DOT Pipeline Compliance News

July 2006 Issue

In This Issue

Who is RCP?

Many people know RCP because of our newsletters, training programs, or perhaps because we have done a specific project for their company. But few people understand much about the company itself, and the range of our services. That’s easy to understand, since we’ve grown over 50% each year for the past 5 years. The company you knew 4 years ago was a fraction of the size of our company today and tomorrow we plan to be bigger still.

RCP Inc. (a.k.a. Regulatory Compliance Partners) is a professional engineering corporation, registered in Texas. Our main office is in downtown Houston (recently expanded), with another office in Baton Rouge – but we work throughout the United States, and increasingly overseas. We have employees in 7 states, and have professional engineering registrations in TX, LA, MS, AL, FL, TN, and OK. We serve over 100 clients, and typically have about 50 projects in progress each month. RCP specializes in the following types of services:

Regulatory Consulting
Compliance Services
Engineering Services

Regulatory Consulting: Typically, these services are provided by subject matter experts with 20+ years of experience. These engagements normally address corporate compliance issues, such as determining the applicability of various regulations to a facility, auditing facilities for compliance with regulations and industry standards, negotiating compliance issues with the applicable agency, and consulting with corporate management on development and implementation of an effective compliance management process. This includes acquisition due-diligence, litigation support and expert witness services.

Compliance Services: These include both day-to-day support activities (such as technical writing, training, permitting, GIS / mapping and on-site personnel) and development of specific compliance programs. For example, we’ve done hundreds of SPCC plans and OPA-90 manuals, over 200 procedure manuals of al types, 42 complete integrity management programs, dozens of public awareness programs, plus class location surveys, HCA analyses, program audits, and so forth. We are a value-added reseller for ESS, one of the leading environmental management software providers. Our employees have served as on-site compliance inspectors during construction projects, as in-house compliance personnel for oil and gas operators, etc. For some of our clients, we literally ARE their compliance organization. For others, we provide the assistance that they need from time to time to supplement their existing compliance organization.

Engineering Services: As a professional engineering corporation, RCP provides additional services to our clients that extend beyond routine compliance support. These include RSTRENG and B31G analysis, span analysis, MOP / MAOP calculations, integrity assessment data review and remediation program development, selection or review of design specifications, and construction management.

If you are still reading, and would like to know more, feel free to call Jessica Roger at 832-255-7809 or email: jroger@your-rcp.com.

Final NPDES Exemption for Oil and Gas Exploration, Production, Processing, or Treatment Operations or Transmission Facilities

Effective June 12, 2006, EPA has taken final action to codify in the Agency’s regulations changes to the Federal Water Pollution Control Act, also known as the “Clean Water Act” or “CWA,” resulting from the Energy Policy Act of 2005. This action modifies the National Pollutant Discharge Elimination System regulations to provide that certain storm water discharges from field activities or operations, including construction, associated with oil and gas exploration, production, processing, or treatment operations or transmission facilities are exempt from National Pollutant Discharge Elimination System permit requirements. EPA interprets the term “transmission facilities” to include all necessary infrastructure to deliver natural gas or crude oil from the producing fields to the final distribution center (in the case of natural gas) or the refinery (for crude oil). Entities potentially affected by this action include operators of oil and gas exploration, production, processing, or treatment operations or transmission facilities and associated construction activities at oil and gas sites that generally are defined in the following North American Industrial Classification System (NAICS) codes and titles:

211 – Oil and Gas Extraction
213111 – Drilling Oil and Gas Wells
213112 – Support Activities for Oil and Gas Operations
48611 – Pipeline Transportation of Crude Oil
48621 – Pipeline Transportation of Natural Gas

The EPA encourages voluntary application of best management practices for oil and gas field activities and operations to minimize the discharge of pollutants in storm water runoff and protect water quality.

