An Outsider’s Perspective PHMSA’s Proposals: An Outsider’s Perspective Pipeliners Association of Houston November 4, 2013 john A. Jacobi, P.E., J.D.

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General Outline New Secretary of Transportation Sequestration Gas Transmission NPRM New Central Region Director Public Awareness Results New Penalties Final Rule IVP (next page)

Integrity Verification Outline IVP Meeting Info Advisory Bulletins NTSB Recommendations Longhorn FONSI Recommended Presentations Draft IVP Chart Personal Observations Questions

New Secretary of Transportation Charlotte Mayor Anthony Foxx was sworn in as the nation’s 17th Secretary of Transportation Tuesday, July 2, 2013.

Discretionary activities and travel was limited. Sequestration PHMSA’s “essential functions” (e.g., operator inspections, accident investigations) continued. Discretionary activities and travel was limited. Inspection of state pipeline safety programs is apparently not an “essential function.”

(*Congressional Mandate **NTSB Recommendation) Gas Transmission NPRM ANPRM Published 8/25/2011 Major Topics under consideration: • Expand assessments beyond HCAs • Repair criteria * • Assessment methods * ** • Corrosion control • Expand gas gathering reporting requirements • Management of change • Seismicity requirements * • MAOP exceedance reporting * (*Congressional Mandate **NTSB Recommendation)

More Classes or No Classes!! Affects Integrity Management Class Location ANPRM Docket ID PHMSA–2013–0161 (8/1/13) Comment Period ends 11/1/13 More Classes or No Classes!! Affects Integrity Management

New RD - Central Region Dave Barrett stepped down and, effective June 21, 2013, Linda Daugherty assumed those responsibilities.

Public Awareness Results PHMSA held a Workshop June 19 -20, 2013 in Richardson TX http://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=90&nocache=6406 I have a whole separate presentation on PAP. Very few operators escaped unscathed.

Integrity Verification Process On August 7, 2013, PHMSA sponsored a public meeting in Arlington, Virginia to discuss a proposed “Integrity Verification Process” (IVP) to help address several mandates set forth in Section 23, Maximum Allowable Operating Pressure, of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 as well as several NTSB Recommendations.

Meeting Web Site & Docket # http://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=91&nocache=9447 Docket Number: PHMSA-2013-0119 Access at www.regulations.gov

Advisory Bulletins Two Advisory Bulletins regarding MAOP/MOP verification: ADB 11-01, 1/10/11 ADB 2102-06, 5/7/12 One Advisory Bulletin relating to Integrity Management ADB 2012-10, 12/5/12

Advisory Bulletins The first two are focused on the data required to document MAOP/MOP – traceable, verifiable and complete. Nothing new – same rules as always – but not everyone has been paying attention. The third is even more telling.

location-specific data.” ADB 2012-10 “[PHMSA] inspectors will check to confirm that information and data gaps are aggressively being addressed and that assumptions are appropriately based on location-specific data.”

ADB 2012-10 “Operators should also be diligently working to eliminate information and data gaps throughout their entire integrity management program.” Translation: Operators need data on every joint of pipe and every valve, flange, fitting or other appurtenance to the pipeline that could affect integrity or affect MAOP.

NTSB Recommendations San Bruno, California – 9/9/10 – 39 recommendations PHMSA (16) PG&E (12) CPUC (5) U.S. Secretary of Transportation (4) INGAA and AGA (1) Governor of California (1)

NTSB Recommendations NTSB P-11-14 “. . . delete the grandfather clause and require that all gas transmission pipelines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a spike test.”

NTSB Recommendations NTSB P-11-15 (Seam Stability)- “. . . manufacturing- and construction-related defects can only be considered stable if a gas pipeline has been subjected to a postconstruction hydrostatic pressure test of at least 1.25 times the maximum allowable operating pressure.”

