Pipeline Safety: Intent To Approve Project and Environmental Assessment for the Mobil Pipe Line Company Pipeline Risk Management Demonstration Program

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

[Docket No. RSPA-98-3891; Notice 12]

Pipeline Safety: Intent To Approve Project and Environmental

Assessment for the Mobil Pipe Line Company Pipeline Risk Management

Demonstration Program

AGENCY: Office of Pipeline Safety, Research and Special Programs

Administration, DOT.

ACTION: Notice of Intent to Approve Project and Environmental

Assessment.

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SUMMARY: As part of its Congressional mandate to conduct a Risk

Management Demonstration Program, the Office of Pipeline Safety (OPS)

has been authorized to conduct demonstration projects with pipeline

operators to determine how risk management might be used to complement

and improve the existing Federal pipeline safety regulatory process.

This is a notice that OPS intends to approve Mobil Pipe Line Company

(Mobil) as a participant in the Pipeline Risk Management Demonstration

Program. This also provides an environmental assessment of Mobil's

demonstration project. Based on this environmental assessment, OPS has

preliminarily concluded that this proposed project will not have

significant environmental impacts.

This notice explains OPS's rationale for approving this project,

and summarizes the demonstration project provisions (including affected

locations, risk control and monitoring activities, and regulatory

exemptions) that would go into effect once OPS issues an order

approving Mobil as a Demonstration Program participant. OPS seeks

public comment on the proposed demonstration project so that it may

consider and address these comments before approving the project. The

Mobil demonstration project is one of several projects OPS plans to

approve and monitor in assessing risk management as a component of the

Federal pipeline safety regulatory program.

ADDRESSES: OPS requests that comments to this notice or about this

environmental assessment be submitted on or before July 31, 1998 so

they can be considered before project approval. However, comments on

this or any other demonstration project will be accepted in the Docket

throughout the 4-year demonstration period. Comments should be sent to

the Dockets Facility, U.S. Department of Transportation, Plaza 401, 400

Seventh Street, SW, Washington, DC 20590-0001, or you can E-Mail your

comments to [email protected]. Comments should identify the

docket number RSPA-98-3891. Persons should submit the original comment

document and one (1) copy. Persons wishing to receive confirmation of

receipt of their comments must include a self-addressed stamped

postcard. The Dockets Facility is located on the plaza level of the

Nassif Building in Room 401, 400 Seventh Street, SW, Washington, DC.

The Dockets Facility is open from 10:00 a.m. to 5:00 p.m., Monday

through Friday, except on Federal holidays.

FOR FURTHER INFORMATION CONTACT: Elizabeth Callsen, OPS, (202) 366-

4572, regarding the subject matter of this notice. Contact the Dockets

Unit, (202) 366-5046, for docket material.

SUPPLEMENTARY INFORMATION:

1. Background

The Office of Pipeline Safety (OPS) is the federal regulatory body

overseeing pipeline safety. As a critical component of its federal

mandate, OPS administers and enforces a broad range of regulations

governing safety and environmental protection of pipelines. These

regulations have contributed to a good pipeline industry safety record

by assuring that risks associated with pipeline design, construction,

operations, and maintenance are understood, managed, and reduced.

Preserving and improving this safety record is OPS's top priority. On

the basis of extensive research, and the experience of both government

and industry, OPS believes that a risk management approach, properly

implemented and monitored, offers opportunities to achieve:

(1) Superior safety, environmental protection, and service

reliability;

(2) Increased efficiency and reliability of pipeline operations;

and

(3) Improved communication and dialogue among industry, the

government, and other stakeholders.

A key benefit of this approach is the opportunity for greater

levels of public participation.

As authorized by Congress, OPS is conducting a structured

Demonstration Program to evaluate the use of a comprehensive risk

management approach in the operations and regulation of interstate

pipeline facilities. This evaluation will be performed under strictly

controlled conditions through a set of Demonstration Projects to be

conducted with interstate pipeline operators. A Presidential Directive

to the Secretary of Transportation (October 16, 1996) stated that in

implementing the Pipeline Risk Management Demonstration Program: ``The

Secretary shall require each project to achieve superior levels of

public safety and environmental protection when compared with

regulatory requirements that otherwise would apply.'' Thus, the process

to select operators for this Demonstration Program involves a

comprehensive review to ensure that the proposed project will provide

the superior safety and environmental protection required by this

Directive. OPS may exempt a participating operator from particular

regulations if the operator needs such flexibility in implementing a

comprehensive risk management program; however, regulatory exemption is

neither a goal nor requirement of the Demonstration Program. This

document summarizes the key points of this review for Mobil's

demonstration project, and evaluates the safety and environmental

impacts of this proposed project.

