Pipeline Safety: Intent To Consider Waiver for Duke Energy Gas Transmission Company

AGENCY:

Research and Special Programs Administration (RSPA), Department of Transportation (DOT).

ACTION:

Notice of intent to consider waiver request.

SUMMARY:

Duke Energy Gas Transmission Company (DEGT) petitioned the Research and Special Programs Administration's Office of Pipeline Safety (RSPA/OPS) for waiver of compliance with 192.611 for locations changing from Class 1 to Class 2 along certain natural gas pipeline segments in Tennessee and Kentucky pursuant to its participation in the Risk Management Demonstration Program. In the absence of a waiver, 192.611 requires gas pipeline operators to confirm or revise the maximum allowable operating pressure of a pipeline after an increase in the population of an area along a pipeline's route results in a change to a higher class location. In lieu of compliance with 192.611, DEGT proposed to conduct a set of alternative risk control activities based on the principles and requirements of the Integrity Management Program on the entire length of the affected pipeline segments. RSPA/OPS is considering whether to grant a waiver and seeks public comment on the proposed waiver.

ADDRESSES:

Any comments to this Notice must be submitted on or before September 15, 2004 so they can be considered before a final determination is made on whether to grant the waiver. You may submit written comments (identified by DOT DMS Docket Number RSPA-00-8452) directly to the docket by any of the following methods:

• Web site: Go to http://dms.dot.gov. Follow instructions for submitting comments on the DOT electronic docket site.
• Fax: 1-202-493-2251.
• Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. Anyone wanting confirmation of mailed comments must include a self-addressed stamped postcard.
• Hand delivery or courier: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC between 10 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

All submissions must include the agency name, docket number and notice number stated in the heading of this notice. Note that all comments received will be posted without change, including any personal information provided. Please see the Privacy Act heading below.

Docket access: For copies of this notice or other material in the dockets, you may contact the Dockets Facility by phone (202-366-9329) or visit the facility at the above street address. For Web access to the dockets to read and download filed material, go to http://dms.dot.gov/search . Then type in the last four digits of the docket number shown in the heading of this notice, and click on “Search.”

Privacy Act Information: Anyone can search the electronic form of all comments filed in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted for an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the April 11, 2000, issue of the Federal Register (65 FR 19477) or go to http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Callsen, RSPA/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 Dockets Management System website at http://dms.dot.gov/.

SUPPLEMENTARY INFORMATION:

Background

Under 192.5, the geographic areas along natural gas pipelines are categorized according to the population densities near the pipelines. Areas with the lowest population density (10 or fewer buildings intended for human occupancy within an area that extends 220 yards on either side of the centerline of any continuous one mile length of pipeline) are designated as Class 1 and areas with the highest population density are designated as Class 4. The pipeline safety regulations generally impose more stringent requirements for pipeline design and operation for line sections in the higher class areas. Under 192.611, when the class designation of a particular location changes to a higher class due to new construction in the vicinity of the pipeline, the pipeline operator must reduce the operating pressure, pressure test the pipe, or replace the pipe.

In accordance with Section 5 of The Accountable Pipeline Safety and Partnership Act of 1996 (Pub. L. 104-304, 110 Stat. 3793; October 12, 1996), RSPA/OPS established the Risk Management Demonstration Program (RMDP) in partnership with operators of natural gas and liquid pipeline facilities to determine how risk management principles could be used to complement and improve the existing Federal pipeline safety regulatory process. Under the RMDP, pipeline operators proposed risk management projects to demonstrate how a structured and formalized risk management process could enable a company to customize its safety program to allocate resources to its pipeline's particular risks, leading to a superior level of safety and environmental protection. DEGT and eleven other pipeline companies were selected as potential candidates for RMDP projects (see Candidates for the Pipeline Risk Management Demonstration Program [62 FR 143; July 25, 1997]; Pipeline Safety: Remaining Candidates for the Pipeline Risk Management Demonstration Program (62 FR 197; October 10, 1997).

In evaluating DEGT as a RMDP candidate, RSPA/OPS and DEGT engaged in a consultation process to scrutinize DEGT's safety practices and pipeline risk management program. DEGT identified twenty-one (21) sites where the class location had changed from Class 1 to Class 2 along the route of two compressor station discharges (i.e., the pipeline beginning at the discharge of those compressor stations and continuing downstream until the next compressor station), one of which is located in Tennessee and the other in Kentucky.

By letter dated October 5, 2000, DEGT petitioned RSPA/OPS for waiver of compliance with 192.611 for class location changes affecting the pipe segments in the two compressor station discharges pursuant to its participation in the RMDP. DEGT proposed to conduct certain alternative risk control activities, including internal inspections, on all of the pipeline segments in the two compressor station discharges in lieu of compliance with the requirements of 192.611 and demonstrated that the alternative risk control activities would provide a level of safety comparable to that provided by compliance with 192.611. The requested waiver was intended to extend through the remainder of the consultation period and to expire upon final action under the RMDP.

