U.S. DOT/PHMSA - Environmental Assessment: Final Rule

Page 1rir-n-r _ ^ r T Grmmmm Environmental Assessment: Final Rule Pipeline Safety: Integrity Management Program for Gas Distribution Pipelines PHMSA-RSPA-2004-19854 Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration (PHMSA) U.S. Department of Transportation May 10,2009#

Page 2PHMSA/OPS Environmental Checklist PHMSA/OPS Environmental Checklist Action Name: Pipeline Safety: Integrity Management Program for Gas Distribution Pipelines PHMSA-RSPA-2004-19854 Action Location: Nationwide Action Description: PHMSA/OPS is issuing a rule to require operators of gas distribution pipeline systems to develop and implement integrity management programs. Action Category: Final Rule ENVIRONMENTAL CHECKLIST Project Description: PHMSA is amending the Federal Pipeline Safety Regulations to require operators of gas distribution pipelines to develop and implement integrity management (IM) programs. The purpose of these programs is to enhance safety by identifying and reducing pipeline integrity risks. The IM programs required by this rule are similar to those required for gas transmission pipelines but are tailored to reflect the differences in and among distribution pipelines. Based on the required risk assessments and enhanced controls, the rule also permits operators to submit a proposal to adjust intervals for leak detection surveys and other fixed-interval requirements in the agency's existing regulations for gas distribution pipelines. To further minimize regulatory burdens, the rule establishes simpler requirements for master meter and small liquefied petroleum gas (LPG) operators serving fewer than 100 customers from a single line, reflecting the relatively lower risk of these small pipelines.#

Page 3Activity Year: 2008 Forward Part I. Checklist Analysis. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Is there greater size or scope than generally experienced for a particular category of action? Is the action located near a site that involves a unique characteristic of the geographic area, such as a historic or cultural resource, park land, wetland, wild and scenic river, ecologically critical area, or property requiring special consideration under 49 U.S.C. 303(c)? Is there a likelihood that the action would be highly controversial on environmental grounds? Is there a potential for effects on the human environment that are highly uncertain or involve unique or unknown risks? Will the action cause effects on the human or natural environment that may be precedent setting? Are the action's impacts likely to create cumulatively significant impacts when considered along with other past, present, and reasonably foreseeable future actions? Is the action likely to have an impact on a district, site, highway, structure, or object that is listed on or eligible for listing on the National Register of Historic Places, or to cause the loss or destruction of a significant scientific, cultural, or historic resource? Will the action have a significant effect on species or habitats protected by the Endangered Species Act or other statute? Is there a likelihood that the action would be inconsistent with or cause a violation of any Federal, State, local, or tribal law or requirement imposed for the protection of the environment? Is the action likely to have an impact that may be both beneficial and adverse? A significant impact may exist even if it is believed that, on balance, the effect will be beneficial such as likelihood that air emissions exceed de minimis levels or otherwise that a formal Clean Air Act conformity determination is required? YES NO NEED DATA X X X X X X X X X X#

Page 411. Are there reportable releases of hazardous or toxic substances as specified in 40 CFR Part 302, Designation, Reportable Quantities, and Notification in the vicinity of the action? 12. Are there reportable releases of petroleum, oils, and lubricants, application of pesticides and herbicides, or where the action results in the requirement to develop or amend a Spill Prevention, Control, or Countermeasures Plan? 13. Does the action have the potential to degrade already poor environmental conditions? Does the initiation of degrading influence activity, or affect areas not already significantly modified from their natural condition? 14. Does the action have the potential to impact minority and/or low- income populations? 15. Other environmental considerations not included on checklist. X X X X X Part 11. Comments or Additional Information Related to Part I: The following space is provided to discuss the '*yes" responses to the above categories (identify by corresponding number), or to provide any supplemental information. #2 the action involves pipelines that may be located near, parks, wetlands, or wild and scenic rivers, or other ecologically critical areas, or property requiring special consideration under 49 U.S.C. 303(c). To the extent that distribution pipelines may be near these locations, there will be benefits of fewer incidents due to the rule. #14 the action has the potential to impact minority and/or low-income populations since distribution pipelines will provide these populations with gas service. To the extent that distribution pipelines may be near these populations, there will be benefits of fewer incidents due to the rule. Part III. Conclusions. 1. This action is a Categorical Exclusion (CE) and it requires no further environmental review [ ] Comments: 2. This action is a CE, but it is recommended for further review under one or more of the environmental authorities noted below (list). [ ]#

