Pipeline Safety 101!! Association of Oil Pipelines! Annual Business Conference! Hyatt Regency Savannah,! Savannah, Georgia! September 18 21, 2012!!

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1 Pipeline Safety 101!! Association of Oil Pipelines! Annual Business Conference! Hyatt Regency Savannah,! Savannah, Georgia! September 18 21, 2012!! Vince Murchison, Murchison Law Firm!! Chris Paul, McAfee & Taft!! Peter Lidiak, American Petroleum Institute!! September 20, 2012!

2 Course Summary! Introductions and Course Overview! Life Cycle Review of Part 195! Evolution of the Regulatory Regime! Performance History and the Effects of Regulatory Change (e.g., IMP)! Current Issues and Initiatives! Q&A!

3 Introduction and Course Overview! Key Questions: What is Safety? What does it take to be Safe?! Public Safety and Environmental Protection?! Personnel Safety?! Process Safety?! Pipeline Safety Regulations?! Policies and Procedures?! Best Practices?! Safety Culture?!

4 The Pipeline Safety Act! The Hazardous Liquids Pipeline Safety Act of 1979 (HLPSA)!! The HLPSA was cloned from the Natural Gas Pipeline Safety Act of 1968 (NGPSA)!! The NGPSA and the HLPSA were recodified in 1994 into the Pipeline Safety Act (PSA)!! 49 United States Code 60101, et seq!

5 The Pipeline Safety Act! Power and Authority! The PSA grants authority over pipeline safety to the Secretary of the U.S. Department of Transportation (DOT)! Among the powers granted by Congress:! To promulgate safety standards (regulations) for the design, installation, inspection, emergency plans and procedures, testing, construction, extension, operation, replacement, and maintenance! To inspect pipeline systems for adherence to the safety standards! To enforce compliance with the safety standards! To direct that unsafe, or hazardous, pipeline systems be made safe!

6 The Pipeline Safety Act! Among the powers granted by Congress (continued):! To certify State pipeline safety programs for oversight of intrastate pipelines! To encourage State damage prevention programs! To grant funds for State programs and research activities (49 CFR Part 198)! To collect user fees from pipeline operators!

7 Jurisdictional Overview: Interstate vs. Intrastate! What it is! What it means! Interstate Jurisdiction! The Office of Pipeline Safety (OPS) in the Pipeline and Hazardous Materials Safety Administration (PHMSA) is delegated the Secretaryʼs powers.! PHMSA/OPS is the agency with primary safety jurisdiction over interstate pipelines.! States also may inspect for PHMSA as interstate agent (6 states for HL)! Intrastate Jurisdiction! States exercise safety oversight under regulatory programs certified by PHMSA (14 states for HL)!! State regulatory program must be no less stringent than the federal program (but may be more stringent).!

8 The Oil Pipeline Safety Regulations! Title 49, Code of Federal Regulations, Part 195! Subpart A: General! Subpart B:! Annual, Accident, and Safety-Related Condition Reporting! Subpart C:! Design Requirements! Subpart D:! Construction! Subpart E:! Pressure Testing! Subpart F:! Operation and Maintenance! Subpart G:! Qualification of Pipeline Personnel! Subpart H:! Corrosion Control! See also, Oil Spill Response Plans (49 CFR Part 194)! See also, Drug and Alcohol testing (49 CFR Part 199)!

9 The Oil Pipeline Safety Regulations! Overarching Subjects! Performance-Based Regulation! Performance vs. Prescriptive (but how much longer?)! Desired safety objectives can be reached! Without impeding future industry innovations! 33 Fed. Reg (July 17, 1968)! Standards Incorporated by Reference! API, ASTM, ASME, NACE, NFPA, Etc.! Best Practices You Will Be Compared To Others! Safety Culture!

10 The Pipeline Safety Life Cycle! Life-Cycle Review! Design! Construction! Operation and Maintenance! Integrity Management! Reporting! Enforcement! Following are Select Provisions of Part 195 (Many Have Been Omitted From This Presentation)!

11 The Pipeline Safety Life Cycle! Design Subpart C! Internal design pressure: P=(2 St/D ) E F! External pressure! External loads! Valves! Passage of internal inspection devices! Design and construction of aboveground breakout tanks! Pipeline location!

12 The Pipeline Safety Life Cycle! Subpart D - Construction! Inspection Trained and qualified! Transportation of pipe! Welding procedures! Welders: Qualification! Welds and welding inspection! Installation of pipe in a ditch! Cover over buried pipeline! Backfilling! Valve Locations! Construction records!

13 The Pipeline Safety Life Cycle! Pressure Testing Subpart E! General requirements! Test pressure! at least 4 continuous hours at a pressure equal to 125 percent of the maximum operating pressure! Testing of components! Pressure testing aboveground breakout tanks! Records!

