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

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration (RSPA), DOT

[Docket No. RSPA-98-4450; Notice 17]

Pipeline Safety: Intent To Approve Project and Environmental

Assessment for the Chevron Pipe Line Company; Pipeline Risk Management

Demonstration Program

AGENCY: Research and Special Programs Administration, Office of

Pipeline Safety, 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 Chevron Pipe Line Company

(Chevron) as a participant in the Pipeline Risk Management

Demonstration Program. This also provides an environmental assessment

of Chevron'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 that would go into

effect once OPS issues an order approving Chevron as a Demonstration

Program participant. OPS seeks public comment on the proposed

demonstration project so it may consider and address these comments

before approving the project. The Chevron 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 February 8, 1999, 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-98-4450. 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 9:00 a.m. to 5:00 p.m., Monday

through Friday, except on Federal holidays.

[[Page 71335]]

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

4572, regarding the subject matter of this notice and environmental

assessment. Contact the Dockets Unit, (202) 366-9322, for docket

material. Comments may also be reviewed on line at the DOT Docket

Management System website at http://dms.dot.gov/.

SUPPLEMENTARY INFORMATION:

1. Background

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

overseeing pipeline safety. As a critical component of its mandate, OPS

administers and enforces a broad range of regulations governing

pipeline safety and environmental protection of pipelines. These

regulations have contributed to a good pipeline industry safety record

by ensuring 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 12, 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 the 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

Chevron's demonstration project, and evaluates the safety and

environmental impacts of this proposed project.

2. OPS Evaluation of Chevron 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 Chevron on the provisions for a demonstration project on

a 330-mile portion of Chevron's Salt Lake Products Pipeline System.

Company History and Record: The Salt Lake Products Pipeline System

is, on average, 41 years old. It is composed of 706 miles of pipeline

right-of-way that originates at Chevron's Salt Lake City refinery and

distributes refined product (gasoline, diesel, jet fuel) throughout the

States of Utah, Idaho, Oregon, and Washington. Construction of the

first leg from Salt Lake City, Utah, to Twin Falls, Idaho, was

completed in 1949. Expansion of the system in the 1950's and 1960's

extended the system to Boise, Idaho; Pasco, Washington; and Spokane,

Washington. Major lateral supply lines include lines to Pocatello,

Idaho, and the Salt Lake City Airport. Chevron is proposing the 330-

mile portion of the system from Salt Lake City, Utah to Boise, Idaho as

its demonstration site. Chevron is headquartered in San Ramon,

California, and has a Salt Lake Products support office in Salt Lake

City, Utah.

Before entering into consultations with Chevron, OPS determined

that Chevron was a favorable candidate for the Program after examining

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. The Salt Lake Products

Pipeline System has experienced five reportable releases since 1990.

Two of these releases were caused by damage from third parties

excavating near the line; two events resulted from external corrosion;

and the final release was due to a welding defect. The volume of

product released from the line in each instance was relatively small--

the largest being a release of approximately 365 barrels of jet fuel

that occurred after an excavator pierced the line. The other four

releases ranged from 88 barrels to 200 barrels. OPS was satisfied with

the remedial actions undertaken in response to the two corrosion

accidents. One involved localized corrosion due to a casing under a

highway crossing. Chevron replaced the corroded pipe and eliminated the

casing to prevent future reoccurrence. The other resulted from general

external corrosion. After conducting an internal inspection of the

pipeline, Chevron replaced all corroded pipe in the vicinity of the

leak. None of the five releases resulted in injuries to pipeline

personnel or members of the public, or caused a fire or explosion. The

environmental impacts in each case were localized. The sites were

cleaned to the satisfaction of regulatory agencies, and caused no

permanent environmental damage.

The most recent significant accident on any Chevron pipeline

occurred on the KLM Crude System on March 11, 1995. Four thousand

barrels of crude oil were spilled into the Arroyo Pasajero near

Kettleman City, California, when an upstream bridge collapsed during a

100-year flood and the resulting debris damaged the pipeline. No deaths

or injuries resulted from the pipeline accident, although crop damage

did occur. Following its accident investigation, the California State

Fire Marshal (acting as an OPS state agent) cited Chevron for failure

of the pipeline controller to take timely action. Chevron has replaced

the segment of pipeline, burying it over 20 feet beneath the bottom of

the channel where it can not be affected by future flooding. Chevron

has also modified training procedures and retrained appropriate

personnel in response to the State Fire Marshal's findings.

