Rebuilding America's Infrastructure: Pipelines


Pipelines are the least expensive method known of transporting products to their markets. However, as with most engineered or man-made structures, rehabilitation or replacement is often necessary.

There are a total of 234 pipelines in the United States. Of these, 143 transport liquids and cover over 150,000 miles, and 91 transport gas over more than 250,000 miles.

With the vast amount of miles covered by these pipelines, it's no wonder that many are in need of repair. Major metropolitan areas in the Northeast typically utilize water pipelines that are more than 100 years old. In New York City, water main breaks have become a near everyday occurrence, and have often made national news. Experts estimate that nearly 15 percent of New York City's water is "lost" through leaks in water pipelines. Throughout the country, leaks in main and branch water lines, as well as domestic and industrial plumbing deficiencies, are responsible for enormous losses.

While leaking water or oil is relatively easy to detect, gas products transported through pipelines can present an entirely different set of challenges. Gas leaking from submerged or underground pipelines can create the risk of explosion due to dispersed fumes. Monitoring of the area is used to offset this possibility.

In addition to pipelines that carry water, oil or gas, there are also "slurry" pipelines which convey solids suspended in water, such as coal, bauxite and ores. Depending on the nature of the solid, the abrasive action of the suspended particles can result in a premature failure of the pipeline.

1. Projected Needs & Cost
New pipeline construction in the United States over the next ten years is expected to continue at its current pace, but will likely take a back seat to rehabilitation of existing pipelines as pipeline operators address Clean Air Act Amendments.

According to the Oil and Gas Journal, it is estimated that nearly 6,500 miles of new pipeline will be constructed in the U.S. (approximately 10 percent of new construction worldwide) over the next decade, at a cost of nearly $29 billion. Changing tax patterns and increasing competition in the natural gas marketplace are resulting in an increased emphasis on transportation, storage, and reliable delivery to the customer. With these criteria in mind, pipeline construction and rehabilitation will likely benefit from improved technology, such as new ìSmart Pipelinesî which are able to detect and pinpoint leaks and unwanted emissions through the use of computer monitoring.

B. Products Transported Via Pipelines

Since its birth, the pipeline industry has undergone major changes, both in construction and in operation techniques. Along with these changes has come an increase in the type of products carried by pipelines. Petroleum and its derivatives, as well as natural gas, still constitutes a major portion of the products carried by pipelines. However, other commodities - such as water, slurry, and carbon dioxide - are becoming increasingly important pipeline commodities.

1. Crude Oil
The pipeline industry originally developed in response to the need for more efficient methods for bringing oil out of the oil fields. Even today, crude oil accounts for a sizable portion of the commodities carried by pipeline. Even though crude oil pipeline construction is reported to have diminished somewhat over recent years, construction still goes on in the Arctic and areas of the North Sea.

Pipelines generally convey crude oil from fields to port facilities, refineries, or chemical plants. The pipeline consists of coated steel pipe with a cathodic protection system to prevent corrosion, and requires several pumping stations to transport the product. The number of stations needed is based on the length of the system, operating flow pressure, and the elevations traversed. Additional considerations include the flow of the oil, the pour point and the flux properties. Flux properties can include items such as specific gravity, thermal expansion, viscosity, and vapor pressure; any of which can affect oilís ability to flow.

2. Natural Gas
Once considered a waste product, natural gas is today considered a major source of energy. As of the mid-1980ís more than half of all existing cross-country pipelines carried natural gas ñ and that figure is believed to be higher today. One factor that makes natural gas so attractive as an energy source is its availability. Even at the current rate of consumption, it is estimated that approximately two-thirds of the worldís gas resources would still be available well into the 21st century.

Similar to oil pipelines, gas pipelines consist of coated steel pipe with cathodic protection systems. Compressors generate and maintain the pressure that assures continuous flow of the gas. A gas gathering system is used at the pipelineís head to convey the raw product to the pipeline from the field. At the discharge end, a station is provided to reduce pressure at operating conditions, and distribute the gas to customers.

Since fires involving natural gas cannot be extinguished safely (the gas source must be shut off or capped), fire prevention and rapid leak detection are critical to the safe operation of the pipeline. Natural gas supply is typically delivered at high pressure (900 psi or more), making it critically important that pipelines are designed, fabricated and assembled to be leak-free.

3. Water
Pipelines are also used to move water, often over great distances and for a variety of purposes. Water pipelines are similar to oil and gas pipelines except unprotected steel cannot be used because water is highly corrosive. Two types of pipe are generally used to convey water:

concrete (reinforced or pre-stressed) for low-pressure or no-pressure operations
steel pipes with a concrete mortar lining for conveying water (particularly fresh water) under high pressure.

In some areas, such as sandy soils, plastic pipe can be used for carrying low-pressure water for irrigation and domestic use. Cast iron piping is generally used for waste water disposal systems.

4. Slurry
As we have previously determined, most pipelines are designed to carry gas and petroleum. However, pipelines are now being used to transport other, less conventional products. One such product involves suspending solids in a liquid, usually water, to form what is called "slurry." This mixture of solid and water is then pumped under pressure through a pipeline.

