# U.S. DOT/PHMSA - Draft Regulatory Evaluation - NPRM: Updates to Pipeline and Liquefied Natural Gas Reporting Requirements (One Rule) - **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:** Not available - **effective on:** Not available - **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:** <<>> 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 <<>> ECONOMETRICA, INC. <<>> Table of Contents Executive Summary iii Introduction 1 1. Background 2 2. Regulatory Impact Analysis 3 2.1. Introduction 3 2.2. Identification of the Problem 3 2.3. Identificationof Available Alternative Approaches 5 2.3.1. Baseline: No Action 5 2.3.2. Option 2. Require Direct Data Submission to the NPMS 6 2.3.3. Option 3. Different Reporting Requirements for Small Operators 7 2.3.4. Option 4. Adopt Proposed NPRM Changes in Reporting Requirements 7 2.3.5. Linking Proposed Actions to Improved Pipeline Data Quality and Risk Targeting 8 2.4. Baseline Data 10 2.4.1. Pipeline Information 10 2.4.2. Baseline Risk Trends 12 2.4.3. Electronic Filing Baseline 17 2.5 Costs of Complying with the Requirements of the Proposed Rule 19 2.5.1 Requirement One - Change the Scope of Part 191 to Reflect the Change to the Definition of Gas Gathering Line in Part 192 20 2.5.2 Requirement Two - Change the Definition of "Incident" for Gas Pipelines and LNG Facilities 21 2.5.3. Requirement Three - Require Operators of HL Pipelines to Report Pipeline Information by State in the Annual Report for HL Pipelines 24 2.5.4. Requirement Four - Require LNG Operators to Submit Incident and Annual Reports 26 2.5.5. Requirement Five - National Pipeline Operator Identification Registry 2.5.6. Requirement Six - Electronic Reporting and Filing of Required Reports 27 31 2.5.7. Requirement Seven - Merge Gas Transmission Gas Integrity Management Semi-Annual Performance Measures Report with the Gas Transmission Operator Report 32 2.5.8. Requirement Eight - Require a Safety-Related Condition Report 34 2.5.9 Requirement Nine - Modify HL Operator Telephonic Notification of Accident Reporting Requirement 34 2.5.10. Total Costs Associated with the Proposed Rule 35 2.6. Benefits of the Proposed Rule 35 2.6.1. Average Number of Significant Pipeline Incidents 36 2.6.2. Calculated Annual Societal Costs Using a VSL of $5.8 Million 37 2.6.3. Comparison of the Costs and Benefits 38 Appendix A— Analyses Using VSLs of $3.2 and $8.4 Million 42 A.l. Significant Incidents in the Pipeline System 42 A.2. Comparison of the Costs and Benefits 42 Appendix B — Regulatory Flexibility Analysis 47 Initial Regulatory Flexibility Analysis 47 <<>> Appendix C — Paperwork Reduction Act Analysis (44 U.S.C. 3501 et seq.) 54 C.l Paperwork Reduction 54 C.2 Burden Hours and Cost of PHMSA Proposed Rule to HL, NG Pipeline Operators and LNG Facility Operators 55 Appendix D —PHMSA/OPS Environmental Checklist and Assessment 60 D.l Environmental Checklist 60 Project Description 60 D.2 Draft Environmental Assessment 65 D.2.1 Background Error! Bookmark not defined. D.2.2. Market Segments Affected and Requirements of the Proposed Rule Error! Bookmark not defined. D.2.3 Alternatives Considered Error! Bookmark not defined. D.2.4. Environmental Effects of the Proposed Rule..Error! Bookmark not defined. n <<>> Executive Summary The Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a Notice of Proposed Rulemaking (NPRM) to improve the reliability and utility of data collections fi"om hazardous liquid (HL) pipeline operators, natural gas (NG) pipeline operators, and liquefied natural gas (LNG) facility operators. The rule proposes revisions to the accident and operator annual reports that are intended to address recognized and needed improvements to the data. These improvements will maximize the quality, objectivity, utility, reliability, and integrity of the pipeline data. As part of PHMSA's strategy to become more risk-based and data driven, these improvements will enhance PHMSA's ability to: understand, measure, and assess the performance of operators; integrate safety data to allow a more accurate assessment of risk; and simplify paperless reporting by operators. PHMSA proposes the following regulatory amendments and changes to the 49 CFR to enhance general data and data management improvements for pipelines: (1) Modify the scope of part 191 addressed in 49 CFR Section 191.1 to reflect the changes made in the scope of part 192 to the definition of gas gathering lines; (2) Change the definition of an "incident" to require an operator to report a fire not intentionally set by the operator, or an explosion, and establish a volumetric basis for reporting unexpected or unintentional gas loss; (3) Require operators of hazardous liquid pipelines to submit pipeline information by State on the annual report for hazardous liquid pipelines; (4) Require operators of Liquefied Natural Gas (LNG) facilities to submit incident and annual reports; (5) Create and require participation