OPS believes that the actions Chevron has taken to address the

specific causes of these accidents, together with Chevron's existing

risk management program, are adequate responses to the incidents and

demonstrate a continued commitment to safety. An important feature of

Chevron's risk management program is the systematic approach Chevron

employs to ensure that lessons-learned from any accident or unplanned

event are considered in future risk assessments. Chevron begins its

scenario based risk assessment of a pipeline system by considering a

standard checklist of initiating events, which is constantly updated to

reflect all known causes of accidents on any Chevron pipeline. In

choosing risk control activities, Chevron carefully

[[Page 71336]]

considers consequences of past accidents on other similar pipeline

systems.

Consultative Evaluation: During the consultations, a Project Review

Team (PRT) consisting of representatives from OPS headquarters and

Western Region, pipeline safety officials from Utah and Washington, and

risk management experts met with Chevron to discuss Chevron's risk

assessment, supporting analyses, proposed risk control activities,

performance measures, and means of administering risk management within

the company. The discussions addressed technical validation of all

proposed activities, demographics and terrain along the demonstration

segment, communications with outside stakeholders, and monitoring and

auditing of results once the demonstration project is underway. These

reviews were undertaken to ensure that the proposed Chevron

demonstration project satisfies the three primary review criteria for

the OPS Risk Management Demonstration Program:

1. Whether Chevron's proposed risk management program is consistent

with the Risk Management Program Standard and compatible with the

Guiding Principles set forth in that Standard;

2. Whether the proposed set of risk control alternatives is

expected to produce superior safety, environmental protection, and

reliability of service compared to that achieved from compliance with

the current regulations;

3. Whether Chevron's proposed risk management demonstration program

includes a company work plan and a performance monitoring plan that

will provide adequate assurance that the expectation for superior

safety, environmental protection, and service reliability is actually

being achieved during implementation.

The demonstration project provisions described in this notice

evolved from these consultations, as well as from any public comments

received to date. An Environmental Assessment was completed as part of

the Consultation process and is included as an Appendix to this Notice.

Once OPS and Chevron consider and address comments received on this

notice, OPS may issue an Order approving the Chevron demonstration

project.

3. Statement of Project Goals

The Salt Lake Products Pipeline System transports gasoline, diesel,

and jet fuel, which are stable, flammable liquids. If released in

sufficient quantities and under certain conditions, spills may result

in property and environmental damage, injuries, and fatalities.

Therefore, ensuring that pipeline leaks and ruptures do not occur is

the highest priority for OPS, state agencies, and Chevron. Through risk

management, Chevron intends to continuously improve the level of safety

associated with operating this line.

OPS and Chevron believe Chevron's demonstration project will

improve safety by applying numerous risk control measures that exceed

regulatory requirements on the pipeline segment. Chevron has completed

two risk assessments on the entire Salt Lake Products Pipeline System:

the first in 1995 and the second in April 1997. Based on the results of

these risk assessments, Chevron has developed a set of risk control

activities that address the areas of highest risk and are intended to

result in reduced risk and superior safety and reliability on the

pipeline system.

For the Salt Lake Products Pipeline System, Chevron will supplement

the required regulatory activities it now performs with numerous new

and additional risk control activities resulting from the comprehensive

risk assessments. Some of the more significant activities that will be

added to existing measures to improve safety along the demonstration

segment are a comprehensive in-line inspection program to address

external corrosion, activities to minimize the potential impact of

drain valve leaks at several locations, a geologic hazard assessment to

identify areas vulnerable to seismic activity, scouring, and land

movement, enhanced risk communication with Local Emergency Planning

Committees, and improved approaches to identify and address risks in

Unusually Sensitive Areas (USAs). (The USA definition will appear in

American Petroleum Institute (API) guidance to be published during the

first quarter of 1999. Examples of USA candidates would be public water

systems and threatened and endangered species).

