{"operation":"document","citation":"0900006480e913c7","title":"U.S. DOT/PHMSA - Draft Regulatory Evaluation - NPRM: Updates to Pipeline and Liquefied Natural Gas Reporting Requirements (One Rule)","source_type":"rulemaking","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":null,"effective_on":null,"summary":"Preliminary Regulatory Analysis^ '•*' . -~\\ i ' \\ l v--._ \"'^.\\^ . O Notice of Proposed Rulemaking m Pipeline Safety: Pipeline and Liquefied Natural Gas Reporting Requirements [Docket No. PHMSA-08-0291] RIN2137-AE33 < February 20009 o o liJ 2.3.3. Option 3. Different Reporting Requirements for Small Operators PHMSA considered setting different requirements for large and small operators, basing the requirements on estimated differences in expected costs and benefits. PHMSA is aware that some regulations, rules, and Government policies place a...","machine_formats":{"json":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006480e913c7.json","markdown":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006480e913c7.md"},"app_url":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006480e913c7","source_url":"https://downloads.regulations.gov/PHMSA-2009-0203-0006/attachment_1.pdf","body":"<<<PAGE 1>>>\n\nPreliminary Regulatory Analysis^ '•*'\n. -~\\ i ' \\ l v--._\n\"'^.\\^ . O\nNotice of Proposed Rulemaking\nm\nPipeline Safety:\nPipeline and Liquefied Natural Gas Reporting\nRequirements\n[Docket No. PHMSA-08-0291]\nRIN2137-AE33\n<\nFebruary 20009\no\no\nliJ\n\n<<<PAGE 2>>>\n\nECONOMETRICA, INC.\n\n<<<PAGE 3>>>\n\nTable of Contents\nExecutive Summary iii\nIntroduction 1\n1. Background 2\n2. Regulatory Impact Analysis 3\n2.1. Introduction 3\n2.2. Identification of the Problem 3\n2.3. Identificationof Available Alternative Approaches 5\n2.3.1. Baseline: No Action 5\n2.3.2. Option 2. Require Direct Data Submission to the NPMS 6\n2.3.3. Option 3. Different Reporting Requirements for Small Operators 7\n2.3.4. Option 4. Adopt Proposed NPRM Changes in Reporting Requirements 7\n2.3.5. Linking Proposed Actions to Improved Pipeline Data Quality and Risk\nTargeting 8\n2.4. Baseline Data 10\n2.4.1. Pipeline Information 10\n2.4.2. Baseline Risk Trends 12\n2.4.3. Electronic Filing Baseline 17\n2.5 Costs of Complying with the Requirements of the Proposed Rule 19\n2.5.1 Requirement One - Change the Scope of Part 191 to Reflect the Change to the\nDefinition of Gas Gathering Line in Part 192 20\n2.5.2 Requirement Two - Change the Definition of \"Incident\" for Gas Pipelines and\nLNG Facilities 21\n2.5.3. Requirement Three - Require Operators of HL Pipelines to Report Pipeline\nInformation by State in the Annual Report for HL Pipelines 24\n2.5.4. Requirement Four - Require LNG Operators to Submit Incident and\nAnnual Reports 26\n2.5.5. Requirement Five - National Pipeline Operator Identification Registry 2.5.6. Requirement Six - Electronic Reporting and Filing of Required Reports 27\n31\n2.5.7. Requirement Seven - Merge Gas Transmission Gas Integrity Management\nSemi-Annual Performance Measures Report with the Gas Transmission Operator\nReport 32\n2.5.8. Requirement Eight - Require a Safety-Related Condition Report 34\n2.5.9 Requirement Nine - Modify HL Operator Telephonic Notification of Accident\nReporting Requirement 34\n2.5.10. Total Costs Associated with the Proposed Rule 35\n2.6. Benefits of the Proposed Rule 35\n2.6.1. Average Number of Significant Pipeline Incidents 36\n2.6.2. Calculated Annual Societal Costs Using a VSL of $5.8 Million 37\n2.6.3. Comparison of the Costs and Benefits 38\nAppendix A— Analyses Using VSLs of $3.2 and $8.4 Million 42\nA.l. Significant Incidents in the Pipeline System 42\nA.2. Comparison of the Costs and Benefits 42\nAppendix B — Regulatory Flexibility Analysis 47\nInitial Regulatory Flexibility Analysis 47\n\n<<<PAGE 4>>>\n\nAppendix C — Paperwork Reduction Act Analysis (44 U.S.C. 3501 et seq.) 54\nC.l Paperwork Reduction 54\nC.2 Burden Hours and Cost of PHMSA Proposed Rule to HL, NG Pipeline Operators\nand LNG Facility Operators 55\nAppendix D —PHMSA/OPS Environmental Checklist and Assessment 60\nD.l Environmental Checklist 60\nProject Description 60\nD.2 Draft Environmental Assessment 65\nD.2.1 Background Error! Bookmark not defined.\nD.2.2. Market Segments Affected and Requirements of the Proposed Rule Error!\nBookmark not defined.\nD.2.3 Alternatives Considered Error! Bookmark not defined.\nD.2.4. Environmental Effects of the Proposed Rule..Error! Bookmark not defined.\nn\n\n<<<PAGE 5>>>\n\nExecutive Summary\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a\nNotice of Proposed Rulemaking (NPRM) to improve the reliability and utility of data\ncollections fi\"om hazardous liquid (HL) pipeline operators, natural gas (NG) pipeline\noperators, and liquefied natural gas (LNG) facility operators. The rule proposes revisions\nto the accident and operator annual reports that are intended to address recognized and\nneeded improvements to the data. These improvements will maximize the quality,\nobjectivity, utility, reliability, and integrity of the pipeline data. As part of PHMSA's\nstrategy to become more risk-based and data driven, these improvements will enhance\nPHMSA's ability to: understand, measure, and assess the performance of operators;\nintegrate safety data to allow a more accurate assessment of risk; and simplify paperless\nreporting by operators.