in a National Pipeline Operator Registry; (6) Require operators to report and file data electronically whenever possible; (7) Merge the natural gas transmission integrity management (IM) Semi-Annual Performance Measures Report with the annual reports; (8) Require operators to use a standard form in submitting Safety-Related Condition Reports; and (9) Modify HL operator telephonic notification of accidents. These revisions will result in improvements not only to the data, but also to the analyses PHMSA relies on to make critical safety-related decisions and allocate scarce agency resources based on risk. In this regulatory evaluation report, the benefits and costs of the proposed regulatory changes are examined. Additionally, the report includes an environmental assessment and addresses other mandatory analyses, including those required by the Regulatory Flexibility Act and the Paperwork Reduction Act (PRA). The analyses find that the proposed rule is not expected to adversely affect the economy or the environment. Both the expected costs and projected benefits of the rule are estimated to be relatively low, and the rule is likely to yield net benefits at very low levels of effectiveness. The aggregate cost of the proposed rule to all pipeline operators is between $1.3 million and $2.0 million. The present value of net benefits is estimated to range from about $62 million to $76 million. The rule is also considered to be cost effective if only one 111 <<>> incident is avoided approximately every 19 months due to the rule. From an economic perspective, these analyses demonstrate that the rule is in the public interest. This is neither an economically significant regulatory action under Section 3(f)(1) of Executive Order 12866 nor under the U.S. Department of Transportation's (DOT) regulatory policies and procedures (44 FR 11034). IV <<>> Introduction The Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a Notice of Proposed Rulemaking (NPRM) to improve the reliability and utility of data collections from operators of hazardous liquid (HL) pipelines, natural gas (NG) pipelines, and liquefied natural gas (LNG) pipelines. The revisions to the accident reports and operator annual reports are intended to address needed improvements to the data and to maximize the quality, objectivity, utility, reliability, and integrity of the pipeline data. As part of PHMSA's strategy to become more risk-based and data driven, these improvements will enhance PHMSA's ability to: Understand, measure, and assess the performance of operators; integrate safety data to allow a more accurate assessment of risk; and simplify paperless reporting by operators. PHMSA's proposed rule is in response to various recommendations from the Government Accountability Office (GAO), the U.S. Department of Transportation Inspector General (DOTIG), the National Transportation Safety Board (NTSB), PHMSA and DOT internal assessments, and industry petitions for improved data quality to evaluate the safety performance of the pipeline industry and to aid regulatory decision making. PHMSA proposes the following regulatory amendments and changes to the 49 CFR to enhance general data and data management improvements for pipelines: 1. Modify the scope of part 191 addressed in 49 CFR Section 191.1 to reflect the changes made in the scope of part 192 to the definition of gas gathering lines. 2. Change the definition of an "incident" in 49 CFR Section 191.3 to require an operator to report a fire not intentionally set by the operator, or an explosion, and establish a volumetric basis for reporting unexpected or unintentional gas loss. 3. Require operators of hazardous liquid pipelines to submit pipeline information by state on the annual report for hazardous liquid pipelines. 4. Require operators of Liquefied Natural Gas (LNG) facilities to submit incident and annual reports. 5. Create and require participation in a National Pipeline Operator Registry. 6. Require operators to report and file data electronically whenever possible. 7. Merge the natural gas transmission integrity management (IM) Semi-Annual Performance Measures Report with the annual reports. 8. Require operators to use a standard form in submitting Safety-Related Condition Reports. 