Chevron is not requesting any exemptions from current regulations

as part of its demonstration project. The set of risk control

activities that Chevron identified from the risk assessments of the

Salt Lake Products Pipeline System are intended to provide additional

safety assurance. Chevron makes a strong case that the risk of a

release on this system will be reduced, and superior safety and

environmental protection will result.

4. Demonstration Project Pipeline Segment

Salt Lake Products Pipeline System. The Salt Lake Products Pipeline

System passes through Utah, Idaho, Oregon, and Washington. Construction

of the first leg from Salt Lake City, Utah, to Twin Falls, Idaho, was

completed in 1949. Expansion of the system in the 1950's and 1960's

extended the system to Boise, Idaho; Pasco, Washington; and Spokane,

Washington. Major lateral supply pipelines include lines to Pocatello,

Idaho, and the Salt Lake City Airport. The portion of the system

proposed for the Demonstration Program consists of two parallel 8-inch

diameter pipelines from Salt Lake City to Boise--one line transporting

all grades of gasoline, and the other line transporting petroleum

distillates such as diesel and jet fuel. The remainder of the system

from Boise to Spokane consists of only one pipeline. With upgrades

planned for completion by early 1999, the Salt Lake Products Pipeline

System will transport a total of 70,000 barrels per day. The pipeline

route crosses a variety of terrains, including desert, farmland,

mountains, wetlands, and several river crossings. The majority of the

route is through sparsely populated areas, with the exception of Salt

Lake City and Boise where the population growth has resulted in a

moderate density of residences and businesses near the right-of-way

(with some individual residences and businesses adjacent to the right-

of-way).

5. Project Description

The following risk control and monitoring activities would be

included in the Order OPS issues formally approving the Chevron

demonstration project.

Risk Control Activities on the Salt Lake Products Pipeline System

Chevron intends to demonstrate it operates more safely with a risk

management program in place, providing a level of safety and

environmental protection that exceeds protection afforded by pipeline

safety requirements. The set of risk control activities that Chevron

has identified from the risk assessments of the Salt Lake Products

Pipeline System are intended to provide additional protection. Chevron

is not requesting any exemptions from current regulations for its

demonstration project.

The risk control activities that Chevron identified from its 1995

and 1997 risk assessments on the Salt Lake Products Pipeline System

will be the focus of the demonstration project. The most significant

risk control activities are the following:

[[Page 71337]]

External corrosion. The Chevron corrosion maintenance and

prevention program meets or exceeds all regulatory requirements and is

consistent with good industry practices. As with all pipelines that

have been operating for several years, there are some locations where

the company is concerned about pipe coating condition and ensuring the

adequacy of cathodic protection. To obtain better information about the

current pipe condition, especially areas where corrosion might be

occurring, the company intends to enhance its comprehensive internal

inspection program by linking inspection results with identified

sensitive environmental areas (discussed below). Chevron will run an

inspection device through the pipe that will identify pipe geometric

defects such as dents, gouges, and areas that are not perfectly round.

Then a second ``intelligent'' pipe inspection tool will be used to

identify locations where there has been metal loss due to corrosion.

The output from these inspection tools will be used to identify pipe

locations where corrosion or other problems might exist. The company

will then excavate, examine, and, if appropriate, repair any damage

that is discovered at these sites.

Geologic hazards in the form of seismic, scouring, and

land movement. Chevron identified these hazards in the 1995 risk

assessment and remediated several key locations. However, the company

still believes these risks need to be better defined and addressed.

Chevron is proposing to conduct a geologic hazard assessment that

identifies and obtains more data on the areas most vulnerable to

geologic hazards. Chevron will use this information in its risk control

and decision making process to identify risk control activities to

address significant geologic threats.

Mapping Sensitive Environmental Areas. Another feature of

the Chevron risk management demonstration project is to develop

improved approaches to identify and address risks in USAs. This effort

will include mapping sensitive environmental areas adjacent to the line

using the Global Positioning System and Geographic Information System.

This information will support a more thorough investigation of

environmental risks on the pipeline system as well as improving the

allocation of resources to focus on potential problems in

environmentally sensitive areas.

