Message-ID: <6087069.1075844935398.JavaMail.evans@thyme> Date: Tue, 14 Mar 2000 00:37:00 -0800 (PST) From: michael.burke@enron.com To: eott.employees@enron.com Subject: Safety and Environmental compliance Cc: stanley.horton@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: stanley.horton@enron.com X-From: Michael Burke X-To: EOTT Employees X-cc: Stanley Horton X-bcc: X-Folder: \Stanley_Horton_1\Notes Folders\All documents X-Origin: HORTON-S X-FileName: shorton.nsf Last week I reported to our Board of Directors that our highest priority objectives for 2000 are to continue to substantially improve our safety and environmental record throughout this year. These objectives supersede any and all of our financial objective for 2000. EOTT 2000 Objectives: Environmental - Reduce reportable spills and leaks by 50% Safety - Reduce lost time accidents by 30% I am pleased to report that our Regional Business Managers, District Managers and their teams are working closely with Operations Governance to ensure that those objectives are met. Please take time to read the following article: When pipelines are time bombs 2 million miles of them deliver potential catastrophe every day By Patrick McMahon, USA TODAY(Front Page Article 3/14/00 BELLINGHAM, Wash. - Last summer, an underground pipeline ruptured in a city park here and sent a torrent of gasoline along a wooded streambed toward two 10-year-olds playing with a barbecue lighter. After the 16-inch pipeline had been hemorrhaging for an hour and 34 minutes, an explosion sent a fireball racing through the park. A plume of smoke rose 30,000 feet. Authorities say the blast probably was triggered by a spark from the lighter. "There was a spark and the sky turned orange, the boys both told me afterward," says Frank King, whose son, Wade, was one of the boys in the park. Wade and his friend, Stephen Tsiorvas, were burned over 90% of their bodies. They died the next day. Also killed was 18-year-old Liam Wood, who had graduated from high school five days before. The college-bound Wood was fly-fishing in the park when he was overcome by fumes, fell into the creek and drowned. "To many people, the boys were considered heroes," says Mark Asmundson, the mayor of this seaside city north of Seattle. In sparking the explosion, the boys kept the most extensive damage confined to the 241-acre park, he says. "The river of gasoline was heading right for the center of the city." On Monday, the Senate Commerce Committee held a one-day hearing here, about five minutes from where the incident occurred, on legislation to improve safety and government oversight of pipelines and the companies that operate them. The hearing included gripping, sometimes tearful, testimony from the boys' parents as well as statements from state and federal officials. "My baby died because of inaction. His death was preventable," said Katherine Dalen, Stephen's mother. More than 2 million miles of iron, steel and plastic pipes - some as large as 5 feet in diameter - snake beneath the earth and deliver oil, gasoline, natural gas and potential disaster across America every day. They range from the trans-Alaskan pipeline to tiny pipes carrying natural gas to people's homes. Safer than gasoline trucks or ocean-going tankers by most measures, once-remote pipelines are prompting new worries as sprawling metropolitan areas grow into their paths. U.S. pipeline accidents have fluctuated in the past 10 years. In the 1990s, there were 3,917 liquid fuel spills and natural gas leaks, roughly one a day. The incidents, most involving local lines carrying natural gas, resulted in 201 deaths, 2,826 injuries and $778 million in property damage from 1990 through 1999. There also are environmental costs. In January, one of the nation's largest pipeline companies, Koch Industries of Wichita, Kan., paid a $30 million civil fine to settle Environmental Protection Agency water-pollution charges involving 300 oil spills from 1990 to 1997. The EPA said Koch failed to inspect its pipelines and waited for leaks before making repairs. Liam Wood's mother, Marlene Robinson, is focused on stronger regulations nationwide, including more and better inspections, and regional watchdog committees. "I don't have any children left to protect," she said in an interview and repeated at the hearing. "This didn't have to happen to Liam, and it doesn't have to happen to other people's children." Although the cause of the Bellingham incident remains under investigation, one factor might have been damage to the pipeline from a backhoe when a water line was being installed in 1995. But investigators also have many questions about the role of Olympic Pipeline Co., which operates a network of pipelines along a 299-mile corridor from north of Bellingham to Portland, Ore. Investigators for the National Transportation Safety Board (NTSB) want to know whether Olympic ignored warning signs and whether it could have acted more swiftly after the leak. But the inquiry has been delayed by a parallel investigation by the U.S. Attorney's Office. Several Olympic employees have declined to testify