Subject: Work flow and procedure - TNM Pipeline System
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Mon, 26 Jun 2000 01:26:00 -0700 (PDT)

The following procedures have been developed by Walt, Mike and myself for the 
Environmental matters associated with the Texas New Mexico Pipeline System. 
Please pay special attention to Item No. 5 which is not only a change in 
procedure but also a huge cost savings to EOTT.   

We had a good visit last Thursday with the carrier.  The local representative 
and our New York claim representative were present.  We were told repeatedly 
that filing timely information and claim notification was required.  We 
tempered their nice but stern stance with their own internal issues regarding 
the change in our local representative.  All was friendly.  The bullet point 
review of the meeting's discussions is as follows and there are several 
procedural points that we will adopt going forward: 

Expense reporting on the known and unknown sites will be filed  monthly and 
the invoices will be provided also at that time.  ( providing the invoices 
with the report is a change in the procedure).  I believe that I will be able 
to pull the report information off of EMS Works going forward.  Please let me 
know who in the organization will be responsible for getting the invoices 
together so I can coordinate this process with them.
Invoices from our vendors need to be more descriptive.  Rich was in the 
meeting when this was discussed and I have asked him to take this matter up 
with our vendors.  In the field, if you see that the description is weak, ( 
for instance, "per work order") it would be helpful for you to contact the 
vendor then as opposed to sending it through the payment process.  If it is 
not descriptive enough to identify the work performed, payment will be 
delayed and claims processing will be slowed.  This enhancement would also 
seem to help us internally identify the expense.
When we are notified of a claim, be it land owner notification of an old 
site, or a new spill, a spill/claim report should be filed. I believe that 
this is the information that I will be receiving from EMS Works.  If it is an 
issue that requires special handling, I will be happy to take this 
information directly and outside the normal channels.  One area that will 
need to be addressed is an estimate of claim size with each report...and an 
update of that information as the claim matures if it changes materially.  I 
am not clear if this information will be available in EMS Works or not.  Can 
someone get back to me on this process?
As reports or correspondence from agencies/any third party are received, we 
will need to forward these on to the carrier for each claim that has been 
filed. Also, I will need to forward to the carrier any reports or 
correspondence that we submit to agencies and third parties. The carrier does 
not want to have to come to our offices to review files if it can be avoided 
and would prefer to process these claims as they mature.  As you forward 
these items to me for processing, please be sure that they are clearly 
identifiable as to the site/claim number.
Any new claim ( that would mean any unknown) will be noticed to the carrier.  
Before dispatching anyone from Entrix ( unless this is an emergency 
situation),  we will notice the carrier and they will authorize the 
investigation by Entrix or any other environmental consultant.  The carrier 
has the right to choose who they use, however Entrix is one of  their 
approved vendors.  I understand that Entrix charges us a fee for these 
investigations and this is a covered expense under the policy.  This will 
also aid in the processing of the claim as the carrier will accept their 
requested Entrix report as their own investigative report. These charges will 
be paid by the carrier, but they need to have the claim verified and then we 
need to have them dispatch Entrix to the site.  I also suspect that the fee 
that we have been charged by Entrix for these matters is in excess of the fee 
that the carrier pays.  Therefore it is even more critical that we have the 
carrier engage Entrix and pay them.  There are as I understand 38 task orders 
( estimated to be $10,000/each) currently outstanding with Entrix.  I have a 
copy of these and I would like to process these through the carrier where we 
have not already incurred any expense.  Who can visit with me on the actual 
status of any work performance under these orders?  We will need to calculate 
work performed and get immediate authorization from the carrier to have 
Entrix provide the service going forward for each site. 
Lawsuits and paper work will be noticed to me by Legal.  

As far as the action items on current updated claims: 

Roger Pennifill, the technical claim handler for AIG, was in our offices 
Thursday and Friday and with the assistance of Mike Kelly reviewed the files 
and talked with the field personnel as needed. 

The situation with Jimmie Cooper lawsuit is the top priority with the 
carrier.  Cynthia Green will get back to me within a day or so to give me 
feedback on the requests that we have made to authorize the fingerprinting of 
the crude oil in the Cooper's well.  This matter takes precedence over the 
filing an answer on the lawsuit.   Walt Zimmerman will work with Cynthia 
Green on the selection of counsel for this matter.  Unless the carrier tells 
us otherwise Paul Bohannon will continue to act as lead counsel for this 
matter.  Walt will provide Cynthia Green with resumes for Paul Bohannon and 
the local counsel that has been suggested.

The second highest priority is Jay Anthony.  We have given Cynthia and Roger 
a complete write up on this situation and they will be coming back to us to 
discuss the options that we have laid in front of them.  

All other claims that we discussed, will be handled as their official 
notification of a claim or an update as to the magnitude of the potential 
problem.  

In the area of site investigation (Example Clay Osborne), we will formally 
ask that Entrix be approved to do the necessary  investigative work.