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

Page 1Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration FINAL RULE PIPELINE SAFETY: STANDARDS FOR DIRECT ASSESSMENT OF GAS AND HAZARDOUS LIQUID PIPELINES Final Environmental Assessment August 2005 Prepared for: Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration Prepared by: John A. Volpe National Transportation Systems Center Research and Innovative Technology Administration#

Page 2Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines TABLE OF CONTENTS TABLE OF CONTENTS I LIST OF ACRONYMS II 1.0 PURPOSE OF AND NEED FOR ACTION 1-1 1.1 INTRODUCTION 1-1 1.2 BACKGROUND 1-2 1.3 PURPOSE OF AND NEED FOR ACTION 1-3 1.4 PUBLIC INVOLVEMENT 1-4 1.5 SCOPE OF ANALYSIS 1-5 2.0 ACTION AND ALTERNATIVE 2-1 2.1 OVERVIEW OF ALTERNATIVES 2-1 2.2 ALTERNATIVES DEVELOPMENT PROCESS 2-1 2.3 NO ACTION ALTERNATIVE 2-1 2.4 ACTION ALTERNATIVE 2-1 2.5 COMPARISON OF THE ALTERNATIVES 2-2 3.0 AFFECTED ENVIRONMENT AND ENVIRONMENTAL CONSEQUENCES 3-1 3.1 AFFECTED ENVIRONMENT 3-1 3.1.1 Physical Environment Affected 3-1 3.2 ENVIRONMENTAL CONSEQUENCES 3-2 3.2.1 Public Health and Safety 3-2 3.2.2 Hazardous Materials Transportation 3-2 3.2.3 Socioeconomics 3-3 3.2.4 Special Areas of Consideration 3-5 3.2.5 Additional Benefits of the Action Alternative 3-6 4.0 LIST OF PERSONS CONSULTED 4-1 5.0 LIST OF PREPARERS AND REVIEWERS 5-1 6.0 REFERENCES 6-1 i#

Page 3Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines LIST OF ACRONYMS FR Federal Register NEPA National Environmental Policy Act NHPA National Historic Preservation Act OPS Office of Pipeline Safety U.S. United States U.S.C. United States Code DOT United States Department of Transportation PHMSA Pipeline and Hazardous Materials Safety Administration RPSA Research and Special Programs Administration ii#

Page 4Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 1.0 PURPOSE OF AND NEED FOR ACTION 1.1 INTRODUCTION The nation's pipelines are a transportation system that enables the safe movement of energy products to industry and consumers. The Pipeline and Hazardous Materials Safety Administration’s (PHMSA) Office of Pipeline Safety (OPS) is the federal safety authority for the nation's natural gas and hazardous liquid pipelines. The primary mission of OPS is to ensure the safe, reliable, and environmentally sound operation of the nation's pipeline transportation system (OPS 2005). In response to a statutory directive, OPS published a Notice of Proposed Rulemaking (NPRM) concerning standards that would apply to the use of direct assessment on any regulated onshore ferrous pipeline (69 FR 61771; Oct. 21, 2004). The proposed standards were the same as those in effect for gas transmission lines under OPS’ integrity management regulations. In consideration of public comments and advisory committee recommendations, OPS has prepared a Final Rule document. The standards included in the Final Rule are similar to the proposed standards, but they do not apply to gas distribution lines. Direct assessment is a process of managing the effects of external corrosion, internal corrosion, or stress-corrosion cracking on ferrous pipelines. Operators use direct assessment to evaluate the risks to their pipeline that are associated with corrosion. The process involves data collection, indirect inspection, direct examination, and evaluation. Operators use direct assessment not only to find existing corrosion defects but also to prevent future corrosion problems. Broader application of direct assessment standards should enhance public confidence in the use of direct assessment to assure pipeline safety. The National Environmental Policy Act of 1969 (NEPA)1 and the Council on Environmental Quality’s (CEQ) implementing regulations2 establish policies and procedures that ensure environmental information is available to decision makers, regulatory agencies, and the public before Federal actions are implemented. OPS, with the cooperation of the U.S. Department of Transportation John A. Volpe National Transportation Systems Center (Volpe Center), prepared this Final Environmental Assessment (EA) for the purpose of analyzing the potential environmental impacts associated with the Final Rule prepared by OPS. This EA follows the procedures established by the United States Department of Transportation (DOT)3 to implement NEPA, pursuant to the CEQ regulations. OPS prepared a Draft EA for the NPRM in September 2004 (OPS 2004a). The 1 42 U.S.C. § 4321 et seq. 2 40 C.F.R. § 1500 et seq. 3 DOT Order 5610.1C, Procedures for Considering Environmental Impacts, 9/18/79, as amended 7/13/82, 7/30/85. 1-1#

