[Federal Register Volume 69, Number 124 (Tuesday, June 29, 2004)]
[Notices]
[Pages 38948-38950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14725]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

[Docket No. RSPA-04-17401]


Pipeline Safety: Development of Class Location Change Waiver 
Criteria

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

ACTION: Notice; criteria for class location change waivers.

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SUMMARY: This notice announces the availability of the criteria that 
the Office of Pipeline Safety (OPS) will use in considering waiver 
applications submitted by operators of natural gas pipeline segments 
that have experienced a change in class location. A class location 
change results from new construction in the vicinity of a pipeline 
segment and, in the absence of a waiver, triggers a requirement that 
the maximum allowable operating pressure be confirmed or revised. The 
criteria matrix provides information and guidance to pipeline operators 
concerning the specific pipe design and operating parameters within 
which OPS is likely to consider a class location waiver application to 
be consistent with pipeline safety.

FOR FURTHER INFORMATION CONTACT: Joy Kadnar, (tel: 202-366-0568; e-mail 
[email protected] regarding the subject matter of this notice. A 
copy of the new criteria for consideration of gas pipeline Class 
Location waiver applications can be accessed in the docket captioned 
above on the DOT's Docket Management System Web site at: http://dms.dot.gov. Additional information about RSPA/OPS Class Location 
waiver criteria can be found at http://primis.rspa.dot.gov/gasimp.

ADDRESSES: For access to the docket to read background documents or 
comments, go to http://dms.dot.gov at any time or to Room PL-40 on the 
plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal Holidays.

SUPPLEMENTARY INFORMATION:

Background

    The criteria document available in the docket establishes 
guidelines for the consideration of requests for waiver of the 
requirement at 49 CFR 192.611 to confirm or revise the maximum 
allowable operating pressure (MAOP) of a natural gas pipeline after a 
change in class location has occurred. If granted, a class location 
waiver would allow a pipeline operator to perform alternative risk 
control activities based on the principles and requirements of the 
Integrity Management Program in lieu of pipe replacement or pressure 
reduction.
    On December 15, 2003, the Office of Pipeline Safety (OPS) published 
a Final Rule requiring operators of gas transmission pipelines to 
develop and implement integrity management programs for their pipelines 
in high consequence areas (68 FR 69778; Dec. 15, 2003). The cost-
benefit analysis in the rule states that:

    Another benefit to be realized from implementing this rule is 
reduced cost to the pipeline industry for assuring safety in areas 
along pipelines with relatively more population. The improved 
knowledge of pipeline integrity that will result from

[[Page 38949]]

implementing this rule will provide a technical basis for providing 
relief to operators from current requirements to reduce operating 
stresses in pipelines when population near them increases. 
Regulations currently require that pipelines with higher local 
population density operate at lower pressures. This is intended to 
provide an extra safety margin in those areas. Operators typically 
replace pipeline when population increases, because reducing 
pressure to reduce stresses reduces the ability of the pipeline to 
carry gas. Areas with population growth typically require more, not 
less, gas. Replacing pipeline, however, is very costly. Providing 
safety assurance in another manner, such as by implementing this 
rule, could allow RSPA/OPS to waive some pipe replacement. RSPA/OPS 
estimates that such waivers could result in a reduction in costs to 
industry of $1 billion over the next 20 years, with no reduction in 
public safety.

    In addition to being factored into the cost-benefit analysis of the 
Integrity Management Program rule, the technical soundness of issuing 
class location waivers has been considered in connection with the 
following regulations, standards, and programs:
     The Risk Management Demonstration Program
     The Integrity Management Program regulations (49 CFR Part 
192, Subpart O)
     The development of ASME Standard B31.8S ``Managing System 
Integrity of Gas Pipelines''
     Various requests for waiver regarding compliance 
activities in class location change areas
    The provision of class location waivers, where warranted, is 
intended to benefit both the public and pipeline operators. First, 
within the waiver area the pipeline operator will be conducting in-line 
inspections and other assessment methods, substantially increasing the 
operator's knowledge of the integrity of pipe structures and 
potentially accelerating the identification and repair of actionable 
anomalies that could pose a threat to the public and environment. 
Second, in addition to performing in-line inspections of the pipe 
located within the waiver areas, in most cases, operators will perform 
in-line inspection and repairs of any actionable anomalies identified 
up to 25 miles upstream and downstream of the waiver area, 
substantially increasing the protection afforded to populated and 
environmentally sensitive areas along the right of way. Third, 
provision of a class location waiver may avoid the delivery 
interruptions, supply shortages, and additional costs associated with 
excavating and replacing the pipe in the affected areas.