\nPHMSA proposes the following regulatory amendments and changes to the 49 CFR to\nenhance general data and data management improvements for pipelines: (1) Modify the\nscope of part 191 addressed in 49 CFR Section 191.1 to reflect the changes made in the\nscope of part 192 to the definition of gas gathering lines; (2) Change the definition of an\n\"incident\" to require an operator to report a fire not intentionally set by the operator, or\nan explosion, and establish a volumetric basis for reporting unexpected or unintentional\ngas loss; (3) Require operators of hazardous liquid pipelines to submit pipeline\ninformation by State on the annual report for hazardous liquid pipelines; (4) Require\noperators of Liquefied Natural Gas (LNG) facilities to submit incident and annual\nreports; (5) Create and require participation in a National Pipeline Operator Registry; (6)\nRequire operators to report and file data electronically whenever possible; (7) Merge the\nnatural gas transmission integrity management (IM) Semi-Annual Performance\nMeasures Report with the annual reports; (8) Require operators to use a standard form in\nsubmitting Safety-Related Condition Reports; and (9) Modify HL operator telephonic\nnotification of accidents.\nThese revisions will result in improvements not only to the data, but also to the analyses\nPHMSA relies on to make critical safety-related decisions and allocate scarce agency\nresources based on risk.\nIn this regulatory evaluation report, the benefits and costs of the proposed regulatory\nchanges are examined. Additionally, the report includes an environmental assessment\nand addresses other mandatory analyses, including those required by the Regulatory\nFlexibility Act and the Paperwork Reduction Act (PRA). The analyses find that the\nproposed rule is not expected to adversely affect the economy or the environment.\nBoth the expected costs and projected benefits of the rule are estimated to be relatively\nlow, and the rule is likely to yield net benefits at very low levels of effectiveness. The\naggregate cost of the proposed rule to all pipeline operators is between $1.3 million and\n$2.0 million. The present value of net benefits is estimated to range from about $62\nmillion to $76 million. The rule is also considered to be cost effective if only one\n111\n\n<<<PAGE 6>>>\n\nincident is avoided approximately every 19 months due to the rule. From an economic\nperspective, these analyses demonstrate that the rule is in the public interest. This is\nneither an economically significant regulatory action under Section 3(f)(1) of Executive\nOrder 12866 nor under the U.S. Department of Transportation's (DOT) regulatory\npolicies and procedures (44 FR 11034).\nIV\n\n<<<PAGE 7>>>\n\nIntroduction\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a\nNotice of Proposed Rulemaking (NPRM) to improve the reliability and utility of data\ncollections from operators of hazardous liquid (HL) pipelines, natural gas (NG) pipelines,\nand liquefied natural gas (LNG) pipelines. The revisions to the accident reports and\noperator annual reports are intended to address needed improvements to the data and to\nmaximize the quality, objectivity, utility, reliability, and integrity of the pipeline data. As\npart of PHMSA's strategy to become more risk-based and data driven, these\nimprovements will enhance PHMSA's ability to: Understand, measure, and assess the\nperformance of operators; integrate safety data to allow a more accurate assessment of\nrisk; and simplify paperless reporting by operators.\nPHMSA's proposed rule is in response to various recommendations from the\nGovernment Accountability Office (GAO), the U.S. Department of Transportation\nInspector General (DOTIG), the National Transportation Safety Board (NTSB), PHMSA\nand DOT internal assessments, and industry petitions for improved data quality to\nevaluate the safety performance of the pipeline industry and to aid regulatory decision\nmaking. PHMSA proposes the following regulatory amendments and changes to the 49\nCFR to enhance general data and data management improvements for pipelines:\n1. Modify the scope of part 191 addressed in 49 CFR Section 191.1 to reflect the\nchanges made in the scope of part 192 to the definition of gas gathering lines.\n2. Change the definition of an \"incident\" in 49 CFR Section 191.3 to require an\noperator to report a fire not intentionally set by the operator, or an explosion, and\nestablish a volumetric basis for reporting unexpected or unintentional gas loss.\n3. Require operators of hazardous liquid pipelines to submit pipeline information by\nstate on the annual report for hazardous liquid pipelines.\n4. Require operators of Liquefied Natural Gas (LNG) facilities to submit incident\nand annual reports.\n5. Create and require participation in a National Pipeline Operator Registry.\n6. Require operators to report and file data electronically whenever possible.\n7. Merge the natural gas transmission integrity management (IM) Semi-Annual\nPerformance Measures Report with the annual reports.