2. OPS Evaluation of Mobil's Demonstration Project Proposal

Using the consultative process described in Appendix A of the

Requests for Application for the Pipeline Risk Management Demonstration

Program (62 FR 14719), published on March 27, 1997, OPS has reached

agreement with Mobil Pipe Line Company on the provisions for a

demonstration project to be conducted at a crude oil storage tank

facility in Patoka, Illinois.

Company History and Record

Mobil Pipe Line Company currently owns approximately 5409 miles of

[[Page 36019]]

hazardous liquid pipeline throughout nine states. The Patoka, Illinois

crude breakout facility is located within the city limits of Vernon,

Illinois, population about 150, in Mobil's East of the Rockies (EOR)

operating region.

Before entering into consultations with Mobil, OPS determined that

Mobil was a good demonstration program candidate based on an

examination of the company's safety and environmental compliance

record, its accident history, and its commitment to working with OPS to

develop a project meeting the Demonstration Program goals.

In considering the merits of Mobil's proposal, OPS undertook a

comprehensive review of the company's safety and compliance record for

the demonstration project location, as well as Mobil's entire East of

the Rockies (EOR) system. Mobil, like all operating companies, has

experienced incidents at its facilities within and outside the United

States. In the last five years, the only incident at Patoka of

sufficient impact that required reporting to OPS occurred on March 7,

1995. A roof drain hose failed due to ice formation during sub-zero

temperatures. This event resulted in no injuries, and the company

reported that 196 of the 200 barrels spilled were recovered.

Considering the frequency, causes, and consequences of these

events, together with Mobil's response to these events, OPS has

concluded that Mobil has demonstrated the corporate commitment to

safety and environmental protection required of demonstration program

candidates.

Mobil has also demonstrated a strong working relationship with

emergency response personnel from federal and state agencies. Mobil

recently participated in a successful emergency drill with

representatives from OPS, the Environmental Protection Agency (EPA),

and the Coast Guard. Local and state participants from Illinois and

Missouri played active roles in this exercise.

Consultative Evaluation

During the consultations, OPS headquarters and Central Region

representatives, an Illinois pipeline safety official, and risk

management experts, met with Mobil to discuss Mobil's Environment,

Health, and Safety Management System (EHSMS). These discussions

included the programmatic and technical processes associated with the

risk management element of the EHSMS, the specific risk assessments

that Mobil has or will perform as part of this program, other

supporting analyses Mobil performed, proposed risk control activities

to address identified risks, and proposed performance measures to

ensure superior performance is being achieved. The discussions

addressed the adequacy of Mobil's management systems and technical

processes, demographics near the demonstration facility, communications

with outside stakeholders, and monitoring and auditing of results once

the demonstration project is underway. The consultation process also

included an environmental assessment, which is described in the

appendix to this notice.

The consultation process was structured around three major review

criteria:

1. Whether Mobil's proposed risk management demonstration program

is consistent with the Risk Management Program Standard and compatible

with the Guiding Principles set forth in that Standard;

2. Whether the specific risk control activities that will result

from Mobil's proposed risk management program are expected to produce

superior safety, environmental protection, and reliability of service

compared to that achieved from compliance with the current regulations;

3. Whether Mobil's proposed risk management demonstration program

includes a company work plan and a performance monitoring plan that

will provide adequate assurance that the expectations for superior

safety, environmental protection, and service reliability are actually

being achieved during implementation.

The demonstration project provisions described in this notice

evolved from these consultations, as well as any public comments

received to date. Once OPS and Mobil consider comments received on this

notice, OPS plans to issue an order approving the Mobil demonstration

project.

3. Statement of Project Goals

OPS and Mobil believe Mobil's demonstration project will improve

safety and environmental protection through the application of the

Mobil EHSMS, which includes numerous hazard and risk assessments and

risk control activities beyond current regulatory requirements.

Specifically, the project will focus on safety and environmental issues

associated with breakout tanks and tank facilities, and will

demonstrate the adequacy of Mobil's release prevention and tank

integrity programs. The project will help demonstrate how Mobil's

release prevention activities will work in conjunction with proposed

American Petroleum Institute (API) aboveground storage tank standards

and National Fire Protection Association (NFPA) codes on flammable and

combustible liquids. OPS has issued a notice of proposed rulemaking

that would incorporate by reference selected industry standards for

breakout tanks into 49 CFR Part 195. (see Federal Register Notice 63 FR

27903, published 05/21/98.) Information and insights from the Mobil

project will help OPS determine if the proposed regulations effectively

address the most important risks at tank facilities, and help operators

define the most effective means of addressing these risks.