Candidates for Waiver Consideration

    The vehicle for an operator seeking a class location waiver will be 
through the normal case-by-case waiver approval process. Under 49 
U.S.C. 60118, OPS may grant a waiver of any regulatory requirement if 
granting the waiver is ``not inconsistent with pipeline safety.'' 
Therefore, each operator submitting a waiver request has the burden of 
demonstrating that the proposed waiver would not be inconsistent with 
pipeline safety with respect to the particular pipe in the affected 
area. Each waiver request is also subject to public notice and comment. 
Operators of intrastate pipelines are required to submit waiver 
requests at the state level.
    Beginning in 2004, requests for class location waivers will be 
considered for a number of candidate sites. During this initial period, 
OPS will gather data to assess whether the integrity management 
programs and other alternative risk control activities these waivers 
would be conditioned upon are being implemented effectively. The 
monitoring of compliance with the required activities will be conducted 
through periodic operator reporting requirements as well as scheduled 
pipeline inspections. If, after a class location waiver is granted, OPS 
determines that the waiver is no longer consistent with public safety, 
OPS may take appropriate regulatory action up to and including 
retraction of the waiver and requiring immediate compliance with the 
MAOP restrictions otherwise applicable to the changed class location. 
Any pipeline or pipeline section for which a class location waiver is 
granted remains subject to all other requirements of 49 CFR Parts 190, 
191, and 192.

Criteria

    The age and manufacturing process of the pipe, construction 
processes used and operating and maintenance history are all 
significant factors that must be considered in the waiver process. 
Additionally, certain threshold requirements must be met in order for a 
pipeline section to be considered a candidate site. Among these 
requirements are:
     No pipe segments changing to Class 4 locations will be 
considered
     No bare pipe will be considered
     No pipe containing wrinkle bends will be considered
     No pipe segments operating above 72% SMYS will be 
considered for a Class 3 waiver
     Records must be produced that show a hydrostatic test to 
at least 1.25 x MAOP
     In-line inspection must have been performed with no 
significant anomalies identified that indicate systemic problems
     Up to 25 miles of pipe either side of the waiver location 
must be included in the pipeline company's Integrity Management Program 
and periodically inspected with an in-line inspection technique
    While each waiver request is considered in its entirety, requests 
involving pipelines with operating conditions reflecting higher risk 
will merit more rigorous scrutiny and require increasing levels of 
justification. The criteria document outlines in more detail the 
specific parameters of pipe design and operating conditions that OPS 
considers in reviewing class location waiver requests. It contains 
three categories specifying: (1) The parameters within which a waiver 
request is likely to be considered consistent with pipeline safety; (2) 
the parameters within which a request is less likely to be considered 
consistent with pipeline safety; and (3) those within which a request 
is unlikely to be considered consistent with pipeline safety. These 
criteria reflect OPS' current thinking and are subject to change as 
more experience with the issuance of class location waivers is gained.

Notification Requirements

    Under 49 CFR 192.611(d) class location change sites have a 24-month 
remediation time limit that begins with the identification of the site. 
Accordingly, operators who have candidate sites should submit written 
notice to OPS of their intent to request a class location waiver as 
early in the 24-month period as possible. With respect to intrastate 
pipelines, since state agency approval is required, the operator should 
submit the notice to both the applicable state agency and OPS. In the 
notification, the operator must include the following information:
     A list of the proposed waiver sites including their 
beginning and ending mileposts and a map of the class change 
location(s), adjacent housing and other structures (within the 1320-
foot corridor, or C-FER Circle if potential impact radius is greater 
than 660 feet (must have actual data, do not prorate)), identification 
of current and previous class location designation, and the reason for 
the class change. The operator shall indicate when this condition 
changed creating the new class location area and will provide 
verification of those date changes.
     Attributes associated with the inspection area containing 
the proposed waiver location(s) including:

[ctrcir] Pipe Vintage

    --Date of installation

[[Page 38950]]

    --Pipe manufacturer
[ctrcir] Diameter, wall thickness, grade and seam type
[ctrcir] Coating type
[ctrcir] Depth of Cover
[ctrcir] Local geology and risks associated with the terrain
[ctrcir] Maximum Allowable Operating Pressure (MAOP) (revised MAOP, if 
applicable); historical maximum and minimum operating pressure
[ctrcir] Hydrostatic test records
[ctrcir] Girth weld radiography records
[ctrcir] In-line inspection records (date launched, tool type, vendor 
or operator evaluated log, dig records, was the tool tolerance 
accurately reflected in digs)
[ctrcir] Cathodic Protection records