Finally, as part of the demonstration project, Chevron will

reassess the risks of the demonstration site every two years to update

its understanding of risks. Chevron will consult with OPS and state

agencies about how best to address the results of these risk

assessments.

Monitoring Demonstration Project Effectiveness

Chevron's Demonstration Project includes performance monitoring to

assure the superior protection of public safety and achieve other

project objectives. A key element of the performance monitoring plan is

a set of performance measures that would track the risk reduction on

the Salt Lake Products Pipeline System over time, track the growth and

institutionalization of risk management within the company, measure the

effectiveness of Chevron's risk control activities, and provide a basis

for future improvement. Examples include:

Risk reduction on the demonstration site over time.

Chevron will analyze the results from the 1995, 1997, as well as future

risk assessments to be conducted in 1999 and 2001, to see if risk is

being reduced on the pipeline over time.

Risk management program evolution from inception five

years ago until present day and through the demonstration project.

Chevron will document what has been done over time to make the program

and processes more effective, and how the risk tools have evolved over

time. For example, initially the scope of the Chevron program was

assessing risk of pipeline systems, but the program has evolved to

include evaluating all Chevron capital-funded pipeline projects as well

as Chevron expense-funded pipeline projects. Risk management is even

being employed in evaluating potential management system changes, such

as automation and manpower requirements.

Chevron will report performance measure 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.

Section B of the Environmental Assessment provides more detail on

Chevron's proposed project.

6. Regulatory Perspective

Why OPS Plans to Approve This Project?

OPS is considering Chevron's proposed project for the Demonstration

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

proposal:

A. Provides superior protection for the demonstration segment.

Chevron's risk control activities for the Salt Lake Products Pipeline

System exceed current regulatory requirements to provide additional

safety and environmental protection.

B. 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 Chevron's

participation, given some of the distinguishing features of its

proposed demonstration project, including:

Chevron has a strong corporate commitment to risk

management, and has already established an integrated and comprehensive

risk management program. This project will provide insights into how a

company effectively integrates a risk management program into its on-

going business practices.

Chevron has already completed two risk assessments of the

entire proposed demonstration project system, and has already developed

a set of projects to address the areas of highest risk. Chevron

believes it can demonstrate superior performance by showing that the

risk management program is an effective addition to the current

regulations.

Chevron's proposed project includes using risk assessment

to develop improved approaches to identify and address risks in

sensitive environmental areas (e.g., public water systems, sole source

acquifers, and habitats of critically imperiled, and threatened and

endangered species). This project may provide useful insights into

OPS's current multi-agency efforts to define USAs.

Chevron is not requesting any regulatory exemption. This

project will demonstrate how a company can use risk management to

achieve superior performance and continued improvement without avoiding

required activities.

This project will demonstrate how a quantitative,

scenario-based approach to risk assessment can be effective in

identifying and addressing pipeline risks.

Chevron is one of the few companies that has truly

integrated risk consideration into the annual capital budget process.

The process and its evolution should provide OPS useful insights into a

truly integrated and effective risk management program.

How Will OPS Oversee This Project?

After Chevron's risk management demonstration project is approved,

the PRT consisting of OPS headquarters and regional staff and state

pipeline safety officials who have been reviewing the proposal, will

monitor the project. The PRT is designed to be a more

[[Page 71338]]

comprehensive oversight process that draws maximum technical experience

and perspective from all affected OPS regional and headquarters

offices, and from any affected state agencies that would not normally

provide oversight on interstate transmission projects.

The PRT will conduct periodic risk management audits to observe

company performance of 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 Chevron

Demonstration Project. This plan will describe the audit process (e.g.,

types of inspections, methods, and their frequency), as well as

specific requirements for reporting information and performance measure

data to OPS.

OPS retains its full authority to administer and enforce all

regulations governing pipeline safety. Chevron is not requesting any

regulatory exemptions. The Salt Lake Products Pipeline System will be

subject to routine OPS inspection to ensure compliance with the

applicable Federal Pipeline Safety Regulations.

Information Provided to the Public

OPS has previously provided information to the public about the

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

sources.

1. OPS aired several electronic ``town meetings'' enabling viewers

of the two-way live broadcasts to pose questions and voice concerns

about candidate companies (including Chevron).

