PIPELINE NOTES FROM WASHINGTON
Vol. 4, No. 22
June 8, 2001

Association of Oil Pipe Lines
(202) 408-7970
(202) 408-7983 (fax)
bcooper@aopl.org

The opinions if any expressed in these notes are the author's only and do
not represent the views of the Association of Oil Pipe Lines (but they
should).


1.	Commission Schedules Colonial Market-Based Rate Renewal Request

	At its June 13 meeting the Federal Energy Regulatory Commission intends to
take up Colonial's request to renew its market-based rates into the
Northeast markets.  In the mid-90's, Colonial was granted market-based rate
status on movements from the Gulf Coast and from Philadelphia and New York
City area origins into Philadelphia and New York City area destinations, on
a temporary basis subject to renewal.  In March 2000, Colonial applied for
renewal.  No one objected, but the Commission has not acted on the matter.
Next week they promise to take it up.  You can view Colonial's application
at http://rimsweb1.ferc.fed.us/rims under docket number OR00-3-000.

2.	Commission Reaffirms Colonial Abandonment and New Service Ruling

	At its last meeting, the Commission approved an Order on Rehearing of the
Commission's October 27, 1999 order granting Colonial's petition for a
declaratory order on abandonment of existing service to Tennessee and the
rate structure of new service to Tennessee. (see 89 FERC  61,095 (1999)).
Exxon Mobil and Motiva had asked the Commission to reconsider that ruling.
	Colonial is building a new line from Birmingham, Alabama to Nashville via
Huntsville, Tennessee.  When that line is completed, it intends to abandon
service to Nashville via a line running from Atlanta.  Colonial sought a
ruling from the Commission that its abandonment of the Atlanta to Nashville
line will not be subject to challenge, that its indexed rates from Houston
origins to Birmingham will not be subject to challenge because of the new
connection, and that a cost-of-service may be used to establish the initial
rate for the service to Nashville and Huntsville via the new pipeline.  The
Commission approved all of the requests subject to verification at the time
that the change takes place.
	Exxon Mobil and Motiva argued that the rules for setting rates as a new
service should not apply to this situation because Colonial is really merely
providing a new route for an existing service.  The Commission disagreed,
finding that rates apply to the specific route and that this was a new
route.  Exxon Mobil and Motiva also argued that Colonial should not be able
to rely on indexed/grandfathered rates to Birmingham and to charge
cost-of-service rates for the new pipeline from Birmingham to the Tennessee
destinations.  They argued this was permitting the pipeline to mix and match
rate methodologies.  The Commission disagreed, stating that Colonial was
merely seeking to add a new service, which under the Commission's rules must
be justified either with a negotiated rate or on a cost-of-service basis.
Finally, Exxon Mobil argued that the Commission should look more closely at
the abandonment to determine whether the cancellation is in the public
interest under section 15(3) of the Interstate Commerce Act.  The Commission
found that complete abandonment of a service is outside its jurisdiction,
but allowed Exxon Mobil to argue at the time of the abandonment that a
complete abandonment would not take place.  A copy of the Commission's order
may be found at http://cips.ferc.fed.us/cips/default.htm under docket number
OR99-16-000.

3.	NTSB Issues Report on Marathon Ashland Spill

	The National Transportation Safety Board last week issued its accident
report on the Marathon Ashland spill in Kentucky last January.  According to
the report, that 11,644 barrel spill resulted from metal fatigue at a dent
site.  The line had been pigged in 1997 and an anomaly had been detected
there but the pig contractor had determined that the dent was not
significant.  It did not meet repair criteria used at the time.  The NTSB
found "failure of the controller and supervisors to timely recognize the
rupture, shut down the pipeline, and isolate the ruptured section of the
pipeline" contributed to the severity of the accident.  To review the report
yourself, go to http://www.ntsb.gov/Publictn/2001/PAB0102.htm.  To read what
the local paper had to say, go to
http://enquirer.com/editions/2001/06/02/loc_pipe_workers_are.html, Pipe,
workers are faulted in pipeline spill.

4.	Nomination for the U.S. Army Corps of Engineers

President Bush intends to nominate Michael Parker to be Assistant Secretary
of the Army for Civil Works.  Parker is a former Congressman from the 4th
District of  Mississippi serving from 1989 to 1999.  He was a member of  the
Budget,  Appropriations, Transportation, Education and Workforce and
Veteran's Affairs Committees.  His nomination must be approved by the
Senate.  The Senate Environment and Public Works Committee, chaired by Sen.
Jeffords (I-VT), will consider the nomination.   Parker was elected as a
Democrat to the House of Representatives in 1989, and soon after the House
majority became Republican in 1994, Parker also became a Republican.  Parker
is currently the President and Owner of Parker-Malvaney Consulting, Inc., a
government affairs consulting firm in Brookhaven, Mississippi.

5.	Patty Murray (D-WA) on Bellingham Accident Anniversary

	Check the Congressional RECORD for June 7 at page S5959.
http://thomas.loc.gov/r107/r107.html  TWO-YEAR ANNIVERSARY OF THE BELLINGHAM
WASHINGTON PIPELINE EXPLOSION.  Sen. Murray's press release is at
http://www.senate.gov/~murray/releases/01/06/2001607D05.html.

6.	New Lawsuits from the Bellingham Accident

http://news.bellinghamherald.com/stories/20010606/LocalState/55677.shtml --
4 sue Olympic for emotional suffering; Other defendants named include those
from prior pipeline suits.

