Unregulated Low-Stress Hazardous Liquid Pipelines

Mike Israni &

John GaleAug 5, 2009

Regulatory Requirements for Low-Stress Hazardous Liquid Pipelines

Section 4 of the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES Act) requires the Secretary to issue regulations subjecting low-stress hazardous liquid pipelines to the same standards and regulations as other hazardous liquid pipelines.

Regulatory Requirements for Low-Stress Hazardous Liquid Pipelines

(continued) Exceptions to the PIPES Act requirements are: (1) low-stress pipelines regulated by the US

Coast Guard; (2) A pipeline that serves refining,

manufacturing, or truck, rail or vessel terminal facilities if the pipeline is less than one mile long (measured outside the facility grounds) and does not cross an offshore area or a waterway currently used for commercial navigation.

The June 3, 2008, Low-Stress Pipelines Final Rule- (Phase one)

Covered Rural low-stress pipelines with a

nominal diameter greater than 8⅝ inches and within ½ mile of unusually sensitive areas (USAs)

Applies full set of regulations to these pipelines

Adds annual, safety-related condition, and accident reporting for ALL rural low stress pipelines

Low-Stress Pipelines Upstream from RefiningLow-Stress Pipelines Upstream from Refining

StoragStoragee

ProductionProduction

8⅝” coming from 8⅝” coming from production – production – Gathering lineGathering line

10” and Operating less than 10” and Operating less than 20% SMYS20% SMYS

USAUSA

Navigable WaterwayNavigable Waterway

Non-Rural AreaNon-Rural Area

Trucked In Trucked In Oil TankageOil Tankage

StoragStoragee 6” and Operating less 6” and Operating less

than 20% SMYSthan 20% SMYS

Subject to Part 195 RequirementsSubject to Part 195 Requirements RefiningRefining

Low-Stress Pipelines Upstream from RefiningLow-Stress Pipelines Upstream from Refining

StoragStoragee

ProductionProduction

8⅝” coming from 8⅝” coming from production – production – Gathering lineGathering line

10” and Operating less than 10” and Operating less than 20% SMYS20% SMYS

USAUSA

Navigable WaterwayNavigable Waterway

Non-Rural AreaNon-Rural Area

Trunked In Trunked In Oil TankageOil Tankage

StoragStoragee 6” and Operating less 6” and Operating less

than 20% SMYSthan 20% SMYS

Subject to Part 195 Requirements After Phase 2Subject to Part 195 Requirements After Phase 2 RefiningRefining

AirportAirport

Breakout TankageBreakout Tankage8 ⅝ ” operating at less 8 ⅝ ” operating at less than 20%than 20%

USAUSA

6”operating at less 6”operating at less than 20% SMYSthan 20% SMYS

RefiningRefining Navigable WaterwayNavigable Waterway

Non-Rural AreaNon-Rural Area

Low-Stress Pipelines Downstream from RefiningLow-Stress Pipelines Downstream from RefiningSubject to Part 195 RequirementsSubject to Part 195 Requirements

RefiningRefining

Less than Less than 1 mile1 mile

AirportAirport

Breakout TankageBreakout Tankage8 ⅝ ” operating at less 8 ⅝ ” operating at less than 20%than 20%

USAUSA

6”operating at less 6”operating at less than 20% SMYSthan 20% SMYS

RefiningRefining Navigable WaterwayNavigable Waterway

Non-Rural AreaNon-Rural Area

Low-Stress Pipelines Downstream from RefiningLow-Stress Pipelines Downstream from Refining

RefiningRefining

Less than Less than 1 mile1 mile

Subject to Part 195 Requirements After Phase 2Subject to Part 195 Requirements After Phase 2

Cost-Benefit of Implementing Regulation for Unregulated Low-Stress Haz Liq. Pipelines

1. Risk = Probability x Consequence (Unknown- No data on unregulated LS)

2. Infrastructure size Total LS Miles =

LS (pop+navig) + LS usa + LS rural

1. Reasonable cost for this Infrastructure

Estimated Benefit for Low-Stress Pipelines

Currently no incident data to review March 2009 we surveyed nine States to

ascertain if they had incident data Currently evaluating the benefits

associated with Low Stress II rulemaking

Supporting Data for Unregulated Low-Stress Hazardous Liquid

Pipelines

Rural Low-Stress Hazardous Liquid Pipelines Survey – October 2008

Low-Stress Pipeline Survey – Company Follow-up – March 30, 2009

Regulatory Evaluation for Low Stress I Final Rule- June 3, 2008

Supporting Data for Unregulated Low-Stress Hazardous Liquid

Pipelines (continued)

Total estimated Unregulated Low-Stress Hazardous Liquid Pipelines = 1575 miles

Phase I picked up = 312 miles Phase II will pick = 1263 miles

Of the total 1263 miles, 161 miles are estimated to be within USAs and with nominal diameter less than 8⅝ inches

Estimated Costs for Low-Stress Pipelines

Cost ComponentUnit Cost per Mile Additional Costs

(In thousands of dollars)

Initial costs Recurring Costs Year 1 Years 2

through 5Years 6 and

onPart 195, Subpart A General $0 $0 $0 $0 $0Part 195, Subpart B – Annual, Accident, and Safety-Related Condition Reporting

Nominal Nominal $0 $0 $0

Part 195, Subpart C – Design Requirements, Subpart D – Construction, and Subpart E – Pressure Testing

$0 $0 $0 $0 $0

Part 195, Subpart F – Operation and Maintenance Various* Various ? ? ?

Part 195, Subpart G – Qualification of Pipeline Personnel

Nominal Nominal $0 $0 $0

Part 195, Subpart H – Corrosion Control $15,022* ? ? ? ?

Part 199 – Drug and Alcohol Testing $0 Negligible $0 $0 $0

TOTAL

Estimated Costs for Low-Stress Pipelines

Subpart F – Operation and Maintenance Maps and Records – nominal cost increase Damage Prevention Programs

Costs under development, based on State mandated One call systems

Line markers – Initial cost: $514 per mile Recurring cost: $134 per mile 90% of these lines are already marked

Estimated Costs for Low-Stress Pipelines

Integrity Management Programs Impacts only those lines that are in a HCA 161 miles of small diameter pipe within a

1/2 mile of a USA Cost per mile is under development

Subpart H Corrosion Control Initial cost: $15,022 per mile Recurring cost: $400 per mile 90% of the lines already comply with Subpart H.

Low-Stress Pipelines-Low-Stress Pipelines- (Phase Two) Will Cover (Phase Two) Will Cover

Depending on supporting data either one, some, all, or none of the following will be regulated: All Part 195 to all low-stress pipelines not

currently regulated All Part 195 to all low-stress pipelines less than

8⅝ inches diameter inside ½ mile of USAs All Part 195 to all low-stress pipelines 8⅝ inches

diameter or more outside ½ mile of USAs All Part 195 to all low-stress pipelines less than

8⅝ inches diameter outside ½ mile of USAs Other option