EEQ » Topics » Pipeline Safety and Transportation Regulation

These excerpts taken from the EEQ 10-K filed Feb 19, 2009.

Pipeline Safety and Transportation Regulation

Our transmission and non-rural gathering pipelines are subject to regulation by the United States Department of Transportation, or DOT, Pipeline and Hazardous Materials Safety Administration (“PHMSA”) under Title 49 United States Code of Federal Regulations (Pipeline Safety Act, or PSA) relating to the design, installation, testing, construction, operation, replacement and management of transmission and non-rural gathering pipeline facilities. The PHMSA is the agency charged with regulating the safe transportation of hazardous materials under all modes of transportation, including intrastate pipelines. Periodically the PSA has been reauthorized and amended, imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.

In 1999 PHMSA published a final rule regarding the qualification of pipeline operations personnel. The “Operator Qualification” regulations require pipeline operators to utilize qualified individuals to perform pipeline operations and maintenance activities or tasks. The rule required pipeline operators to have a written plan in place by April 27, 2001 and to complete qualification of personnel by October 28, 2002. We have prepared an Operator Qualification Plan which is in compliance with the final rule. The implementation of this plan does not have a material affect on the operations of our pipelines.

On December 17, 2002, the PSI Act of 2002 was enacted reauthorizing and amending the PSA. The most significant amendment required natural gas pipelines to develop integrity management programs and conduct integrity assessment tests at a minimum of seven year intervals. Such tests can include internal inspection, hydrostatic pressure tests or direct assessments on pipelines in certain high consequence areas. The PHMSA has since promulgated rules for this and other mandates included in the PSI Act of 2002.

On December 29, 2006, the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (“PIPES of 2006”) was enacted, which further amended the Pipeline Safety Act. Many of the provisions were welcome, including strengthening excavation damage prevention and enforcement. The most significant provisions of PIPES of 2006 that will affect us, but not materially, include a mandate to PHMSA to remove most exemptions from federal regulations for liquid pipelines operating at low stress and mandates PHMSA to undertake rulemaking requiring pipeline operators to have a human factors management plan for pipeline control room personnel, including consideration for controlling hours of service.

We have incorporated the new requirements of the 2002 and 2006 PSA amendments into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase is not expected to be material.

The Pipeline Safety Act Reauthorization of 2006 (“PIPES Act”) required, among other measures, for PHMSA to extend their current jurisdictional authority to regulate previously exempted low operating stress pipelines. In September 2007, the PHMSA issued a NOPR that details how such low stress pipelines would be regulated and the safety measures that would be required. Industry commented and PHMSA issued the Final Rule on June 3, 2008. The Final Rule does not have any regulatory requirements that materially affect our low stress transmission pipelines.

 

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Table of Contents
Index to Financial Statements

When hydrocarbons are released into the environment, the PHMSA can impose a return-to-service plan, which can include implementing certain internal inspections, pipeline pressure reductions, and other strategies to verify the integrity of the pipeline in the affected area. We do not anticipate any return-to-service plans that will have a material impact on system throughput or compliance costs; however, we have the potential of incurring expenditures to remediate any condition in the event of a discharge or failure on our systems.

Our trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other materials.

We believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.

Pipeline Safety and Transportation Regulation

Our transmission and non-rural gathering pipelines are subject to regulation by the United States Department of Transportation, or DOT, Pipeline and Hazardous Materials Safety Administration (“PHMSA”) under Title 49 United States Code of Federal Regulations (Pipeline Safety Act, or PSA) relating to the design, installation, testing, construction, operation, replacement and management of transmission and non-rural gathering pipeline facilities. The PHMSA is the agency charged with regulating the safe transportation of hazardous materials under all modes of transportation, including intrastate pipelines. Periodically the PSA has been reauthorized and amended, imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.

In 1999 PHMSA published a final rule regarding the qualification of pipeline operations personnel. The “Operator Qualification” regulations require pipeline operators to utilize qualified individuals to perform pipeline operations and maintenance activities or tasks. The rule required pipeline operators to have a written plan in place by April 27, 2001 and to complete qualification of personnel by October 28, 2002. We have prepared an Operator Qualification Plan which is in compliance with the final rule. The implementation of this plan does not have a material affect on the operations of our pipelines.

