Current Inspection Process for Operators of Hazardous Liquids Pipelines

1. Current Inspection Process for Operators ofHazardous Liquids Pipelines Rod Seeley OPS SW Region Director May 18, 2005

2. Goals of Future IMP Inspections • Continuous improvement in OPS IMP inspection process • Seamless inspection process to Operators

3. OPS Liquid IMP Inspection Organizational Changes • Management of IM inspection program has shifted from OPS Program Development to OPS Regions • OPS Program Development will monitor the inspection process and identify significant trends

4. Seamless Transition in Inspection Process • OPS SW Region to lead Liquid IMP inspections of many large Operators with jurisdictional assets in multiple Regions • Change should be seamless to Operators • All OPS Regions participating in and/or directly supporting SW Region-lead inspections for large multi-region Operators

5. Inspection Process • Inspection process is the same for all Operators and follows the format used in first round of IMP inspections • Pre-inspection meeting or teleconference • Inspection (approximately two weeks) • Exit interview at conclusion of inspection

6. Continuous Improvement in OPS IMP Inspection Process • Implemented systematic processes for the conduct of IMP inspections • Revised inspection protocols and Inspector guidance materials • Utilizing previous inspection results in preparation for IMP inspections

7. Current Inspection Process for Operators ofHazardous Liquids Pipelines Chris McLaren OPS SW Region May 18, 2005

8. Talking Points • Lessons learned • IMP inspection format • Areas of improvement • Consensus standards • Path forward

9. Lessons Learned from First Round IM Inspections • Operators generally understand and are implementing the assessment provisions of the rule • Progress is needed in development and implementation of several IMP elements • Preventive & mitigative • Leak detection and EFRD analyses • Periodic evaluations • Re-assessment interval determination • Program evaluation

10. Lessons Learned from First Round IM Inspections • Improved performance results from a commitment to continuous improvement • Operator interactions have been generally cooperative with open communication • Inspection approach continues to improve with the use of protocol driven inspections

11. OPS Organizational Changes • All OPS Regions participating in and supporting SW Region-lead inspections for large multi-region Operators • IMP related field activities and Region-specific issues identified during status update meetings and IM inspections for follow-up by individual Regions

12. 2005 Inspection Format • IMP status update meetings • Scheduling of inspections • Performance of inspections using revised inspection protocols • Documentation requirements • Reporting requirements

13. Status Update Meetings • IMP Status Update Meetings conducted at SW Region with nine large liquid multi-region Operators being inspected by the SW Region in 2005 • Operator IMP improvements since previous inspection discussed • OPS expectations for next inspection discussed • Performed pre-inspection activities

14. Status Update Meetings • Provide opportunity for Operators to discuss specific concerns and areas of uncertainty with OPS • Ensure appropriate inspection resources are allocated • Operator IMP-related field activities identified on Regional basis to assist resource allocation (e.g., witness implementation tasks – integrity assessments, repair and rehabilitation, EFRD installation, etc.)

15. Scheduling of Inspections • 2005 Schedule Considerations • Date of previous inspection • OPS and operator personnel scheduling • Conclusion dates of any major assessment/remediation programs • Timing of significant mergers/acquisitions • Anticipated closing of any relevant open enforcement • Date of implementation of IMP-related projects (e.g. GIS, work order systems)

16. Scheduling of Inspections • Flexibility from participants was needed in the inspection scheduling process • Future scheduling of IMP team inspections to be done prior to status update meetings to alleviate scheduling issues

17. IMP needs to have matured from framework status into detailed process descriptions All protocols will be used during inspections Results of the previous inspection will be utilized as applicable Anticipated to take two weeks IMP Inspection

18. IMP Inspection • Use of revised protocols dated December 31, 2004 on OPS website • Spreadsheets for operator performance data acquisition revised • Liquid operator program information form now includes leak detection systems data (Protocol 6.05 removed and incorporated here)

21. Post Inspection Activities • Exit interview used for communication to Operator of strengths and weaknesses of IMP identified during inspection • Communication to OPS Regions of possible field verification activities identified during the inspection • Documentation of IMP inspection

22. Inspection Documentation • Summary Report (reviewed by Operator for factual content prior to finalization) • Electronic format of IMP is extremely helpful in completing OPS documentation requirements • All documents not included in reports and/or enforcement returned or disposed of at conclusion of inspection process

23. Areas of Improvement • Evaluation of leak detection capabilities • Implementation of preventive and mitigative measures • EFRD need determination • Re-assessment interval determination • Program performance evaluation

24. Areas of Improvement • Evaluation of corrosion control programs and their input into risk analysis and integration with integrity assessment results • QA/QC processes • Verification of data in risk analysis and use of data obtained from OM&I tasks • Review of integrity assessment results and other vendor supplied data

25. Industry Consensus Standards

26. Industry Consensus Standards

27. Path Forward • Integrity management is a continuous improvement regulation • OPS is committed to developing and implementing improved tools and techniques as inspection process evolves • Operator feedback / perspective of which methods are effective and which methods are not effective is important to OPS

28. Path Forward • Continue to improve inspection process and standardization of documentation and communication channels • Ensure inspections are consistently performed and IM Rule is consistently applied during inspection process • Field verification of IMP activities • Complete “second round” of IMP inspections by 2007

29. The End