The Patoka crude breakout tank facility will be the initial focus

of the Mobil demonstration project. Mobil has conducted a thorough and

systematic hazard analysis and risk assessment to identify hazards and

risks associated with operating the facility. Mobil invited OPS to

observe these assessments. Based on these risk assessments, Mobil has

identified potential corrective actions for various systems at the

facility, including piping, pumps, communications, fire water system,

utility/support systems, and cast iron valves. During the demonstration

project, Mobil will identify the specific risk control activities that

are expected to result in reduced risk and superior safety and

reliability at the facility. These risk control activities will exceed

the requirements of the current regulations.

Through these activities at Patoka, both Mobil and OPS will improve

their understanding of risks associated with tanks and the most

effective risk control activities to manage these risks. Mobil will use

this information to assure superior performance at Patoka and, as

appropriate, at other Mobil tank facilities. OPS will use the

additional information to assure that Mobil and OPS fully understand

the major risks of the Patoka facility and that Mobil is implementing

effective risk control activities, specific to the Patoka facility.

Mobil seeks no relief from current pipeline safety regulations

governing the operation of the Patoka facility. The Patoka facility

would be exempt from compliance with any new regulations that are not

consistent with the approved risk management activities and OPS would

continue to monitor Mobil's performance under the risk management order

to assure that superior performance is being achieved.

4. Demonstration Project Facility:

The Patoka facility is located within the city limits of Vernon,

Illinois, a town with a population of about 150. The surrounding area

is also low population density. The facility contains 22 vertical

aboveground crude

[[Page 36020]]

storage tanks, plant transfer piping, transfer pumps, crude oil

blenders, offices, a maintenance building, miscellaneous auxiliary

pipeline station equipment, and the station manager's personal

residence. Patoka is a self-contained facility, with no public roads

traversing the property. The North Fork Creek, which runs along the

south end of the Patoka facility, is a water supply for the city of

Patoka. Mobil protects the creek by maintaining a second physical

barrier surrounding each tank that is capable of holding more than the

entire contents of the tank. Mobil has provided additional

precautionary barriers to releases of product along the south end of

its Patoka facility.

The facility is used as a common carrier crude pipeline handling

facility. Products handled at the facility include crudes of varying

sulphur content from the US Gulf Coast and Canada, and petroleum

condensate. The products include both ``sour'' crude (oil with a total

sulphur content above one percent), and ``sweet'' crude (oil with

little or no sulphur impurities).

5. Project Description

In 1996, Mobil updated its Corporate Policy on Environment, Health,

and Safety (EHS). To fulfill the commitments in the EHS Policy, Mobil

has adopted an Environmental, Health, and Safety Management System

(EHSMS). The EHSMS is the vehicle for institutionalizing a

comprehensive and integrated risk management program throughout Mobil.

The primary objective of the Mobil project is to demonstrate that

implementing the EHSMS will lead to superior performance, improved

safety and environmental protection.

Mobil's environment, health, and safety program includes 11 key

elements and 56 specific management ``expectations''. An

``expectation'' within the EHSMS is a well-defined objective and

includes identification of those accountable and responsible for

achieving the objective, the documentation required to demonstrate

achievement, performance indicators, and the key corporate resources

that will be used to achieve the objective.

The 11 elements are:

1. Policy and Leadership.

2. Continuous Improvement.

3. Safety and Health.

4. Risk Management.

5. Incident Reporting and Investigation.

6. Crisis Preparedness.

7. Environmental Protection.

8. Product Stewardship.

9. Training.

10. Community Relations.

11. Legal Requirements.

The Risk Management element of the program (Element #4) has four

expectations:

4.1 A system is in place to identify environment, health, and

safety hazards and their potential consequences.

4.2 A system is in place to assess and prioritize risks and manage

them in a cost-effective manner.

4.3 A system is in place to review the design of new and modified

facilities to ensure the incorporation of appropriate environment,

health, and safety protection measures.

4.4 Risks associated with the acquisition, closure and divestment

of facilities and operations are assessed and managed.

Mobil has structured and documented processes in place for

performing the hazards analyses, risk assessments, and job safety

analyses, prioritizing risks, defining risk control activities, and

evaluating and prioritizing risk control activities required to meet

the corporate expectations. These structured analytical and management

processes also satisfy the requirements of the Risk Management Program

Standard.

The Mobil EHSMS also includes structured processes for qualifying

and training personnel in risk assessment, and integrating the risk

assessment program with other Mobil operating and business systems,

including those processes used by Mobil to ensure that proposed changes

to the physical design of the system or to the maintenance and

operating procedures of the system are carefully considered,

documented, and communicated.