9. Modify hazardous liquid operator telephonic notification of accidents. <<>> These revisions will result in improvements not only to the data, but also to the analyses PHMSA relies on to make critical safety-related decisions and allocate scarce agency resources based on risk. The proposed regulatory changes are authorized by statutory authority to carry out pipeline safety duties under 49 U.S.C. 60101 et seq. (the pipeline safety laws), 49 U.S.C. 5101 et seq. (the hazardous material fransportation laws), and the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006 (PIPES) (Public Law No. 109-468). Executive Order 12866 directs all Federal agencies to develop both preliminary and final regulatory analyses if their proposed regulations are likely to be "significant regulatory actions" that may have an annual impact on the economy of $100 million. The Order also requires a determination as to whether a proposed rule could adversely affect the economy or a section of the economy in terms of productivity and employment, the environment, public health, safety, or State, local or tribal governments. In accordance with the regulatory philosophy and principles provided in Sections 1 (a) and (b) and Section 6(a)(3)(C) of Executive Order 12866, an economic analysis of the proposed regulatory changes is required. DOT does not consider this proposed rule to be a significant regulatory action under section 3(f) of Executive Order 12866 (58 FR 51735; October 4, 1993). This NPRM is also not significant under DOT's regulatory policies and procedures (44 FR 11034; February 26, 1979). PHMSA prepared a Draft Regulatory Evaluation for this NPRM and placed it in the public docket. 1. Background The Natural Gas Pipeline Safety Act of 1968 and the Hazardous Liquid Pipeline Safety Act of 1979 require the reporting of incidents on natural gas transmission and distribution pipelines. These reporting requirements, as defined in 49 CFR Section 191.15, mandate that operators report any incident that meets certain specific conditions. These requirements were revised in 1984 and again in 2002. Additionally, in 2002, OPS issued a rule that required hazardous liquid pipeline operators to file an annual report similar to the annual report already required for natural gas transmission and distribution pipeline operators. More recently, PHMSA recognized the need to revise several components of the rules relating to data reporting, including revisions to Section 191.3 and 195 subpart B (to modify reporting requirements for operators of hazardous liquid pipelines); Section 191 references to LNG operators; to create a National Pipelines Owner/Operator Registry; and to facilitate elecfronic data collection. PHMSA is the nation's repository for pipeline data. These data are used by many entities for various reasons, including planning purposes, safety-related research, critical public safety information, and statistical analysis. This NPRM is intended to address recognized needed improvements and enhance safety by ensuring that PHMSA has accurate safety <<>> data to manage and reduce risks associated with natural gas transmission and hazardous liquid pipeline systems and LNG facilities. 2. Regulatory Impact Analysis 2.1. Introduction Executive Order 12866 directs all Federal agencies to develop both preliminary and final regulatory analyses if their regulations are likely to be "significant regulatory actions" that may have an annual impact on the economy of $ 100 million or more. The Order also requires a determination as to whether a rule could adversely affect the economy or a section of the economy in terms of productivity and employment, the environment, public health, safety, or state, local or tribal governments. This requirement applies to rulemakings that rescind or modify existing rules as well as to those that establish new requirements. Whereas regulatory analysis is used to anticipate and evaluate the likely consequences of rules, cost-benefit analysis is a primary tool for such analysis. This tool provides decision-makers with a clear indication of the most efficient alternative—that is, the alternative that generates the largest net benefits to society (ignoring distributional effects). This regulatory analysis: 1. Identifies the target problem, including a statement of the need for the proposed action. 2. Identifies available alternative approaches. 3. Defines the baseline. 4. Defines the scope and parameters of the analysis. 5. Defines and evaluates the costs and benefits of the proposed action and the main alternatives identified by the analysis. 6. Compares the costs and benefits. 7. Interprets the cost and benefit results. In accordance with the above directives, PHMSA has performed a preliminary evaluation of the potential compliance costs of the proposed rule and feasible regulatory options and identified those benefits that can be expressed in monetary terms. 2.2. Identification of the Problem As the nation's repository for pipeline data, PHMSA is responsible for maintaining the most comprehensive collection of accident and incident data for both infrastate and interstate pipelines. PHMSA is subject to constant and continued interest and scrutiny by various stakeholders for the reliability, utility, and applicability of pipeline data. PHMSA is currently confronted with several data-related strategies to address shortcomings and gaps in data collection. These gaps arise from changing industry and business practices. <<>> as well as changes in PHMSA's regulations and changes in PHMSA's own data-analysis strategies and objectives. There are several problem areas: • Currently PHMSA's data cannot fully support regulatory oversight activities. Some factors that contribute to this include: 1. Definitions of certain key terms in current reporting requirements do not reflect the contribution of extraneous factors that could influence the frequency of reported incidents (e.g., inflationary price increases have led to a steep rise in the cost of various pipeline transported commodities, resulting in a higher number of incident reports). 