Page 5Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines information presented in the Draft EA shows that the proposed direct assessment standards are not expected to have significant environmental impacts. OPS received no comments on the Draft EA from the public or its pipeline safety advisory committees. The information presented in this Final EA also shows that the Final Rule is not expected to have significant environmental impacts. 1.2 BACKGROUND Current regulations governing integrity management of gas transmission lines require that operators using direct assessment to evaluate corrosion risks must carry out that direct assessment according to particular standards. Congress has recognized the advantages of using direct assessment on DOT regulated gas, hazardous liquid, and carbon dioxide pipeline facilities. Section 14 of the Pipeline Safety Improvement Act of 2002 (Pub. L. 107-355; Dec. 17, 2002) directs DOT to issue regulations on using internal inspection, pressure testing, and direct assessment to manage the risks to gas pipeline facilities in high-consequence areas. In addition, Section 23 of that statute directs DOT to issue regulations prescribing standards for inspecting pipeline facilities by direct assessment. In response to the first statutory directive, DOT’s Research and Special Programs Administration (RSPA)4 published regulations in 49 CFR Part 192, Subpart O, that require operators to follow detailed programs to manage the integrity of gas transmission line segments in high-consequence areas. These regulations also require that if operators use direct assessment in their integrity management programs, they must carry out the direct assessment according to the standards in §§ 192.925, 192.927, and 192.929, as appropriate.5 Each of these standards includes cross-references to the American Society of Mechanical Engineers’ document, ASME B31.8S-2001, “Managing System Integrity of Gas Pipelines.” This document describes a comprehensive process to assess and mitigate the likelihood and consequences of gas pipeline risks. In addition, § 192.925 cross- references a document published by NACE International, titled NACE Standard RP0502–2002, “Pipeline External Corrosion Direct Assessment Methodology.” The NACE document describes a step-by-step process for identifying and addressing external corrosion activity, repairing defects, and taking remedial action. Other provisions of the 4 The Norman Y. Mineta Research and Special Programs Improvement Act (Pub. L. 108–426, 118; November 30, 2004) reorganized RSPA into two new DOT administrations: PHMSA and the Research and Innovative Technology Administration. RSPA’s regulatory authority over pipeline and hazardous materials safety was transferred to PHMSA. 5 The standard on external corrosion direct assessment (§ 192.925) requires operators to integrate data on physical characteristics and operating history, conduct indirect aboveground inspections, directly examine pipe surfaces, and evaluate the effectiveness of the assessment process. Under the standard for direct assessment of internal corrosion (§ 192.927), operators must predict locations where electrolytes may accumulate in normally dry-gas pipelines, examine those locations, and validate the assessment process. The standard for direct assessment of stress-corrosion cracking (§ 192.929) involves collecting data relevant to stress-corrosion cracking, assessing the risk of pipeline segments, and examining and evaluating segments at risk. 1-2#

Page 6Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Part 192 standards ensure that operators use appropriate criteria in making direct assessment decisions. In response to the second statutory directive, RSPA published a notice of proposed rulemaking (NPRM)(69 FR 61771; Oct. 21, 2004). The NPRM proposed standards for using direct assessment on any onshore ferrous gas pipeline regulated by 49 CFR Part 192 or onshore ferrous hazardous liquid or carbon dioxide pipeline regulated by 49 CFR Part 195. Under proposed § 192.490, if an operator chooses to use direct assessment to evaluate the threat of external corrosion, internal corrosion, or stress-corrosion cracking on a regulated onshore gas pipeline, the direct assessment would have to be done according to the standards in § 192.925, § 192.927, or § 192.929, as appropriate. For regulated hazardous liquid and carbon dioxide pipelines, proposed § 195.588 would require similar action, except compliance with § 192.927, because this internal corrosion Direct Assessment standard is only suitable for dry gas pipelines. In § 192.903, PHMSA defines direct assessment as: …an integrity assessment method that utilizes a process to evaluate certain threats (i.e., external corrosion, internal corrosion and stress corrosion cracking) to a covered pipeline segment’s integrity. The process includes the gathering and integration of risk factor data, indirect examination or analysis to identify areas of suspected corrosion, direct examination of the pipeline in these areas, and post assessment evaluation Direct assessment is a new process. Currently, direct assessment is applied mainly to gas transmission lines subject to Subpart O of Part 192. However, a few operators have used direct assessment on hazardous liquid pipelines to meet integrity management requirements in 49 CFR 195.452. Tests of direct assessment indicate that it is reasonably reliable. It is reported that those tests have found that direct assessment produces “…reliable results with a 70 to 80 percent positive predictive capability.”6 In addition to corrosion, it might be noted, operators can also use direct assessment to evaluate mechanical damage to pipelines.7 1.3 PURPOSE OF AND NEED FOR ACTION The purpose of the Final Rule is to increase pipeline safety through broader application of direct assessment standards currently applicable only to gas transmission lines in high consequence areas. Congress has recognized the advantages of using direct assessment on DOT regulated gas, hazardous liquid, and carbon dioxide pipeline facilities and directed DOT to prescribe standards for its use. Thus, the Final Rule contains standards that operators must meet if they use direct assessment on certain onshore gas, hazardous 6 Neil G. Thompson, “Appendix E, Gas and Liquid Transmission Pipelines,” Cost of Corrosion, FHWA Report FHWA-01-156, April 2005, p. E-36, www.corrosioncost.com/home.html. 7 Neil G. Thompson, “Appendix E, Gas and Liquid Transmission Pipelines,” Cost of Corrosion, FHWA Report FHWA-01-156, April 2005, p. E-35, www.corrosioncost.com/home.html. 1-3#