\n8. Require operators to use a standard form in submitting Safety-Related Condition\nReports.\n9. Modify hazardous liquid operator telephonic notification of accidents.\n\n<<<PAGE 8>>>\n\nThese revisions will result in improvements not only to the data, but also to the analyses\nPHMSA relies on to make critical safety-related decisions and allocate scarce agency\nresources based on risk.\nThe proposed regulatory changes are authorized by statutory authority to carry out\npipeline safety duties under 49 U.S.C. 60101 et seq. (the pipeline safety laws), 49 U.S.C.\n5101 et seq. (the hazardous material fransportation laws), and the Pipeline Inspection,\nProtection, Enforcement and Safety Act of 2006 (PIPES) (Public Law No. 109-468).\nExecutive Order 12866 directs all Federal agencies to develop both preliminary and final\nregulatory analyses if their proposed regulations are likely to be \"significant regulatory\nactions\" that may have an annual impact on the economy of $100 million. The Order\nalso requires a determination as to whether a proposed rule could adversely affect the\neconomy or a section of the economy in terms of productivity and employment, the\nenvironment, public health, safety, or State, local or tribal governments. In accordance\nwith the regulatory philosophy and principles provided in Sections 1 (a) and (b) and\nSection 6(a)(3)(C) of Executive Order 12866, an economic analysis of the proposed\nregulatory changes is required.\nDOT does not consider this proposed rule to be a significant regulatory action under\nsection 3(f) of Executive Order 12866 (58 FR 51735; October 4, 1993). This NPRM is\nalso not significant under DOT's regulatory policies and procedures (44 FR 11034;\nFebruary 26, 1979). PHMSA prepared a Draft Regulatory Evaluation for this NPRM and\nplaced it in the public docket.\n1. Background\nThe Natural Gas Pipeline Safety Act of 1968 and the Hazardous Liquid Pipeline Safety\nAct of 1979 require the reporting of incidents on natural gas transmission and distribution\npipelines. These reporting requirements, as defined in 49 CFR Section 191.15, mandate\nthat operators report any incident that meets certain specific conditions. These\nrequirements were revised in 1984 and again in 2002. Additionally, in 2002, OPS issued\na rule that required hazardous liquid pipeline operators to file an annual report similar to\nthe annual report already required for natural gas transmission and distribution pipeline\noperators.\nMore recently, PHMSA recognized the need to revise several components of the rules\nrelating to data reporting, including revisions to Section 191.3 and 195 subpart B (to\nmodify reporting requirements for operators of hazardous liquid pipelines); Section 191\nreferences to LNG operators; to create a National Pipelines Owner/Operator Registry;\nand to facilitate elecfronic data collection.\nPHMSA is the nation's repository for pipeline data. These data are used by many entities\nfor various reasons, including planning purposes, safety-related research, critical public\nsafety information, and statistical analysis. This NPRM is intended to address recognized\nneeded improvements and enhance safety by ensuring that PHMSA has accurate safety\n\n<<<PAGE 9>>>\n\ndata to manage and reduce risks associated with natural gas transmission and hazardous\nliquid pipeline systems and LNG facilities.\n2. Regulatory Impact Analysis\n2.1. Introduction\nExecutive Order 12866 directs all Federal agencies to develop both preliminary and final\nregulatory analyses if their regulations are likely to be \"significant regulatory actions\"\nthat may have an annual impact on the economy of $ 100 million or more. The Order also\nrequires a determination as to whether a rule could adversely affect the economy or a\nsection of the economy in terms of productivity and employment, the environment, public\nhealth, safety, or state, local or tribal governments. This requirement applies to\nrulemakings that rescind or modify existing rules as well as to those that establish new\nrequirements. Whereas regulatory analysis is used to anticipate and evaluate the likely\nconsequences of rules, cost-benefit analysis is a primary tool for such analysis. This tool\nprovides decision-makers with a clear indication of the most efficient alternative—that is,\nthe alternative that generates the largest net benefits to society (ignoring distributional\neffects).\nThis regulatory analysis:\n1. Identifies the target problem, including a statement of the need for the proposed\naction.\n2. Identifies available alternative approaches.\n3. Defines the baseline.\n4. Defines the scope and parameters of the analysis.\n5. Defines and evaluates the costs and benefits of the proposed action and the main\nalternatives identified by the analysis.\n6. Compares the costs and benefits.\n7. Interprets the cost and benefit results.\nIn accordance with the above directives, PHMSA has performed a preliminary evaluation\nof the potential compliance costs of the proposed rule and feasible regulatory options and\nidentified those benefits that can be expressed in monetary terms.