36018 Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices

These meetings will last up to four

hours. The exact dates shall be decided

by mutual consent of the COTR and

grantee. In addition, the grantee shall

plan for a presentation at one national

meeting (e.g., Lifesavers, Pro-Bike ProWalk) per year.

g. Professional Journal Paper: The

grantee shall prepare and submit at least

one paper for publication in a

professional journal if deemed

appropriate by the COTR.

3. During the effective performance

period of the cooperative agreement

awarded as a result of this

announcement, the agreement shall be

subject to the National Highway Traffic

Safety Administration’s General

Provisions for Assistance Agreements.

James Nichols,

Acting Associate Administrator for Traffic

Safety Programs.

[FR Doc. 98–17511 Filed 6–30–98; 8:45 am]

BILLING CODE 4910–59–P

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.

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

ops.comments@rspa.dot.gov. 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
Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices 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
36020 Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices

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 selfcontained 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
Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices 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)
36022 Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices

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 costeffective 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 facilityspecific 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.
Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices 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
36024 Federal Register / Vol. 63, No. 126 /Wednesday, July 1, 1998 / Notices

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

DEPARTMENT OF TRANSPORTATION

Research and Special Programs

Administration (RSPA), DOT.

[Docket No. RSPA–98–3892; Notice 13]

Pipeline Safety: Intent To Approve

Project and Environmental

Assessment for the Phillips Pipe Line

Company Pipeline Risk Management

Demonstration Program

AGENCY: Office of Pipeline Safety, DOT.

ACTION: Notice of Intent to Approve

Project and Environmental Assessment.

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 Phillips Pipe

Line Company (Phillips) as a participant

in the Pipeline Risk Management

Demonstration Program. This also

provides an environmental assessment

of Phillips’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 Phillips 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

Phillips 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 four 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

ops.comments@rspa.dot.gov. Comments

should identify the docket number

RSPA–98–3892. 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

Phillips’s demonstration project, and

evaluates the safety and environmental

impacts of this proposed project.

2. OPS Evaluation of Phillips’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 Phillips Pipe

Line Company on the provisions for a

demonstration project to be conducted

along Phillips’s Sweeny-Pasadena

system in Texas.

Company History and Record

Phillips Pipe Line Company is

headquartered in Bartlesville,