Slurry lines are cost effective because of the low-cost nature of their operation. They offer an alternative to the constantly rising operating expenses incurred by other forms of land transportation. The nature of slurry transportation requires special techniques, and specific design limitations also apply. Chief among these are restrictions on the angle of the line when traversing steep slopes to prevent sedimentation of the solids if the line is shut down. Slurry lines also require burial well below the frost line, so that the water in the solution is not susceptible to freezing.

5. Carbon Dioxide
According to some estimates, standard technology is capable of bringing less than half of the total hydrocarbons of an oil field to the surface. After this initial production, the likelihood of flow problems increases. Eventually, a well or field is only marginally profitable, or yields no profit at all. In order to extend the life of the well or field, methods have been developed to force more oil to the surface. One such method is the injection of carbon dioxide (CO2) into oil reservoirs to displace hydrocarbons. The CO2 is transported to the fields via pipelines.

A pipeline carrying CO2 usually requires a high operating pressure and thick wall pipe. Because CO2 is found naturally in the atmosphere, it represents no danger of toxicity to the environment, and in the event of a pipeline leak or rupture, can be safely vented directly into the air. Unlike other pipeline fluids, CO2 is noncombustible and thus will not explode or burn.

C. Exposures

1. Land Clearing/Tearing Out
There are several processes and considerations for preparing land for a pipeline installation. The first consideration when clearing the land is the amount of terrain to clear. The space generally utilized is between 40 and 100 feet, depending upon the width of the pipeline and the soil conditions where the pipeline is being installed.

When clearing the area, solid rock may be encountered. Drilling and blasting techniques are used to clear the rock (and are described below). Muddy and/or wet soils may also be encountered, and water must be removed from the soil before digging of the trench can begin.

The second consideration is the depth of the trench in which the pipeline is to be installed. Ditches typically range in size from 3 to 7 feet (1-2 meters) in depth. Pipelines range in size from 2 inches (5 cm) in diameter to as much as 48 inches (122 cm) for the main trunk lines that are used to transport crude petroleum products. Pipelines that are used for natural gas vary in the same size range.

The third consideration involves a procedure called grading. The purpose of grading is to create an even and level work area, and provide easy access for the movement of equipment on and off the work site. This can include cutting down or filling in land areas as well as blasting operations to remove rock formations close to the ground surface. Contract specifications, state regulations and local ordinances will affect the disposal of the brush, vegetation and timber cleared from the area. Bulldozers typically handle most of the clearing, while chain saws are used to fell trees and remove stumps. Ditch digging machines excavate the trenches. Clearing is considered complete when all obstructions have been removed.

2. Trenching and/or Tunneling
Ditching and trenching standards are formulated by the Department of Transportation (DOT), and are based on soil type and the pipelineís location. The standards prescribe the minimum cover requirements for all types of pipeline constructions. When local ordinances differ from these guidelines, the local ordinance takes precedence over the DOT regulation.

The depth at which the pipeline is buried, known as its ìcover requirement,î is usually consistent over a majority of the pipeline. When working with small creeks and streams, cover requirements vary and are usually increased by 5 feet, necessitating the removal of additional soil.

Trenching in difficult conditions, such as rocky or sandy soils, muddy or wet soils, soils containing quicksand, or in solid rock can create significant problems and delays. When faced with waterlogged soils, the contractor may opt to dig ìwell pointsî in order to remove the water from the soil. This process consists of installing hollow steel rods, approximately 18 feet in length, into the ground to a specified depth. On the top end, a flexible hose or tubing connects the well point to a header pipe that carries the collected water back to portable well point pumps. These powerful units pump the water away from the ditch. Even with well points, however, effective drainage is not always possible. In addition, the pumping also creates the danger of collapse of the ditch wall. Sheet piling and slurry walls are methods commonly used to shore up the walls of the trench and prevent a collapse.

When laying a pipeline under a heavily traveled road or thoroughfare, horizontal boring beneath the road is employed. One advantage of horizontal boring is that it usually does not disrupt existing traffic patterns. Pipelines are placed inside of a larger pipe called a casing, which is intended to increase the safety of the carrier pipe by shielding it from the greater stress load of vehicular traffic. Casing is also mandatory when crossing under railroad right of ways. In recent years, the use of casing has been reduced because of improvements in corrosion control and cathodic protections, and the development of higher grades of steel and better welding techniques. The use of casing is still mandatory in certain locations, and is specified by some state regulations and local ordinances.

3. Drilling and/or Blasting
Solid rock may be encountered in varying degrees of hardness when clearing the area. Harder rock and more densely packed rock formations usually require specialized techniques and equipment. Blasting, or "shooting," is the standard technique for dealing with hard rock (granite, bedrock, etc.) in the ditch line. When a soft or light rock (such as caliche or limestone) is in the path of the pipeline, it is necessary to modify the contractorsí equipment so that it will break though more easily. Bulldozers with claw shaped ripper attachments are used to help loosen the rock. Explosives can also be used for rocks of all degrees of hardness, and while the use of explosives does present inherent risks, it can be a valuable time-saving tool.

4. Pipeline Bending
It is rare that a pipeline will run over consistently level landscape. In most cases the pipeís configuration is altered many times during the course of a project to follow the landís contours, or avoid immovable obstacles.