Mobil's East of the Rockies (EOR) business unit, which is

responsible for the Patoka facility, has defined the accountabilities,

responsibilities, documentation requirements, and performance

indicators for management expectations, including the four risk

management expectations. A business unit review of how Mobil's EOR

Business Unit is implementing the EHSMS was performed in the First

Quarter of 1998, and no significant deficiencies were reported.

Business unit reviews will occur annually.

Mobil has performed the required hazards assessment, job safety

analyses, and risk assessment of its Patoka facility. Mobil has

identified a variety of potential risk control activities to address

the identified risks including improvements to piping, pumps,

communications, fire water system, utility/support systems, and cast

iron valves. During the demonstration project, Mobil will identify the

specific set of risk control activities that will best manage the risks

identified. Mobil will continue to perform all of the preventive

measures and risk control activities currently in effect. In addition,

through the EHSMS process, Mobil has identified facility-specific

hazards and concerns that were not specifically or adequately addressed

through compliance with current DOT regulations. The risk analyses that

Mobil has performed are beyond the requirements of the current

regulations.

Mobil has defined performance indicators for management

expectations, including performance indicators for the four risk

management expectations discussed previously. Mobil tracks several high

level EHS performance indicators including the number of environmental

incidents, DOT and OSHA reportable incidents, and lost work days. The

financial compensation for Mobil employees is tied to these performance

measures. Ongoing audits and assessments, conducted as part of the

Continuous Improvement element (Element #2 of the EHSMS), assure that

all expectations have been met.

The activities below would be included in an Order formally

approving the Mobil demonstration project:

Share information with OPS concerning the use of hazards

analyses, risk screening tools, and other risk assessment and

prioritization tools;

Share information with OPS concerning facility-specific

risks at Patoka;

Share information with OPS concerning the preventive and

risk control activities Mobil has identified to address these risks and

their relative priority;

Implement the risk control activities selected for Patoka;

Share information with OPS concerning the lessons learned

on institutionalizing risk management programs to help OPS in

evaluating the effectiveness of risk management programs; and

Track, monitor, and report performance measures selected

to determine the effectiveness of the risk control activities selected

for Patoka, and the Mobil risk management program in general.

Monitoring Demonstration Project Effectiveness

The Mobil Demonstration Project includes a comprehensive approach

to performance monitoring that assures the superior protection of

public safety and the environment, and achieves other project

objectives. A key element of this monitoring plan is a set of

programmatic performance measures that would track the growth and

institutionalization of

[[Page 36021]]

risk management within the company, measure the effectiveness of the

EHSMS in achieving stated expectations, and measure the effectiveness

of specific risk control activities. Mobil uses a simple, three point

scale to score performance in implementing the Mobil EHSMS:

0=No Evidence That Expectation is Being Met

1=Expectation is Partially Met

2=Expectation is Fully Met

B=Best Practice (equivalent to a ``2'' for roll-up purposes)

Mobil will report performance measurement data and project progress

quarterly to OPS throughout the four year demonstration period. This

information, as well as periodic OPS audits, will assure accountability

for improved performance.

6. Regulatory Perspective

Why Is OPS Considering This Project?

OPS is considering Mobil's proposed project for the Demonstration

Program because, after extensive review, OPS is satisfied that the

proposal:

1. Provides superior safety and environmental protection for the

Patoka facility. Mobil has adequately demonstrated that the risk

control activities it will perform at Patoka go beyond current pipeline

safety regulatory requirements and, thus, provide a higher level of

public safety and environmental protection than exists today.

2. Offers a good opportunity to evaluate risk management as a

component of the Federal pipeline safety regulatory program. OPS

believes the Demonstration Program could benefit from Mobil's

participation, given some of the distinguishing features of its

proposed demonstration project, including:

A fully-institutionalized, integrated, corporate-wide risk

management program with documented roles, responsibilities, and

accountabilities;

Comprehensive evaluation of the hazards and risks of the

facility;

A structured and documented approach for identifying and

evaluating the relative merits of risk control activities through a

multi-attribute decision process;

A good illustration of how companies can use risk

management to improve safety and environmental protection over and

above current regulatory requirements;

Willingness to share information with OPS and state

pipeline safety agencies on the specific risks associated with the

facility, as well as its risk management program and processes.

3. Provides valuable information about the risks and effective risk

control activities for aboveground storage tanks. This additional

information will allow OPS to more effectively ensure

4. Safe operation of Patoka, and be better able to develop, apply,

and enforce regulations related to aboveground storage tanks.

How Will OPS Oversee This Project?