\n2.2. Identification of the Problem\nAs the nation's repository for pipeline data, PHMSA is responsible for maintaining the\nmost comprehensive collection of accident and incident data for both infrastate and\ninterstate pipelines. PHMSA is subject to constant and continued interest and scrutiny by\nvarious stakeholders for the reliability, utility, and applicability of pipeline data. PHMSA\nis currently confronted with several data-related strategies to address shortcomings and\ngaps in data collection. These gaps arise from changing industry and business practices.\n\n<<<PAGE 10>>>\n\nas well as changes in PHMSA's regulations and changes in PHMSA's own data-analysis\nstrategies and objectives.\nThere are several problem areas:\n• Currently PHMSA's data cannot fully support regulatory oversight activities.\nSome factors that contribute to this include:\n1. Definitions of certain key terms in current reporting requirements do not\nreflect the contribution of extraneous factors that could influence the\nfrequency of reported incidents (e.g., inflationary price increases have led to a\nsteep rise in the cost of various pipeline transported commodities, resulting in\na higher number of incident reports).\n2. Lack of incident information on \"near misses,\" such as explosions and fires\nthat do not cause serious damages or injuries, decreases the value of\nvulnerability assessments in IM programs.\n3. Lack of consistent causal information in the current incident databases due to\na non-systematic approach for data collection leads to data gaps. Operators\nuse varying methods to report incidents. For example, reports can be\nsubmitted online and by fax, letter, and e-mail. In the absence of a systematic\napproach to data collection, PHMSA is not able to validate or assess risks\nposed by specific pipeline operators.\n• LNG operators are exempt from annual and incident reporting requirements.\nQuality and availability of data on LNG facilities are inadequate for monitoring\nthe safety performance of this critical portion of the infrastructure. The proposed\nreporting requirement provides PHMSA with timely information needed for\nfacility risk evaluation and accurate user fee assessments.\n• Annual reports do not support an efficient assessment of pipeline vulnerabilities.\nCurrently, HL operators do not report state-specific information in their annual\nreports. The HL operators report mileage operated, pipeline characteristics, and\nintegrity management operation in the aggregate. Nationally aggregated\ninformation on HL pipelines does not provide the level of detail or the State-\nspecific information necessary for PHMSA to understand, monitor, and assess\nsafety performance and risks posed by the pipelines. For example, the HL pipeline\nannual reports show approximately 314 pipeline operators with a total of 165,000\nmiles of pipelines. Data from the National Pipeline Mapping System (NPMS),\nwhich contains mileage by State, do not support these statistics (the latest NPMS\nsubmission shows about 310 operators reporting a total of approximately 175,000\npipeline miles).\n• There is no consistent method of registering pipeline owners and operators.\nPHMSA needs to be able to maintain control over operator identification numbers\nand the associated contact information. Currently, PHMSA cannot meaningfully\nanalyze and normalize data received from pipeline operators across different\n\n<<<PAGE 11>>>\n\nreporting requirements. Under the Pipeline Safety Improvement Act of 2002,\nCongress requires operator identification information so that PHMSA can assess\noperator compliance with the NPMS. With the information currently available,\nPHMSA cannot fiilly determine which companies constitute the universe of\noperators and whether or not \"umbrella\" companies had submitted data for other\nrelated companies.\n• Incident data reported to PHMSA are currentiy provided primarily through paper\nfilings. These paper reports are often incomplete and inconsistent, eind the forms\nimproperly filled out. If an operator enters data inconsistently on paper reports,\nboth the States and PHMSA are prevented from identifying system-wide\nproblems with respect to that operator, impeding optimal pipeline safety\noversight.\n2.3. Identification of Available Alternative Approaches\nPHMSA considered four alternatives to the proposed rule for implementing its data\ncollection requirements. After reviewing the four options, PHMSA selected the proposed\nalternative which provides that the reporting requirements discussed earlier be applied to\nall operators.\n2.3.1. Baseline: No Action\nUnder this option, PHMSA would maintain existing requirements for reporting by taking\nno action. However, PHMSA believes that this would not effectively support the\nAgency's safety mission. Given the magnitude of the accident risks and economic losses\ncurrentiy prevailing in the industry, as documented later in this report, a do-nothing\nalternative is not an acceptable option. Taking no action would prolong the adverse\nconditions currently prevailing in the industry, including:\n• Inability to mitigate potential safety issues due to inadequate decision-making\ncapability, stemming from lack of needed information about the location of\nhazardous liquid accidents and LNG facilities.