New Offshore Discharge Reporting Form

The EPA Region VI has modified the Discharge Monitoring Report (DMR) forms for discharges in the Gulf of Mexico. The new forms are dated May 24, 2006. Operators should start using the new forms immediately. For copies of the new forms, contact Jessica Roger

Texas Pipeline Integrity Management – Proposed Revisions

Gas Utilities Docket No. 9665

The Texas Railroad Commission has proposed minor changes to their pipeline integrity regulations in 16 TAC §8.101 [see TR, Volume 31, Number 22, 06/02/2006, pages 4554-4555]. Under the existing regulations, the Commission has to approve the use of direct assessment or other technology or assessment methodology not specifically listed in the regulations. The proposed change will assign the Safety Division director as the Commission’s designee for approval of direct assessment and other integrity assessment technology methods not listed in the rule. This change will allow the staff to work more closely with the federal Office of Pipeline Safety as new technologies become available for integrity assessment.

The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

Will your SPCC Plan pass an EPA inspection based on the new SPCC Inspectors’ Guidance document?

RCP can conduct a gap analysis of your current SPCC Plan and provide updates and recommendations based on the new SPCC Guidance for Regional Inspectors that was published Dec. 2, 2005. The new guidance document includes more detail than is in many of the plans in use today.

Updates to Standards “Incorporated by Reference”

On July 18, 2005, PHMSA published a Notice of Proposed Rulemaking (NPRM) to incorporate by reference 39 new and/or reaffirmed editions of standards into the Federal pipeline safety regulations. All but one of the new editions has now been incorporated by reference into the regulations in 49 CFR 192, 193, and 195. In addition, minor rule changes have been made to correct previous typographical errors, and to accommodate revised section numbering within the updated standards. The phrase, “HIGH CONSEQUENCE AREAS”, that appears after § 192.755 has been deleted. This phrase was a typographical error. The title to subpart O of part 192 has been changed to read, “Gas Transmission Pipeline Integrity Management”. This new title accurately reflects that the subpart applies only to gas transmission pipelines. The addenda for selected API tank standards are an integral part of the new editions of these standards, and have been explicitly cited in the revised rules:

API Standard 620-include Addendum 1
API Standard 650-include Addenda 1-3
API Standard 653-include Addendum 1

PHMSA has chosen not to update the regulatory references found in the 2004 edition of the American Society for Testing and Materials’ (ASTM) D2513, Standard Specification for Thermoplastic Gas Pressure Pipe, Tubing, and Fittings. A number of important issues need to be fully addressed by the ASTM Committee F-17 before PHMSA adopts any new editions of ASTM D2513. Among these are the issues of rework, regrind, marking, increase in design factor, and requirements for new materials. The gas pipeline safety regulations therefore continue to reference standards found in ASTM D2513 (1999 edition) and ASTM D2517 (2000 edition) for plastic pipe and fittings.

Public Awareness Plans

An advisory (ADB-06-02) was issued by the Pipeline and Hazardous materials Safety Administration (PHMSA) in the Federal Register (Volume 71, Number 116) on June 16, 2006. This advisory informs pipeline operators how to submit their written public awareness programs for review.

PHMSA has elected to use a clearinghouse approach for reviewing interstate and many intrastate operator programs.
The following state pipeline safety agencies have decided to conduct independent reviews of the public awareness programs of at least some intrastate operators. Intrastate Operators from the following states should review the advisory bulletin in detail or contact the appropriate state agency.
- District of Columbia
- Illinois
- Maryland
- Montana
- South Dakota
- Virginia
- Wyoming
All interstate operators and those intrastate operator not filing with a State Pipeline Safety Agency (reference previous bullet) who are required to develop public awareness programs satisfying the requirements of 49 CFR 192.616 or 49 CFR 195.440 by June 20, 2006 must submit their written public awareness program to PHMSA’s Public Awareness Program Clearinghouse between August 8 and October 8 of this year (2006).
Provide the following information for each pipeline covered by the Public Awareness Program.
- Operator ID and Name of the Operator
- Person to contact, with e-mail and telephone number
- Type or types of pipeline covered by the Operator ID
  - Gathering (gas or hazardous liquid)
  - Petroleum gas distribution
  - Natural gas distribution – municipally-owned and privately-owned
  - Gas Distribution – other
  - Gas Transmission – intrastate and interstate
  - Hazardous Liquid – intrastate and interstate
- State or states in which the pipeline operates (by type)
- PHMSA region or regions in which pipeline is located (by type)
- Copy of Plan

Plans may be filed between August 8, 2006 and October 8, 2006 in any of the following ways:
- E-filing. PHMSA strongly encourages operators to submit public awareness programs through the Internet. The Online Data Entry System (ODES) is being modified to accept these programs.
- Mail a computer disk with the aforementioned information to the following address: Public Awareness Program Clearinghouse, PHMSA, 400 7th Street, SW., Room 2103, Washington, DC 20590.
- Mail the same information in paper form to the following address: Public Awareness Program Clearinghouse, PHMSA, 400 7th Street, SW., Room 2103, Washington, DC 20590.