OPS retains its full authority to administer and enforce all

regulations governing pipeline safety. Mobil is not requesting any

regulatory exemptions. The Patoka facility will be subject to the

routine OPS inspection to ensure compliance with the applicable Federal

Pipeline Safety Regulations. In addition, subsequent to approval, a

Project Review Team (PRT) consisting of OPS headquarters and regional

staff and state pipeline safety officials who have been reviewing the

proposal, will continue to monitor the project. The PRT is designed to

be a more comprehensive oversight process which draws maximum technical

experience and perspective from all affected OPS regional and

headquarters offices as well as any affected state agencies that would

not normally provide oversight on interstate transmission projects.

One of the primary functions of this Team will be to conduct

periodic risk management audits. These risk management audits will be

used to ensure company compliance with the specific terms and

conditions of the OPS Order authorizing this Demonstration Project. OPS

is developing a detailed audit plan, tailored to the unique

requirements of the Mobil Demonstration Project. This plan will

describe the audit process (e.g., types of inspections, methods, points

of disclosure of risk assessment information, frequency of audit), as

well as the specific requirements for reporting information and

performance measurement data to OPS.

Information Provided to the Public

OPS has previously provided information to the public about the

Mobil project, and has requested public comment, using many different

sources. OPS aired an electronic town meeting on September 17, 1997

that enabled viewers of the two-way live broadcasts to pose questions

and voice concerns about candidate companies (including Mobil). An

earlier Federal Register notice (62 FR 53052; October 10, 1997)

informed the public that Mobil was interested in participating in the

Demonstration Program, provided general information about technical

issues and risk control alternatives to be explored, and identified the

geographic areas the demonstration project would traverse.

Since August 1997, OPS has used an Internet-accessible data system

called the Pipeline Risk Management Information System (PRIMIS) at

http://www.cycla.com/opsdemo to collect, update, and exchange

information about all demonstration candidates, including Mobil.

At a November 19, 1997, public meeting hosted by OPS in Houston,

TX, Mobil officials presented a summary of the proposed demonstration

project and answered questions from meeting attendees. (Portions of

this meeting were broadcast on January 15, 1998, 2:00 p.m. Eastern

Standard Time, via satellite to locations nationwide and via Internet

to individuals at their personal computers). OPS featured members of

the Patoka community on a satellite/Internet nationwide broadcast which

aired March 26, 1998. The school superintendent, fire chief, and mayor

were among the citizens who remarked on community relations, training

programs, exercises, spill drills, and other interactions between the

company and citizens. In addition to viewers of the live broadcast at

sites throughout the nation, the Internet broadcast received over 4300

hits.

OPS has provided a prospectus, which includes a map of the

demonstration sites, to State officials and community representatives

who may be interested in reviewing project information, providing

input, or monitoring the progress of the project. This notice is OPS's

final request for public comment before OPS intends to approve Mobil's

demonstration project. So far, the public has not raised any issues or

concerns related to the Mobil proposal.

Issued in Washington, DC on June 25, 1998.

Richard B. Felder,

Associate Administrator for Pipeline Safety.

Appendix--Environmental Assessment

A. Background and Purpose

A Presidential Directive to the Secretary of Transportation

(October 16, 1996) stated that in implementing the Pipeline Risk

Management Demonstration Program: ``The Secretary shall require each

project to achieve superior levels of public safety and

environmental protection when compared with regulatory requirements

that otherwise would apply.'' Thus, the process to select operators

for this Demonstration Program involves a comprehensive review to

ensure that the proposed project will provide the superior safety

and environmental protection required by this Directive. This

document summarizes the key points of this review for Mobil Pipe

Line Company's (Mobil)

[[Page 36022]]

demonstration project, and evaluates the safety and environmental

impacts of this proposed project.

This document was prepared in accordance with section 102(2)(c)

of the National Environmental Policy Act (42 U.S.C. Section 4332),

the Council on Environmental Quality regulations (40 CFR Sections

1500-1508), and Department of Transportation Order 5610.1c,

Procedures for Considering Environmental Impacts.

B. Description of Proposed Action

Mobil will conduct its demonstration project at its crude oil

breakout storage tank facility in Patoka, Illinois. Mobil has

adopted an Environment, Health, and Safety Management System (EHSMS)

to institutionalize a comprehensive and integrated risk management

program throughout the company. The proposed project's primary

objective is to demonstrate that implementing the Mobil EHSMS will

lead to superior performance, improved safety and environmental

protection. The project will focus on safety and environmental

issues associated with breakout tanks and tank facilities, and will

demonstrate the adequacy of Mobil's release prevention and tank

integrity programs.

As a result of a comprehensive review of Mobil's risk management

demonstration project, the Office of Pipeline Safety (OPS) proposes

to approve this project for participation in the Demonstration

Program.

