage along this full 273 mile length. Compliance with 49 CFR 
192.611 would require replacement of pipe or requalification tests 
within the waiver segments only (less than 1 mile of pipe), with no 
added protection for the additional segments. The ETS/TW Activities 
provide added protection by including the additional segments.
    4. ETS/TW was selected as a candidate for the Risk Management 
Demonstration Program and has participated in a consultation process 
with OPS, which included an enhanced sharing with OPS of information 
related to the integrity of ETS/TW's pipeline.

How Will OPS Oversee the Activities?

    OPS retains its authority to enforce ETS/TW'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 three segments 
where ETS/TW 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 ETS/TW to again comply with 49 CFR 
192.611.
    This Notice is OPS's final request for public comment before OPS 
makes a final decision on whether to grant the waiver to ETS/TW.

    Issued in Washington, DC, on June 20, 2001.
Stacey L. Gerard,
Associate Administrator for Pipeline Safety.
[FR Doc. 01-16782 Filed 7-3-01; 8:45 am]
BILLING CODE 4910-60-P