On December 11, 2000, RSPA/OPS published a notice in the Federal Register seeking comment on the waiver (65 FR 77419; December 11, 2000). No comments were received in response to the notice. On March 9, 2001, RSPA/OPS granted the waiver with respect to the compressor station discharge in Tennessee containing 15 of the 21 sites where the class location had changed from Class 1 to Class 2 while approval of DEGT's RMDP project was pending (66 FR 14256; March 9, 2001). Based in part on the knowledge and experience with risk management gained in connection with DEGT's RMDP project, on December 15, 2003, RSPA/OPS issued its Integrity Management Program regulations requiring gas pipeline operators to conduct comprehensive assessments of their systems and perform any remedial actions necessary in high consequence areas such as populated areas and environmentally sensitive areas (49 CFR Part 192, Subpart O).

By letter dated June 1, 2004, DEGT submitted a petition for waiver of 192.611 that would apply to all 21 of the sites where the class location had changed from Class 1 to Class 2, including those in Kentucky. DEGT further requested that the waiver be applicable to any Class 1 pipe that should change to Class 2 in the future anywhere in the two compressor station discharges. DEGT's petition for waiver amounts to a request that the waiver granted on March 9, 2001, be extended to all of the pipeline segments in both compressor station discharges and be made permanent, constituting final action under the RMDP.

DEGT's Waiver Request

DEGT's waiver request involves three parallel pipelines in its Texas Eastern Pipeline system designated as Line 10, Line 15, and Line 25. More specifically, the request involves: (1) All three line segments running downstream of the Mt. Pleasant, TN, compressor station discharge, each for a distance of approximately 63.6 miles; and (2) all three line segments running downstream of the Owingsville, KY, compressor station discharge, each for a distance of approximately 60.5 miles (collectively, the “waiver segments”). Within the waiver segments are the 21 sites already identified as having changed from Class 1 to Class 2 (the “Class Change Sites”). The following table shows the waiver segments and the class change sites within each segment:

DEGT recently re-evaluated the class designations on the waiver segments using a referencing system (i.e., milepost designations) unique to each of the three pipelines rather than the more generic milestones applicable to the right-of-way and used in the RMDP discussions. DEGT determined that no class location change had actually occurred at one of the 21 class change sites, reducing the number of class change sites to 20. However, DEGT also identified one additional site along one of the waiver segments that had changed from Class 1 to Class 2, bringing the total number of class change sites back to 21. The 21 sites described in the above table are the results of DEGT's re-evaluation.

RSPA/OPS is considering granting the waiver for the following reasons:

• As a candidate for a RMDP project, DEGT participated in a consultation process with RSPA/OPS which included an enhanced sharing of information related to the integrity of DEGT's pipelines. DEGT's risk management practices and alternative risk control activities continue to focus on the risks identified by DEGT as the most important threats to the integrity of its system.
• DEGT has internally inspected the entire length of all waiver segments, a total of nearly 375 miles of pipeline including all pipe located in the 21 class change sites.
• The resources saved by not replacing the pipe in the class change sites will allow DEGT to assess the integrity of additional portions of its system, reducing the overall risks along the DEGT pipeline system. The alternative risk control activities add protection against pipeline failures from corrosion, manufacturing and construction defects, and outside third-party damage along the full 373 miles of the waiver segments. By way of contrast, compliance with 192.611 would require replacement of pipe or re-qualification tests in only the 17 miles of pipe located at the class change sites, with no added protection for the remaining 356 miles of pipe.

The Alternative Risk Control Activities

Consistent with the agreements reached under the RMDP, DEGT implemented the following alternative risk control activities in lieu of compliance with 192.611:

• Conduct internal inspections on the entire length of the waiver segments using geometry and magnetic flux leakage in-line inspection tools. These tools must be capable of identifying indications of wall loss (e.g. corrosion), as well as dents and gouges from initial construction damage or damage from third party excavators working along the pipeline right-of-way. Internal inspections of Lines 10, 15, and 25 in the Mt. Pleasant, TN compressor station discharge covering approximately 190 miles of pipe and internal inspections of Lines 10, 15, and 25 in the Owingsville, KY compressor station discharge covering approximately 185 miles of pipe have been performed and the OPS Southern Region has reviewed the inspection results.
• Repair indications of corrosion, existing construction damage, and existing outside force damage identified by the internal inspection using conservative investigation and repair criteria. The criteria used by DEGT calls 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.
• Hydrostatic tests on portions of Line 10 that had previously not been tested to 100 percent of SMYS. This includes two sites in Tennessee (2.5 miles northwest of Rally Hill in Maury County and 3.5 miles east-northeast of Arrington in Williamson County) and one site in Kentucky (4.4 miles southeast of Kinniconick in Lewis County). This hydrostatic testing has been completed and the OPS Southern Region has reviewed the results.
• Perform enhanced third-party damage prevention activities. Damage caused by excavators near the pipeline represents one of the highest risks to the pipe in the class location change sites. This damage prevention program included installation, for a one-year trial period, of the TransWave monitoring system on the full length of pipeline within the Mt. Pleasant discharge (63.6 miles on each line). The TransWave system monitors the waveform of a small current impressed onto the pipeline for changes, such as might be caused by disturbances created by excavation or other third-party activities. It was tested to determine its reliability and usefulness at detecting third-party encroachments (construction, excavation, etc.) in the pipeline right-of-way. The trial period for testing the TransWave system has been completed and a final report of this trial has been submitted to RSPA/OPS.
• Conduct future inspections on the waiver segments and remediation of any defects identified in accordance with Subpart O of Part 192.

Representatives from OPS Headquarters, OPS Southern and Eastern Regions, and the Tennessee Regulatory Authority, meeting as a RMDP Project Review Team, evaluated DEGT's alternative risk control activities. The Project Review Team met with DEGT to discuss the risk assessment and risk control processes DEGT uses, how these processes were used to identify and define the activities, and DEGT's analysis of the protection achieved by the activities compared to the protection 192.611 provides. The analysis also included an environmental assessment. It is the preliminary opinion of OPS that the implementation of the alternative risk control activities on the waiver segments has resulted in a margin of safety and environmental protection comparable to that provided through compliance with 192.611.

RSPA/OPS' Proposed Action

RSPA/OPS is considering granting the proposed waiver. If granted, the waiver would be conditioned on the following:

1. DEGT must ensure full implementation of the alternative risk control activities.

2. DEGT must verify that the technical criteria presented to the PRT, or other criteria for class location waivers which RSPA/OPS may approve in the future, are met for any future class change sites within the waiver segments that might change from Class 1 to Class 2.

3. DEGT must provide prior notice to RSPA/OPS of its intention to rely upon this waiver, rather than replacing pipe, in any application to future class change sites so that RSPA/OPS can independently verify that the criteria have been met.

4. DEGT must monitor the effectiveness of the alternative risk control activities and submit ongoing reports to RSPA/OPS.

5. DEGT must conduct an inspection of Line 15 in the Owingsville discharge using an in-line inspection tool designed to detect the condition(s) that caused or contributed to the November 2, 2003, release on Line 15 upstream of Owingsville including hard spots. (Note: This accident location is not within the waiver segments, but the waiver segments include pipe of similar materials and construction. DEGT's investigation of the accident has concluded that it resulted from hydrogen cracking where a lamination (an area within the pipe wall where the material was not fully fused together) and a hard spot (an area where the metallurgical properties of the pipe are altered due to localized rapid cooling in a manner that would make cracking more likely) coincided. Line 15 within the Owingsville discharge contains pipe from the same manufacturer and vintage as the pipe that failed in the 2003 accident. DEGT has agreed to conduct an inspection from the same manufacturer and vintage as the pipe that failed in the 2003 accident. DEGT has agreed to conduct an inspection of Line 15 in the Owingsville discharge using an in-line inspection tool designed to detect hard spots.)

6. DEGT must investigate and remediate all hard spots detected pursuant to Item 5 as necessary. Make the results of the investigation and any remediation activities available to RSPA/OPS.

7. DEGT must conduct additional public information activities in the populated areas along the waiver segments, providing information to local emergency response personnel/agencies about the operation of the pipeline, the possibility of accidents, and actions that must be taken in the event of an accident on the pipeline.

8. Within three months following approval of this waiver and annually thereafter, DEGT will be required to report the following:

• The economic benefit to the company. This will be required to 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 in 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 their 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.
• To the extent possible, DEGT's first annual report will be required to describe the benefit of this waiver 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.

After RSPA/OPS has considered any comments received in response to this notice, we will make a final determination on whether to grant a waiver to DEGT. If a waiver is granted and RSPA/OPS subsequently determines that the terms of the waiver are no longer appropriate or that the overall effect of the waiver is inconsistent with pipeline safety, RSPA/OPS retains its authority to revoke the waiver and require DEGT to immediately comply with 192.611 and all other applicable regulations. This Notice is RSPA/OPS' final request for public comment before we make a final decision on whether to grant the waiver.

Authority: 49 U.S.C. 60118(c); 49 CFR 1.53.