The Risk Management element of Mobil's EHSMS (Element #4)

contains four expectations:

4.1 A system is in place to identify environment, health, and

safety hazards and their potential consequences.

4.2 A system is in place to assess and prioritize risks and

manage them in a cost-effective manner.

4.3 A system is in place to review the design of new and

modified facilities to ensure the incorporation of appropriate

environment, health, and safety protection measures.

4.4 Risks associated with the acquisition, closure and

divestment of facilities and operations are assessed and managed.

Each ``expectation'' within the EHSMS contains a well-defined

objective and includes identification of those accountable and

responsible for achieving the objective, the documentation required

to demonstrate achievement, performance indicators, and the key

corporate resources that will be used to achieve the objective.

Mobil has structured and documented processes in place for

performing the hazards analyses, risk assessments, job safety

analyses, prioritizing risks, defining risk control activities, and

evaluating and prioritizing risk control activities required to meet

the corporate expectations. These structured analytical and

management processes also satisfy the requirements of the Risk

Management Program Standard.

The Mobil EHSMS also includes structured processes for

qualifying and training personnel in risk assessment, and

integrating the risk assessment program with other Mobil operating

and business systems, including those processes used by Mobil to

ensure that proposed changes to the physical design of the system,

or to the maintenance and operating procedures of the system, are

carefully considered, documented, and communicated.

Mobil is performing the required hazards assessment, job safety

analyses, and risk assessment of its Patoka facility and will

identify a set of risk control activities to effectively manage the

risks identified. Mobil requests no exemptions from the current

pipeline safety regulations. Mobil will continue to perform all of

the preventive measures and risk control activities that are

presently in effect. In addition, through the EHSMS process, Mobil

has identified facility-specific hazards and concerns that were not

specifically or adequately addressed through compliance with current

pipeline safety regulations. The analyses that Mobil has performed

and the risk control activities that Mobil will perform are beyond

the requirements of the current regulations.

Mobil will define performance indicators for each of the 56

management objectives in the EHSMS. The financial compensation for

Mobil employees is tied to these performance measures. Ongoing

audits and assessments, conducted as part of the Continuous

Improvement element of EHSMS (Element #2), will assure that all

expectations are being met.

The activities below would be included in an Order formally

approving the Mobil demonstration project:

Share information with OPS concerning the use of

hazards analyses, risk screening tools, and other risk assessment

and prioritization tools;

Share information with OPS concerning the facility-

specific risks at Patoka;

Share information with OPS concerning the preventive

and risk control activities Mobil has identified to address these

risks and their relative priority;

Implement the risk control activities selected for

Patoka;

Share information with OPS concerning the lessons

learned on institutionalizing risk management programs to help OPS

in evaluating the effectiveness of risk management programs;

Track, monitor, and report performance measures

selected to determine the effectiveness of the risk control

activities selected for Patoka, and the Mobil risk management

program in general.

Monitoring Demonstration Project Effectiveness

The Mobil Demonstration Project includes a comprehensive

approach to performance monitoring that assures the superior

protection of public safety and the environment, and achieves other

project objectives. A key element of this monitoring plan is a set

of programmatic performance measures that would track the growth and

institutionalization of risk management within the company, measure

the effectiveness of the EHSMS in achieving stated expectations, and

measure the effectiveness of specific risk control activities.

Mobil will report performance measurement data and project

progress regularly to OPS throughout the four year demonstration

period. This information, as well as periodic OPS audits, will

assure accountability for improved performance.

More detailed descriptions of all aspects of the Mobil proposal

and OPS rationale for approving the project are available to the

public via the Pipeline Risk Management Information System (PRIMIS),

at http://www.cycla.com/opsdemo.

C. Purpose and Need for Action

As authorized by Congress, OPS is conducting a structured

Demonstration Program to evaluate the use of a comprehensive risk

management approach in the operations and regulation of interstate

pipeline facilities. This evaluation is being performed under

strictly controlled conditions through a set of demonstration

projects being conducted with interstate pipeline operators. Through

the Demonstration Program, OPS will determine whether a risk

management approach, properly implemented and monitored through a

formal risk management regulatory framework, achieves:

(1) Superior safety and environmental protection; and

(2) Increased efficiency and service reliability of pipeline

operations.

In June, 1997, Mobil submitted a Letter of Intent to OPS, asking

to be considered as a Demonstration Program candidate. Using the

consultative process described in Appendix A of the Requests for

Application for the Pipeline Risk Management Demonstration Program

(62 FR 14719), published on March 27, 1997, OPS is satisfied that

Mobil's proposal will provide superior safety and environmental

protection, and is prepared to finalize the agreement with Mobil on

the provisions for the demonstration project.