2. Lack of incident information on "near misses," such as explosions and fires that do not cause serious damages or injuries, decreases the value of vulnerability assessments in IM programs. 3. Lack of consistent causal information in the current incident databases due to a non-systematic approach for data collection leads to data gaps. Operators use varying methods to report incidents. For example, reports can be submitted online and by fax, letter, and e-mail. In the absence of a systematic approach to data collection, PHMSA is not able to validate or assess risks posed by specific pipeline operators. • LNG operators are exempt from annual and incident reporting requirements. Quality and availability of data on LNG facilities are inadequate for monitoring the safety performance of this critical portion of the infrastructure. The proposed reporting requirement provides PHMSA with timely information needed for facility risk evaluation and accurate user fee assessments. • Annual reports do not support an efficient assessment of pipeline vulnerabilities. Currently, HL operators do not report state-specific information in their annual reports. The HL operators report mileage operated, pipeline characteristics, and integrity management operation in the aggregate. Nationally aggregated information on HL pipelines does not provide the level of detail or the State- specific information necessary for PHMSA to understand, monitor, and assess safety performance and risks posed by the pipelines. For example, the HL pipeline annual reports show approximately 314 pipeline operators with a total of 165,000 miles of pipelines. Data from the National Pipeline Mapping System (NPMS), which contains mileage by State, do not support these statistics (the latest NPMS submission shows about 310 operators reporting a total of approximately 175,000 pipeline miles). • There is no consistent method of registering pipeline owners and operators. PHMSA needs to be able to maintain control over operator identification numbers and the associated contact information. Currently, PHMSA cannot meaningfully analyze and normalize data received from pipeline operators across different <<>> reporting requirements. Under the Pipeline Safety Improvement Act of 2002, Congress requires operator identification information so that PHMSA can assess operator compliance with the NPMS. With the information currently available, PHMSA cannot fiilly determine which companies constitute the universe of operators and whether or not "umbrella" companies had submitted data for other related companies. • Incident data reported to PHMSA are currentiy provided primarily through paper filings. These paper reports are often incomplete and inconsistent, eind the forms improperly filled out. If an operator enters data inconsistently on paper reports, both the States and PHMSA are prevented from identifying system-wide problems with respect to that operator, impeding optimal pipeline safety oversight. 2.3. Identification of Available Alternative Approaches PHMSA considered four alternatives to the proposed rule for implementing its data collection requirements. After reviewing the four options, PHMSA selected the proposed alternative which provides that the reporting requirements discussed earlier be applied to all operators. 2.3.1. Baseline: No Action Under this option, PHMSA would maintain existing requirements for reporting by taking no action. However, PHMSA believes that this would not effectively support the Agency's safety mission. Given the magnitude of the accident risks and economic losses currentiy prevailing in the industry, as documented later in this report, a do-nothing alternative is not an acceptable option. Taking no action would prolong the adverse conditions currently prevailing in the industry, including: • Inability to mitigate potential safety issues due to inadequate decision-making capability, stemming from lack of needed information about the location of hazardous liquid accidents and LNG facilities. • Inability to address the safety due to the poor quality of data on natural gas pipelines incident reports, and inadequate information on operators contained in the annual reports and OPID. • Inefficiencies in, and high costs of, processing and correcting error-prone paper- based reports; inadequate information sent to the OPID; and failure to meet the DOT strategic goals for E-Govemment. By not taking action the Agency would be unresponsive, there would likely be no reductions in the array of safety risks, and data collection inefficiencies and gaps identified in the NPRM would continue to exist. Although taking no action would eliminate additional compliance costs, there would be no reduction in the societal costs <<>> associated with the deaths, injuries, and property damages. This results in zero net benefits. Thus, this alternative is the baseline for comparison with other alternatives. 