Page 7Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines liquid, or carbon dioxide pipelines, thereby enhancing the overall safety of pipelines. The Final Rule amends the Federal pipeline safety regulations by requiring operators using direct assessment for evaluating corrosion risks to perform that direct assessment according to particular standards. For gas transmission pipelines, standards are specified for internal corrosion, external corrosion, and stress-corrosion cracking. For hazardous liquid pipelines, standards are specified for external corrosion only. These standards are similar to the standards currently in effect for gas transmission lines in high consequence areas under the integrity management regulations in 49 CFR Part 192, Subpart O. The need for this action is derived from the fact that OPS presently has regulations governing integrity management of gas transmission lines requiring that operators using direct assessment to evaluate corrosion risks must carry out that direct assessment according to particular standards. Those regulations are found in 49 CFR Part192. In response to a statutory directive, OPS is proposing that DOT prescribe similar standards that operators must meet if they use direct assessment on certain other onshore gas, hazardous liquid, or carbon dioxide pipelines. Broader application of direct assessment standards currently in effect should enhance public confidence in the use of direct assessment to assure pipeline safety, control pipeline corrosion, and possibly reduce the number of corrosion-caused accidents. Current standards for gas transmission pipelines are not inherently appropriate only for gas transmission lines in high consequence areas and the selected standard for hazardous liquid and carbon dioxide pipelines is needed to provide guidance to operators of these types of pipelines, since direct assessment is a new process and its use is so far limited primarily to gas transmission lines subject to Subpart O of Part 192. A further reason for the Action is that the proposed standards have already undergone public notice and comment in the gas transmission integrity management proceeding, and they were generally well received by the gas transmission industry. Finally, the proposed standards rely heavily on consensus standards published by NACE International and the American Society of Mechanical Engineers (ASME), two organizations whose standards are widely used and highly regarded in the pipeline industry. 1.4 PUBLIC INVOLVEMENT Public involvement is a critical aspect of the NEPA process. As such, OPS must consider any comments received from the public and any comments and recommendations of relevant stakeholders. Public comments and advisory committee recommendations have been addressed in the development of the Final Rule. However, none of the commenters or committee members spoke directly about the Draft EA that OPS prepared for the NPRM. The Technical Pipeline Safety Standards Committee (TPSSC) and the Technical Hazardous Liquid Pipeline Safety Standards Committee (THLPSSC) considered the NPRM at meetings in Washington, D.C. on December 14 and 15, 2004. The TPSSC is a statutorily mandated advisory committee that advises PHMSA on proposed safety 1-4#

Page 8Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines standards and other policies concerning gas pipelines. The THLPSSC is a similar committee that provides advice about hazardous liquid and carbon dioxide pipelines. Each committee has an authorized membership of 15 persons, five each representing government, industry, and the public. Each member is qualified to consider the technical feasibility, reasonableness, cost-effectiveness, and practicability of proposed pipeline safety standards. A transcript of each committee’s meeting is available in Docket No. PHMSA-98-4470. After careful consideration of the NPRM, the THLPSSC voted unanimously to recommend the following: (1) adopt a single definition of direct assessment for use inside and outside high-consequence areas; (2) state direct assessment standards directly in Part 195, rather than by cross-referencing Part 192 standards; (3) for direct assessment of stress corrosion cracking, consider adopting the NACE consensus standard currently under development; and (4) amend the integrity management rule (§ 195.452) to allow use of direct assessment without prior notice. As a result of its deliberation, the TPSSC voted unanimously that proposed § 192.490 should not be applied to gas distribution lines. It also voted unanimously that the final rule should distinguish direct assessment from similar methods of assessing corrosion. This latter recommendation was intended to clarify situations in which operators could use similar methods without incurring the proposed direct assessment standards. Comments in response to the NPRM where received from 19 different sources. Only one commenter, the Cook Inlet Regional Citizens Advisory Council, a monitor of oil terminal operations, supported the proposed rules without change. The Council welcomed the additional federal standards because of the need to control pipeline corrosion. The remaining commenters were primarily concerned about specific issues. Those issues are presented in the Final Rule, along with OPS’ disposition of the issues and the advisory committees’ recommendations. 1.5 SCOPE OF ANALYSIS This Final EA analyzes the potential environmental consequences associated with implementing the Final Rule. Chapter 1 provides background information regarding the purpose of and need for the rulemaking. Chapter 2 describes OPS’ federal action and the No-Action Alternative. Chapter 3 describes the environment affected by the rulemaking, as well as potential environmental consequences to that affected environment from the alternatives. This EA will focus only on those resource categories that are of interest to the public and/or important to the decision: Public Health and Safety, Hazardous Materials Transportation, Socioeconomics, and other Special Areas of Consideration. Chapter 4 lists those agencies and persons with whom OPS consulted during this NEPA compliance process. Chapter 5 lists the preparers and reviewers of this document. Finally, Chapter 6 lists references consulted during the development of this document. 1-5#