and have invoked their constitutional rights against self-incrimination. Pipeline owners and government regulators defend the safety of transporting two-thirds of the nation's fuels by pipeline, and they warn that more rules could boost energy prices. Critics say pipelines are too loosely regulated, not fully inspected and, in some cases, deteriorating. The U.S. Transportation Department oversees pipelines. Its Office of Pipeline Safety sets standards for design, operation, maintenance and emergency response. Richard Felder, who heads the office, testified at Monday's hearing. "Our goal is to prevent incidents like Bellingham from ever happening again," he said. In an earlier interview, he defended his office's performance and the industry: "It's a good record. It's the safest form of transporting fuel, far and away." The office has extensive rules on pipeline safety, including requirements for signs along the route and programs to alert potential diggers, but "there's no such thing as risk elimination," Felder says. "All you can do is manage it." But the chairman of the federal government's transportation safety watchdog agency is unimpressed with Felder's office and says it deserves a grade of F. "It's been the most frustrating area I've had to deal with as chairman," says Jim Hall, NTSB chairman since 1994. He says no agency has a worse record of responding to NTSB recommendations. In a recent speech, he said there's no indication that the Office of Pipeline Safety "is in charge or that its regulations, its inspections, its assets, its staffing and its spirit are adequate to the task." Felder takes issue with much of the criticism, but he endorses calls for more research into pipeline safety. He said his office is in the final stages of preparing new safety standards for heavily populated and environmentally sensitive areas. He emphasized that the leading cause of pipeline failure is "third-party damage" from road, utility and construction work. The agency has worked to enhance a system to alert pipeline companies of digging with one telephone call. Felder is critical of local authorities who ignore pipelines when making decisions on housing and commercial development. "Local planning has not kept people away from pipelines," he says. "It's astounding to me." Felder bristles at critics' suggestions that his agency is a tool of the oil and gas industry. "I can't agree with that one iota," he says. "We try to balance the safety issue and the economic issue." The Senate Commerce Committee will consider a bipartisan bill sponsored by Sens. Patty Murray, D-Wash., and Slade Gorton, R-Wash.; Rep. Jack Metcalf, the Republican who represents Bellingham; and Rep. Jay Inslee, a Democrat whose district includes an operating section of the pipeline. The bill would require periodic internal inspections of pipelines, boost federal spending on research, increase the number of federal pipeline inspectors nationwide - there now are 55 - and expand states' regulatory authority. On Monday, the Office of Pipeline Safety gave the state of Washington the temporary right to do more inspections. The Murray-Gorton bill also would require federal certification of pipeline workers and expand the public's right to know about spills and leaks. "I was totally shocked and amazed when this happened," Murray says. "You always assume that your neighborhood is safe and somebody has taken care of this." The Bellingham rupture not only dumped 278,000 gallons of gasoline into this city of 63,000 near the Canadian border but also unleashed civic furor at Olympic Pipeline. "It's hard for people to get interested in things they can't see. Out of sight is out of mind," Mayor Asmundson says. He has visited the boys' grieving families and lobbied Congress. The blast "has dominated my life since June 10." Pipeline operators portray accidents as isolated to escape national scrutiny, he says. "The whole focus of the industry is containment. Do whatever you have to do locally, but don't stir things up nationally." Last week, Murray released a report she requested from the Transportation Department's inspector general. It faults the Office of Pipeline Safety for ignoring enhanced safety requirements, including increased inspections inside pipes, in highly populated and environmentally sensitive areas as Congress required in 1992 and 1996. A U.S. General Accounting Office audit of operations is due in May. Also pending is a decision from Felder and the pipeline safety office on whether to restart the 39-mile section shut down since the Bellingham accident. Olympic Pipeline has repaired the line and is eager to reopen it. People living along the route and officials are pushing for more extensive testing of the still-operating section of the line south of Bellingham. Felder says he has not decided whether it should be shut down. Last week, Felder's office ordered a new round of testing along the entire line, but critics such as Inslee are not convinced it will be enough. The tests must be conducted on the closed section of the pipeline before a decision is made on reopening it.