For further information contact: Blaine Keener by phone at 202-366-0970 or by e-mail at blaine.keener@dot.gov.

Gas Integrity Management – 7 year Re-assessment FAQs

This message is to inform you of a modification to PHMSA’s position concerning gas transmission integrity management assessments required every seven years.

The Pipeline Safety Improvement Act of 2002 requires that gas transmission IM programs provide for an assessment of covered segments at least every 7 years. This requirement was incorporated in 49 CFR 192.939. During theearly workshops on implementing IM requirements, questions were asked concerning the scope of assessments required at 7-year intervals. PHMSA responded that the assessments needed to address all threats applicable to the covered segment. This answer was incorporated in a Frequently Asked Question (FAQ-133).

PHMSA has recently re-evaluated the answer to this question and has concluded that it was incorrect. Section 192.939 requires that reassessment intervals be established and specifies maximum reassessment intervals that can be as long as 20 years for low-pressure pipelines. The intervals defined per this requirement are those in which all applicable threats must be assessed, using ILI, pressure testing, direct assessment, or “other technology” (with notification). Section 192.939(a) also states, in part:

“If an operator establishes a reassessment interval that is greater than seven years, the operator must, within the seven-year period, conduct a confirmatory direct assessment on the covered segment, and then conduct the follow-up reassessment at the interval the operator has established.”

Confirmatory direct assessment (CDA) is capable of identifying corrosion (and must be used in conjunction with data integration to identify third-party damage), but it does not address other threats. Nevertheless, this is the specific method required by the rule for the 7-year “confirmatory” assessments required by the Act. PHMSA has therefore concluded that, in cases where the reassessment interval established by the operator per 192.939(a)or (b) is greater than 7 years, the interim confirmatory reassessment need not address all applicable threats, but rather can be performed using CDA. (Note that a CDA assessment would be required within 7 years and again within 14 years in cases where the established reassessment interval exceeds 14 years).

An operator always has the option of establishing its reassessment intervals to be less than or equal to seven years, in which case it need not perform assessments using CDA.

The response to FAQ-133 has been revised. FAQs 40, 42, 43, and 207, all of which refer to seven-year inspections in some way, have also been modified accordingly.

Reporting of Damage to Natural Gas Pipeline Facilities to FERC

Docket No. RM06-18-000

The Federal Energy Regulatory Commission (FERC) is proposing to amend section 260.9 of its regulations in 18 CFR Part 260. Currently, section 260.9 requires that a natural gas company submit a report only when it experiences a serious service interruption involving facilities operated under certificate authority granted by FERC under the Natural Gas Act (Act). However, in situations where natural gas pipeline facilities are damaged, service interruptions can sometimes be avoided by rerouting gas supplies through other facilities or by means of other delivery arrangements. In these situations, section 260.9 does not presently require that companies report the damage to their pipeline facilities.

companies to undertake necessary construction activities in crisis situations. However, FERC’s current reporting requirements are not adequate to permit a reliable “snapshot” of the natural gas infrastructure at any given time. This inadequacy can be addressed by amending section 260.9 to require that jurisdictional companies report any damage to facilities that limits service through those facilities, regardless whether service can be maintained by rerouting gas supplies through other facilities or by other means.

FERC proposes to add a requirement that jurisdictional natural gas pipelines report (1) damage to pipeline facilities that results in loss of or reduction in service through such facilities, and (2) when service through such facilities has been restored. The Commission also proposes to amend sections 260.9(b) and (e) to eliminate references to reporting by telegraph and to require reporting by e-mail or, as currently provided, by facsimile. The Commission further proposes to amend section 260.9(d) to change, from 20 to 30 days, the time by which a company must file with the Commission a copy of any incident report required by the U.S. Department of Transportation.

For further information contact:

Berne Mosley
Office of Energy Projects
Federal Energy Regulatory Commission
berne.mosley@ferc.gov
(202) 502-8625.