\n• Inability to address the safety due to the poor quality of data on natural gas\npipelines incident reports, and inadequate information on operators contained in\nthe annual reports and OPID.\n• Inefficiencies in, and high costs of, processing and correcting error-prone paper-\nbased reports; inadequate information sent to the OPID; and failure to meet the\nDOT strategic goals for E-Govemment.\nBy not taking action the Agency would be unresponsive, there would likely be no\nreductions in the array of safety risks, and data collection inefficiencies and gaps\nidentified in the NPRM would continue to exist. Although taking no action would\neliminate additional compliance costs, there would be no reduction in the societal costs\n\n<<<PAGE 12>>>\n\nassociated with the deaths, injuries, and property damages. This results in zero net\nbenefits. Thus, this alternative is the baseline for comparison with other alternatives.\n2.3.2. Option 2. Require Direct Data Submission to the NPIVIS\nThe NPMS is created by PHMSA in cooperation with other Federal and State\ngovernmental agencies and the pipeline industry. The NPMS consists of geospatial\nattribute data related to natural gas fransmission and HL pipelines and LNG facilities\nunder PHMSA's jurisdiction. The NPMS is built and maintained using information\nsupplied by firms that operate pipeline and LNG facilities.\nTo date, pipeline facility data in the NPMS are submitted by pipeline operators on a\nvoluntary basis. Under Option 2, PHMSA would require all operators to adhere to\nNPMS data standards for all submissions. Operators would be provided with access to\nsample maps and submission checklists and information on data standards available for\nonline review and downloading.\nThis option would enable PHMSA to use the NPMS as a tool for decision support,\nemergency response, inspection planning, community access, and regulatory compliance.\nPHMSA will also be able to use the risk-based pipeline integrity management data\nobtained from the NPMS for rulemaking. Through visualization, geospatial analysis, and\nthe integration of various databases, PHMSA will be able to use the NPMS to help ensure\nthe safe, reliable, and environmentally sound operation of the nation's pipeline\nfransportation system.\nThis option was not selected for several reasons. To submit the proposed information via\nthe NPMS as opposed to other means, PHMSA would have to make modifications to the\nexisting geospatial technological architecture of the NPMS to accept the substantial data\nelements that would have to be submitted if the NPMS were to generate the proposed\nState totals. These modifications would be costly, and the costs are not currently\nbudgeted or planned for. To retrofit the NPMS into a format that could meet the\nrequirement, PHMSA would have to put in several years of planning and extensive work.\nAdditionally, we do not know the percentage of the hazardous liquid industry that\ncurrently have geospatial data in a format that would enable such a submission. Many\nsmall companies are not American Petroleum Institute (API) or Association of Oil Pipe\nLines (AOPL) members, and PHMSA would need to better understand the universe of\ncapabilities for such a consideration.\n\n<<<PAGE 13>>>\n\n2.3.3. Option 3. Different Reporting Requirements for\nSmall Operators\nPHMSA considered setting different requirements for large and small operators, basing\nthe requirements on estimated differences in expected costs and benefits. PHMSA is\naware that some regulations, rules, and Government policies place a disproportionate\nburden on small firms and enfrepreneurs. Consequently, to promote entrepreneurship.\nGovernment agencies have sometimes granted small businesses special regulatory\ntreatment, such as exemptions from legislation or extended deadlines for compliance.\nPHMSA judged that these considerations were not sufficient to recommend reporting\nrequirements based on business size. This option was not chosen because PHMSA\nconcluded that allowing disparate reporting would not meet its informational needs. The\nAgency believes reporting must provide relevant information that is useful for the\ndecision-making needs of groups for whom the information is provided. PHMSA\ndetermined, therefore, that allowing for firm size would dampen the regulation's\neffectiveness and that special regulatory freatment would not, in fact, help small\nbusinesses. PHMSA believes that although there may be a learning curve for small\nentities, with practice and guidance—which PHMSA is willing to provide—small\noperators will leam how to comply with the proposed reporting requirements.\n2.3.4. Option 4. Adopt Proposed NPRM Changes in\nReporting Requirements\nPHMSA has chosen Option 4, the proposed rule changes in this NPRM, as the most\nreasonable of the four options, based on the OMB criteria for regulatory evaluation. This\noption responds to various Government Accountability Office (GAO), DOT Inspector\nGeneral (DOT IG), and National Transportation Safety Board recommendations. This\noption is PHMSA's preferred option and requires the following proposed changes:\n1. Modify the scope of part 191 addressed in 49 CFR Section 191.1 to reflect\nthe changes made in the scope of part 192 to the definition of gas\ngathering lines.