2. An earlier Federal Register notice (62 FR 53052; October 10,

1997) informed the public that Chevron was interested in participating

in the Demonstration Program, provided general information about

technical issues and risk control activities to be explored, and

identified the geographic areas the demonstration project would

traverse.

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

system called the Pipeline Risk Management Information System (PRIMIS),

available via the OPS Home Page at http://ops.dot.gov to collect,

update, and exchange information about all demonstration candidates,

including Chevron.

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

TX, Chevron 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, and March 26, 1998).

5. OPS is providing a prospectus, which includes a map of the

demonstration pipeline segment, to State officials and community

representatives who may be interested in reviewing project information,

providing input, or monitoring the progress of the project.

At this point, OPS has received no public comment on Chevron's

proposal. This notice is OPS's final request for public comment before

OPS intends to approve Chevron's participation in the Demonstration

Program.

Issued in Washington, DC on December 18, 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 12, 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 Chevron Pipe

Line Company's (Chevron's) 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. 4332), the

Council on Environmental Quality regulations (40 CFR Parts 1500-

1508), and Department of Transportation Order 5610.1c, Procedures

for Considering Environmental Impacts.

B. Description of the Proposed Action

As a result of a comprehensive review of the risk management

demonstration project Chevron has proposed, the Office of Pipeline

Safety (OPS) proposes to approve this project for participation in

the Demonstration Program.

The Chevron project would involve the following pipeline

segment:

(1) The 330-mile portion of the Salt Lake Products Pipeline

System from Salt Lake City, Utah to Boise, Idaho.

The OPS Project Review Team that conducted this review has

concluded the Chevron project will:

(1) Provide superior safety and environmental protection for the

pipeline segment proposed for the demonstration project; and

(2) Offer a good opportunity to evaluate risk management as a

component of the Federal pipeline safety regulatory program.

The Project Review Team evaluated the project according to

review protocols and criteria available on PRIMIS. This evaluation

is documented in ``OPS Project Review Team Evaluation of Chevron

Demonstration Project.'' As a candidate for the Pipeline Risk

Management Demonstration Program, Chevron has conducted thorough and

systematic risk assessments to identify hazards and risks associated

with operating the demonstration segment. The process used for

performing these risk assessments is described in ``OPS Project

Review Team Evaluation of Chevron Demonstration Project''.

Chevron has a strong, fully institutionalized risk management

program that it has developed and refined through five years of

application on all of its pipeline systems. The foundation of the

Chevron program is a very systematic risk assessment process. This

investigative process involves a comprehensive examination of the

entire pipeline looking for possible sources of risk, modeling

potential accident scenarios represented by these threats, and

quantifying the relative importance of the risks. The examination of

potential consequences includes public and worker safety as well as

health effects, impacts on the environment, and maintaining service

to Chevron's customers. The Chevron risk management program

incorporates a well documented Risk Management Program Manual which

includes a comprehensive set of risk management implementing

procedures. Chevron effectively involves experienced field personnel

in the risk management process. This comprehensive approach to risk

management typically discovers risks that might not have been

addressed through compliance with existing regulations.

Chevron is not requesting exemptions from current regulations

for its proposed demonstration project. The set of risk control

activities that have been identified from the risk assessments of

the Salt Lake Products Pipeline System (described below) go beyond

current pipeline safety requirements to provide additional

protection. Chevron intends to demonstrate it operates more safely

with a risk management program in place, providing a level of safety

and environmental protection that exceeds current regulations.

Chevron has completed two risk assessments on the Salt Lake

Products Pipeline System: the first in 1995 and the second in April

1997. Based on the results of these risk assessments, Chevron has

developed a set of risk control activities that address the areas of

highest risk. The following are the most significant activities that

will be applied to the 330-mile demonstration segment and will be

the focus of the Chevron demonstration project:

External corrosion. The Chevron corrosion maintenance

and prevention program meets or exceeds all regulatory requirements

and is consistent with good industry practices. As with all

pipelines that have been operating for several years, there are some

locations where the company is concerned about pipe coating

condition and ensuring the adequacy of cathodic protection. To

obtain better information about the current pipe condition,

especially areas where corrosion might be occurring, the

[[Page 71339]]

company intends to enhance its comprehensive internal inspection

program by linking inspection results with identified sensitive

environmental areas (discussed below). Chevron will run an

inspection device through the pipe that will identify pipe geometric

defects such as dents, gouges, and areas that are not perfectly

round. Then a second ``intelligent'' pipe inspection tool will be

used to identify locations where there has been metal loss due to

corrosion. The output from these inspection tools will be used to

identify pipe locations where corrosion or other problems might

exist. The company will then excavate, examine, and, if appropriate,

repair any damage that is discovered at these sites.

