U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration

1. U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Update on Ethanol and Biofuels Issues Presentation to the Pipeline Safety Technical Advisory Committees January 17, 2008 www.phmsa.dot.gov

2. Overview Ethanol and Biofuels • Why a PHMSA involvement? • What are the Challenges? • What Have We Done? • What are our Future Actions?

3. Background--Why a PHMSA Involvement? • 20-in-10 Plan: 2007 State of the Union address--President Bush outlined a proposal to reduce nationwide gasoline consumption by 20 percent in 10 years by increasing the supply of renewable and alternative fuels. • Plan would require 35 billion gallons of renewable and alternative fuels by 2017. • Energy Independence and Security Act of 2007: • Increases the supply of alternative fuel sources by modifying the Renewable Fuel Standard (RFS) to require fuel producers to use at least 36 billion gallons of biofuel by 2022. • Requires the Department of Energy, in consultation with the Department of Transportation, to conduct a study examining the feasibility of transporting ethanol via dedicated pipelines. • Energy Policy Act of 2005: Mandated 7.5 billion gallons of biofuels by 2012.

4. Background--Why a PHMSA Involvement? • PHMSA Strategic Plan “Safe and efficient transportation of alternative fuels. Given the agency's relationships in the energy and hazardous materials industries and expertise in understanding and managing the risks associated with transportation of hazardous liquids, PHMSA is in a position to support the President's energy agenda by promoting the development of suitable infrastructure and packaging; standards for the transportation of alternative fuels, including ethanol, ethanol blended fuels, biodiesel, hydrogen and other alternatives; and the preparation of communities to accept new transportation and facilities associated with these new products.Working with other federal agencies and stakeholders, PHMSA proposes to use an enterprise approach to guide the assessment of risks posed by the transportation of alternative fuels in different transportation modes; identify and lead any necessary cooperative research projects concerning technical requirements; facilitate the sponsorship of such research; and develop best practices and consensus standards for addressing risks and managing technical issues. Recognizing that pipeline transportation is the safest and most cost-effective mode for moving large quantities of flammable liquids, PHMSA published a policy statement declaring our jurisdiction over the transportation of biofuels by pipeline, seeking comments on appropriate modification of existing pipeline safety standards.”

5. Goals and Objectives Address infrastructure challenges and address/remove identified barriers to the safe transportation of ethanol and biofuels through the following: • Policy Development/Setting Minimum Safety Standards • Research & Development/Studies • Stakeholder Coordination/Communication/Outreach

6. What is PHMSA’s Challenge with Biofuels? • Identify and quantify any safety and reliability threats to liquid pipelines. • Address emergency response issues unique to biofuels and ethanol. • Remove or manage these threats through a risk-based, data-driven integrity management approach. • Address adequacy of operating procedures, set minimum standards and modify them as needed. • Work with multiple industry and governmentstakeholders to address any safety, environment, and equipment impacts due to ethanol transportation.

7. PHMSA Actions—What Have We Done? Policy Development/Setting Standards • Ethanol Federal Register Notice (August 2007) outlining biofuel pipelines regulatory jurisdiction - 49 CFR Part 195 - and critical role of pipelines in biofuels transportation; requested technical papers and R&D proposals on implementation challenges; and described PHMSA’s cooperative activities with emergency responders. Feedback was supportive of our collaborative strategy. • 2007 Rio Pipeline Conference--obtain information on the Brazilian experience with ethanol; considering various ways to formalize and foster a closer working relationship with Brazil to share knowledge on ethanol pipeline and transportation issues. • October 2007Ethanol Roadmap Workshop--collaboratively craft an R&D strategy that addresses remaining technical barriers. • Biomass Research and Development Board--participating on many panels and boards to coordinate Federal strategy.

8. PHMSA Actions—What Have We Done? Policy Development/Setting Standards • Hazmat Safety Alert issued in June 2006 to provide emergency responders with guidance on appropriate procedures for responding to incidents involving fuel mixtures composed of ethanol. • Changes/updates to hazard communications for transportation of ethanol and blends. • Emergency Response Guide (ERG) revisions which will include an update for the appropriate guidance for initial response to incidents involving ethanol-gasoline mixtures and will also include information on pipeline markers.

9. PHMSA Actions—What Have We Done? Research and Development/Studies • Pipeline R&D Forum in Feb. 2007 • Subject matter experts identify some ethanol challenges • R&D Solicitation in July 2007, Awards in January, 2008 • Ethanol effects on new and existing pipelines • Seven proposals now requested • Solutions in 1-3 years • Pipeline Industry JIP on Ethanol Blends • Identifies QA/QC impacts & investigates pipe retrofitting options • Solutions in 9-12 months (Summer/Fall, 2008) • Foam & Retardant Research for Ethanol • Response equipment performance with blends and pure ethanol

10. Ethanol Pipeline Research:Basic Steps & Phases Industry Consensus Standards PHMSA – 49 CFR Part 195 Goal Pipeline Safety/Reliability Assessments Blends Status of current technical issues… Industry JIP Pure ethanol & blends PHMSA & Industry R&D Laboratory Research & Testing

11. PHMSA Actions—What Have We Done? Stakeholder Communication/Outreach • Pipeline Industry • American Petroleum Institute; Association of Oil Pipe Lines; American Society of Mechanical Engineers and Pipeline Research Council International, etc… • Emergency Response Organizations • U.S. Fire Service; National Association of State Fire Marshals; International Association of Fire Chiefs; Independent Liquid Terminal Association; and the Ethanol Emergency Response Committee, etc… • Federal Agencies & Others • Other DOT Modes (FRA, FMSCA, RITA, etc…) • DOE, USDA & EPA

12. Ethanol Pipelines:What are Future Actions for PHMSA? • Assist in developing any required technology improvements to address threats. • Work with Standard Developing Organizations to push new knowledge into consensus standards. • Set minimum standards in 49 CFR. • Work with Emergency Response Community: • Revise emergency response plans & measures • Assess ethanol blend physical properties (flammability/toxicity) • Investigate response equipment effectiveness with ethanol/ethanol blends • Absorption booms and foam retardants • Stakeholder Outreach