The old process of fire bends, which involved building a fire under and around the pipe and literally bending it around a tree, has given way to the current method of cold working. As the name implies, this method stretches and thins the wall of the pipe at the bending point without the use of heat. Oddly enough, this process actually increases the yield strength of the pipe at the bending point. Done with the use of a track-mounted hydraulic machine, the bend is made by a set of clamps or shoes that grip the pipe at the bend point to prevent slippage. The free end of the pipe is held level by a winch and cable while the pipe is guided through the machine.

5. Cathodic Protection and pipeline coatings
Any buried metal object will eventually succumb to corrosion, particularly in damp or wet areas such as swamps, rivers or off-shore locations. Corrosion is a process whereby a metal object reacts to the elements in the surrounding environment, causing it to release electrical current and resulting in corrosion and degradation of the metal. Cathodic protection reverses this process through the use of carbon anodes which are placed directly into the surrounding environment and cause an equal or near-equal flow of current back toward the object. This achieves an electrochemical "balance" which stabilizes or reduces the corrosion process.

Coatings and wrappings with special sealing materials also play a major role in pipeline protection. Critical to the process is insuring that the pipeline is impervious to water. Should water come in contact with unprotected pipe, the corrosion process would begin immediately. Many factors affect the coating selection process, such a soil conditions, temperature extremes, and proximity to population centers. Because the pipe coating is vulnerable to disbonding or separation from the pipe, extra care must be taken during construction. Wrappings are often used to provide additional protection from puncture or abrasion.

Types of coatings include:

fusion-bonded epoxy
tape coatings
ìon the lineî coatings
(See Glossary for definitions of these types of coatings)

Recent developments in pipeline rehabilitation now allow coating removal and replacement using an over-the-ditch method that employs air, abrasive or water blast technology. Given the proper soil environment, pipeline and coating condition, and operating temperatures, these systems can remove existing pipe coatings, prepare the old surface and apply multicomponent recoatings faster and less expensively than the traditional ditching and recoating process. While the success of these systems varies by coating type and thickness, pipe diameter and length, and overall condition of the pipeline, they represent considerable progress in the technology of pipeline rehabilitation.

6. Welding
Welding is considered to be the most critical component of pipeline construction; directly impacting the integrity, safety and operational life of the finished product. Prior to delivery to the site, pipe ends are cut and beveled at the factory to the proper specifications. The pipe is then positioned along the right-of-way, thoroughly cleaned and aligned, then spaced and internally clamped in preparation for the initial welds or root beads. Depending upon the ambient temperature or the composition of the steel, preheating may be required at this time. After the root bead or stringer bead is completed, the crew removes the internal clamp and moves to the next joint, replaced by another crew which makes the second weld, also known as the "hot pass."

Types of welds include:

manual welding
semiautomatic welding
automatic welding
(See Glossary for definitions of these types of welds)

In keeping with the priority placed on the welding process, quality control in the form of non-destructive x-ray testing of welds is paramount. Both quick and accurate, x-rays are passed through the weld and onto radiographic film, clearly highlighting any flaws in the joint. Self-propelled x-ray machinery, known as crawlers, are frequently used as a means of inspection. They may be pre-programmed to stop at each joint or any pre-selected sequence, saving countless hours of manual inspection. The film is developed at the site so that any necessary corrections can be made immediately. All welds must be inspected and the records retained. While x-rays are the preferred method, other techniques such as ultrasonics, particle tracing and fracture mechanics are also gaining acceptance.

7. Installation & Backfilling
The installation of a pipeline in a ditch is known as "lowering-in." The pipe can be either lowered into the ditch as part of the coating operation, or lowered at another point in the project. Once the pipe is coated, it must be handled carefully or damage to the coating is possible. Experienced operators are a necessity to insure the safety and quality of the pipe. Once the pipe is safely in the ditch, it should be properly backfilled. Backfill covers the pipe completely, and prevents damage due to loose rocks, abrasions, washouts and shifting. When backfilling, clean fill often is used since the original soil/rock could damage the piping.

Various equipment is used in the backfilling process. The specific equipment utilized depends on the nature of the soil, terrain, and the condition of the ditch. Backfill depth fluctuates in accordance with government regulations and right-of-way access in urban and rural areas.

8. Testing
The pipeline is continuously inspected and monitored prior to testing. Testing of the pipeline demonstrates if it was constructed properly, and proves the pipelines integrity. Hydraulic testing, the most popular method, is performed by filling a section of pipeline with water. The pipeline is pressurized and maintained for a designated period of time. If the pipe does not rupture or leak, it is certified for use. The amount and degree of testing is determined by design criteria. Once a section of pipeline is tested and considered sound, contractors prepare the section for final tie-in.

9. Right-of-way Crossings
In the construction or rehabilitation of a pipeline, it is important to consider all conveyances which may cross the pipeline's path. These include vehicles, railroads and waterborne traffic. In all but a few rare cases, the contractor does not have control over these conveyances, and must take steps not to disrupt their usage. The contractor must also be aware of the additional exposure to a delay in the construction project as a result of the traffic involved with right-of-way crossings.