Page 5Comments: 3. An EA was conducted for this action. X Comments: The Environmental Assessment follows this section. 4. An EIS is recommended for this action. Comments: [ ] 5. A SEIS is recommended for this action. [ ] Comments: 6. A FEIS is recommended for this action. [ ] Comments: Date Preparer/Envirormiental Project Manager Title/Position Date Environmental Reviewer Title/Position • B B B B ^ B ^ ^ I ^ B H B ^ i ^ H a B i#

Page 61. Environmental Assessment This Environmental Assessment is prepared in accordance with the National Environmental Policy Act of 1969, as amended (42 U.S.C).' This assessment addresses the need for the action, the alternatives considered, the environment affected by this action, and the consequences to the environment. This Environmental Assessment provides sufficient evidence to determine that the provisions of the rule are expected to have no significant impact on the environment. 1.1 Introduction The Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued IM program regulations for operators of hazardous liquid pipelines (49 CFR 195,452) and gas transmission pipelines (49 CFR Part 192, Subpart O). PHMSA is revising the Pipeline Safety Regulations to require operators of gas distribution pipelines to develop and implement programs that will better assure the integrity of their pipeline systems (49 CFR Part 192, Docket No. PHMSA-RSPA-2004- 19854). The IM approach was designed to promote continuous improvement in pipeline safety by requiring operators to identify and invest in risk control measures beyond core regulatory requirements. 1.2 Background Existing integrity management regulations cover operators of hazardous liquid pipelines (49 CFR 195.452, published at 65 FR 75378 and 67 FR 2136) and gas transmission pipelines (49 CFR 192, Subpart Q, published at 68 FR 69778). These regulations require that operators of these pipelines develop and follow individualized integrity management (IM) programs, in addition to PHMSA's core pipeline safety regulations. PHMSA published a Notice of Proposed Rulemaking (NPRM) on June 25, 2008, (73 FR 36015) to extend its integrity management approach to the largest segment of the Nation's pipeline network - the gas distribution pipelines that directly serve homes, schools, businesses, and other natural gas consumers. Significant differences between gas distribution pipelines and gas transmission or hazardous liquid pipelines made it impractical to apply the existing regulations to distribution pipelines. On December 12, 2008, PHMSA discussed the proposed rule with the Technical Pipeline Safety Standards Committee (TPSSC). The TPSSC is a statutorily mandated advisory committee that advises PHMSA about the technical feasibility, reasonableness and cost- ' Pub. L. 91-190,42 U.S.C. 4321-4347, January 1, 1970, as amended by Pub. L. 94-52, July 3, 1975, Pub. L. 94-83, August 9, 1975, and Pub. L. 97-258, § 4(b), Sept. 13, 1982).#

