PHMSA Environmental Assessment/FONSI

Page 1PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION SPECIAL PERMIT ENVIRONMENTAL ASSESSMENT and FINDING OF NO SIGNIFICANT IMPACT Special Permit Requester: TransCanada Pipelines Limited PHMSA Docket No.: PHMSA-2009-0056 Location of Subject Facilities: Tate County, Mississippi Document Date: June 2, 2010 Contacts: Tewabe Asebe, 202-366-5523, tewabe.asebe@dot.gov I. Background The National Environmental Policy Act (NEPA), 42 USC §§ 4321 – 4375, Council on Environmental Quality regulations, 40 CFR §§ 1500-1508, and DOT Order 5610.1C, require that Pipeline and Hazardous Materials Safety Administration (“PHMSA”) analyze a proposed action to determine whether the action will have a significant impact on the human environment. PHMSA analyzes special permit requests for potential risks to public safety and the environment that could result from our decision to grant or deny the request. As part of this analysis, PHMSA evaluates whether a special permit would impact the likelihood of a pipeline failure, as compared to the environmental status quo in the absence of the special permit. We are denying TransCanada’s special permit request because based on our analysis it would not be consistent with pipeline safety. We developed this assessment to determine the effects of our action on the environment. II. Purpose and Need On February 6, 2009, PHMSA received a special permit petition from TransCanada Pipelines Limited, operator of American Natural Resources Pipeline (TCPL-ANR), for relief from the requirements of 49 C.F.R. § 192.611(a), concerning maximum allowable operating pressure (MAOP) limitations for certain pipeline segments located in Tate County Mississippi. 1 The class locations along these pipeline segments have changed from an original Class 1 location to a Class 3 location because of an increase in the population within the original class location of the pipeline. Section 192.611(a) would require TCPL-ANR to take one or more actions, including a reduction in operating pressure, the performance of pressure tests to re-qualify MAOP, or the installation of new pipe, to continue operating the affected segments after a class location 1 A description of the pipeline segments can be found in the docket for this Special Permit request (PHMSA-2009- 0056) at www.regulations.gov. - See PHMSA Special Permit Analysis and Findings, page 2.#

Page 2change. TCPL-ANR would like to continue operating the affected segments at their current MAOPs, despite the fact that those segments have experienced changes in Class Location. PHMSA weighed the alternatives of granting the permit with conditions or denying the permit. PHMSA is denying TransCanada’s special permit request. PHMSA concluded that even with conditions, the issuance of a special permit would be inconsistent with pipeline safety. III. Affected Environment TCPL-ANR’s special permit request concerns a segment of 30-inch Line 1-501 downstream of Valve 27 in Tate County, Mississippi.2 The class locations along this pipeline have changed from an original Class 1 location to a Class 3 location, due to an increase in the population near the pipeline segments. The population figures in the vicinity of the affected segments and other information about the affected environment are incorporated into this document and can be found in the docket PHMSA-2009-0056, at www.Regulations.gov. 3 IV. Alternatives Considered and Environmental Impacts of Each Alternative Alternative 1: Grant Special Permit Request with Conditions Under this alternative, PHMSA would grant the special permit with certain conditions designed to reduce the risks associated with permitting TCPL-ANR to continue to operate its pipeline segments at the existing MAOP in Class 3 locations. TCPL-ANR would be required to take action to reduce risks associated with pipe coating, cathodic protection, damage prevention, and weld seam and girth weld integrity. As PHMSA has done in past class location special permits, we would condition a special permit on TCPL-ANR performing close interval surveys to determine the effectiveness of its cathodic protection systems; performing a pipeline coating survey and repairing damage; performing stress corrosion cracking surveys; improving damage prevention programs; performing engineering analysis of longitudinal pipe seams and remediating any threats; performing pipeline inspections with instrumented in-line inspection (ILI) tools and repairing any anomalies, etc. Some of the conditions that would be imposed, if the permit was granted, would have a positive impact on the environment because they would provide enhanced safety protections for a number of pipeline threats. However, on balance, selection of this alternative could have a negative impact on the environment. This choice would not reduce pipeline safety threats associated with a pipe toughness4 properties and girth welds on the pipe segment. 2 A Map and description of the environment surrounding the pipeline segments can also be found in the docket. See page 9 of each of TransCanada’s responses to PHMSA’s environmental questionnaire. 3 See TransCanada’s responses to PHMSA’s environmental questionnaire, page 3. 4 A description of the issues associated with low toughness pipe and girth welds can be found in the docket. See PHMSA Special Permit Analysis and Findings, PHMSA-2009-0056, page 5. 2#

Page 3Low toughness pipe increases the consequences of a failure of the TCPL-ANR segment that would be subject to a special permit. The threats posed by low toughness steel characteristics are not acceptable in a populated Class 3 location. Higher toughness properties are needed for a ductile fracture arrest and to reduce fracture propagation if the pipe should have a failure, so that a smaller area would be affected. There is no existing technology to remediate these in service gas pipelines that would mitigate the safety risks in a Class 3 Location consistent with replacing the pipe with modern steel pipe, external coatings, field welding, girth weld non-destructive testing, and in-place hydrostatic testing methods. Gas pipeline failures are a threat to the public and the environment because they may result in fires or explosions, which can harm the public and the environment. Alternative 2: Deny Special Permit Request Under this alternative, we would deny TCPL-ANR’s special permit request. TCPL-ANR would not be granted a waiver of compliance with the requirements of § 192.611(a), and would be required to continue to comply with existing regulations. Current regulations have achieved excellent safety performance through use of increased safety factors, to compensate for unknowns or technological limitations associated with historical operation and maintenance practices, as the population near a natural gas transmission pipeline increases (resulting in Class Location changes). Because certain of TCPL-ANR’s pipeline segments are now in Class 3 locations due to an increase in population in the nearby area, the company would have to reduce the operating pressure of the Class 3 pipeline segments, perform pressure tests to re-qualify the pipe, or install new pipe. TCPL-ANR has indicated that if its special permit request is denied it would replace 0.17 miles of pipe in order to address the Class Location change. Denial of the special permit request (if TCPL-ANR, in fact, chooses not to reduce pressure or re- qualify pipe MAOP) could lead to the disturbance of soil, vehicle and equipment travel on the rights-of-way, and other negative environmental impacts associated with pipe replacement. However, such negative environmental impacts would be limited to the existing rights-of-way and would be the same impacts that would have likely occurred had TCPL-ANR never applied for a special permit and had simply complied with the regulations. PHMSA’s denial would have a positive impact on the environment because it would likely lead to TCPL-ANR replacing pipe with known low toughness with new pipe, and a reduction in the risk and consequences of a pipeline failure in populated Class 3 areas. Gas pipeline failures can lead to fires and explosions and cause harm to the public and the environment. On balance, PHMSA’s denial of the permit would have a net positive impact because it is likely to lead to TCPL-ANR replacing the pipe with low toughness and other possible safety threats. V. Finding of No Significant Impact (FONSI) PHMSA has carefully analyzed the safety and environmental risks associated with denial of this special permit. By denying this special permit TCPL-ANR will be required to reduce the 3#

Page 4operating pressure or replace pipe that presents certain safety threats. The net safety and environmental impact of this denial will be positive. Therefore, we believe there are no significant environmental impacts associated with the denial of TCPL-ANR’s request. VI. List of Preparers and Reviewers Steve Nanney, PHMSA Jim Curry, PHMSA Tewabe Asebe, PHMSA VII. Agencies and Persons Consulted No other agencies were consulted, but PHMSA considered environmental information and documents submitted by TCPL-ANR. 4#