Integrity Management Rule Enforcement Integrity Office of Pipeline

Integrity Management Rule Enforcement Integrity Office of Pipeline Safety Management Workshop July 23 -24, 2002

Enforcement Presentation Topics • Objectives • OPS Enforcement Approach ° Prescriptive Requirements ° Performance-Based Requirements • Segment Identification Inspection Enforcement Office of Pipeline Safety

Objectives • Assure operators are developing IM Programs consistent with the rule ° Performing integrity assessments ° Addressing issues discovered through assessments Office of Pipeline Safety ° Developing IM program elements • Foster continuous improvement in IM Programs

Tools to Achieve Objectives • FAQs and other Guidance • Feedback to Operators During Inspections • Enforcement Actions • Hearings or Other Interactions Associated with Enforcement Process Office of Pipeline Safety • Communication of Noteworthy Practices

IM Rule Enforcement • Rule has Prescriptive & Performance-based Requirements • New Challenges for Inspection and Enforcement • Drawing on Broad Organizational Experience and Expertise Office of Pipeline Safety • Our Approach is Evolving

Enforcement of Prescriptive Requirements • Prescriptive Requirements Define Clearly Required Actions & Time Frames ° Segment Identification ° Baseline Assessment Plan and Framework Preparation Office of Pipeline Safety ° Baseline Assessment Methods & Schedules ° Mitigation/Repair Time Frames ° Re-assessment Intervals

Enforcement of Prescriptive Requirements, cont. Office of Pipeline Safety • Enforcement Instruments the Same as for Standard Inspections ° Warning Letter ° Notice of Amendment ° Notice of Probable Violation ° Compliance Order ° Corrective Action Order • Civil Penalties Commensurate with Severity and Safety Significance of Violation

Enforcement of Performance-Based Requirements • Performance-based Requirements Involve Development of IM Programs ° In-Line Inspection Results Review and Data Integration ° Risk Analysis ° Risk-based Decision Making (e. g. , EFRDs) • There a Variety of Acceptable Processes Office of Pipeline Safety • OPS needs a Different Approach for such Requirements

Guiding Principles for Performance. Based Requirement Enforcement • Objective: Foster Continuous Improvement of IM Programs, Processes & Tools • No Rigid “Standard” for IM Program Acceptance Office of Pipeline Safety • Structured Inspection Protocols will Focus on Basic Requirements & Operator Efforts to Comply

Promote Continuous Improvement • Operator Periodically Evaluates IM Program & Implements Improvements • Operator Analyzes Incident Root Causes & Implements Lessons Learned • Operator Implements New Consensus Standards • OPS Feedback & Observations from Inspections Office of Pipeline Safety • Operator Awareness of Industry Best Practices & New Technology

Example Protocol Structure • Is Process Documented? • Does Process Use All Relevant Inputs? • Is Process Logical, Technically Correct, and Adequate to Produce Desired Results? • Are Results Documented and Communicated? Office of Pipeline Safety • Are Roles and Responsibilities Established? • Is Process Implemented as Described?

Enforcement Process Evolution Office of Pipeline Safety • Operators and OPS are Learning and will Continue to Learn • Fully Implemented and Mature Programs not Expected Immediately • “Success” in Initial Review Will Not Imply Long-term “Acceptability”of Operator’s IM Program or its Processes • Subsequent Reviews Will Examine Operator Implementation Against Plan in Framework • Will Examine IM Process Improvements & Effectiveness

Feedback & Enforcement for Performance-Based Requirements • Verbal Communication During Exit Interview • Notice of Amendment to Require Changes & Improvements to IM Processes Office of Pipeline Safety • NOPV/Compliance Orders for Non. Compliance

Civil Penalties • This rule is a strong step forward in the effort to improve safety and will be enforced to assure compliance • OPS will work with companies who evidence good faith in attempting to comply Office of Pipeline Safety • Large civil penalties can be expected for probable violations

Segment Identification Inspection Enforcement • OPS Demonstrated Commitment to Enforcement of the Integrity Management Rule Office of Pipeline Safety Operators 40 Operators with no 8 compliance action Operators receiving NOAs 31 Operators receiving NOPVs and CP 9 Operators receiving WL 1

IM Enforcement To Date Office of Pipeline Safety • Segment Identification Inspections ° Notice of Amendment Incomplete Technical Justification or Simplifying Assumptions that Did Not Consider all Factors » No consideration of stream transport » HVL properties not considered

IM Enforcement To Date (cont. ) • Segment Identification Inspections ° NOPV with Proposed Civil Penalty Did not Address Fundamental Rule Requirement Office of Pipeline Safety » Did not identify segments that could affect USAs in states where USAs were not mapped on NPMS

Summary • Committed to Firm but Fair Enforcement • Continuous Improvement of Operator Programs is Expected • Both OPS and Operators are Still Learning Office of Pipeline Safety