10. Pumps, Compressors & Other Equipment
In addition to the pipeline itself, there are considerable values involved in related transmission, distribution and mechanical systems. This equipment can comprise a significant percentage of the total value of the pipeline system, and damage to this equipment can produce serious direct losses and significant time element claims. Examples of these types of equipment include:

Compressors, pumps and valves
Pumping stations and booster stations
Batching equipment and storage tanks
Mea suring, monitoring and control equipment
Leak detection systems
Communications equipment


When a pipeline is utilized to transport a volatile substance, such as natural gas, the operator of the pipeline must be vigilant against leaks and/or weakness in the pipeís walls. In the United States, demand for natural gas necessitates that pipelines often cross through heavily populated areas to deliver fuel where it is most needed. Considering the large volumes transported annually, pipelines are one of the safest means for delivering natural gas. Hazards, however, are always present.

There are four general sources of failures to a pipeline:

mechanical damage (third-party damage), usually by construction equipment;
environmental causes, such as landslides and corrosion;
metal fatigue as a result of material, construction and fabrication defects;
and operational errors and miscellaneous causes.

Mechanical damage from construction or excavation equipment accounts for over 36 percent of pipeline loss incidents. According to the Federal Register, between 1988 and 1993, gouges and dents from boring tools or backhoes resulted in more than $42 million in damages to pipelines. Although a gouge in the coating or wrapping tape may not cause an immediate rupture of the pipe, the damage may shorten the life of the pipe by exposing the steel to corrosion.

The major causes of loss from the environment are:

general corrosion,
hydrogen-stress cracking in hard areas,
external stress-corrosion cracking,
and hydrogen blistering.

In addition, pipelines rust in the presence of carbon dioxide, moisture content, and ionized salts in the soil.

Material and fabrication failure involves the presence of defects in pipe, equipment or mechanical components (e.g. pressure regulator, valve and meter run), or is due to manufacturing defects. The types of defects that have occurred include cracks and lack of fusion in seam welds or girth welds, casting defects, machining defects, hot tears in seamless pipe, foreign particles in the pipe, quench cracks in heat-treated fittings, and mechanical failure of pressure regulators.

Other causes of loss involve human error, including accidental cutting into pressurized pipe, overpressuring components, opening sphere receivers or traps that are under pressure, attaching low-pressure rated equipment to high-pressure line sources, and venting gas too close to welding operations.

1. Collapse
Collapse is a cause of loss arising from loose rock, abrasion, shifting and washouts. After a pipe is lowered into a ditch, settling occurs, and the weight of the pipe combined with insufficient backfill can place shear stresses on the pipe. Unstable soils in marshes and swampland can impose subsidence problems at pipe joints. In river crossings, the shifting of river banks and riverbed soil due to erosion, scour and changing currents may expose buried pipe to damage and stress.

2. Weather-Related Concerns
Pipeline design and layout must take into account potential ice accumulations, flood, earthquake, landslide (from shifting soils) and windstorm that could contribute to scour from sand and debris.

Exposure mitigation can be accomplished through the use of proper backfill procedures, material, and distribution equipment (such as a bulldozer-auger combination); suitable coating materials and anchoring devices (dependent on the application); and properly designed pipe specifications, such as diameter and wall thickness. Riprap deposited on riverbanks can help reduce potential erosion and subsequent undermining of pipe.

See Attachment A for a Case History of a Pipeline Loss


Pipeline construction can involve a wide range of contractorsí equipment - including highly specialized machinery - and some unique hazards.

1. Clearing, Grading & Backfilling Equipment
The initial operation of land clearing can be likened to a logging exposure where trees are felled, stripped and stacked, and brush cleared in preparation for ditching. Equipment used may include tractors, graders, skidders, harvesters, and log stackers where the primary concerns are fire and overturn. More difficult terrain may require the use of towers or spars, which may be prone to collapse. In areas where backfilling under the pipeline is a problem, augers are used, which also pose a threat of collapse and overturn into the trench. All equipment should be fitted with fire extinguishers, and monitored for at least 30 minutes after shut-down to prevent ignition of debris. Operator experience and proper maintenance are of critical importance.

2. Ditching Equipment
The ditching operation involves the use of various equipment dictated by the conditions and the terrain. Most common are wheel ditchers, which literally scoop-out dirt (known as ìspoilî) and pile it beside the trench for easier backfilling. Rockier areas may require the use of compressors and drills to bore the charge holes, and blasting to loosen the rock for removal by excavators and backhoes. Bulldozers equipped with rippers are also used to loosen softer rock and stone along the ditch line. Unstable areas are particularly difficult and require a more specialized approach. Creeks or small waterways can be diverted and the excavation performed by dozers and draglines.

3. Stringing and Lowering Equipment
The unloading of pipe from the delivery conveyance onto the right-of-way, and subsequent lowering into the ditch, are usually performed by crane. Given that the materials involved are both heavy and sometimes awkward, the proper equipment and experienced operators are required due to the extreme hazard of upset and overturn.