2.3.2. Option 2. Require Direct Data Submission to the NPIVIS The NPMS is created by PHMSA in cooperation with other Federal and State governmental agencies and the pipeline industry. The NPMS consists of geospatial attribute data related to natural gas fransmission and HL pipelines and LNG facilities under PHMSA's jurisdiction. The NPMS is built and maintained using information supplied by firms that operate pipeline and LNG facilities. To date, pipeline facility data in the NPMS are submitted by pipeline operators on a voluntary basis. Under Option 2, PHMSA would require all operators to adhere to NPMS data standards for all submissions. Operators would be provided with access to sample maps and submission checklists and information on data standards available for online review and downloading. This option would enable PHMSA to use the NPMS as a tool for decision support, emergency response, inspection planning, community access, and regulatory compliance. PHMSA will also be able to use the risk-based pipeline integrity management data obtained from the NPMS for rulemaking. Through visualization, geospatial analysis, and the integration of various databases, PHMSA will be able to use the NPMS to help ensure the safe, reliable, and environmentally sound operation of the nation's pipeline fransportation system. This option was not selected for several reasons. To submit the proposed information via the NPMS as opposed to other means, PHMSA would have to make modifications to the existing geospatial technological architecture of the NPMS to accept the substantial data elements that would have to be submitted if the NPMS were to generate the proposed State totals. These modifications would be costly, and the costs are not currently budgeted or planned for. To retrofit the NPMS into a format that could meet the requirement, PHMSA would have to put in several years of planning and extensive work. Additionally, we do not know the percentage of the hazardous liquid industry that currently have geospatial data in a format that would enable such a submission. Many small companies are not American Petroleum Institute (API) or Association of Oil Pipe Lines (AOPL) members, and PHMSA would need to better understand the universe of capabilities for such a consideration. <<>> 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 disproportionate burden on small firms and enfrepreneurs. Consequently, to promote entrepreneurship. Government agencies have sometimes granted small businesses special regulatory treatment, such as exemptions from legislation or extended deadlines for compliance. PHMSA judged that these considerations were not sufficient to recommend reporting requirements based on business size. This option was not chosen because PHMSA concluded that allowing disparate reporting would not meet its informational needs. The Agency believes reporting must provide relevant information that is useful for the decision-making needs of groups for whom the information is provided. PHMSA determined, therefore, that allowing for firm size would dampen the regulation's effectiveness and that special regulatory freatment would not, in fact, help small businesses. PHMSA believes that although there may be a learning curve for small entities, with practice and guidance—which PHMSA is willing to provide—small operators will leam how to comply with the proposed reporting requirements. 2.3.4. Option 4. Adopt Proposed NPRM Changes in Reporting Requirements PHMSA has chosen Option 4, the proposed rule changes in this NPRM, as the most reasonable of the four options, based on the OMB criteria for regulatory evaluation. This option responds to various Government Accountability Office (GAO), DOT Inspector General (DOT IG), and National Transportation Safety Board recommendations. This option is PHMSA's preferred option and requires the following proposed changes: 1. Modify the scope of part 191 addressed in 49 CFR Section 191.1 to reflect the changes made in the scope of part 192 to the definition of gas gathering lines. 2. Change the definition of an "incident" in 49 CFR Section 191.3 to require an operator to report a fire not intentionally set by the operator, or an explosion, and establish a volumetric basis for reporting imexpected or unintentional gas loss. This requirement will more accurately depict the safety performance of gas pipelines over time. 3. Require operators of hazardous liquid pipelines to submit pipeline information by state on the aimual report for hazardous liquid pipelines. This data will allow PHMSA to improve its allocation of inspection and other resources due to an improved understanding of the infrastructure it regulates. 