Page 9Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 2.0 ACTION AND ALTERNATIVE 2.1 OVERVIEW OF ALTERNATIVES This Chapter presents the NEPA alternatives for the proposed regulations. The No Action alternative is used in the NEPA analysis to define existing conditions of the natural and man-made environments. The Action Alternatives define those alternative approaches that the federal agency is considering for an agency action. 2.2 ALTERNATIVES DEVELOPMENT PROCESS OPS’ authority to issue safety standards for the design, construction, operation, replacement, and maintenance of gas and hazardous liquid pipelines is found in 49 U.S.C. 60102(a). OPS considered two alternatives to respond to Section 23 of the Pipeline Safety Improvement Act of 2002 (Pub. L. 107-355; Dec. 17, 2002), Congress’ second directive in that Act relating to direct assessment: (1) No Action, and (2) Action – apply existing direct assessment standards to certain other regulated pipelines besides gas transmission pipelines in high consequence areas. 2.3 NO ACTION ALTERNATIVE Under the No Action alternative the existing regulations would remain in place. Thus, no additional regulations are needed given that OPS has already issued regulations that prescribe standards for the use of direct assessment. This alternative was rejected, however, because the existing regulations are limited to gas transmission lines in high consequence areas. They do not cover all pipelines that fall under Congress’ second directive. Therefore, the No Action Alternative does not meet the purpose and need of the regulation. However, as the No Action Alternative represents the current conditions, it will be used as the baseline for analyzing the implications of the Action. 2.4 ACTION ALTERNATIVE The Action alternative was selected because (1) the existing standards for gas transmission pipelines are not inherently appropriate only for gas transmission lines in high consequence areas and (2) the existing standards have proved satisfactory in practice. A further reason for choosing the second alternative is that the existing standards have already undergone public notice and comment in the gas transmission integrity management proceeding, and they were generally well received by the gas transmission industry. Finally, the existing standards rely heavily on consensus standards published by NACE International and the American Society of Mechanical Engineers (ASME), two organizations whose standards are widely used and highly regarded in the pipeline industry. The Action alternative covers gas transmission pipelines (including those gas gathering lines subject to Federal safety regulation) and hazardous liquid and carbon dioxide 2-1#

Page 10Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines pipelines. Although in the NPRM this alternative covered gas distribution pipelines, these lines are excluded from the Final Rule. The principal features of the Final Rule include (1) incorporating by reference NACE Standard RP0502-2002 “Pipeline External Corrosion Direct Assessment Methodology” (2002); (2) adding a new § 192.490, which covers direct assessment for gas transmission and gathering lines; (3) adding a new § 192.588, which covers direct assessment for hazardous liquid and carbon dioxide pipelines; and (4) amending § 192.452 to remove the requirement that operators give OPS 90 days’ notice before using direct assessment to assess the integrity of hazardous liquid and carbon dioxide pipelines. Under the Final Rule, if an operator chooses to use direct assessment to evaluate the threat of external corrosion, internal corrosion, or stress-corrosion cracking on a regulated onshore ferrous gas transmission line, the direct assessment would have to be done according to the existing standards in §§ 192.925, 192.927, or 192.929, as appropriate. These standards do not apply to methods associated with direct assessment, such as close interval surveys, voltage gradient surveys, or examination of exposed pipelines, when used separately from the direct assessment process. Onshore hazardous liquid and carbon dioxide pipelines are covered by § 195.588. That section focuses exclusively on direct assessment for external corrosion. Operators undertaking direct assessment for external corrosion must follow the requirements of NACE Standard RP0502-2002. Under § 195.588, operators must develop and implement an external corrosion direct assessment (ECDA) plan that covers pre-assessment, indirect examination, direct examination, and post assessment. The requirement specified in § 195.588 does not apply to methods associated with direct assessment, such as close interval surveys, voltage gradient surveys, or examination of exposed pipelines, when used separately from the direct assessment process. 2.5 COMPARISON OF THE ALTERNATIVES This section compares the potential consequences of the Action Alternative and the No Action Alternative. Even though the No Action Alternative does not meet the purpose and need established by OPS for this regulation, it was analyzed to provide a baseline against which to compare the Action Alternative. Table 2-1 presents a comparison of the environmental and socioeconomic consequences of the Action Alternative and No-Action Alternative. It lists several impact categories for which there exists a potential for a positive or negative indirect impact from the alternatives. Without certain key pieces of information and a costly quantitative analysis, it is impossible to accurately quantify most of these impacts, though qualitative rationale is offered in this document. Nevertheless, it is evident from Table 2-1 that the rulemaking may result in beneficial impacts – most importantly, the positive impacts to public health and safety, in addition to positive indirect impacts to aspects of the physical and human environment. 2-2#