14 The Pipeline Safety Life Cycle! Operation and Maintenance Subparts F, G & H! General requirements! No operator may operate or maintain its pipeline systems at a level of safety lower than that required by this subpart! Procedural manual for operations, maintenance, and emergencies! General! Maintenance and normal operations! Abnormal operation! Emergencies! Safety-related condition reports!

15 The Pipeline Safety Life Cycle! Operation and Maintenance (continued)! Emergency response training! Maps and records! Maximum operating pressure! Line markers! Inspection of ROW and navigable water crossings! Valve maintenance! Inspection of in-service breakout tanks! Security of facilities!

16 The Pipeline Safety Life Cycle! Operation and Maintenance (continued)! Public awareness! Damage prevention program! CPM leak detection! Control room management! Roles and responsibilities! Provide adequate information! Fatigue mitigation! Alarm management! Change management!

17 The Pipeline Safety Life Cycle! Operation and Maintenance (continued)! Qualification of Pipeline Personnel! Subpart H Corrosion Control! Pipeline integrity management in high consequence areas! Applies to each [and every] hazardous liquid pipeline and carbon dioxide pipeline that could affect a high consequence area! Develop a written integrity management program that addresses the risks on each segment of pipeline!

18 Pipeline Integrity Management! Pipeline integrity management in high consequence areas! What are the elements of an integrity management program?! A process for identifying which pipeline segments could affect a high consequence area (update)! A baseline assessment plan (new system)! An analysis that integrates all available information about the integrity of the entire pipeline and the consequences of a failure! Criteria for remedial actions to address integrity issues raised by the assessment methods and information analysis! A continual process of assessment and evaluation to maintain a pipeline's integrity! Identification of preventive and mitigative measures to protect the high consequence areas! Methods to measure the program's effectiveness! A process for review of integrity assessment results and information analysis!

19 Pipeline Integrity Management! Pipeline integrity management in high consequence areas (continued)! Assess the integrity of the line pipe! Internal inspection tool or tools capable of detecting corrosion and deformation anomalies including dents, gouges and grooves! Pressure test conducted in accordance with subpart E of this part! External corrosion direct assessment in accordance with ! A schedule for completing the integrity assessment! An explanation of the assessment methods selected and evaluation of risk factors considered!

20 Pipeline Integrity Management! Pipeline integrity management in high consequence areas (continued)! Risk factors for establishing an assessment schedule:! Results of the previous integrity assessment, defect type and size that the assessment method can detect, and defect growth rate! Pipe size, material, manufacturing information, coating type and condition, and seam type! Leak history, repair history and cathodic protection history! Product transported! Operating stress level! Existing or projected activities in the area! Local environmental factors that could affect the pipeline ( e.g., corrosivity of soil, subsidence, climatic)! Geo-technical hazards! Physical support of the segment (e.g., a cable suspension bridge)!

21 Reporting! Reporting Subpart B! Annual Report Form (June 15)! Safety-Related Conditions! Corrosion; Movement or loading; Impaired serviceability; Surge greater than 110% MOP; A leak that constitutes an emergency; Pressure reduction (20%) or shutdown! Accidents! Explosion or fire! Release of 5 gallons (ROW exception)! Death or Injury requiring hospitalization! Damage greater than $50,000! National Registry Construction (60 days)! Rehab, replacement, etc. > $10 million! 10+ miles new pipeline or a facility!

22 Enforcement! Inspections! Investigations! Notice of Amendment! Warning Letter! Notice of Probable Violation! Compliance Order! Civil Penalty! Safety Order! Corrective Action Order! Administrative Procedure!

23 Performance History and the Effects of Regulatory Change! Significant Decline in Hazardous Liquids Spills from 1999 to 2011! Driven by Industry Performance Improvement Processes! Pipeline Performance Tracking System (1999)! Data Mining Team & Lessons Learned (PPTS Advisories)! What does our history tell us?! Performance Excellence Team (2001)! How can we do better in the future?! PIX: Pipeline Information exchange (2008)! Integrity Management Regulations! Focus on Integrity Management Programs has had benefits for HCA could affect segments as well as non-hca segments!