4. Require operators of Liquefied Natural Gas (LNG) facilities to submit incident and annual reports. This data will provide valuable infrastructure <<>> information to PHMSA, and allow for a more thorough evaluation of the safety performance of LNG facilities. 5. Create and require participation in a National Pipeline Operator Registry. This data will provide PHMSA with timely updates on significant and potential safety-impacting changes occurring under its purview, and help PHMSA to better monitor and assess operator performance. 6. Require operators to report and file data electronically whenever possible. The electronically submission of data will increase the accuracy and quality of data collected which, in turn, will improve PHMSA's data integration efforts. Electronic submission will also reduce the reporting burden on operators. 7. Merge the natural gas transmission integrity management Semi-Annual Performance Measures Report with the annual reports. This change will significantly reduce the reporting burden on operators by changing the current semi-annual requirement to an annual requirement. 8. Require operators to use a standard form in submitting Safety-Related Condition Reports. This will ensure consistency of data submitted across the pipeline industry. 9. Modify hazardous liquid operator telephonic notification of accidents to require operators to have a procedure to calculate and provide a reasonable initial estimate of released product and maintain a record of the procedure used for reporting and to provide an additional telephonic report to the National Response Center if significant new information becomes available during the emergency response phase. HL pipeline operators, NG transmission and distribution pipeline operators, and LNG facilities are impacted by this proposed rule. PHMSA has determined that an Industrial Engineer would be able to address the requirements under this proposed rule. Table 1 below summarizes the baseline data elements used in this analysis. 2.3.5. Linking Proposed Actions to Improved Pipeline Data Quality and Risk Targeting Given the anticipated outcomes outlined in this section, the proposed data reporting requirements are justified. The proposed requirements presume an implicit linkage between the elements of the proposed changes in data reporting requirements and the following expected improvements. 2.3.5.1 Improved Efficiency of incident Anaiysis, More Effective Risl( Assessment and Targeting PHMSA and industry representatives believe that better risk management can both improve safety outcomes and effectively allocate Agency resources cost effectively. Improved reporting will expand the Agency's ability to analyze pipeline incidents, events and the causes of potential pipeline incidents, as well as to examine both the likelihood <<>> and severity of potential pipeline incidents. To strengthen the linkage between risk reduction and improved reporting requirements, PHMSA proposes to: • Amend Section 191.3 definition of "incident" for natural gas pipeline operator reports will improve the efficiency of data collection. New risk-based information will enable PHMSA to focus more attention on high- to moderate- impact incidents, as the number of reported minor and low-impact incidents will be reduced. • • Revise §195.49 (subpart B - Annual Reports) to require operators of hazardous liquid pipelines to submit certain infrastructure and IM data by State. By identifying the location of high-risk accidents, State inspectors can utilize safety assessment tools and PHMSA can target mitigation measures. Amend Sections 191 and 195 to require LNG operators to submit incident reports, and HL pipeline operators to submit risk-based and location-specific annual reports. This will improve PHMSA's capability to conduct risk-based assessment of pipeline vulnerabilities and improve performance monitoring. Require the semi-annual natural gas IM reports' incorporation into the annual report. This will reduce compliance costs for interstate pipeline operators while improving PHMSA ability to conduct risk-based vulnerability assessments. 