4. Bending Equipment
Todayís pipelines are much more highly engineered and require sophisticated bending techniques and equipment to conform to the landís contours. Expensive hydraulic bending machinery working around and over open ditches are subject to the usual upset and overturn, as well as damage from ìspring-backî of improperly pulled pipeline. Again, experienced operators and engineers are critical to the success of the project.

5. Welding Equipment
From the initial root or stringer bead through the final bead cap, the smaller oxy-acetylene manual welders and generators, as well the EDP operated automatic welders, are subject to loss from fire, explosion and trench collapse. Proper shoring and fire watches during all ìhotî work are fundamental to any safe operation, as are adequate training and equipment maintenance.

F. Rehabilitation Techniques
Depending on the type and extent of the problems facing a pipeline owner there are several options to consider in pipeline rehabilitation, including:

removal and replacement of all or selected portions of the pipeline;
removal and replacement of old or disbonded pipeline coatings;
repair of leaking and damaged pipe joints;
and installation of a liner into the existing pipeline.

The degree of difficulty of a pipeline repair or rehabilitation project is usually a function of the location of the pipeline involved. Hilly or mountainous terrain typically require greater physical and economic resources than relatively flat terrain with soft soil conditions. In some cases, it is easier and less costly to construct a new section and tie it into the remaining system, rather than attempt to access and repair the damaged section. Weather conditions can also increase the difficulty of a rehabilitation project. Areas subject to freezing weather, high winds, floods or earth movement will necessitate additional time and equipment, which can in turn lead to higher project costs.

A brief discussion of each of these options follows.

1. Replacement
Removal and replacement of an entire pipeline is the most costly option available to pipeline owners. Pipeline replacement is generally required due to one or more of the following factors:

population density near or over the line has increased substantially;
corrosion has weakened the piping;
current pipeline capacity is inadequate.
A more common occurrence is the need for rehabilitation or replacement of affected portions of the pipeline due to damage, leakage or corrosion to a particular section of the line.

If a section needs to be replaced it is necessary for the pipeline to be shut down during the rehabilitation. For projects where the downtime will be of short duration and it is not critical for the pipeline to be continuously operational, the line will be shut down and the affected section will be taken out of service, removed, and replaced with the new section. If, however, the owner wishes to reduce downtime, the new section can be installed adjacent to the old section and prior to removal of the old section.

2. Coating Removal & Replacement
Newly installed pipelines are often protected by a coating to ward off corrosion. The three most common coatings encountered in the U.S. are coal-tar enamel (CTE), asphalt and tape. With the passage of time and exposure to the elements, the coating may become disbanded from the pipe or develop gaps, presenting the owner with the prospect of either replacing the pipeline or rehabilitating the pipeline's coating.

Rehabilitation of the coating can be accomplished over long stretches of pipe in a more cost-effective manner than was previously available, using recently developed over-the-ditch technology. The process involves high pressure water-jet blasting for removal of the existing coating, air or mechanical abrasion for preparing the pipeline surface for the new coating, and line-travel coating equipment which sprays multi-component liquid coatings. This technology is highly automated and allows the coating removal and replacement to take place without taking the pipeline out of service. Although this process may be used to remove and replace all three types of coatings, it has been found to be most effective on CTE and asphalt coatings. The rate of removal of tape coatings is more difficult to predict.

Over-the-ditch technology was used successfully in 1991 on jobs for United Texas Transmission Co. (nearly 12 miles of 30-inch gas pipeline completed in 34 days) and Natural Gas Pipeline Co. of America (16.5 miles of 26-inch gas pipeline completed in 35 days).

Some coating removal and replacement projects are further complicated by the fact that the original coating may have an asbestos-containing outerwrap that must also be removed and safely disposed of. This was a manual process until recently and consequently was very slow and expensive. Equipment and procedures have now been developed which will remove, collect, transfer and containerize asbestos-containing material so it can be disposed of safely.

3. Pipe Joint Repair
Leaking joints in the pipeline can be remedied by installing encapsulating couplings which are designed to be installed over existing joints or couplings. This provides new, air tight, high pressure seals without the expense or aggravation of removing the pipe or taking the system out of service.

4. Sliplining
As is the case with much of our nationís infrastructure, many cities and towns are facing a serious problem with deterioration of concrete, iron and clay sewer lines. They are searching for ways to quickly and cost effectively repair sewers without having to dig up streets and private property.

One possible answer is to install a PVC pipe within the existing pipe, a process known as sliplining. This process has many advantages, including:

significant cost savings over pipeline removal and replacement;
no service disruption;
utilizing ìtrenchless technologyî which minimizes demolition;
PVC is very strong, durable and corrosion resistant;
joints are gasketed, providing a tight, durable seal;
and smooth internal surface minimizes friction, resulting in no loss of the pipeís existing carrying capacity.

Section replacement, coating removal and replacement, joint repair and sliplining represent some of the most common options available to owners in their efforts to find quick, cost effective methods of rehabilitating deteriorating pipeline systems.


1. Time Element
The time element exposure is dependent upon the physical location, accessibility, and route of the pipeline. If the damaged property is located underground and excavation is the only means of access, the business income/extra expense period of restoration may be significantly increased. Available replacement materials and transit to the site will also be factors, as well as any contingency plans allowing for either full or partial delivery of the product supplied by the damaged pipeline.