\n2. Change the definition of an \"incident\" in 49 CFR Section 191.3 to require\nan operator to report a fire not intentionally set by the operator, or an\nexplosion, and establish a volumetric basis for reporting imexpected or\nunintentional gas loss. This requirement will more accurately depict the\nsafety performance of gas pipelines over time.\n3. Require operators of hazardous liquid pipelines to submit pipeline\ninformation by state on the aimual report for hazardous liquid pipelines.\nThis data will allow PHMSA to improve its allocation of inspection and\nother resources due to an improved understanding of the infrastructure it\nregulates.\n4. Require operators of Liquefied Natural Gas (LNG) facilities to submit\nincident and annual reports. This data will provide valuable infrastructure\n\n<<<PAGE 14>>>\n\ninformation to PHMSA, and allow for a more thorough evaluation of the\nsafety performance of LNG facilities.\n5. Create and require participation in a National Pipeline Operator Registry.\nThis data will provide PHMSA with timely updates on significant and\npotential safety-impacting changes occurring under its purview, and help\nPHMSA to better monitor and assess operator performance.\n6. Require operators to report and file data electronically whenever possible.\nThe electronically submission of data will increase the accuracy and\nquality of data collected which, in turn, will improve PHMSA's data\nintegration efforts. Electronic submission will also reduce the reporting\nburden on operators.\n7. Merge the natural gas transmission integrity management Semi-Annual\nPerformance Measures Report with the annual reports. This change will\nsignificantly reduce the reporting burden on operators by changing the\ncurrent semi-annual requirement to an annual requirement.\n8. Require operators to use a standard form in submitting Safety-Related\nCondition Reports. This will ensure consistency of data submitted across\nthe pipeline industry.\n9. Modify hazardous liquid operator telephonic notification of accidents to\nrequire operators to have a procedure to calculate and provide a reasonable\ninitial estimate of released product and maintain a record of the procedure\nused for reporting and to provide an additional telephonic report to the\nNational Response Center if significant new information becomes\navailable during the emergency response phase.\nHL pipeline operators, NG transmission and distribution pipeline operators, and LNG\nfacilities are impacted by this proposed rule. PHMSA has determined that an Industrial\nEngineer would be able to address the requirements under this proposed rule. Table 1\nbelow summarizes the baseline data elements used in this analysis.\n2.3.5. Linking Proposed Actions to Improved Pipeline Data Quality and Risk\nTargeting\nGiven the anticipated outcomes outlined in this section, the proposed data reporting\nrequirements are justified. The proposed requirements presume an implicit linkage\nbetween the elements of the proposed changes in data reporting requirements and the\nfollowing expected improvements.\n2.3.5.1 Improved Efficiency of incident Anaiysis, More Effective Risl( Assessment\nand Targeting\nPHMSA and industry representatives believe that better risk management can both\nimprove safety outcomes and effectively allocate Agency resources cost effectively.\nImproved reporting will expand the Agency's ability to analyze pipeline incidents, events\nand the causes of potential pipeline incidents, as well as to examine both the likelihood\n\n<<<PAGE 15>>>\n\nand severity of potential pipeline incidents. To strengthen the linkage between risk\nreduction and improved reporting requirements, PHMSA proposes to:\n• Amend Section 191.3 definition of \"incident\" for natural gas pipeline operator\nreports will improve the efficiency of data collection. New risk-based\ninformation will enable PHMSA to focus more attention on high- to moderate-\nimpact incidents, as the number of reported minor and low-impact incidents will\nbe reduced.\n•\n•\nRevise §195.49 (subpart B - Annual Reports) to require operators of hazardous\nliquid pipelines to submit certain infrastructure and IM data by State. By\nidentifying the location of high-risk accidents, State inspectors can utilize safety\nassessment tools and PHMSA can target mitigation measures.\nAmend Sections 191 and 195 to require LNG operators to submit incident reports,\nand HL pipeline operators to submit risk-based and location-specific annual\nreports. This will improve PHMSA's capability to conduct risk-based assessment\nof pipeline vulnerabilities and improve performance monitoring.\nRequire the semi-annual natural gas IM reports' incorporation into the annual\nreport. This will reduce compliance costs for interstate pipeline operators while\nimproving PHMSA ability to conduct risk-based vulnerability assessments.\n2.3.5.2 improved Data Quality Leads to Accurate Data Reporting and Improved\nProductivity of PHMSA and Pipeline Operators\nThe linkage between gains in accuracy, worker productivity, and improved reporting\nrequirements can be made in the following ways:\n• Revising reporting requirements for HL, LNG, and NG transmission operators\nthat will improve data accuracy and consistency across reporting units and make it\npossible to link the reports with the NPMS to enhance its function.