     Identify the inspection area containing the proposed 
waiver location(s).
     Limits of HCAs within the inspection area containing the 
proposed waiver location(s), if applicable.
     Direct Assessment results for the proposed waiver area 
(ECDA, SCCDA, and coating)
     Any incidents associated with the inspection area 
containing the proposed waiver location(s) (both reportable and non 
reportable)
     History of leaks on the pipeline in the inspection area 
containing the proposed waiver location(s) (both reportable and non 
reportable)
     List of all repairs on the pipeline within the inspection 
area containing the proposed waiver location(s).
     On-going damage prevention initiatives on the pipeline 
within the inspection area containing the proposed waiver location(s) 
and a discussion of its effectiveness.
     A list of all Safety Related Condition Reports related to 
line pipe integrity submitted on the inspection area containing the 
proposed waiver location(s).
     A summary of the integrity threats to which the pipe 
within the site is susceptible based on Part 192 criteria.
     An in-line inspection schedule and a hydrostatic testing 
schedule (if a valid in-line inspection and hydrostatic test have not 
already been conducted). These inspections/tests must be scheduled such 
that they will be completed, and any actionable anomalies remediated in 
accordance with Part 192, Subpart O, prior to the end of the 24-month 
compliance window. The operator shall provide 30 days prior notice of 
any ILI or direct assessments to be performed within the inspection 
area containing the waiver location(s). Note: Final approval of the 
waiver will be based on the results of the hydrostatic test and ILI 
results and remedial activities.
     The operator must determine and provide certification that 
the inspections/activities associated with this site will not impact or 
defer any of the operator's assessments for HCAs under Part 192, 
Subpart O, particularly those associated with the most significant 50%.
     A summary list of any additional proposed alternative risk 
control activities for each candidate site, including any sites not 
located in a HCA (i.e., inspections and assessments, electrical 
surveys, increased patrolling, leak surveys, public education, etc. 
above and beyond the current requirements of Part 192). Include the 
mileposts within which each activity would be conducted (additional 
mileage upstream and downstream of the waiver area is expected) and the 
proposed time interval for performing the activities on an ongoing 
basis. Note that OPS may require that the scope or the interval of any 
proposed alternative risk control activity be modified or require 
additional activities before granting a waiver.
     Describe the safety benefit both to the specific waiver 
request site, and areas outside the waiver location. This should 
specifically include the number of residences and identified sites at 
the proposed waiver location(s) and within the inspection area 
containing the waiver location(s).

Reporting Requirements

    Within three months following approval of a class location waiver 
and annually thereafter, operators will be required to periodically 
report the following:
     Define the economic benefit to the company. This should 
address both the cost avoided from not replacing the pipe as well as 
the added costs of the inspection program (required for the initial 
report only).
     The results of any ILI or direct assessments performed 
within the inspection area containing the waiver location(s) during the 
previous year.
     Any new integrity threats identified within the inspection 
area containing the waiver location(s) during the previous year.
     Any encroachment in the inspection area including the 
waiver location(s) including the number of new residences or gathering 
areas.
     Any incidents associated with the inspection area 
containing the waiver location(s) that occurred during the previous 
year. (both reportable and non reportable)
     Any leaks on the pipeline in the inspection area 
containing the waiver location(s) that occurred during the previous 
year. (both reportable and non reportable)
     List of all repairs on the pipeline the inspection area 
containing the waiver location(s) made during the previous year.
     On-going damage prevention initiatives on the pipeline in 
the inspection area containing the waiver location(s) and a discussion 
on its success.
     Any mergers, acquisitions, transfers of assets, or other 
events affecting the regulatory responsibility of the company operating 
the pipeline to which the waiver applies.

Supplemental Reporting

    To the extent possible, the pipeline company should provide the 
following information with the first annual report:
     Describe the benefit to the public in terms of energy 
availability. Availability should address the benefit of avoided 
disruptions required for pipe replacement and the benefit of 
maintaining system capacity.

    Authority: 49 U.S.C. 60102, 60109, 60117.

    Issued in Washington, DC, on June 24, 2004.
Richard D. Huriaux,
Director, Technical Standards, Office of Pipeline Safety.
[FR Doc. 04-14725 Filed 6-28-04; 8:45 am]
BILLING CODE 4910-60-P