Page 7effectiveness of its proposed regulations. PHMSA discussed some of the key comments received in response to the NPRM, e.g., burdensome documentation requirements, performance through people, plastic pipe failure reporting and excess flow valves. These comments are discussed in the preamble to the final rule. After careful consideration, the TPSSC voted imanimously to find the NPRM (with proposed changes as discussed at the meeting) and supporting regulatory evaluation technically feasible, reasonable, practicable, and cost effective. In the final rule, gas distribution pipeline operators are required to implement an IM program similar to those required by gas transmission operators but they are tailored to reflect the differences in and among distribution pipelines. This rule requires operators of gas distribution pipelines and of LPG distribution pipeline serving 100 or more customers from a single source to develop and implement an IM program no later than 18 months after the effective date of this final rule. The rule establishes simpler requirements for master meter and small LPG operators, reflecting the relatively lower risk of these small pipelines. PHMSA is adding a new Subpart P - Gas Distribution Pipeline Integrity Management to 49 U.S.C, Part 192 as follows: § 192.1001 What definitions apply to this subpart? § 192.1003 What do the regulations in this subpart cover? § 192.1003 What definitions apply to this subpart? § 192.1005 What must a gas distribution operator (other than a master meter or small LPG operator) do to implement this subpart? § 192.1007 What are the required elements of an integrity management IM plan? § 192.1009 What must an operator report when plastic pipe compression couplings fail? § 192.1011 What records must an operator keep? § 192.1013 When may an operator deviate from required periodic inspections under this part? § 192.1015 What must a master meter or small liquefied petroleum gas (LPG) operator do to implement this subpart? The final rule also adds a requirement that operators install excess flow valves (EFV) on all new and replaced residential service lines serving single residences, as required by the PIPES Act. 1.3 Purpose and Need The IM approach was designed to promote continuous improvement in pipeline safety by requiring operators to identify and invest in risk control measures beyond core regulatory requirements. Aimually, incidents and accidents associated with gas distribution pipeline systems average more than 10 fatalities, more than 40 serious injuries, and tens of millions of dollars in property damages. Also, each year hundreds of millions of dollars of gas is lost due to leaks in the systems. This regulation is designed to address the ^m#

Page 8hazards that lead to those incidents as well as reduce gas loss by including leak management and excess flow valve provisions. This rule addresses recommendations from DOT's Inspector General and the National Transportation Safety Board (NTSB). It also implements requirements in the Pipeline Inspection, Protection, Enforcement and Safety Act (PIPES Act) of 2006. 1.4 Public Involvement PHMSA has solicited the opinions of industry, other agencies, and stakeholders through public meetings, requests for public comment, electronic discussion forums. Federal Register notices, and other smaller meetings and conference calls. Throughout the development of this rule, PHMSA has held Advisory Committee Meetings with industry and public representatives, and meetings with NTSB representatives to discuss issues related to the rule. All information pertaining to the development of the rule is in the docket and/or on the PHMSA website. 1.5 Alternatives Considered PHMSA considered several alternatives to assure the necessary protection from potential incidents caused by gas distribution pipelines, with the intention of selecting the alternative that is likely to result in the highest net benefits. PHMSA considered the following approaches: • No action. • Apply existing gas transmission pipeline IMP regulations to gas distribution pipelines. • Model State legislation by imposing requirements on excavators and others outside the regulatory jurisdiction of pipeline safety authorities. • Develop guidance documents for adoption by States. • Implement prescriptive Federal regulations, specifying in detail, actions that must be taken to assure distribution pipeline integrity. • Implement risk-based, flexible, performance-oriented Federal regulations, establishing high-level elements that must be included in integrity management programs. 1.5.1 Baseline: No Action This was used as the baseline against which PHMSA compared all other alternatives. Regulatory analyses typically consider an alternative in which the agency would not take any action, because it would maintain the status quo. No new requirements would be#