D. Alternatives Considered

OPS has considered three alternatives: approval of the Mobil

risk management demonstration project as proposed in Mobil's

application; denial of the Mobil demonstration project; or approval

of the project with certain modifications to Mobil's application.

OPS's preferred alternative is to approve the Mobil

demonstration project. OPS is satisfied that the proposal protects

the Patoka facility and surrounding environment. The risk assessment

findings disclosed from Mobil's hazard and risk analyses already

exceed the information that would have been available to OPS through

the current regulatory process. As a result of the assessments,

Mobil is considering potential corrective actions for various

systems at the facility, including piping, pumps, communications,

fire water system, utility/support systems, and cast iron valves.

Because Mobil will continue to perform the activities currently

required by the regulations, the set of proposed risk control

activities will go beyond the current regulatory requirements to

provide a higher level of protection than exists today. OPS and

Mobil will monitor and, if necessary, improve the effectiveness of

the risk control activities throughout the demonstration period.

[[Page 36023]]

Denial of the project would result in OPS's considerable loss of

valuable information concerning the sources of risks at Patoka and

other similar breakout tank facilities and the most effective means

of managing these risks. Denial would also significantly diminish

OPS's ability to evaluate the effectiveness of an institutionalized,

integrated, and comprehensive risk management program in producing

superior performance, and would hinder OPS's ability to satisfy the

objectives of the Risk management Demonstration Program, and the

requirements of the previously-mentioned Presidential Directive.

All of the issues raised by OPS, state regulators, stakeholders,

and the public about Mobil's proposed project have been discussed

within the consultative process, resolved to OPS's satisfaction, and

reflected in Mobil's application. Therefore, OPS does not believe

that modifications to Mobil's application are required.

E. Affected Environment and Environmental Consequences

The Patoka facility is located within the city limits of Vernon,

Illinois, a town with a population of about 150. The area around the

facility is low population density. The facility contains 22

vertical aboveground crude storage tanks, plant transfer piping,

transfer pumps, crude oil blenders, offices, a maintenance building,

miscellaneous auxiliary pipeline station equipment, and the station

manager's personal residence. Patoka is a self-contained facility,

with no public roads traversing the property.

The North Fork Creek, which runs along the south end of the

Patoka facility, is a water supply for the city of Patoka. Mobil

protects the creek by maintaining a second physical barrier

surrounding each tank that is capable of holding more than the

entire contents of the tank. Mobil has provided additional

precautionary barriers to releases of product along the south end of

its Patoka facility.

The facility is used as a common carrier crude pipeline handling

facility. Products handled at the facility include crudes of varying

sulphur content from the U.S. Gulf Coast and Canada, and petroleum

condensate. The products include both ``sour'' crude (oil with a

total sulphur content above one percent), and ``sweet'' crude (oil

with little or no sulphur impurities). If a tank leak or rupture

were to occur, the crude product could possibly spill into the

immediate surrounding area within the facility, and in the presence

of an ignition source, could ignite releasing fumes into the air.

The likelihood of such spills and the levels of associated

environmental consequences are already very low, as evidenced by

both Patoka-specific and industry-wide operating history. The

performance of the risk demonstration project will result in

additional risk control activities over those currently required,

reducing even further the likelihood of events that could impact the

environment and the potential levels of those impacts.

In considering the merits of Mobil's proposal, OPS undertook a

comprehensive review of the company's safety and compliance record

for the demonstration project location, as well as Mobil's entire

East of the Rockies (EOR) system. Mobil, like all operating

companies, has experienced incidents at its facilities within and

outside the United States. In the last five years, the only incident

at Patoka of sufficient impact that required reporting to OPS

occurred on March 7, 1995. A roof drain hose failed due to ice

formation during sub-zero temperatures. This event resulted in no

injuries and the company reported that 196 of the 200 barrels

spilled were recovered.

Considering the frequency, causes, and consequences of these

events, together with Mobil's response to these events, OPS has

concluded that Mobil has demonstrated the corporate commitment to

safety and environmental protection required of demonstration

program candidates.

Mobil has also demonstrated a strong working relationship with

emergency response personnel from federal and state agencies. Mobil

recently participated in a successful emergency drill with

representatives from OPS, the Environmental Protection Agency (EPA),

and the Coast Guard. Local and state participants from Illinois and

Missouri played active roles in this exercise.

F. Environmental Justice Considerations

In accordance with Executive Order 12898 (Federal Actions to

Address Environmental Justice in Minority and Low-Income

Populations), OPS has considered the effects of the demonstration

project on minority and low-income populations. As explained above,

OPS believes this project will provide superior safety and

environmental protection at the Patoka facility. The risk control

activities will provide greater protection than compliance with

existing regulations. The Patoka facility is located within the city

limits of Vernon, Illinois, population about 150. Residents of

Vernon will be afforded greater protection than they presently have,

regardless of the residents' income level or minority status.