Geologic hazards in the form of seismic, scouring, and

land movement. Chevron identified these hazards in the 1995 risk

assessment and remediated several key locations. However, the

company still believes these risks need to be better defined and

addressed. Chevron is proposing to conduct a geologic hazard

assessment that identifies and obtains more data on the areas most

vulnerable to geologic hazards. Chevron will use this information in

its risk control and decision making process to identify risk

control activities to address significant geologic threats.

Mapping Sensitive Environmental Areas. Another feature

of the Chevron risk management demonstration project is to develop

improved approaches to identify and address risks in Unusually

Sensitive Areas (USAs). (The USA definition will appear in American

Petroleum Institute (API) guidance to be published during the first

quarter of 1999. Examples of USA candidates would be public water

systems and threatened and endangered species.) This effort will

include mapping sensitive environmental areas adjacent to the line

using the Global Positioning System and Geographic Information

System. This information will support a more thorough investigation

of environmental risks on the pipeline system as well as improving

the allocation of resources to focus on potential problems in

environmentally sensitive areas.

Finally, as part of the demonstration project, Chevron will

reassess the risks of the demonstration site every two years to

update its understanding of risks. Chevron will share the results of

these risk assessments with OPS.

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, Chevron 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

Chevron's proposal will provide superior safety and environmental

protection, and is prepared to finalize the agreement with Chevron

on the provisions for the demonstration project.

D. Alternatives Considered

OPS has considered three alternatives: approval of the Chevron

risk management demonstration project as proposed in Chevron's

application; denial of the Chevron demonstration project; or

approval of the project with certain modifications to Chevron's

application.

OPS's preferred alternative is to approve the Chevron

demonstration project. OPS is satisfied that the proposal will not

significantly affect the surrounding environment. OPS expects the

project will lead to superior levels of safety and environmental

protection than provided under current regulatory requirements,

because of the identification and analysis of effective risk control

activities. Increased sharing between OPS and Chevron about

potential pipeline risks will increase OPS's knowledge and awareness

about potential pipeline threats, provide earlier opportunity to

consider appropriate risk control options, and thereby support a

more effective regulatory role in improving safety and environmental

protection.

If OPS denied the project, it would lose valuable information

concerning the sources of risks to Chevron's pipeline system 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, and other

stakeholders about Chevron's proposed project have been discussed

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

reflected in Chevron's application. Thus, we do not see any need to

modify Chevron's proposal.

E. Affected Environment and Environmental Consequences

The Salt Lake Products Pipeline System is composed of 706 miles

of pipeline right-of-way that originates at Chevron's Salt Lake City

refinery and distributes refined product (gasoline, diesel, jet

fuel) throughout the States of Utah, Idaho, Oregon, and Washington.

Chevron has proposed the 330-mile portion of the system between Salt

Lake City, Utah and Boise, Idaho as its demonstration project. The

transported products meet the 49 CFR part 195 definition of

petroleum products in that they are flammable, toxic or corrosive.

This means that the highest priority for OPS and Chevron is ensuring

that pipeline leaks and ruptures do not occur. Through risk

management, Chevron intends to continuously improve the level of

safety and environmental protection associated with operating this

system.

Gasoline, diesel, and jet fuel are stable, flammable liquids.

However, under rare circumstances, spills may result in the

accumulation of highly flammable, heavier than air vapors in low

areas. These vapors may also spread along the ground away from the

spill site. Ignition of the vapor trail may occur if an ignition

source is present. Localized damage created by a fire in the

vicinity of the release could occur. These products form carbon

oxides and various hydrocarbons which are dispersed into the

atmosphere when burned. These products will also float on water, and

large spills have been known to result in kills of fish and other

aquatic life.