On December 17, 2002, the PSI Act of 2002 was enacted reauthorizing and amending the PSA. The most significant amendment required natural gas pipelines to develop integrity management programs and conduct integrity assessment tests at a minimum of seven year intervals. Such tests can include internal inspection, hydrostatic pressure tests or direct assessments on pipelines in certain high consequence areas. The PHMSA has since promulgated rules for this and other mandates included in the PSI Act of 2002.

On December 29, 2006, the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (“PIPES of 2006”) was enacted, which further amended the Pipeline Safety Act. Many of the provisions were welcome, including strengthening excavation damage prevention and enforcement. The most significant provisions of PIPES of 2006 that will affect us, but not materially, include a mandate to PHMSA to remove most exemptions from federal regulations for liquid pipelines operating at low stress and mandates PHMSA to undertake rulemaking requiring pipeline operators to have a human factors management plan for pipeline control room personnel, including consideration for controlling hours of service.

We have incorporated the new requirements of the 2002 and 2006 PSA amendments into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase is not expected to be material.

The Pipeline Safety Act Reauthorization of 2006 (“PIPES Act”) required, among other measures, for PHMSA to extend their current jurisdictional authority to regulate previously exempted low operating stress pipelines. In September 2007, the PHMSA issued a NOPR that details how such low stress pipelines would be regulated and the safety measures that would be required. Industry commented and PHMSA issued the Final Rule on June 3, 2008. The Final Rule does not have any regulatory requirements that materially affect our low stress transmission pipelines.

 

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Table of Contents
Index to Financial Statements

When hydrocarbons are released into the environment, the PHMSA can impose a return-to-service plan, which can include implementing certain internal inspections, pipeline pressure reductions, and other strategies to verify the integrity of the pipeline in the affected area. We do not anticipate any return-to-service plans that will have a material impact on system throughput or compliance costs; however, we have the potential of incurring expenditures to remediate any condition in the event of a discharge or failure on our systems.

Our trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other materials.

We believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.

These excerpts taken from the EEQ 10-K filed Feb 21, 2008.

Pipeline Safety and Transportation Regulation

        Our transmission and non-rural gathering pipelines are subject to regulation by the United States Department of Transportation, or DOT, Pipeline and Hazardous Materials Safety Administration ("PHMSA") under Title 49 United States Code (Pipeline Safety Act, or PSA) relating to the design, installation, testing, construction, operation, replacement and management of transmission and non-rural gathering pipeline facilities. The PHMSA is the agency charged with regulating the safe transportation of hazardous materials under all modes of transportation, including intrastate pipelines. Periodically the PSA has been reauthorized and amended, imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.

        On December 17, 2002, the PSI Act of 2002 was enacted reauthorizing and amending the PSA. The most significant amendment required natural gas pipelines to develop integrity management programs and conduct integrity assessment tests at a minimum of seven year intervals. Such tests can include internal inspection, hydrostatic pressure tests or direct assessments on pipelines in certain high consequence areas. The PHMSA has since promulgated rules for this and other mandates included in the PSI Act of 2002.

        On December 29, 2006, the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES of 2006) was signed into legislation that further amended the Pipeline Safety Act. Many of the provisions were welcome, including strengthening excavation damage prevention and enforcement. The most significant provisions of PIPES of 2006 that will affect us, but not materially, include a mandate to PHMSA to remove most exemptions from federal regulations for liquid pipelines operating at low stress and mandates PHMSA to undertake rulemaking requiring pipeline operators to have a human factors management plan for pipeline control room personnel, including consideration for controlling hours of service.

        We have incorporated the new requirements of the 2002 and 2006 PSA amendments into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase is not expected to be material.

        The Pipeline Safety Act Reauthorization of 2006 (PIPES Act) required, among other measures, for PHMSA to extend their current jurisdictional authority to regulate previously exempted low operating stress pipelines. In September 2007, the PHMSA issued a Notice of Proposed Rulemaking that details how such low stress pipelines would be regulated and the safety measures that would be required. Industry commented and PHMSA is expected to issue the Final Rule early in 2008. The Final Rule is expected to have regulatory requirements that will not materially affect our low stress transmission pipelines.