24 Performance History and the Effects of Regulatory Change! Dramatic Improvement:! Liquids Pipeline Industry Onshore Pipe Spill Record! 300 Number of Spills! 100 1,000 Barrels Released! % 80-43% '99 '01 '03 '05 '07 '09 '11 '99 '01 '03 '05 '07 '09 '11

25 Performance History and the Effects of Regulatory Change! Spills Are Down In Every Major Cause Category! Number of Releases year average ending: % - 59% - 26% - 23% - 38% - 53% 200%

26 '01 '03 '05 '07 '09 '11 Causes of Releases from Onshore Pipelines Total Corrosion Third Party '01 '03 '05 '07 '09 ' '01 '03 '05 '07 '09 '11 '01 '03 '05 '07 '09 ' '01 '03 '05 '07 '09 '11 Equip/Non- Pipe Operator/Oper n Mat l/seam/weld Onshore pipeline (no staqon piping); Excl. unreg d gathering; 3- year avg ending in year shown; Source: PPTS '01 '03 '05 '07 '09 '11

27 Current Issues and Initiatives! Recent Pipeline Accidents Raised Questions For! The Public, Regulators and Legislators About Pipeline Safety! Marshall, MI Crude Release NTSB Findings and Recommendations! Salt Lake City, UT Crude Release (I & II) release to water! San Bruno, CA Gas Transmission Explosion and Fire fatalities/property loss! Allentown, PA Gas Distribution fatalities/property loss! Laurel, MT Release to Water! DOT Secretary LaHood Call To Action -! April 18, 2011 Pipeline Safety Forum! Secretaryʼs Report to the Nation on Pipeline Safety?!!

28 Current Issues and Initiatives! API-AOPL Leadership Safety Initiatives! Leak Detection! Damage Prevention! Enhanced Data Integration! Sharing Practices! External Communications! Strategic Planning! Research & Development/Enhanced Technology! Emergency Response (new in 2012)! Purpose: Undertake significant near-term and long-term actions that will make real improvements in industry performance!!

29 Current Issues and Initiatives! Pipeline Safety Act of 2011 Key Provisions! Civil Penalty Authority Doubled to $200,000 per violation, $2 million max! Enforcement Procedural Changes! Dedicated Presiding Official! Expedited Review of orders issued without a hearing (e.g., CAO)! Separation of Functions between investigative and prosecutorial staff! Onshore Facility Response Plans PHMSA Enforcement Authority! Onshore Facility Response Plans Public now may obtain a copy! Damage Prevention Elimination of exemptions for states and municipalities! Authority to require automatic or remote-controlled valves! Cost Recovery for design reviews - $2.5 B or new or novel technology!

30 Current Issues and Initiatives! Pipeline Safety Act of 2011 Key Provisions for Oil Pipelines! Numerous Studies, Analyses, and Reports! Diluted Bitumen Does it bring increased risk of release?! Integrity Management Whether IMP should be expanded! Leak detection system utilization, technical limitations, reliability, and safety benefits / adverse consequences of using leak detection systems! Extent of non-petroleum hazardous liquids transportation by pipeline! Gathering lines sufficiency of existing laws/regulations, economic and technical challenges to application of existing requirements, risk-based justifications used to remove gathering line exceptions! Depth of cover as a factor in water crossing incidents! PHMSA inspection and enforcement resources and needs! Pipeline construction permitting issues (GAO)!

31 !! Current Issues and Initiatives! Verification of Records Establishing Maximum Operating Pressure (MOP)! San Bruno incident raised issue of reliability/accuracy of records! National Transportation Safety Board recommendation! Advisory Bulletin January 2011 MOP records must be reliable, traceable, verifiable and complete! Advisory Bulletin May 2012 Defined traceable, verifiable and complete! Traceable: Can be linked to original information about a pipeline/facility! Verifiable: Information confirmed by separate documentation?! Complete: Record is finalized by a signature, date, or other marking! More to come Stay tuned.!

32 Current Issues and Initiatives! NTSB Recommendations from Marshall, Michigan Incident! PHMSA! Revise integrity management regs to address assessment of cracks, including environmentally assisted cracks (SSC)! Revise integrity management regs to address discovery of condition, and timing of receipt of adequate information to make a determination of a threat to integrity! Issue ADBs about deficiencies in IMP and facility response planning! Require team training of control center staffs! Harmonize Part 194 FRP requirements with Coast Guard and EPA regulations! U.S. DOT! Audit PHMSAʼs FRP program business practices, including plan reviews and drill programs! Allocate resources for program to pass muster under OPA ʻ90! American Petroleum Institute! Develop safety management system standard! Pipeline Research Council International! Develop model procedures for evaluating interacting corrosion and cracks!

33 Current Issues and Initiatives! AOPL & API Pipeline Safety Principles! Zero Incidents! Organization-Wide Commitment! A Culture of Safety! Continuous Improvement! Learn from Experience! Systems for Success! Employ Technology! Communicate with Stakeholders!!!!!

34 Vince Murchison! Murchison Law Firm! Chris Paul! McAfee & Taft! Peter Lidiak! American Petroleum Institute!