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.