        When hydrocarbons are released into the environment, the PHMSA can impose a return-to-service plan, which can include implementing certain internal inspections, pipeline pressure reductions, and other strategies to verify the integrity of the pipeline in the affected area. We do not anticipate any return-to-service plans that will have a material impact on system throughput or compliance costs; however we have the potential of incurring expenditures to remediate any condition in the event of a discharge or failure on our systems.

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        Our trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other materials.

        We believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.

Pipeline Safety and Transportation Regulation



        Our transmission and non-rural gathering pipelines are subject to regulation by the United States Department of Transportation, or DOT, Pipeline and
Hazardous Materials Safety Administration ("PHMSA") under Title 49 United States Code (Pipeline Safety Act, or PSA) relating to the design, installation, testing, construction, operation, replacement
and management of transmission and non-rural gathering pipeline facilities. The PHMSA is the agency charged with regulating the safe transportation of hazardous materials under all modes
of transportation, including intrastate pipelines. Periodically the PSA has been reauthorized and amended,
imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.



        On
December 17, 2002, the PSI Act of 2002 was enacted reauthorizing and amending the PSA. The most significant amendment required natural gas pipelines to develop integrity
management programs and conduct integrity assessment tests at a minimum of seven year intervals. Such tests can include internal inspection, hydrostatic pressure tests or direct assessments on
pipelines in certain high consequence areas. The PHMSA has since promulgated rules for this and other mandates included in the PSI Act of 2002.



        On
December 29, 2006, the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES of 2006) was signed into legislation that further amended the Pipeline Safety
Act. Many of the provisions were welcome, including strengthening excavation damage prevention and enforcement. The most significant provisions of PIPES of 2006 that will affect us, but not
materially, include a mandate to PHMSA to remove most exemptions from federal regulations for liquid pipelines operating at low stress and mandates PHMSA to undertake rulemaking requiring pipeline
operators to have a human factors management plan for pipeline control room personnel, including consideration for controlling hours of service.



        We
have incorporated the new requirements of the 2002 and 2006 PSA amendments into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase
is not expected to be material.



        The
Pipeline Safety Act Reauthorization of 2006 (PIPES Act) required, among other measures, for PHMSA to extend their current jurisdictional authority to regulate previously exempted low
operating stress pipelines. In September 2007, the PHMSA issued a Notice of Proposed Rulemaking that details how such low stress pipelines would be regulated and the safety measures that would be
required. Industry commented and PHMSA is expected to issue the Final Rule early in 2008. The Final Rule is expected to have regulatory requirements that will not materially affect our low stress
transmission pipelines.



        When
hydrocarbons are released into the environment, the PHMSA can impose a return-to-service plan, which can include implementing certain internal inspections,
pipeline pressure reductions, and other strategies to verify the integrity of the pipeline in the affected area. We do not anticipate any return-to-service plans that will have
a material impact on system throughput or compliance costs; however we have the potential of incurring expenditures to remediate any condition in the event of a discharge or failure on our systems.



31









        Our
trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other
materials.



        We
believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of
non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if
safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.



This excerpt taken from the EEQ 10-K filed Feb 22, 2007.

Pipeline Safety and Transportation Regulation

Our transmission and non-rural gathering pipelines are subject to regulation by the United States Department of Transportation, or DOT, Pipeline and Hazardous Materials Safety Administration (“PHMSA”) under Title 49 United States Code (Pipeline Safety Act, or PSA) relating to the design, installation, testing, construction, operation, replacement and management of transmission and non-rural gathering pipeline facilities. The PHMSA is the agency charged with regulating the safe transportation of hazardous materials under all modes of transportation, including intrastate pipelines. Periodically the PSA has been reauthorized and amended, imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.

On December 17, 2002 the PSI Act of 2002 was enacted reauthorizing and amending the PSA. The most significant amendment required natural gas pipelines to develop integrity management programs and conduct integrity assessment tests at a minimum of seven year intervals. Such tests can include internal inspection, hydrostatic pressure tests or direct assessments on pipelines in certain high consequence areas. The PHMSA has since promulgated rules for this and other mandates included in the PSI of 2002.

On December 29, 2006 the “Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006” (PIPES of 2006) was signed into legislation that further amended the Pipeline Safety Act. Many of the provisions were welcome, including strengthening excavation damage prevention and enforcement. The most significant provisions of PIPES of 2006 that will affect the Partnership, but not materially, include a mandate to PHMSA to remove most exemptions from federal regulations for liquid pipelines operating at low stress and mandates PHMSA to undertake rulemaking requiring pipeline operators to have a human factors management plan for pipeline control room personnel, including consideration for controlling hours of service.