7.	FERC Announces New Web Site

	The FERC has developed a new website including a new URL (www.ferc.gov)
designed to be more user friendly and organized "in a more intuitive manner"
than the old site.  Take a look at it and let us know what you think.

8.	Commissioner Wood Sworn In

	After confirmation by the Senate, it takes a few days for the nominees to
wrap up work at their former jobs. FERC Commissioner Pat Wood this week
finished his work at the Texas Public Utility Commission, where he was
chair, was sworn in on Tuesday and is in his office at the FERC.  One of his
first tasks will be to travel to California to meet with Governor Gray Davis
about the crisis in that state.  Commissioner Nora Mead Brownell may not
come on board until July.  Rumor has it that she will qualify for an
improved pension if she stays on in Pennsylvania for another month.

9.	Lois Epstein Changes Jobs and Job Locations

Lois Epstein, Environmental Defense's pipeline safety advocate, has left
Washington DC and Environmental Defense for Anchorage, Alaska.   There she
will work for a watershed-protection organization called Cook Inlet Keeper
"advocating for best possible performance for pipelines, refineries, and
other oil and gas infrastructure and working to prevent new oil and gas
drilling in sensitive portions of the watershed."  This leaves the pipeline
safety issue in DC to Jeremiah Baumann of US Public Interest Research Group,
Patricio Silva of the Natural Resources Defense Council and Paul Orum of the
Working Group on Community Right-to-Know.  There is still a possibility that
Environmental Defense will assign some new DC person to work on pipeline
safety issues.  Ms. Epstein hopes to continue as a public member of the
Office of Pipeline Safety's Technical Hazardous Liquid Pipeline Safety
Advisory Committee.  For more on her new job, see www.inletkeeper.org.

10.	Exxon Prevails in Louisiana Expropriation Case

	We thought we had already reported to you on this one but can't find it in
back issues, and want to be sure you know.  Exxon recently prevailed in the
Supreme Court of Louisiana in a case involving valuation of pipeline
right-of-way in expropriation cases.  The landowners argued that the
appropriate measure of value for the expropriated land should be for the
highest and best use of the property as a pipeline corridor, and to
determine the value by looking at what other pipeline companies paid for
similar rights-of-way on a per rod basis.  Exxon argued that the appropriate
valuation method was using property comparables on a per acre basis.  The
difference in the two methods in this case was $ 251,505 versus $ 17,172.
The lower courts sided with the landowner but the Supreme Court agreed with
Exxon.  The opinion, Exxon Pipeline Company v. Hill, et al. can be accessed
on the court's web site at www.lasc.org.  Once you reach the site, go to the
May 15th press release to find the opinion.

11.	OPS Authorizes Reopening of Chalk Point Pipeline

	This is the pipeline that runs to the power plant just north of Washington,
DC that experienced a spill into a local wetlands last year, now rumored to
be the most expensive pipeline spill ever. The line was owned by Potomac
Electric Power Company.   The Office of Pipeline Safety has proposed a civil
fine of $ 674,000, and PEPCO claims the clean up has cost it more than $ 60
million.  The line and the power plant have now been sold to Mirant
Mid-Atlantic LLC.  OPS this week authorized Mirant to start the line back
up.  The OPS release can be found at
http://www.dot.gov/affairs/rspa1601.htm.   For the local view see
http://washingtonpost.com:80/wp-dyn/articles/A26573-2001Jun5.html, Closed
Oil Pipeline Slated for Reopening.

12.	Senate Commerce Subcommittee Chairmanships under the Democrats

The Democrats organized the Senate this week.  In the Coimmerce, Science and
Transportation Committee, Sen. Fritz Hollings (D-SC) became Committee
Chairman, and the subcommittees got new chairmen.   Sen. John Breaux (D-LA)
has the important one for us.  The lineup is as follows:
Aviation: Sen. Jay Rockefeller (D-WV); Communications: Sen. Daniel Inouye
(D-HI);  Consumer Affairs, Foreign Commerce and Tourism: Sen. Byron Dorgan
(D-ND); Oceans & Fisheries: Sen. John Kerry (D-MA); Science, Space &
Technology: Sen. Ron Wyden (D-OR); and Surface Transportation and Merchant
Marine: Sen. John Breaux (D-LA).

13.	Pipeline Safety R&D at the Department of Energy

Following is a link to the Department of Energy's Office of Fossil Energy
and a recent announcement of several join government/industry projects to
develop high-tech ways to improve the safety and performance of the nation's
natural gas delivery system.
http://www.fe.doe.gov/techline/tl_gasinfra_sel1.shtml.

14.	Transportation Facility Siting

Pipeline permitting problems are just a subset of the permitting problems of
transportation modes generally.
http://www.trafficworld.com/news/feature/index.html -- Decongesting
Politics: Brawl brewing on Capitol Hill over environmental review of
transport projects.

15.	Eminent Domain

We wrote USA Today to tell them they have to process for liquid pipeline
siting wrong in this article:
http://www.usatoday.com/usatonline/20010606/3376984s.htm -- Energy plan
intrudes on land Bush policy would allow the government to take private
property for power line sites, and some say it's not for the public good.

16.	Montana Power Costs Becoming a Big Concern

	We wonder to whether this experience is found in other states.  Let us
know.
http://www.trib.com/HOMENEWS/WYO/PipelinePower.html -- Express Pipeline
turns to diesel generators to cut power costs

17.	Pipeline to the Salt Lake City Market

Service changes like this one are becoming more frequent as the industry
seeks to serve growth markets.
 http://www.durangoherald.com/1news4534.htm -- Pipeline plan worries some
residents


 - PIPELINE NOTES6.8.01.rtf