1. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Pipeline and Hazardous Material Safety Administration (PHMSA) Office of Pipeline Safety Dave Mulligan Community Assistance & Technical Services (CATS) Western Region

2. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Western Region Facts Western Region encompasses 12 states 26 Inspectors and 3 Contractors Regional office Based in Lakewood, CO Major Satellite offices in Anchorage, AK and Ontario, CA One man field offices in Billings, MT, Cheyenne, WY, and Reno, NV

3. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration CATS Western Region Focus Public Complaints/Whistleblowers Technical Support Re: Pipeline Safety Regulations Emergency Response – Information dissemination including incident causes and PHMSA safety actions Permits – Foster relationships with other Federal/State/Local agencies and pipeline operators Pipeline Safety Education - public and gov’t officials Operators’ Public Awareness Program Effectiveness Evaluations (PAPEE)

4. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Western Region (WR) CATS Example 1 Products pipeline – Willard Bay, UT (March 2013) –Low frequency seam failure –Focus on communication (federal, state, local public officials) to cause and mandated remedial actions –Ongoing communication through startup and ongoing repairs and tests.

5. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration WR CATS Example 2 Products pipeline – Lodge Grass, MT (July 2013) –Failure due to land movement –Facilitated Interaction between Crow Nation leaders and pipeline operator due to cause and follow PHMSA actions –Communication with public officials due to remoteness

6. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration WR Safety Challenges Low stress and rural gathering lines applicability – Finding those operators who do not think they are regulated by PHMSA AC Interference/Lightning Landslide Areas Seasonal flash flooding events Encroachment of urban areas and parallel utility/pipeline construction Aging Infrastructure Being Overly Amortized - Bandaids Impact of Shale Oil/Gas: New, Reversed, Converted Pipelines Challenges to Recruit, Train and Retain Qualified Workforce The World is Watching – Bloggers and the Internet

7. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Integrity Management (IM) IM Program Working: –ILI tools advancement in technology (MFL, geometry, crack, seam, stress/strain) continue to identify integrity threats before they can fail –Systems being reassessed and compared to previous ILI results thereby finding changes in pipe condition –Fewer incidents caused by: Corrosion Outside Force Damage (dents/gouges)

8. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Who Regulates Pipelines Who Regulates Pipelines Individual state U.S. DOT, PHMSA In California: Hazardous Liquid Pipelines  CSFM Regulates Intrastate pipelines  PHMSA Regulates Interstate pipelines Natural Gas Pipelines:  CA PUC Regulates Public Utilities systems within CA  PHMSA Regulates all other systems (municipal distribution, master meter, non-public utility transmission)

9. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Jurisdictional Vs. Regulated? Jurisdictional: Transportation of hazardous liquid by pipeline under Part 195 Regulated: Pipeline facilities and the transportation of gas that are not exempted under Part 195.1(b) –In plant –Gravity –Other modes of transportation - 9 -

10. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration What We Regulate Pipeline Miles by System Types – as-of 3/14/2013 System TypeMiles%Total# Operators Hazardous Liquid 182,5637%379 Gas Transmission 304,87312%923 Gas Gathering 19,8721%320 Gas Distribution (Mains & Services ) 2,114,65980%1308 Total 2,621,966 Some Operators have multiple System Types Liquefied Natural Gas 97 Plants 138 Tanks57 Operators

11. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Regulatory Update Regulatory Update This PHMSA website link http://www.phmsa.dot.gov/pipeline/regs/rulemaking has the status of federal rulemaking http://www.phmsa.dot.gov/pipeline/regs/rulemaking Not much new in 2013-2014

12. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Rulemakings in Process Safety of On-Shore Hazardous Liquid Pipelines (NPRM stage) Excavation Damage Prevention (Final Rule stage) Miscellaneous Rulemaking (Final Rule stage) EFV Expansion beyond Single Family Residences (NPRM stage) Safety of Gas Transmission and Gathering Lines (NPRM stage) Operator Qualification, Cost Recovery and Other Pipeline Safety Proposed Changes (NPRM stage) Plastic Pipe (NPRM stage) Standards Update (Final Rule stage) Rupture Detection and Valve Rule (NPRM stage) - 12 -

13. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration - 13 - Current Rulemakings in Process Safety of On-Shore Hazardous Liquid Pipelines (NPRM stage)  NPRM moved past PHMSA  ANPRM published 10/18/2010  Major topics under consideration: Assessments beyond High Consequence Areas (HCAs) Leak detection beyond HCAs Repair criteria in HCA and non-HCA areas Stress Corrosion Cracking (SCC) Piggability of lines Reporting requirements for Gathering lines Gravity Line exception

14. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration The Pipeline Inspector Regular People, believe it or not? (like Operations people) Hired to protect the public and environment from pipeline inherent risks (Enforce Pipeline Safety Regulations) 80+ days away from home Plenty of windshield time Typically no Hilton where Interstate Pipelines are Not out to “get-em” philosophy We do not get graded on finding something wrong Another information resource for operators - 14 -

15. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Inspector’s Role #1 tool to enforce regulations is phone call and showing up Ask plenty of questions – and listen Be considerate and cooperate with the operator –Meeting time/place –Understand operators file keeping process Different set of outside eyes on safety Should learn something new each inspection Inform operator of deficiencies/concerns upon leaving Why I do it: –Great people and industry –Would rather be on the ROW than in office - 15 -

16. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration It’s Inspection Time Don’t panic Should be prepared every day –Records in order –Business as usual Typically scheduled Your time to show off your pipeline safety program Ask questions and be cooperative Don’t be afraid to voice your opinion Seems tougher on the inspector than operator - 16 -

17. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration New PHMSA Inspection Tool IA – Inspection Assistant A tool for Inspector’s to capture results from questions A software application installed on a laptop (client/server solution) Replaces standard MSWord inspection forms and questions Electronically records inspection results in database for historical trending Provides considerations/guidance to Inspector to determine compliance to regulations –Considerations are for inspector guidance only. They are memory joggers. They are not meant to replace the code - 17 -

18. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration

19. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Western Region CATS Contact Information Tom Finch: thomas.finch@dot.gov Phone: (720) 963-3175 Dave Mulligan: david.mulligan@dot.gov Phone: (720) 963-3193

20. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Pipeline and Hazardous Materials Safety Administration Hazardous Liquid IM Program Huy Nguyen 12300 West Dakota Avenue, Suite 110 Lakewood, CO 80228 huy.v.nguyen@dot.gov

21. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration General Topics Overview Observations Western Region Focus Areas

22. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Objectives for the HL IM Program Accelerate and improve the quality of integrity assessments conducted on pipelines in areas with the highest potential for adverse consequences, Promote a more rigorous, integrated, and systemic management of pipeline integrity and risk by operators, Strengthen government’s role in the oversight of pipeline operator integrity plans and programs, and Increase the public’s confidence in the safe operation of the nation’s pipeline network.

23. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview of HL IM Program Hazardous Liquid Pipelines - ~186,000 (1) miles. Over 79,000 (1) miles or 43% of all hazardous liquid pipelines designated as potentially affecting a high consequence area. 8100 (1) immediate repair conditions have been remediated 32,000 (1) 60 and 180-day conditions have been remediated (1) – 2012

24. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Elements for the HL IM Program Segment Identification Risk Analysis Baseline Assessment Plan Assessment Results Review Remediation Preventive and Mitigative Measures Continual Assessment Performance Evaluation

25. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Segment Identification: –Direct Intersect Method –Release Locations and Spill Volumes –Overland Spread of Liquid Pool –Water Transport Analysis –Air Dispersion Analysis –Identification of Segments that Could Indirectly Affect an HCA

26. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Risk Analysis: – Comprehensiveness of Approach – Integration of Risk Information – Process for Input of Data and Information – Risk Analysis of Segments that Could Affect HCAs – Results – Facilities

27. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Baseline Assessment Plan: –Assessment Methods –Prioritized Assessment Schedule Category 3 – Date of pipeline begins operation Low-stress pipeline: –Category 1 – July 3, 2015 –Category 2 – October 1, 2016

28. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Assessment Results Review: –Qualifications of Individuals that Review and Evaluate Assessment Results –ILI Vendor Specifications –Validation of Assessment Results –Integration of Other Information with Assessment Results –Identifying and Categorizing Defects –Hydrostatic Pressure Testing –Results from the Application of Other Assessment Technologies

29. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Remediation: –Discovery of Condition –Schedule of evaluation and remediation –Special requirements for scheduling remediation Immediate Repair Conditions 60-day Conditions 180-day Conditions –Pressure Reduction: Temporary Pressure Reduction Long-term Pressure Reduction

30. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Preventive and Mitigative Measures: –Risk Analysis Criteria –Leak Detection Capability Evaluation –Emergency Flow Restricting Devices (EFRD) Evaluation

31. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Continual Evaluation: –Periodic Evaluation –Reassessment Interval –Assessment Methods –Assessment Interval Variance –External Corrosion Direct Assessment (ECDA)

32. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Overview Performance Evaluation: –Process for Measuring IM Program Effectiveness –Records Demonstrate IM Program Effectiveness –Process for Defining Performance Metrics –Records Demonstrate Effective Use of Performance Metrics –Communication of Evaluation Results –Root Cause Analysis Process –Revision and Document Control

33. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Observations Operators generally understand the Rule and are implementing the assessment provisions of the Rule. Operator interactions have been generally cooperative with open communication. Operators of small systems may be more likely to contract out significant portions of IM program development. Operators now have an improved understanding of the condition of pipelines in the safety-sensitive areas.

34. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Observations Operators are generally making progress toward developing the mature, proactive IM Program. Progress is needed in development and implementation of several IMP elements  Preventive & Mitigative Measures  Continual Evaluation  Performance Evaluation  Remediation

35. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Western Region Focus Areas Assessment Results Results of ILI Tool Data Evaluation Repair Records Preventive and Mitigative Measures Performance Metrics (1) Verification of Records (2) Other IMP Activities (1)– ADB 2012-10 & Office of the Inspector General (OIG) (2) - ADB 2012-06

36. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration - 36 - Questions ?