\n• Creating an OPID Registry that will improve the quality and accuracy of the data,\nfacilitate development of a more comprehensive inventory of operators, and\nreduce data submission errors and inconsistencies.\n•\nRequiring operators to provide advance notice of new pipeline construction that\nwill similarly improve data quality and forecasting capability.\n•\nRequiring elecfronic submissions that will be more efficient, more accurate, and\ncheaper.\n\n<<<PAGE 16>>>\n\n2.4. Baseline Data\n2.4.1. Pipeline Information\nThe energy fransportation network of the United States consists of over 2 million\nmiles of pipelines. The network includes approximately:\n• 170,000 miles of onshore and offshore HL pipeline;\n• 295,220 miles of onshore and offshore NG Transmission pipelines;\n• 1,900,000 miles of NG Distribution pipelines;\n• LNG Plants connected to our natural gas transmission and distribution systems;\nand\n• Propane Distribution System pipelines.\nThe pipeline industry is extremely diverse. Pipeline systems vary in size and complexity.\nThese pipelines are operated by approximately 2,600 operators, large and small. PHMSA\nbelieves an industrial engineer would best respond to the requirements of the proposed\nrule.\nBaseline Paratnetecs\nNo. of operators'\nPipeline mileage'^\nAverage hourly wage rate for an\nengineer, based on BLS data\nAverage hourly wage rate for an\nengineer based on industry\nestimates\nTable 1. Pipeline Information\nHL\nPipelines\n314\n170,000\n$40.39\n$60.00\nNatujRalGas\nTransttiission\n950\n295,220\n$37.21\n$60.00\nNatttral^iias ?\nI»strlbtfc-c-. :... ,\n1,262\n1,900,000\n$37.21\n$60.00\nfl::\n77\nNA\n$37.21\n$60.00\n2.4.1.1. HL Pipelines\nGathering pipeline systems gather crude oil from production wells. Crude oil pipeline\nsystems transport crude oil from the gathering systems to refineries. Crude oil systems\ncan be tens to hundreds of miles in length and cross state and continental borders.\nPipeline systems transport refined products such as gasoline, kerosene, and many\nindustrial feedstock petrochemicals from refineries to the end user or to storage and\ndistribution terminals. Refined products pipelines can extend tens to thousands of miles\nand cross state and continental borders. The pipe used in oil pipeline systems can range in\nhttp://ops.dot.gov/stats/DT98.htm.\nhttp://primis.phmsa.dot.gov/comm/PipeUneBasics.htm.\n' BLS. May 2006 National Industry-Specific Occupational Employment and Wage Estimates. See\nhttp://www.bls.gov/oes/current/naics3_486000.htm.\n* Average hourly wage rate is based on conversations with a few pipeline industry representatives.\n10\n\n<<<PAGE 17>>>\n\nsize from 2 inches to 42 inches in diameter. Oil pipeline systems are owned and operated\nby many different companies. The location, construction, and operation of these systems\nare generally regulated by federal and state regulations.\n2.4.1.2. Natural Gas Pipelines\nNatural gas transmission pipeline systems transport natural gas thousands of miles across\nmany parts of the continental United States. Natural gas distribution pipeline systems can\nbe found in thousands of communities from coast to coast and distribute natural gas to\nhomes and businesses. The pipe used in natural gas pipeline systems can range in size\nfrom 2 inches to 42 inches in diameter. Natural gas gathering and fransmission pipeline\nsystems are constructed from steel pipe. However, natural gas distribution systems can be\nconstructed from steel or plastic pipe. The use of modem plastic pipe for distribution\nsystems is becoming more and more prevalent today. Natural gas pipeline systems are\nowned and operated by many different companies. The location, construction, and\noperation of these systems are generally regulated by federal and state regulations.\n2.4.1.3. LNG Facilities\nLNG is the liquid form of natural gas - natural gas which has been cooled to the point\nthat it condenses to a liquid. Although LNG has been fransported safely in the U.S.,\nsecurity has been a concern of both Federal agencies and the industry. PHMSA prescribes\nsafety standards concerning the location, design, installation, construction, initial\ninspection, and testing of new onshore and offshore LNG facilities. In cooperation with\nthe Interstate Natural Gas Association of America, OPS formed a task force to develop\nand oversee industry-wide security standards \"for critical onshore and offshore pipelines\nand related facilities, as well as LNG facilities.\"' Technological improvements made\nsince the 1940s have made LNG facilities much safer. Serious risks remain, however,\nbecause LNG is inherentiy volatile and is usually stored in large quantities.^ With the\nendorsement of the OPS, in September 2002, the association's task force issued security\nguidelines for natural gas infrastructure, including LNG facilities.