OPS IMP Inspection Process

1. OPS IMP Inspection Process Workshop on the Integrity Management Rule for Large Liquid Pipelines Paul Wood August 7, 2001

2. OPS Process Implemented in Stages • Initial Review Focused on Presence of Framework Containing All Program Elements • Appropriate Decision Processes • Reasonable Plan for Improvement • Success in Initial Review will not Imply Long-Term “Acceptability”of Operator’s Process

3. OPS Process Implemented in Stages, cont. • Subsequent Reviews will Examine Operator Performance against “Roadmap” in Framework • Will Examine Improvements in the Process

4. Comprehensive Review of Baseline Assessment Plan & IM Framework Objectives: • Inspect for Compliance with Requirements of Baseline Assessment Plan and IM Framework • Promote Continuous Improvement

5. Features of Inspection Process • Focused at Company Level (Not Region-by-Region) • Separate from Normal Compliance Inspections • Multi-Discipline, Multi-Region Teams will Conduct Inspections • Reasonable Team Size Requires Focused State Participation

6. Inspection Process Issues • Evaluation Basis & Consistency • The Inspection Process Itself • Team Composition & Expertise • Nature of Feedback to Operators • Schedule • Enforcement (Addressed Later by Chris Hoidal)

7. Evaluation Basis & Consistency • Criteria being Developed to Guide Evaluation of Performance-Based Aspects • Examine Operator Data Collection & Analysis Process • Examine Operator Analytical Processes • Examine Effectiveness of Operator Processes • Criteria will Evolve with Time & Allow Some Implementation Flexibility • Quality Documentation of Inspection Results is Essential to Support Follow-up Inspections.

8. Inspector Expertise • Pipeline Design & Operations • Assessment/Inspection Technology • Management Systems & Processes • Risk Analysis Methods

9. Type of OPS Feedback to Operators • Direct Operator to Modify Program to Address Clear Deficiencies • Identify Aspects of Process or Tools to Consider Modifying • Encourage Operator to Consider Adopting “Noteworthy Practices” • Promote Consideration of Use of Demonstrated New Technologies

10. OPS Inspection of Operator IM Program Implementation • Confirmation of Integrity Assessments • Confirmation of Repairs • Review of “Notifications” • Review of Assessment Results and Integration with Other Data • Review Basis for Repair Method Selection and Schedule

11. OPS Inspection of Operator IM Program Implementation, Cont. • Review Operator Risk Analysis and Determination of Need for Additional Risk Controls (e.g., EFRDs and leak detection enhancements) • Review Basis for Re-assessment Method Selection and Schedule • IM Program Development • Operator’s Internal Performance Evaluation

12. Separate vs Integrated Inspection • Some Aspects could be Integrated with Standard Inspections • Other Aspects may be Better Performed in Separate, In-depth Inspections • Expect Evolution from Entirely Separate Inspections to Largely Integrated with Standard Inspections

13. Scheduling On-going IM Program Implementation Inspections • Base Frequency on Results of Inspection of Comprehensive Plan and Framework • Program Maturity and Quality • Operator Performance • Progress in Implementing Assessment Plan • May Involve Multiple Company Locations • Complete One Round of IM Program Implementation Inspections by 9/30/04 (for large liquid operators)