Page 11Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Table 2-1. Environmental Consequences of Alternatives Impact Category No Action Alternative Action Alternative Public Health and Safety The No Action Alternative would not change the current and projected status of public health and safety. The Action alternative is expected to make pipeline operations safer by helping to reduce the number of incidents due to corrosion on onshore gas and hazardous liquid pipelines. Therefore, the Action alternative would result in a net reduction in the level of public health and safety impacts. Hazardous Materials Transportation The No Action Alternative would not change the current and projected status of hazardous materials transportation. Potential impacts to the natural and human environment would continue to occur. The Action alternative is expected to increase pipeline safety through the broader application of direct assessment standards, potentially resulting in a reduction in corrosion-caused incidents gas and hazardous liquid pipelines. Therefore, the Action would result in a net reduction in the level of impacts from hazardous materials transportation. Socioeconomics The No Action Alternative would not change the costs associated with pipeline safety and incidents, as there would be no changes to existing regulations. The Action alternative would result in a benefit to socioeconomic resources from increased pipeline safety, and associated reductions in incident property damage and public health and safety related costs. Additional “Special Areas of Consideration” Endangered Species Potential impacts to endangered species would continue to occur. However, since the rate of pipeline incidents is small, these impacts are expected to be minor. Since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks related to pipeline incidents, it may result in a minor benefit to endangered species that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. Resources protected by the NHPA Potential impacts to NHPA resources would continue to occur. However, since the rate of pipeline incidents is small, these impacts are expected to be minor. However, based on the lack of national data on pipelines in the vicinity of historical structures, it is impossible to estimate the extent of potential impacts. Since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks related to pipeline incidents, it may result in a minor benefit to historical and cultural resources that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. However, based on the lack of national data on pipelines in the vicinity of historical structures, it is impossible to estimate the extent of potential benefits. Wetlands Potential impacts to wetlands would continue to occur. However, since the rate of pipeline incidents is small, these impacts are expected to be minor. Since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks related to pipeline incidents, it may result in a minor benefit to wetlands that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. Section 4(f) resources Potential impacts to Section 4(f) resources would continue to occur. However, since the rate of pipeline incidents is small, these impacts are expected to be minor. However, based on the lack of national data on pipelines in the vicinity of 4(f) resources, it is impossible to estimate the extent of potential impacts Since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks related to pipeline incidents, it may result in a minor benefit to Section 4(f) resources that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. However, based on the lack of national data on pipelines in the vicinity of 4(f) resources, it is impossible to estimate the extent of potential benefits. 2-3#

Page 12Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Since the Action alternative affects only those operators that voluntarily use direct assessment and because it largely involves processes of data collection and evaluation, OPS has determined that it is unlikely to significantly affect the quality of the human environment. The primary benefit of the Final Rule is to promote acceptable, reliable, and uniform practices for using direct assessment to evaluate the threat of corrosion on onshore gas and hazardous liquid pipelines. Such practices have the potential to reduce incidents due to corrosion and to increase the public’s confidence in operators’ safety programs. Thus, the benefits of the Action alternative will include a potential reduction in the consequences of pipeline incidents (i.e., a reduction in the deaths, injuries, property damage, and lost product directly attributable to pipeline incidents). It will also include other savings, such as those related to increasing the operational life of pipe, and avoiding economic consequences of accident-induced supply restrictions, legal costs, and reduced emergency response costs. A further benefit involves the Federal policy that encourages agencies to adopt consensus standards that meet regulatory needs rather than develop new prescriptive Federal regulations. Two consensus standards form the basis for activities required by the Final Rule. Thus, the Final Rule would benefit the public by furthering the Federal policy on use of consensus standards. Additional benefits could result from the Action alternative that are difficult to quantify, but which OPS believes to be significant. Foremost among these is improved public confidence in the use of direct assessment to assure pipeline safety. Public confidence in pipeline safety has been shaken by major incidents in recent years. These incidents have generated concerns among public interest groups, the National Transportation Safety Board, and the Congress, and have prompted OPS to issue several new regulations. The public is concerned about the possibility of pipeline incidents that could cause them harm. OPS believes that the Action Alternative and other agency activities will continue to improve the confidence of the public living, working, and congregating near pipelines that their safety is being assured. Furthermore, OPS expects that the Action alternative may have a positive net benefit for pipeline operators, public safety, and the environment. 2-4#