Page 9levied. No new costs would be incurred to implement new requirements. No new benefits would result. PHMSA is initiating this rulemaking in response to the mandate concerning IMPs for distribution systems contained in the PIPES Act of 2006 (Public Law No: 109-468, Dec. 29, 2006). Begiiming in 2000, the Agency promulgated regulations requiring operators of hazardous liquid pipelines (49 CFR 195.452, published at 65 FR 75378 and 67 FR 2136) and gas transmission pipelines (49 CFR 192, Subpart O, published at 68 FR 69778) to develop and follow individualized IMPs, in addition to PHMSA's core pipeline safety regulations. Although some distribution pipeline operators are already implementing some elements of integrity management into their systems, the IMP approach was designed to promote continuous improvement in pipeline safety by requiring all operators to identify and invest in risk control measures beyond core regulatory requirements existing today. By not taking action, the Agency would be unresponsive to the congressional mandate in the PIPES Act, and there would likely be no reductions in the numbers of deaths, injuries, or property damages associated with risks related to distribution lines. Although this alternative would not lead to increased compliance costs, there would be no reduction in the societal costs associated with the deaths, injuries, and property damages associated with distribution pipeline incidents. This alternative results in zero net benefits. Thus, this alternative is the baseline for comparison with other alternatives. 1.5.2 Apply existing sas transmission pipeline IMP regulations to sas distribution pipelines This alternative was determined by PHMSA to be infeasible. Gas distribution pipelines are different from hazardous liquid and gas transmission pipelines. Distribution systems combine main lines with an almost equal amount of mileage branching from the main lines to connect services to natural gas users. Lines are generally smaller in diameter, operate at much lower pressures, and are constructed of a variety of materials, both metallic and non-metallic. Approximately half of the pipe in distribution systems is plastic, compared to very small amounts of plastic gas transmission pipeline. To reach the many end users they serve, distribution pipelines include extensive branching and interconnection compared to transmission systems that have long uninterrupted runs of pipe. These differences substantially distinguish distribution systems from transmission systems, and thus it is not technically feasible to apply gas transmission integrity management requirements to distribution pipelines. For instance, the low pressures, small diameters, and complex connections associated with distribution systems make it infeasible to use smart pigs or hydrotesting, techniques that are used by transmission lines for integrity management. Since we have determined this alternative is not technically feasible to implement, we were unable to estimate impacts. Consequently, no further consideration was given to this alternative.#

Page 101.5.3 Model State legislation, potentially imposing requirements on excavators and others outside the jurisdiction of pipeline safety authorities This alternative was determined by PHMSA to be impractical because PHMSA could not ensure that any or all of the States would adopt the model State legislation. According to the Integrity Management for Gas Distribution Report of Phase I Investigations, experience indicates that this option may not be practical for addressing the broad question of integrity management. The study group that prepared the report referenced the failure of State legislatures to adopt an available model from the Common Ground effort to prevent excavation damage.^ The study group found that model State legislation may be useful for narrower issues, such as improving excavation damage prevention through implementation of comprehensive damage prevention programs, including active enforcement.^ The report concludes, "There are many factors affecting State approaches to regulation. It would be very unlikely that all States could adopt model legislation with sufficient consistency that would represent a national solution to integrity management concerns." After careful study, this option is not considered any further as a means of addressing the entire integrity management issue, because the integrity management study group found that the issues surrounding integrity management are broad and require a holistic approach at the Federal level. Not being operationally feasible, this alternative was not considered to be amenable to a comparison of the costs and benefits. 1.5.4 Guidance documents for adoption by States with the intent of States mandating use of the guidance As with the previous alternative, this alternative was determined by PHMSA to be unworkable because PHMSA could not ensure that any of the States would mandate the use of the guidance, and distribution safety would not improve. The Integrity Management for Gas Distribution Report of Phase I Investigations determined that this option is essentially the same as Option 5.3 above, except it contemplates States adopting the guidance as mandatory requirements. As with model legislation, the study group considered that adoption likely would not occur in many States. Although the Federal Government establishes basic safety standards, integrity management-certified States are responsible for intrastate pipelmes. The study group notes that States have not uniformly adopted recommended approaches in the past. Selecting this option would thus provide only the illusion of a solution. The costs of such an approach would be relatively low, but if the conclusions of the study group are correct. ^ The group was composed of representatives of the natural gas distribution industry. State pipeline regulatory authorities, and the public. Integrity Management for Gas Distribution: Report of Phase I Investigations," December 2005.,p. 71. ^Ibid.,p.71.#