2. Pollutant Clean-up & Debris Removal
The cost of pollutant clean-up and debris removal will also be based upon location and accessibility, as well as the product involved. Leached products such as sewage, oil and petrochemicals will normally involve much greater abatement costs than non-hazardous substances like water. In almost every instance, these additional coverages should be provided as a sublimit per occurrence and often on an annual aggregate basis, particularly with respect to pollutant clean-up.

3. Pipeline Rehabilitation
During a pipeline rehabilitation, a section of the pipe is exposed after excavation. As a result, exposure to flood damage is significantly increased. To mitigate this hazard, the insured should limit the length of the pipe to be exposed at any given time during the project. This can be accomplished through the use of an open trench limitation clause, which allows only a specified distance of pipe to be worked upon prior to being backfilled, and affords the insurer a specific limit on the values exposed to loss. Coverage for pipeline rehabilitation normally excludes the value of the existing pipe. As an alternative, a specified sublimit can also be used.

4. Valuation
Replacement cost is typically utilized for new pipeline construction, as well as the replacement of old with new; although agreed amount is sometimes used. However, in a situation where the existing system is to be repaired, recoated, relined or only partially replaced, the question of valuation becomes less quantifiable. Options to consider include replacement cost for new work with:

ACV on existing system;
agreed amount on existing system;
or functional replacement cost on the existing system.

With any builders risk/installation project, the issues of labor, overhead and profit often arise. While it is not atypical to include some or all of these issues, it can become a formidable insurance to value problem unless accurate values can be agreed upon. In addition, other consequential loss issues, such as soft costs, loss of income, contracts or lease value may need to be addressed. Sublimits or loss limits are often used to more accurately quantify any time element and/or consequential loss exposures.

5. Loss Evaluation
When evaluating loss potential, consideration must be given to a number of criteria which vary depending on local conditions and environmental influences. Weather-related conditions typically present the most significant risk. It is estimated that flooding, hurricanes, and windstorms account for 75 percent of all pipeline losses. Earthquake, while not weather-related, is also a major factor in pipeline losses.

Other large losses are created by the terrain in which the pipeline is placed, such as mountains, rivers, lakes, seas or frigid areas. Pipelines are also subject to loss from pressure testing, construction machinery, faulty design, defective material and poor workmanship.

In developing a loss scenario, the length of pipe exposed, the number of pumping stations, the support structures and the terrain must be taken into consideration. In addition, any time element, debris removal, or consequential loss amounts should also be considered.

6. Probable Maximum Loss (PML)
Given the almost infinite number of locations, elevations, climates and geography in any pipeline project, PML will vary greatly from project to project. On smaller jobs, a single pipe length of 40 to 80 feet may be accurate. For larger projects, the PML becomes much more difficult to establish. In addition to that are consequential loss exposures which may PML at close to 100 percent.

As a general rule, the single largest length of pipe in the project, subject to any one covered loss plus any time element or consequential loss amount, should be considered a minimum PML estimate.

Pipeline PML's are also significantly affected by the commodity involved. For example, natural gas is considerably more volatile than water or slurry and can result in severe, and often catastrophic, loss. In addition, the pipeline itself will differ from project to project. For example, heavy thick-wall pipe used for ocean crossings has significantly more value per foot than concrete sewer pipe, and the PML will vary accordingly. The use of a loss limit or stop loss can assist in the reduction and control of the PML.

Attachment A

Pipeline Explosion - A Case History

On March 23, 1994 a 36-inch diameter pipeline, owned and operated by Texas Eastern Transmission (TETCO), ruptured catastrophically in Edison, New Jersey, within the property of Quality Materials, Inc., an asphalt plant. The force of the rupture was caused by natural gas escaping at a pressure of about 970 psig (pounds-per-square-inch gauge), and it propelled pipe fragments, rocks and other debris more than 800 feet in the air. The escaping gas then ignited, sending flames shooting more than 400 feet. Heat radiating from the massive fire ignited several nearby apartment buildings. The fire ultimately destroyed eight buildings, resulting the evacuation of 1,500 residents and total damages in excess of $25 million.

The rupture destroyed 75 feet of pipe and released nearly 300 million standard cubic feet of natural gas into the atmosphere. Damages from loss of gas and pipe repairs totaled approximately $2.5 million.

The 36-inch pipe was manufactured by Bethlehem Steel Company to API Standard 5L for Grade 52 (52,000 pounds per square inch specified minimum yield strength) steel pipe. The thickness of the pipe wall was 0.675, standard for Class 3 locations.

Metallurgical analysis of the pipeline fragments shows the scrapes were made by nonexcavation activities and the gouges made by mechanical excavation equipment.

The pipe separated as a brittle (cleavage) fracture, rather than a ductile fracture, indicating the steel in the pipe had low toughness properties. The brittle failure left two ends of the 36-inch pipe wide open, allowing high-pressure gas to flow initially from two directions to the rupture site, where the gas escaped into the air and fed the fire. Gas continued to flow from one direction into the pipeline for more than 2 hours until crews were able to close the mainline valves.