2.3.5.2 improved Data Quality Leads to Accurate Data Reporting and Improved Productivity of PHMSA and Pipeline Operators The linkage between gains in accuracy, worker productivity, and improved reporting requirements can be made in the following ways: • Revising reporting requirements for HL, LNG, and NG transmission operators that will improve data accuracy and consistency across reporting units and make it possible to link the reports with the NPMS to enhance its function. • Creating an OPID Registry that will improve the quality and accuracy of the data, facilitate development of a more comprehensive inventory of operators, and reduce data submission errors and inconsistencies. • Requiring operators to provide advance notice of new pipeline construction that will similarly improve data quality and forecasting capability. • Requiring elecfronic submissions that will be more efficient, more accurate, and cheaper. <<>> 2.4. Baseline Data 2.4.1. Pipeline Information The energy fransportation network of the United States consists of over 2 million miles of pipelines. The network includes approximately: • 170,000 miles of onshore and offshore HL pipeline; • 295,220 miles of onshore and offshore NG Transmission pipelines; • 1,900,000 miles of NG Distribution pipelines; • LNG Plants connected to our natural gas transmission and distribution systems; and • Propane Distribution System pipelines. The pipeline industry is extremely diverse. Pipeline systems vary in size and complexity. These pipelines are operated by approximately 2,600 operators, large and small. PHMSA believes an industrial engineer would best respond to the requirements of the proposed rule. Baseline Paratnetecs No. of operators' Pipeline mileage'^ Average hourly wage rate for an engineer, based on BLS data Average hourly wage rate for an engineer based on industry estimates Table 1. Pipeline Information HL Pipelines 314 170,000 $40.39 $60.00 NatujRalGas Transttiission 950 295,220 $37.21 $60.00 Natttral^iias ? I»strlbtfc-c-. :... , 1,262 1,900,000 $37.21 $60.00 fl:: 77 NA $37.21 $60.00 2.4.1.1. HL Pipelines Gathering pipeline systems gather crude oil from production wells. Crude oil pipeline systems transport crude oil from the gathering systems to refineries. Crude oil systems can be tens to hundreds of miles in length and cross state and continental borders. Pipeline systems transport refined products such as gasoline, kerosene, and many industrial feedstock petrochemicals from refineries to the end user or to storage and distribution terminals. Refined products pipelines can extend tens to thousands of miles and cross state and continental borders. The pipe used in oil pipeline systems can range in http://ops.dot.gov/stats/DT98.htm. http://primis.phmsa.dot.gov/comm/PipeUneBasics.htm. ' BLS. May 2006 National Industry-Specific Occupational Employment and Wage Estimates. See http://www.bls.gov/oes/current/naics3_486000.htm. * Average hourly wage rate is based on conversations with a few pipeline industry representatives. 10 <<>> size from 2 inches to 42 inches in diameter. Oil pipeline systems are owned and operated by many different companies. The location, construction, and operation of these systems are generally regulated by federal and state regulations. 2.4.1.2. Natural Gas Pipelines Natural gas transmission pipeline systems transport natural gas thousands of miles across many parts of the continental United States. Natural gas distribution pipeline systems can be found in thousands of communities from coast to coast and distribute natural gas to homes and businesses. The pipe used in natural gas pipeline systems can range in size from 2 inches to 42 inches in diameter. Natural gas gathering and fransmission pipeline systems are constructed from steel pipe. However, natural gas distribution systems can be constructed from steel or plastic pipe. The use of modem plastic pipe for distribution systems is becoming more and more prevalent today. Natural gas pipeline systems are owned and operated by many different companies. The location, construction, and operation of these systems are generally regulated by federal and state regulations. 2.4.1.3. LNG Facilities LNG is the liquid form of natural gas - natural gas which has been cooled to the point that it condenses to a liquid. Although LNG has been fransported safely in the U.S., security has been a concern of both Federal agencies and the industry. PHMSA prescribes safety standards concerning the location, design, installation, construction, initial inspection, and testing of new onshore and offshore LNG facilities. In cooperation with the Interstate Natural Gas Association of America, OPS formed a task force to develop and oversee industry-wide security standards "for critical onshore and offshore pipelines and related facilities, as well as LNG facilities."' Technological improvements made since the 1940s have made LNG facilities much safer. Serious risks remain, however, because LNG is inherentiy volatile and is usually stored in large quantities.^ With the endorsement of the OPS, in September 2002, the association's task force issued security guidelines for natural gas infrastructure, including LNG facilities.