We have incorporated the new requirements of the 2002 and 2006 PSA amendments into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase is not expected to be material.

In September 2006, PHMSA proposed extending its regulatory oversight to include environmentally sensitive areas that are beyond the scope of its current jurisdiction. PHMSA currently has jurisdiction over

33




rural gathering pipelines, low operating stress transmission pipelines that are located in high consequence areas and pipelines in urban areas or across navigable waters. We expect this proposed rule to become final by mid-2007 and do not expect the new mandates to have a material impact on our current systems. However, the PIPES of 2006 mandated that PHMSA go further and expand jurisdiction over all low stress pipelines, not just those in high consequence areas. We expect the PHMSA, therefore, to immediately issue another proposed rule for low stress pipelines, but until such rules are proposed, we are not certain of the effect or costs that the new requirements may have on our operations.

When hydrocarbons are released into the environment, the PHMSA can impose a return-to-service plan, which can include implementing certain internal inspections, pipeline pressure reductions, and other strategies to verify the integrity of the pipeline in the affected area. We do not anticipate any return-to-service plans that will have a material impact on system throughput or compliance costs; however we have the potential of incurring additional expenditures to remediate any condition in the event of a discharge or failure on the system.

Our trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other materials.

We believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.

This excerpt taken from the EEQ 10-K filed Feb 23, 2006.

Pipeline Safety and Transportation Regulation

Our transmission and non-rural gathering pipelines are subject to regulation by the DOT, under Title 49 United States Code (Pipeline Safety Act) relating to the design, installation, testing, construction, operation, replacement and management of transmission and non-rural gathering pipeline facilities. Periodically the PSA has been reauthorized and amended, imposing new mandates on the regulator to promulgate new regulations, imposing direct mandates on operators of pipelines.

On December 17, 2002 the PSI Act of 2002 was enacted reauthorizing and amending the PSA in several important respects. Following requirements of mandates in the PSA, the DOT has issued regulations requiring operators of hazardous liquid and natural gas transmission pipelines subject to the regulations to assess, evaluate, repair and validate, through a comprehensive analysis, the integrity of pipeline segments that, in the event of a leak or failure, could affect a high consequence area. HCA’s for liquid pipelines have been defined as: populated areas, areas unusually sensitive to environmental damage and commercially navigable waterways. For natural gas pipelines, HCA’s are defined as segments in proximity to population density or places of public congregation.

The DOT has issued rules on requirements to submit maps, additional reports and enhance operator personnel qualification programs. We anticipate new rules regulating pipeline security, contractor drug testing, inspection, public awareness programs and annual information reporting. The 2002 amendments of the PSA also called for expanded regulations for qualification of workers performing safety-related tasks on pipelines, which we expect to be enacted by incorporation of an industry consensus standard currently under development. We have incorporated many of the anticipated new requirements into procedures and budgets and, while we expect to incur higher regulatory compliance costs, the increase is not expected to be material. Additionally, revised regulations are anticipated that may impose new federal mandates on certain non-DOT jurisdictional pipelines currently classified as “rural gathering lines.” Pending specific proposed regulations, we are not certain of the effect or costs that the new requirements may have on our operations.

Various states in which we operate have authority to issue additional regulations affecting intrastate or gathering pipeline design, safety and operational requirements. In particular, during 2003 the State of Oklahoma passed legislation affecting gathering pipeline business activities and in early 2005, the State of Texas proposed new legislation that could, if passed, increase the commercial regulation of gathering pipelines. We are not certain of the effect that passage of the final legislation, or any of the legislation will have on our business operations or costs.

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Our trucking and railcar operations are also subject to safety and permitting regulation by the DOT and state agencies with regard to the safe transportation of hazardous and other materials.

We believe that our pipeline, trucking and railcar operations are in substantial compliance with applicable operational and safety requirements. In instances of non-compliance, we have taken actions to remediate the situations. Nevertheless, significant expenses could be incurred in the future if additional safety measures are required or if safety standards are raised and exceed the capabilities of our current pipeline control system or other safety equipment.

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