As a result of the Edison accident, New Jersey Institute of Technology (NJIT) was asked to perform a study on methods for reducing the risks and enhancing pipeline safety and environmental protection with respect to the sitting and proximity of pipelines.

Attachment B

Summary of 10 Most Recent Pipeline Accidents
From the National Transportation Safety Board
March 11, 1997

Company Date Location Cause Damage
UGI Utilities 6/4/94 John T. Gross Third-Party Damage by a >$5 million
Towers, contractor excavating nearby. 1 dead, 65 injured
Allentown, PA Lack of excess flow valve.

Texas Eastern 3/23/94 Edison, NJ Catastrophic failure due to >$25 million
Transmission mechanical damage on exterior 112 injured
Corp. of pipe.

Natural Gas 4/7/92 TX Failure to have fail-safe features >$6 million
Liquids in wellhead safety system. Also 3 dead, 21 injured
Lack of Federal or state regulations
on design and operation of
Underground gas storage systems.

Peoples Gas 1/17/92 Chicago, IL Lack of proper training of >$1 million
Light & Coke Peoples Gas employees 4 dead, 4 injured

U.S. Army 12/9/90 Fort Benjamin Failure of Army to construct, approx. $600,000
Harrison, maintain, and operate gas system 2 dead, 24 injured
Indianapolis, IN in accordance with its own and
Industry standards.

Texas Eastern 3/13/90 North Blenheim, Failure of company to use proper >$4 million
Products NY safety procedures. 2 dead, 7 injured
Pipeline Co.

Natural Gas 10/3/89 Sabine Pass, Failure of pipeline company to >$2.2 million
Pipeline Co. of TX bury pipeline at depth specified 11 dead
America by U.S. Army Corps of Engineers.

North Shore 8/31/88 Green Oaks, IL Failure of company personnel to <$100,000
Gas Co. check systems map before 4 injured
beginning to dig.

Piedmont 1/18/88 Winston-Salem, Corrosion failure of gas service approx. $4.5 million
Natural Gas NC pipeline. 5 injured

Lone Star 3/12/85 Fort Worth, TX Failure of company to show >$4.1 million
Gas Co. ruptured line on its own maps, 21 injured
and failure to train its employees
in accident procedures.

Attachment C


Acetylene welding: a method of joining steel components in which acetylene gas and oxygen are mixed in a torch to attain the high temperatures necessary for welding.
Aerial river crossing: a river crossing technique in which the pipeline is either suspended by cables over the waterway or attached to the girders of a bridge designed to carry vehicular traffic.
Anchor: a device that secures a pipe in a ditch.
Anchoring system: a combination of anchors used to hold a lay barge on station and move it forward along the planned route. Lay barge anchors may weigh in excess of 20 tons each, and a dozen or more anchors may be needed.
Auger: a boring tool that consists of a shaft with spiral channels. An auger is used to bore the hole for a pipeline that must cross beneath a roadbed.
Automatic welding: a welding technique for joining pipe ends. Two general types used in pipeline construction are submerged-arc welding and automatic wire welding.
Automatic wire welding: an automatic welding process utilizing a continuous wire feed and a shielding gas.

Backfilling: the technique for covering a completed pipeline so that adequate fill material is provided underneath the pipe as well as above it.
Backhoe: an excavating machine fitted with a hinged arm to which is rigidly attached a bucket that is drawn toward the machine in operation. Used for excavating and clearing blasted rock out of the ditch.
Barrel reamer: a cylindrical device fitted on both ends with hollow cutting teeth; used in directionally drilled river crossings.
Big Inch: the first cross-country pipeline with a 24-inch diameter. The 1,340-mile Big Inch was begun in 1942 as part of an emergency construction program to meet the demand for petroleum products during World War II.
Big-inch pipe: thin-walled pipe of high tensile strength with diameters of 20 inches or more.
Blasting mats: covering used to contain flying debris and rock caused by the use of explosives during pipeline ditching.
Bore: to penetrate or pierce with a rotary tool.
Bottom-pull method: an offshore pipeline construction technique in which the pipe string remains below the surface while it is towed to its final location.
Bury barge: a barge used for trenching underwater lines.

Canal-lay construction: a pipeline construction technique used in swamps and marshes.
Cap bead: the final welding pass made the complete the uniting of two joints of pipe.
Carrier pipe: term used to refer to a pipeline when other pipe, called casing, is used with in crossing under roadbeds and railroad right-of-ways.
Casing: large pipe in which a carrier pipeline is contained.
Cathodic protection: a means of preventing the destructive electrochemical process of corrosion of a metal object by using it as the cathode of a cell with a sacrificial anode.
Cleaning and priming machine: a self-propelled machine that uses a rotating set of brushes and buffers to remove loose material from pipe surfaces. The machine then applies a thin coat of primer to prepare the pipe for coating.
Clear: to remove brush, trees, rocks and other obstructions from an area.
Coating flaw: a gap or flaw in pipe coating.
Coating machine: a machine that applies an even layer of coating material to pipe surfaces.
Cold work: to work metal without the use of heat.
Conventional river crossing: a waterway crossing with pipeline construction techniques similar to those on land.
Corrosion: any of a variety of complex chemical or electrochemical processes by which metal is destroyed through reaction with its environment.
Cover depth: the measurement from the top of a pipe to ground level along a right-of-way.
Crawler: a self-propelled X-ray machine that rides inside the pipe to examine welds for possible defects.
Cut and fill: to cut down high ground or fill-in low ground to achieve a uniform grade for a pipeline.
Cutterhead: in pipeline construction, the lead component in a directional drilling assembly.