Therefore, the proposed project does not have any disproportionately

high or adverse health or environmental effects on any minority or

low-income populations near the demonstration facility.

G. Information Made Available to States, Local Governments, and

Individuals

OPS has made the following documents publicly available, and

incorporates them by reference into this environmental assessment:

(1) ``Demonstration Project Prospectus: Mobil Pipe Line

Corporation'', June 1998, available by contacting Elizabeth M.

Callsen at 202-366-4572. Includes a map showing the location of the

demonstration project site. Purpose is to reach the public, local

officials, and other stakeholders, and to solicit their input about

the proposed project. Mailed to several hundred individuals,

including Local Emergency Planning Committees (LEPC) and other local

safety officials, Regional Response Teams (RRT) representing other

federal agencies, state pipeline safety officials, conference

attendees, and members of public interest groups.

(2) ``Mobil Pipe Line Company--Application for DOT-OPS Risk

Management Demonstration Program'', available in Docket No. RSPA-98-

3891 at the Dockets Facility, U.S. Department of Transportation,

Plaza 401, 400 Seventh Street, SW, Washington, DC 20590-0001, (202)

366-5046.

(3) ``OPS Project Review Team Evaluation of the Mobil

Demonstration Project''.

(4) ``Notice of Intent to Approve Project'', published

concurrently with this Environmental Assessment.

OPS has previously provided information to the public about the

Mobil project, and has requested public comment, using many

different sources. OPS aired four electronic broadcasts (June 5,

1997; September 17, 1997; and December 4, 1997; and March 26, 1998.)

reporting on demonstration project proposals (the last three of

which provided specific information on Mobil's proposal). An earlier

Federal Register notice (62 FR 53052; October 10, 1997) informed the

public that Mobil was interested in participating in the

Demonstration Program, provided general information about technical

issues and risk control alternatives to be explored, and identified

the geographic areas the demonstration project would traverse.

Since August, 1997 OPS has used an Internet-accessible data

system called the Pipeline Risk Management Information System

(PRIMIS) at http://www.cycla.com/opsdemo to collect, update, and

exchange information about all demonstration candidates, including

Mobil.

At a November 19, 1997, public meeting OPS hosted in Houston,

TX, Mobil officials presented a summary of the proposed

demonstration project and answered questions from meeting attendees.

(Portions of this meeting were broadcast on December 4, 1997.) OPS

featured members of the Patoka community on a satellite/Internet

nationwide broadcast which aired March 26, 1998. The school

superintendent, fire chief, and mayor were among the citizens who

remarked on community relations, training programs, exercises, spill

drills, and other interactions between the company and citizens. In

addition to viewers of the live broadcast at sites throughout the

nation, the Internet broadcast received over 4300 hits. This

broadcast is available on demand via the OPS website ops.dot.gov/

tmvid.htm. So far, the public has not raised any issues or concerns

related to the Mobil proposal.

H. Listing of the Agencies and Persons Consulted, Including Any

Consultants

Persons/Agencies Directly Involved in Project Evaluation

Stacey Gerard, OPS/U.S. Department of Transportation

Tom Fortner, OPS/U.S. Department of Transportation

Ivan Huntoon, OPS/U.S. Department of Transportation

Donald Moore, OPS/U.S. Department of Transportation

Linda Daugherty, OPS/U.S. Department of Transportation

Bruce Hansen, OPS/U.S. Department of Transportation

Elizabeth Callsen, OPS/U.S. Department of Transportation

Steve Smock, Illinois Commerce Commission

Mary McDaniel, Railroad Commission of Texas

[[Page 36024]]

Jim vonHerrmann, Cycla Corporation (consultant)

Andrew McClymont, Cycla Corporation (consultant)

Persons/Agencies Receiving Briefings/Project Prospectus/Requests

for Comment

Regional Response Team (RRT), Region 5, representing the

Environmental Protection Agency; the Coast Guard; the U.S.

Departments of Interior, Commerce, Justice, Transportation,

Agriculture, Defense, State, Energy, Labor; Health and Human

Services; the Nuclear Regulatory Commission; the General Services

Administration; and the Federal Emergency Management Agency (RRT Co-

Chairs: Richard Karl, EPA and Captain Gregory Cope, Coast Guard).

I. Conclusion

Based on the above-described analysis of the proposed

demonstration project, OPS has determined that there are no

significant impacts associated with this action.

[FR Doc. 98-17492 Filed 6-30-98; 8:45 am]

BILLING CODE 4910-60-P