Page 13Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 3.0 AFFECTED ENVIRONMENT AND ENVIRONMENTAL CONSEQUENCES The alternatives considered in this document relate to direct assessment, a process of managing the effects of external corrosion, internal corrosion, and stress-corrosion cracking on ferrous pipelines. To assist OPS in understanding the potential environmental impacts of the alternatives, this chapter describes the environmental resources of the U.S. particular to the Action alternative. The resources that may be affected by the alternatives are presented and described, along with a description of the regulatory framework where relevant. This chapter also addresses the potential environmental consequences associated with No Action (current conditions) and Action Alternatives. In general, transportation affects a range of environmental resources through the construction of the transportation network, the improvement of facilities and infrastructure, and their operation. Since the proposed regulation affects all regulated natural gas transmission pipelines and gathering lines and regulated hazardous liquid and carbon dioxide pipelines, the affected environment is the land area in the U.S. in which these pipelines are located. This EA will focus only on those resource categories that are potentially impacted by the alternatives, those that are of interest to the public, and/or important to the decision. The resource categories to be analyzed in this EA are: Public Health and Safety, Hazardous Materials Transportation, Socioeconomics, and Other Special Areas of Consideration. 3.1 AFFECTED ENVIRONMENT As the Action and No Action alternatives relate to the regulation of the safety of about two million miles of gas and hazardous liquid pipelines, the actual physical environment that may be affected includes the environmental and socioeconomic resources in the vicinity of those pipelines. 3.1.1 Physical Environment Affected The physical environment potentially affected by the Final Rule 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 covered by the Final Rule. Because the pipelines subject to the Final Rule may contain hazardous materials, these resources within the physical affected environment, as well as public health and safety, may be affected by gas and hazardous pipeline incidents such as spills and leaks. 3-1#

Page 14Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Depending on the size of the spill or gas leak, and the nature of the impact zone, the environmental impacts vary from deaths and injuries to property and environmental damage. Incidents on pipelines often 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. Environmental consequences to the physical environment are examined in Section 3.2. 3.2 ENVIRONMENTAL CONSEQUENCES 3.2.1 Public Health and Safety No-Action Alternative Under the No-Action Alternative, OPS would no additional regulations would be established given that OPS has already issued regulations that prescribe standards for the use of direct assessment. Therefore, the No Action Alternative would not change the current and projected status of public health and safety. Action Alternative The Action alternative may make pipeline operations safer by helping to reduce the number of incidents due to corrosion if operators choose to use direct assessment. In addition, it may increase pipeline safety through the broader application of direct assessment standards, potentially resulting in a reduction in fatalities and injuries attributable to pipeline incidents. Therefore, the Action alternative may result in a net reduction in the level of public health and safety impacts when compared to those under the No Action alternative. It may also result in additional benefits, such as those related to making future maintenance easier, with potential public health and safety benefits. OPS cannot, however, say with certainty that implementing this Final Rule will avoid fatalities or injuries, but it is possible. Therefore, it is possible that the Action Alternative would result in a minor positive impact to public health and safety. 3.2.2 Hazardous Materials Transportation OPS recognizes that pipeline incidents can result in fatalities and injuries, and lost gas, hazardous liquids, and carbon dioxide. Such incidents can impact the physical environment (i.e., air, water, biological, and historical resources) around the pipeline if the material being transported within the pipelines leaks or spills into that environment. No-Action Alternative Under the No-Action Alternative, the rate of pipeline incidents will not change, as no new regulations would be implemented. Therefore, the No Action Alternative would not change the current and projected status of hazardous materials transportation. Potential impacts to the natural and human environment would continue to occur. 3-2#

Page 15Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Action Alternative The Action alternative may increase pipeline safety through the broader application of direct assessment standards, potentially resulting in a reduction in fatalities and injuries attributable to pipeline incidents. It is possible that the Action Alternative would result in a reduction in the number and frequency of corrosion incidents on onshore gas and hazardous liquid pipelines. Therefore, the Action alternative may result in a net reduction in the level of impacts from hazardous materials transportation when compared to those under the No Action alternative. 3.2.3 Socioeconomics As part of the rulemaking action, the costs and benefits of the Final Rule have been assessed. The economic analysis is summarized in the final Regulatory Evaluation (OPS 2004b). This final EA will, in analyzing the alternatives, analyze the socioeconomic impact of the Action. No-Action Alternative Under the No-Action Alternative, no change in the costs resulting from pipeline incidents would occur, as there would be no changes to the existing regulations. Action Alternative In its Final Rule, Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines, PHMSA is amending 49 CFR Part 192 by adding § 192.440 mandating direct assessment standards for external, internal, and stress-crack corrosion for operators of gas transmission pipelines, and amending 49 CFR Part 195 by adding § 195.588 mandating a direct assessment standard for external corrosion for operators of hazardous liquid and carbon dioxide pipelines. In the remainder of this section, the impacted industry will be identified, and then the economic impact of the rule will be considered. The Final Rule applies to direct assessments for external, internal, or stress corrosion performed on gas transmission and gathering pipelines subject to Federal pipeline safety regulation. It also applies to direct assessments for external corrosion performed on hazardous liquid and carbon dioxide pipelines. The operators of natural gas transmission and gathering pipelines are generally large firms, as are the operators of hazardous liquid and carbon dioxide pipelines. Table 3-1 shows the salient characteristics of the pipelines impacted by the Final Rule. The Action alternative will impact natural gas transmission pipeline operators choosing direct assessment as their approach for evaluating corrosion and hazardous liquid pipeline operators choosing direct assessment as their approach for evaluating external corrosion. The expected impact of direct assessment would be identification of present corrosion risks and prevention of future risks. It may make pipeline operations safer by helping to reduce the number of incidents due to corrosion and incident consequences when 3-3#