^\nSince September 11, 2001, the U.S. LNG industry and Federal agencies have put new\nmeasures in place to both protect the LNG infrastructure and respond to potential terrorist\nattacks. In 2004, the Federal Energy Regulatory Commission formed a new LNG\nEngineering Branch within its Office of Energy Projects that is devoted to the safety and\nsecurity of LNG facilities. More recently, in May 2006, the Commission created a new\nLNG Compliance Branch within its Office of Energy Projects to fiirther ensure the use of\n^ Haener, William J., CMS Energy Corp. Testimony on behalf of the Interstate Natural Gas Association of\nAmerica (INGAA) before the House Transportation and Infrastructixre Subcommittee on Highways and\nTransit. February 13, 2002: p. 4.\n* Congressional Research Service (CRS) \"Liquefied Natural Gas (LNG) Infrastructure Security:\nBackground and Issues for Congress,\" September 2003: p. 9.\n' Interstate Natural Gas Association of America (INGAA), \"Security Guidelines Natural Gas Industry\nTransmission and Distribution,\" Washington, DC, September 6, 2002.\n* CRS \"Liquefied Natural Gas (LNG) Infrastructure Security: Background and Issues for Congress,\"\nSeptember 2003: Executive Summary. Also see http://www.energv.ca.gov/lng/safetv.html. Liquefied\nNatural Gas Safety.\n11\n\n<<<PAGE 18>>>\n\nsound .:>w«iiJ engineering practices and appropriate safety and security measures during the\nconstruction and operation of LNG facilities.^\n2.4.2. Baseline Risk Trends\nOver the years, OPS has partnered with industry to investigate the potential application of\nrisk management within the pipeline industry. Together they have concluded that risk\nanalysis and management requires suitable and sufficient data. However, the monitoring\nof performance over time suggests that certain initial assumptions and data elements are\ninadequate and need to be updated.\nThe information for LNG plants is mainly derived from outside sources. Table 2 below\ncontains a listing of LNG indents.\nTable 2. The History of LNG Incidents in the U.S 10\n'l°# ^te ^\n• % - ; ^ ^ , : : \" *\n' • • %\n•c^t • m . :\n1944 East Ohio Gas\nCleveland,\nLNG Tank\nOH\n128\ndeaths\nLNG peak shaving facility. Tank failure\nand no earthen berm. Vapor cloud formed\nand filled the surrounding streets and\nstorm sewer system. Natural gas in the\nvaporizing LNG pool ignited.\n1969 LNG tank Portland,\nOR\nAn explosion occurred in an LNG tank\nunder construction. No LNG had ever been\nintroduced into the tank. The cause of the\naccident was attributed to the accidental\nremoval of blinds from natural gas\npipelines which were connected to the\ntank. This led to the flow of natural gas\ninto the tank while it was being\nconstmcted.\n1973 Texas Eastem\nTransmission\nLNG\nStaten\nIsland, NY\n40\ndeaths\nIndustrial incident unrelated to the\npresence of LNG (incident). During\nrepairs, vapors associated with the\ncleaning process apparently ignited the\nmylar liner. Fire caused temperature in the\ntank to rise, generating enough pressure to\ndislodge a 6-inch thick concrete roof,\nwhich then fell on the workers in the tank.\n1974 Massachusetts Loading None Valve leakage. Deck fractures.\nFor additional information on LNG plants see Liquefied Natural Gas: An Overview of the LNG Industry\nfor Fire marshals and Emergency Responders.\nhttp://primis.phmsa.dot.gov/comm/publications/LNG_for_Fire_Marshals_06-2005 .pdf?nocache= 1982\n'* ^ University of Texas, Center for Energy and Economics \"LNG Safety and Security,\" October 2003.\nTable 4, p. 77. See\nhttp://www.beg.utexas.edu/energvecon/lng/documents/CEE LNG Safetv and Securitv.pdf.\n12\n\n<<<PAGE 19>>>\n\n.\n• : j \\ - . - -\n:iac|i% # . • •\n1979 Columbia Gas\nLNG Terminal\nCove\nPoint,\nMD,\n1 death,\n1 serious\ninjury\nAugust\n1987\nNevada Test\nSite\nMercury,\nNV\nMarch\n2005\nWG utility District\nHeights,\nMD\nAn explosion occurred within an electrical\nsubstation. LNG leaked through LNG\npump's electrical penetration seal,\nvaporized, passed through 200 feet of\nunderground electrical conduit, and\nentered the substation. Since natural gas\nwas never expected in this building, there\nwere no gas detectors installed in the\nbuilding. The normal arcing contacts of a\ncircuit breaker ignited the natural gas-air\nmixture, resulting in an explosion causing\nabout $3 million in damages.\nAn accidental ignition of an LNG vapor\ncloud occurred at the U.S. Department of\nEnergy Test Site during large-scale tests\ninvolving LNG spills. The cloud was\naccidentally ignited and damaged and\npropelled polyurethane pipe insulation\noutside the fence.\nA Washington Gas company-sponsored\nstudy released in July 2005 pointed to\nsubtle molecular differences in the\nimported LNG the utility began using in\nAugust 2003 as the cause of a house\nexplosion.\nWorldwide, there have been approximately 10 serious accidents directiy attributed to\nLNG facilities.\"\nPHMSA's LNG responsibilities under 49 CFR 193 relate primarily to safety issues. The\nPipeline Branch of the TSA is responsible for pipeline security, for both land-based and\nmarine LNG facilities. The overlapping jurisdictions of TSA and OPS for monitoring\nLNG safety and security have led to memoranda of agreement between the two agencies\nto guide the security plans required by the facilities. The U.S. Coast Guard (USCG)\nProgram Office has estimated that ","truncated":true,"body_characters":157254}