Reporting of Over Pressurization Events Restoring Trust in Pipeline Safety Nov 2nd & 3rd, 2006 New Orleans, LA Accufacts Inc.

Over Pressurization Today’s Focus on Transmission Pipelines Allowed “Accumulation” over MOP/MAOP MOP = Maximum Operating Pressure (liquid) MAOP = Max Allowable Operating Pressure (gas) For Sound Pipeline/Welds Not a Problem High SMYS Tolerance Large Safety Factor on Properly Tested/Inspected Systems Exceeding Regulatory/Code Pressure Accumulation Limit Suggests Serious Loss of Operator Control of Pipeline Calls into Question Management Processes Accufacts Inc.

Over Pressurization The Belief - Canvass the Operators The Reality No one “Exceeds” Accumulation Limit A Serious Regulatory/Code Violation The Reality Many Forces Increase Risk of Over Pressure Seeing too Often No Real Defense for this Violation Loopholes in Regulatory Reporting Biases the Database Misstates Pipeline Failure Mode Distribution Taints IM & Risk Approaches Accufacts Inc.

Over Pressurization Current Regulations Drivers of Overpressure Events Allow Avoiding Reporting to PHMSA Past Argument Burden of Reporting No Failure What’s the Concern? “Loose” Requirement for Certain Pressure Records How Can One Have an Effective IM Program? Drivers of Overpressure Events Very Poor Management Practices Serious System Breakdowns - No Accident Cost Reduction and Efficiency Forces Over Reliance on Electronics as Fail Safes Changing Role of Transmission Pipelines Accufacts Inc.

Over Pressurization Regulatory Recommendations Outcomes Eliminate Reporting Waivers in Pipeline Regulations 191.23(b)(4) - gas, 195.55(b)(3) - liquid Mandate Simple Electronic Reporting within 24 hours (all events in Excess of Permitted Accumulation Pressure) Strengthen System Pressure History Recordkeeping Outcomes Public Confidence and Creditability in Database Strengthens Certain Risk Approaches for Pipelines Protects the Pipeline Operator and the Public All Parties Have Same Objective - Keep the Pressure Within the Pipe Accufacts Inc.