Page 11there would also be low benefits and perhaps, insignificant net benefits. For these reasons, this alternative was not considered any further. 7.5.5 Prescriptive Federal regulation, specifying in detail actions that must be taken to assure distribution pipeline integrity This alternative was determined by PHMSA to be too inflexible to be applicable to all relevant situations that distribution system operators might face. The Integrity Management for Gas Distribution Report of Phase I Investigations reaffirms the need for a flexible Federal rule. The study group reasoned that a highly detailed prescriptive regulation would lack the flexibility needed to address the unique circumstances of individual States and operators. The study group reported, "The issues important to assuring the integrity of these diverse systems will vary. This diversity makes it difficult for any one prescriptive requirement to address all possible circumstances. It is important that any new requirements that are developed allow sufficient flexibility for the operators of distribution pipeline systems, and the State regulators who oversee their operations, to customize their integrity management efforts to address their specific systems, threats, and issues.""^ Although some small operators might prefer a prescriptive regulation, most large operators want the flexibility of a performance-based regulation. The wide range in size and nature of distribution pipeline systems calls for a flexible approach to integrity management rather than a single detailed set of requirements. Giving operators the guidance, and allowing them to shape it to fit their particular system, will assure integrity management is implemented efficiently and effectively. A detailed prescriptive rule was deemed by PHMSA to be too inflexible to be applicable to all relevant situations that distribution operators might face, since there is wide spectrum of distribution operators, from master meters (mostly one-person operations) to large utilities covering thousands of miles of pipelines and over a million customers. Thus a prescriptive rule would be inappropriate and cost prohibitive, resulting in many operators being required to perform tasks not appropriate for their pipeline systems.^ For these reasons, a prescriptive Federal regulation was evaluated no further. 1.5.6 Risk-based, flexible, performance-oriented Federal regulation, establishing high-level elements that must be included in integrity management programs This altemative was determined by PHMSA to be practicable and is compared in this document with the baseline "no action" altemative. As will be demonstrated, there are significant net benefits associated with this altemative. This altemative—the subject of the proposal—creates a high-level, flexible, and performance-based Federal regulation that requires gas distribution operators to develop and implement an integrity management program for their distribution pipeline systems. ' * Integrity Management for Gas Distribution. Report of Phase Ilnvestigations. December 2005. p. 13-14. ^ Ibid.,, p.72 10#

Page 12The regulation requires all operators of a distribution pipeline system to implement an integrity management program and prescribes minimum requirements each operator must meet in doing so. An integrity management program is intended to manage the risks associated with an operator's pipeline system. An integrity management plan must address, at a minimum, the following elements: • Improving knowledge of the system's infrastructure • Identifying threats (existing and potential) • Evaluating and prioritizing risk • Identifying and implementing measures to mitigate risks • Measuring performance, monitoring results, and evaluating effectiveness • Periodic re-evaluation and improvement • Reporting results. This altemative also embraces the installation of excess flow valves (EFVs). An operator will be required to install an EFV on newly installed or replaced service lines that operate continuously throughout the year at a pressure not less than 10 psig and serve a single- family residence, unless doing so would not be practicable. This requirement applies only to new or replaced service lines. There is no requirement for an operator to install an EFV retroactively on an existing service. The PIPES Act 2006 mandated this requirement. The requirement on EFVs is intended to replace the notification requirements in 49 CFR 192.383, which requires operators to notify the customer for new and replaced service lines about the availability and benefits derived for installing an EFV. PHMSA believes the customer notification requirement would not be necessary if the rule goes into effect. Federal pipeline safety law requires States adopt requirements at least as stringent as those established by PHMSA to maintain their certification to exercise regulatory jurisdiction over intrastate pipeline safety. This altemative establishes basic requirements, while allowing States the flexibility to accommodate the unique needs of different geographical areas and different communities of operators. Furthermore, the altemative does this while assuring that a Federal mle, which provides for a consistent approach to distribution integrity management, is implemented. For the reasons stated above, this altemative was selected. After considering all the altematives, PHMSA selected the "implementation of risk- based, flexible, performance-oriented Federal regulations establishing high-level elements that must be included in integrity management plans as part of an integrity management program." PHMSA modified the NPRM in response to concerns voiced by industry and public. The final mle is in the docket. 1.6 Comparison of Alternatives 11#