^ Since September 11, 2001, the U.S. LNG industry and Federal agencies have put new measures in place to both protect the LNG infrastructure and respond to potential terrorist attacks. In 2004, the Federal Energy Regulatory Commission formed a new LNG Engineering Branch within its Office of Energy Projects that is devoted to the safety and security of LNG facilities. More recently, in May 2006, the Commission created a new LNG Compliance Branch within its Office of Energy Projects to fiirther ensure the use of ^ Haener, William J., CMS Energy Corp. Testimony on behalf of the Interstate Natural Gas Association of America (INGAA) before the House Transportation and Infrastructixre Subcommittee on Highways and Transit. February 13, 2002: p. 4. * Congressional Research Service (CRS) "Liquefied Natural Gas (LNG) Infrastructure Security: Background and Issues for Congress," September 2003: p. 9. ' Interstate Natural Gas Association of America (INGAA), "Security Guidelines Natural Gas Industry Transmission and Distribution," Washington, DC, September 6, 2002. * CRS "Liquefied Natural Gas (LNG) Infrastructure Security: Background and Issues for Congress," September 2003: Executive Summary. Also see http://www.energv.ca.gov/lng/safetv.html. Liquefied Natural Gas Safety. 11 <<>> sound .:>w«iiJ engineering practices and appropriate safety and security measures during the construction and operation of LNG facilities.^ 2.4.2. Baseline Risk Trends Over the years, OPS has partnered with industry to investigate the potential application of risk management within the pipeline industry. Together they have concluded that risk analysis and management requires suitable and sufficient data. However, the monitoring of performance over time suggests that certain initial assumptions and data elements are inadequate and need to be updated. The information for LNG plants is mainly derived from outside sources. Table 2 below contains a listing of LNG indents. Table 2. The History of LNG Incidents in the U.S 10 'l°# ^te ^ • % - ; ^ ^ , : : " * ' • • % •c^t • m . : 1944 East Ohio Gas Cleveland, LNG Tank OH 128 deaths LNG peak shaving facility. Tank failure and no earthen berm. Vapor cloud formed and filled the surrounding streets and storm sewer system. Natural gas in the vaporizing LNG pool ignited. 1969 LNG tank Portland, OR An explosion occurred in an LNG tank under construction. No LNG had ever been introduced into the tank. The cause of the accident was attributed to the accidental removal of blinds from natural gas pipelines which were connected to the tank. This led to the flow of natural gas into the tank while it was being constmcted. 1973 Texas Eastem Transmission LNG Staten Island, NY 40 deaths Industrial incident unrelated to the presence of LNG (incident). During repairs, vapors associated with the cleaning process apparently ignited the mylar liner. Fire caused temperature in the tank to rise, generating enough pressure to dislodge a 6-inch thick concrete roof, which then fell on the workers in the tank. 1974 Massachusetts Loading None Valve leakage. Deck fractures. For additional information on LNG plants see Liquefied Natural Gas: An Overview of the LNG Industry for Fire marshals and Emergency Responders. http://primis.phmsa.dot.gov/comm/publications/LNG_for_Fire_Marshals_06-2005 .pdf?nocache= 1982 '* ^ University of Texas, Center for Energy and Economics "LNG Safety and Security," October 2003. Table 4, p. 77. See http://www.beg.utexas.edu/energvecon/lng/documents/CEE LNG Safetv and Securitv.pdf. 12 <<>> . • : j \ - . - - :iac|i% # . • • 1979 Columbia Gas LNG Terminal Cove Point, MD, 1 death, 1 serious injury August 1987 Nevada Test Site Mercury, NV March 2005 WG utility District Heights, MD An explosion occurred within an electrical substation. LNG leaked through LNG pump's electrical penetration seal, vaporized, passed through 200 feet of underground electrical conduit, and entered the substation. Since natural gas was never expected in this building, there were no gas detectors installed in the building. The normal arcing contacts of a circuit breaker ignited the natural gas-air mixture, resulting in an explosion causing about $3 million in damages. An accidental ignition of an LNG vapor cloud occurred at the U.S. Department of Energy Test Site during large-scale tests involving LNG spills. The cloud was accidentally ignited and damaged and propelled polyurethane pipe insulation outside the fence. A Washington Gas company-sponsored study released in July 2005 pointed to subtle molecular differences in the imported LNG the utility began using in August 2003 as the cause of a house explosion. Worldwide, there have been approximately 10 serious accidents directiy attributed to LNG facilities." PHMSA's LNG responsibilities under 49 CFR 193 relate primarily to safety issues. The Pipeline Branch of the TSA is responsible for pipeline security, for both land-based and marine LNG facilities. The overlapping jurisdictions of TSA and OPS for monitoring LNG safety and security have led to memoranda of agreement between the two agencies to guide the security plans required by the facilities. The U.S. Coast Guard (USCG) Program Office has estimated that - **truncated:** true - **body characters:** 157254