NTSB Recommendations NTSB P-11-17 (Piggability) – “Require . . . all natural gas transmission pipelines be configured so as to accommodate in-line inspection tools, with priority given to older pipelines.” 119,026 Total Miles Not Piggable ILI tools not commercially available for most very small lines (~ 22,018 miles of GT ≤ 4” Diameter) Motivate operators to upgrade lines to the maximum extent practicable

The Longhorn EA PHMSA announced the availability of the Final Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) for the Longhorn Pipeline Reversal Project (Project) January 2, 2013 (78 FR 146). The FONSI is available online at www.regulations.gov in docket number PHMSA–2012–0175.

The Longhorn EA The Material Documentation Plan (Section 9.3.3.3.1, page 9-40 to 9-44) is particularly significant in that it sets forth the procedures and assessments required by PHMSA where historic documentation is incomplete (i.e., historic information is insufficient to adequately demonstrate Maximum Operating Pressure 49 CFR §195.406)

The Longhorn EA The Longhorn EA is much more than just an Advisory Bulletin. While Longhorn is a Part 195 system, the underlying rationale can be applied to Part 192 systems. The rationale is not yet reflected in a rulemaking, but is a strong indicator.

Recommended Presentations All of the presentations are available on the web site (as is the video recording of the meeting). There are, however, four that are “must see”: Material_Strength_Decision_Chart_-_07-09-2013.pdf Blaine_Keener.pdf (Contains an analysis of the CY 2012 GT Annual Report submissions) Steve_Nanney.pdf (Explains the Material Strength Decision Chart) 2012_GT_Annual_Key_Data_Points_2013-07-15.pdf (the data analyzed by Blaine Keener)

Personal Observations The mileage reported with incomplete records was, in my opinion, remarkably low (only 5401 miles out of a total of almost 307,000). The numbers are changing because supplemental reports are being filed and it appears obvious that some operators did not report in the fashion that PHMSA expected. Very high level discussion – what is available now, what else is needed, and how can it be collected and analyzed.

Personal Observations NTSB does not like the grandfather clause and eventually it will be removed from the code (at least in its current form). PHMSA emphasized that 192.619(c) IS the grandfather clause and that all four portions of 192.619(a) must be available in order to identify the lowest of the four as the MAOP for a segment if the segment is not grandfathered.

Personal Observations The NTSB likes “Spike Tests” and it is likely that PHMSA will eventually publish criteria for such tests (probably based on TTO Number 6, Spike Hydrostatic Test Evaluation, July 2004, Baker & Kiefner) http://primis.phmsa.dot.gov/gasimp/docs/TTO06_SpikeHydrostaticTestEvaluation_FinalReport_July2004.pdf (or e-mail me if you want a copy)

Personal Observations Concern that this initiative (the Draft IVP Chart) is too complex was voiced. My guess is that PHMSA will be reluctant to break this down into multiple rulemakings. The current initiative does NOT include gas distribution, gas gathering or hazardous liquid lines. That said, if it works for gas transmission, it will almost certainly carry over in some form.

Personal Observations A risk-based approach similar to that used in Appendix B to Part 195 was mentioned as a possible approach but PHMSA did not offer any further comment (the regulatory deadlines found in Appendix B have expired but it appears that PHMSA MAY be receptive, in principle, to such an approach).

Personal Observations Smart pigging is a preferred approach to evaluating the condition of the pipeline but the issue of making existing non-piggable lines piggable is problematic. Pressure testing will likely be the ultimate trump card for pre-code lines and for lines which do not have traceable, verifiable and complete records.

Personal Observations The Docket Number is PHMSA-2013-0119 (accessible at www.regulations.gov). Comments may be submitted there and all previous submissions can be reviewed there. There was no indication as to when the comment period will end. The regulatory process is still “stuck in amber” and it may take several years before regulations become final.

Closing Comments If you do not have “bulletproof” records you need to be developing a plan to address your data gaps and ways to convince PHMSA that, whatever else the plan is, it is reasonable in light of 49 CFR Parts 190 -199.

Questions John Jacobi john.jacobi@g2partnersllc.com (713) 260-4039 (Office) (832) 712-3098 (Mobile) Thank YOU!!