Page 13PHMSA determined that none of the altematives presented significant adverse impacts to the environment, including natural resources, endangered species, and resources protected by the National Historic Preservation Act (NHPA). PHMSA also found that revising the Federal pipeline regulations offered potential benefits for public health and safety, particularly in the area of reducing the level of pipeline incidents and accidents. A detailed regulatory impact analysis (RIA) has been prepared for this mle and is posted in the docket (PHMSA-RSPA-2004-19854). 1.7 Environmental Effects of the Rule The Nation's pipelines are located throughout the United States, onshore and offshore, and traverse of variety of environments—from highly populated urban sites to remote, unpopulated rural areas. This mle covers all gas distribution pipeline systems. The pipeline infrastmcture is a network of over 2 million miles of pipeline that moves millions of gallons of hazardous liquids and over 55 billion cubic feet of natural gas daily.^ The biggest source of energy is petroleum, including oil and natural gas. Together, they supply 65 percent of the energy in the United States.^ The physical environment potentially affected by the mle includes the airspace, water resources (e.g., oceans, streams, lakes), cultural and historical resources (e.g., properties listed on the National Register of Historic Places), biological and ecological resources (e.g., coastal zones, wetlands, plant and animal species and their habitat, forests, grasslands, offshore marine ecosystems), and special ecological resources (e.g., threatened and endangered plant and animal species and their habitat, national and State parklands, biological reserves, wild and scenic rivers) that exist directly adjacent to and within the vicinity of pipelines. Because the pipelines subject to the mle contain hazardous materials, resources within the physically affected environment, as well as public health and safety, may be affected by gas pipeline incidents such as spills and leaks. Incidents on pipelines can result in fires and explosions, with resulting damage to the local environment. In addition, since pipelines often contain gas streams laden with condensates and natural gas liquids (NGL's), failures also result in spills of these liquids, which can cause environmental harm. Depending on the size of a spill or gas leak, and the nature of the impact zone, the environmental impacts could vary from property damage and environmental damage to injuries or, on rare occasions, fatalities. While IMPs cannot eliminate all pipeline failures, they can reduce the frequency of these events. Thus on a national scale, the cumulative environmental damage from gas distribution pipeline accidents is reduced. Since the provisions of the mle will be implemented on systems that can affect populated areas, it is expected that the areas will benefit by the reduced likelihood of a pipeline failure. PHMSA concludes that requiring * PHMSA, Pipeline Basics, http://primis.phmsa.dot.gov/comm/PipelineBasics.htm. ^ GAO/RCED-00-128, "The Office of Pipeline Safety is Changing How it Oversees the Pipeline Industry." * PHMSA. Pipeline Safety Q&As. 12#

Page 14pipeline operators to implement more systematic and integrated approaches to assure pipeline integrity will enhance control of pipeline risks and improve industry performance. 1.8 Conclusion and Finding of No Significant Impact (PONS!) PHMSA's assessment finds that there are no adverse significant environmental impacts associated with the mle. The provisions of this mle build in and improve current regulatory requirements related to identification of adverse impacts on the environment. The mle enhances safety by identifying and reducing pipeline integrity risks. The IM programs required by this mle are similar to those required for gas transmission pipelines but are tailored to reflect the differences in and among distribution pipelines. Based on the required risk assessments and enhanced controls, the mle also authorizes States to approve risk-based adjustment of prescribed intervals for leak detection surveys and other fixed-interval requirements in the Agency's existing regulations for gas distribution pipelines. The mle also requires operators to install excess flow valves on new and replaced residential service lines, subject to feasibility criteria outlined in the mle. The net environmental impact of this mle will be positive. 2. List of Preparers and Reviewers This EA was prepared by Volpe, revised by Econometrica, Inc. and reviewed by staff and specialists within PHMSA. 13#