The Salt Lake Products Pipeline System has experienced five

relatively small reportable releases since 1990. Two of these

releases were caused by damage from third parties excavating near

the line; two events resulted from external corrosion; and the final

release was due to a welding defect. The volume of product released

from the line in each instance was relatively small--the largest

being approximately 365 barrels of jet fuel that occurred after an

excavator pierced the line. The other four releases ranged from 88

barrels to 200 barrels. None of these releases resulted in injuries

to pipeline personnel or members of the public, or caused a fire or

explosion. The environmental impacts in each case were localized,

cleaned to the satisfaction of regulatory agencies, and caused no

permanent environmental damage.

Chevron is not requesting any exemptions from current

regulations. The set of risk control activities that have been

identified from the risk assessments of the Salt Lake Products

Pipeline System (previously mentioned) go beyond the requirements of

existing regulations to provide additional protection.

During the course of the consultation, Chevron presented the

results of its risk control and decision support process that

identified the risk control activities it proposes to implement on

its proposed demonstration site. The OPS Project Review Team

carefully reviewed these activities and has concluded that superior

protection would be provided. As stated previously, all of these

risk control activities go beyond the existing regulations in

providing additional assurance of safety. The OPS review looked for

potentially negative, unintended outcomes from the proposed

activities but did not identify any significant negative impacts.

OPS has concluded that Chevron's proposed risk control activities

when combined with the existing company practices (which comply with

and in some cases exceed 49 CFR part 195 requirements) will reduce

the likelihood and consequences of pipeline accidents and leaks

along the demonstration segment.

[[Page 71340]]

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,

this project will not result in any significant environmental

impacts, because Chevron will be complying with current applicable

pipeline safety regulations. Residents along the segment will have

the same level of protection that 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

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

system called the Pipeline Risk Management Information System

(PRIMIS), available via the OPS Home Page at http://ops.dot.gov, to

collect, update, and exchange information about all demonstration

candidates, including Chevron. OPS has made the following documents

publicly available through PRIMIS, and incorporates them by

reference into this environmental assessment:

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

Company'', available by contacting Elizabeth M. Callsen at 202-366-

4572. Includes a map of the demonstration segment. Purpose is to

reach the public, local officials, and other stakeholders, and to

solicit their input about the proposed project. The prospectus has

been mailed to 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) ``Chevron Pipe Line Company--Application for DOT-OPS Risk

Management Demonstration Program''.

(3) ``OPS Project Review Team Evaluation of Chevron

Demonstration Project''.

(4) Notice of Intent to Approve Project, published concurrently

with this environmental assessment.

OPS has provided additional information to the public about the

Chevron project, and has requested public comment, using many

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

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

reporting on demonstration project proposals (including Chevron's

proposal). An earlier Federal Register notice (62 FR 53052; October

10, 1997) informed the public that Chevron was interested in

participating in the Demonstration Program, provided general

information about technical issues and risk control activities to be

explored, and identified the geographic areas the demonstration

project would traverse.

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

TX, Chevron 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 and

March 26, 1998.)

No issues or concerns about Chevron's proposal have been raised.

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

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

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

Edward Ondak, OPS/U.S. Department of Transportation

Joseph Robertson, OPS/Western Region/U.S. Department of

Transportation

Kent Evans, Utah Department of Commerce

Dennis Lloyd, Washington Utilities and Transportation Commission

Steve Rieger, Washington Utilities and Transportation Commission

Robert Brown, Cycla Corporation (Consultant)

Jim Quilliam, Cycla Corporation (Consultant)

Persons/Agencies Receiving Briefings/Project Prospectus/Requests for

Comment

Regional Response Team (RRT), Regions 8 & 10, 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: Doug Skie, EPA Region 8; Cdr. Ed Stanton, Coast Guard 8th

District; James Everts, EPA Region 10; and Capt. James Morris, Coast

Guard 13th District).

I. Conclusion

Based on the above-described analysis of the proposed risk

management demonstration project, OPS has determined that there are

no significant impacts associated with this action.

[FR Doc. 98-34145 Filed 12-23-98; 8:45 am]

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