FERC Policy Statement on Natural Gas Interchangeability

Docket No. PL04-3-000

The Federal Energy Regulatory Commission has seen interest in natural gas quality and interchangeability issues escalate for several years, and these issues have come before the Commission in complaints, proposed tariff provisions and certificate proceedings. Historically, gas quality is one of many terms and conditions of service stated in individual pipelines’ FERC-jurisdictional tariffs. The Commission has no generic policy in this area, and individual pipelines have different standards, practices, and enforcement mechanisms.

On June 15, 2006, FERC announced its policy on natural gas quality and interchangeability issues. The Commission’s intention in issuing this statement of generic policy is to provide direction for addressing gas quality and interchangeability concerns, as well as to provide guidance to individual companies that have concerns about these issues. The Commission’s policy embodies five principles:

Only natural gas quality and interchangeability specifications contained in a Commission-approved gas tariff can be enforced
pipeline tariff provisions on gas quality and interchangeability need to be flexible to allow pipelines to balance safety and reliability concerns with the importance of maximizing supply, as well as recognizing the evolving nature of the science underlying gas quality and interchangeability specifications
pipelines and their customers should develop gas quality and interchangeability specifications based on technical requirements
in negotiating technically based solutions, pipelines and their customers are strongly encouraged to use the Natural Gas Council Plus (NGC+) interim guidelines filed with the Commission on February 28, 2005 as a common reference point for resolving gas quality and interchangeability issues
to the extent pipelines and their customers cannot resolve disputes over gas quality and interchangeability, those disputes can be brought before the Commission to be resolved on a case-by-case basis, on a record of fact and technical review

Minerals Management Service Seeks Comments

The Minerals Management Service (MMS) published an Advanced Notice of Proposed Rulemaking (ANPR) in the Federal Register on May 22, 2006. MMS is responsible for implementing policies intended to maintain safety and environmental protection for industry operating in the Outer Continental Shelf (OCS). Regulations require submission of various site-specific plans and permit requests for MMS approval before operations can begin. The implementing regulations have both prescriptive and performance elements. MMS is seeking to improve the current voluntary approach to Safety and Environmental management Systems (SEMS) in order to minimize injuries, fatalities, accidents, fires, explosions, collisions, pollution incidents, or damage to the marine environment on the OCS and is requesting comments. All comments received by August 21, 2006 will be considered.

To submit comments follow the instructions at the Federal eRulemaking Portal: http://www.regulations.gov

For further information contact:
David Nedoronstek – Safety and Enforcement Branch (703) 787-1029
William Hauser – Chief, Regulations and Standards Branch (703) 787-1613.

Need to Update Your Current Operator Qualification Program?

We have the expertise to update your current operator qualification program to satisfy the upcoming regulation change and inspection protocols. For more information on how RCP can support your ongoing OQ Program needs.

MMS Proposed Changes to ROW Pipeline Requirements

RIN 1010-AD18

MMS is proposing to amend its regulations to require lessees, lease operators, and pipeline right-of-way (ROW) holders to submit assessment information on the structural integrity of their OCS platforms each year, and to submit an inspection program to MMS yearly. Also, a damage report would be required if a facility or pipeline was damaged by a hurricane or other natural phenomena. Lessees, lease operators, and pipeline ROW holders proposing to use unbonded flexible pipe for pipelines, or to install pipeline risers on floating platforms, would have to provide additional information on their projects. The proposed rule also would incorporate an industry-developed standard concerning the in-service inspection of mooring hardware for floating drilling units. These proposed changes would allow MMS to better regulate the safety of the oil and gas infrastructure, and to promptly assess damage resulting from hurricanes or other natural phenomena.

Submit comments by September 1, 2006 by sending an e-mail to rules.comments@mms.gov. Use the RIN 1010-AD18 in the subject line. Send comments on the information collection in this rule by August 2, 2006 to:

Interior Desk Officer 1010-AD18
Office of Management and Budget
202/395-6566 (facsimile)
e-mail: oira-docket@omb.eop.gov.
Please also send a copy to MMS.

FOR FURTHER INFORMATION CONTACT:
Larry Ake
Regulations and Standards Branch
(703) 787-1567

Bill Byrd signature
W. R. (Bill) Byrd, PE
President
RCP Inc.

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