Page 16Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines corrosion incidents occur. The use of direct assessment by pipeline operators is 1 new approach, and its use at present is limited. Since the use of direct assessment i oluntary. Other approaches for evaluating corrosion exist. Direct assessment is, in fact voluntary, the Final Rule is not expected to have any measurable costs or benefits. Table 3-1: Salient Characteristics of Impacted Pipelines Characteristic Value Natural Gas Pipelines* NAICS 2002 industry sector 486210 Onshore mileage Number of operators 760 312 thousand*** Hazardous Liquid Pipelines** NAICS 2002 industry sector 486910 Number of operators 200 Onshore mileage 161 thousand*** *Includes gas gathering lines subject to Federal pipeline safety regulation **Including carbon dioxide pipelines ***Mileage data for 2003. Source of pipeline data: PHMSA Industry's costs of compliance with the Final Rule would be nominal, since operators would not be required to use direct assessment. Operators would incur costs of compliance only if they chose to voluntarily use direct assessment on regulated onshore ferrous pipelines. The costs of direct assessment are reported to be between $2,720 and $9,600 per mile for natural gas pipelines and between $2,000 and $6,000 per mile for liquid pipelines. These estimates include the cost of pipeline preparation and inspection, if any, as well as any lost revenue attributable to less than normal throughput resulting from lowered operating pressure. Comments on the NPRM from gas pipeline operators, on the other hand, suggest that the cost of direct assessment might be approximately $12 thousand per mile? Of course, it is the incremental (i.e., marginal) cost, not the total cost, that is relevant, and it is not clear what the incremental cost would be. The incremental cost represents the difference between what direct assessment would typically cost in the absence of the Final Rule and the cost of direct assessment under the Final Rule. If operators would 8 Neil G. Thompson, "Appendix E, Gas and Liquid Transmission Pipelines," Cost of Corrosion, FHWA ' Southwest Gas and its subsidiary, Paiute Pipeline, reported that direct assessments completed in Report FHWA-01-156, April 2005, p. E-36, www.corrosioncost.com/home.html. transmission pipelines, while Nicor reported costs of $10 thousand per mile for direct assessment accordance to NACE RP0502-202 requirements cost in excess of $12 thousand per mile for straight-line (excluding GIS development and digs). The Gas Piping Technology Committee, on the other hand, reported costs for its members ranging from $10 thousand to $55 thousand per mile for external corrosion direct assessment activities. 3-4#

Page 17Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines have followed the standards even in the absence of the Final Rule, which is fairly likely given the fact that the standards in the Final Rule are based on industry consensus standards developed by ASME and NACE, then the incremental cost is $0. Given that (1) the regulations largely involve two consensus standards developed by respected U.S. standards-setting organizations (ASME and NACE), (2) pipeline operators widely follow these organizations’ standards, and (3) many pipeline operators helped develop the direct assessment consensus standards, the incremental costs should be minimal. Given the potential benefits related to increased pipeline safety, the Action alternative may result in a benefit to socioeconomic resources from reduced incident property damage and public health and safety related costs. 3.2.4 Special Areas of Consideration Specific resources and impact categories that should be considered under NEPA include resources protected by the National Historic Preservation Act (NHPA) and Related Executive Orders, Wetlands, Determinations under Section 4(f) of the DOT Act [recodified at 49 U.S.C. 303(c)], and plants and animals that are protected under the Endangered Species Act. Endangered species, wetlands, historical resources, and ecological resources such as parklands and reserves are discussed as part of the physical affected environment in Section 3.1.1, where it also states that impacts to these resources are discussed in Section 3.2. This section will elaborate on OPS’ responsibility under the NHPA and Section 4(f) of the DOT Act Section 4(f) of the DOT Act. NHPA Compliance Based on the information found at 36 CFR 800.16(y)10, the rulemaking under the Action Alternative constitutes an undertaking, as it is an activity funded under the direct jurisdiction of OPS. However, the rulemaking will not directly affect any historic or cultural resources, as it largely involves processes of data collection and evaluation. Thus, the Action Alternative is not a type of action that has the potential to cause effects on historic properties or cultural resources. Since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks, it may result in a minor benefit to historical and cultural resources that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. However, based on the lack of national data on pipelines in the vicinity of historical structures, it is impossible to estimate the extent of potential benefits. 10 36 CFR 800.16(y): “Undertaking means a project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including those carried out by or on behalf of a Federal agency; those carried out with Federal financial assistance; and those requiring a Federal permit, license, or approval.” 3-5#

Page 18Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines Section 4(f) Compliance Section 4(f) of the DOT Act requires agencies within the DOT to make special effort to preserve the natural beauty of historic sites and public parks and recreation lands; if a transportation program requires the use of public land in a public park, the program must include all possible planning to minimize harm to the park or historic area. Neither the No Action Alternative nor the rulemaking under the Action Alternative includes, either directly or indirectly, the use of any land from, or in close proximity to, a public park, recreation area, wildlife and waterfowl refuge, or historic site, because of an activity such as construction of a new building. As such, there will not be a 4(f) statement prepared for this rule. In addition, since the Action alternative could reduce the likelihood of hazardous liquid spills or natural gas leaks, it may result in a minor benefit to Section 4(f) resources that could be negatively impacted by spills or leaks if they were located in areas in the vicinity of a pipeline. However, based on the lack of national data on pipelines in the vicinity of 4(f) resources, it is impossible to estimate the extent of potential benefits. 3.2.5 Additional Benefits of the Action Alternative Since the Action alternative affects only those operators that voluntarily use direct assessment and because it largely involves processes of data collection and evaluation, OPS has determined that it is unlikely to significantly affect the quality of the human environment. The primary benefit of the Final Rule is to promote acceptable, reliable, and uniform practices for using direct assessment to evaluate the threat of corrosion on onshore gas and hazardous liquid pipelines. Such practices have the potential to reduce incidents due to corrosion and to increase the public’s confidence in operators’ safety programs. Thus, the benefits of the Action alternative will include a potential reduction in the consequences of pipeline incidents (i.e., a reduction in the deaths, injuries, property damage, and lost product directly attributable to pipeline incidents). It will also include other savings, such as those related to increasing the operational life of pipe, and avoiding economic consequences of accident-induced supply restrictions, legal costs, and reduced emergency response costs. A further benefit involves the Federal policy that encourages agencies to adopt consensus standards that meet regulatory needs rather than develop new prescriptive Federal regulations. Two consensus standards form the basis for activities required by the Final Rule. Thus, the Final Rule would benefit the public by furthering the Federal policy on use of consensus standards. Additional benefits may result from the Action alternative that are difficult to quantify, but which OPS believes to be significant. Foremost among these is improved public confidence in the use of direct assessment to assure pipeline safety. Public confidence in pipeline safety has been shaken by major incidents in recent years. These incidents have generated concerns among public interest groups, the National Transportation Safety Board, and the Congress, and have prompted OPS to issue several new regulations. The 3-6#

Page 19Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines public is concerned about the possibility of pipeline incidents that could cause them harm. OPS believes that the Action Alternative and other agency activities will continue to improve the confidence of the public living, working, and congregating near pipelines that their safety is being assured. Furthermore, OPS expects that the Action alternative may have a positive net benefit for pipeline operators, public safety, and the environment. 3-7#

Page 20Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 4.0 LIST OF PERSONS CONSULTED The direct assessment standards were developed during the proceeding on integrity management of gas transmission lines in high-consequence areas. RSPA interacted and consulted with several organizations in that proceeding. These organizations included the Interstate Natural Gas Association of America, the American Gas Association, the Battelle Memorial Institute, the Gas Technology Institute, the Western States Land Commissioners, the National Governors Association, the National League of Cities, the National Council of State Legislators, the Environmental Defense Fund, the Public Interest Reform Group, and the Working Group on Communities Right-To-Know. Additional contacts include members of OPS’ two pipeline advisory committees: the Technical Pipeline Safety Standards Committee and the Technical Hazardous Liquid Pipeline Safety Standards Committee. Committee rosters are available at http://www.cycla.com/opsiswc/wc.dll?tacs%7Etoppage. 4-1#

Page 21Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 5.0 LIST OF PREPARERS AND REVIEWERS The following people participated in the development of the EA: Office of Pipeline Safety Renita Bivins Buck Furrow Florence Hamn John A. Volpe National Transportation Systems Center Research and Innovative Technology Administration U.S. Department of Transportation José G. Mantilla Paul Valihura, Ph.D. 5-1#

Page 22Final Environmental Assessment Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines 6.0 REFERENCES OPS 2005. Office of Pipeline Safety. http://ops.dot.gov/. Last visited: March 17 2005. OPS 2004a. Environmental Assessment – Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines. Research and Innovation Technology Administration, U.S. Department of Transportation. Docket RSPA-2004-16855 (entry #2 sated September 10, 2004). OPS 2004b. Draft Regulatory Evaluation, Standards for Direct Assessment of Gas and Hazardous Liquid Pipelines. Research and Innovation Technology Administration, U.S. Department of Transportation. Docket RSPA-2004-16855 (entry #2 sated September 10, 2004). 6-1#