Deadman: an anchoring point against which the winch on a boring machine for pipelining can pull.
Deflect-to-connect connection: an underwater pipe-joining technique in which the pipe is pulled to a target area in line with a platform but to one side of it.
Destructive testing: a procedure in which a weld is torn apart so that its structure can be examined.
Directional drilling: a technique of river crossing in pipeline construction in which the pipe is buried under the riverbed at depths much greater than those of conventional crossings.
Direct pull-in connection: an underwater pipe-joining technique in which the pipe with its connector sled is steered straight onto the matching receiver at the base of a platform.
Disbonding: a common coating failure in which the coating separates from the pipe.
Ditch: to excavate a trench in which to lay pipe or cable.
Ditch breaker: a device that divides a ditch into sections for form internal barriers to water movement.
Dope pot: a portable container used to melt coal tar enamel.
Double jointing: the process of welding two pipe joints together to form a single piece of pipe.
Dummy pipe: the pipe used to slick-bore a road.
Dynamic tensioning: a sophisticated monitoring system for laying pipe, used to control pipe release off a stinger.

Enamels: A type of coating which include a wide variety of petroleum based derivatives, such as asphalts and coal tars. Since they vary in terms of thickness, adhesion properties and durability, their use depends upon soil and moisture conditions.
Expansion loop: a full loop built into a pipeline to allow for expansion and contraction of the line.
External line-up clamp: an alignment clamp used on the outside of a pipe.

Fabrication: a collective term for the specialized connections and fittings on a pipeline.
Fabrication crew: pipeline construction workers responsible for welding fabrication assemblies onto the line.
Field bevel: a rebeveling of pipe ends in the field, usually required because of damage sustained by the pipe during transport or because a defective weld must be cut out.
Fire bending: one of the earliest methods for bending pipe. The joint was placed over a small bonfire, and when the heat rendered it sufficiently malleable, it was placed against a tree and bent. Fire bends can significantly weaken the pipe.
Flash welding: a welding technique in which low voltage is applied to each pipe joint while the ends are in light contact.
Freeze pipe: a device fitted on the vertical support members of the pipeline to circulate a refrigerant continuously between he subsoil and the top of the pipe. The refrigerant keeps the ground beneath the pipeline frozen to prevent frost heaving.
Frost heaving: movement of soil resulting from alternate thawing and freezing. Frost heaving generates stress of vertical support members of pipelines.
Fusion-bonded epoxy: A type of coating which involves the use of powdered resins applied to a heated pipe, and forming a protective ìskinî over the steel surface. The pipe is blast cleaned and heated to between 400 and 500 degrees Fahrenheit, and a fine spray of epoxy resin is applied. The resin melts on contact, and the remaining heat from the pipe cures the coating and bonds it to the pipe. This process may be applied both externally and internally, and is often utilized in gas transmission lines, which are susceptible to corrosion from elements contained within the gas itself. Fusion-bonded epoxies leave a very thin coating, which facilitates the handling, bending and inspection of the pipe. In addition, the epoxies can withstand the high operating temperatures common to gas transmission lines.

Grading: the process of providing a smooth and even work area to facilitate the movement of equipment along a right-of-way.
Grinding and buffing: the process of cleaning pipe ends of dirt, rust, mill scale, or solvent to prepare them for welding.
Guidance system: the means by which a river crossing operation stays on course. Guidance systems are frequently computerized.

Holiday: a gap or void in coating on a pipeline or in paint on a metal surface.
Holiday detector: an electrical device used to locate a weak spot, or holiday, in coatings on pipelines. Also called jeep.
Hot pass: the second pass made on a weld. The hot pass follows the root, or stringer, bead and precedes the filler pass and cap.
Hot tie-in: a weld made on a pipeline already in service.
Hydrostatic testing: the most common final quality-control check of the structural soundness of a pipeline. In this test, the pipe is filled with water and pressurized.

Internal line-up clamp: an alignment clamp used on the inside of pipe. The clamp uses a number of small, expandable blocks to grip the inside surfaces of both pipe joints and hold them in place.

Jeep: see Holiday detector.
Jet sled: a pipe-straddling device, fitted with nozzles, that is towed by a bury barge. As water is pumped at high pressure through the nozzles, spoil from beneath the pipe is removed and pumped to one side of the trench. The pipeline then sags naturally into position in the trench.
Joint: a single length (usually 40 feet) of pipe.

Lay barge: a barge used in the construction and placement of underwater pipelines.
Lay barge construction: a pipe-laying technique used in swamps and marshes in which the forward motion of the barge sends the pipe down a ramp and into the water. Also called marine lay.
Line travel applied coating: the coating applied to pipe over the ditch.
Little Big Inch: a 20-inch products line constructed during the same period as the Big Inch as part of the World War II effort.
Looping: the technique of laying an additional pipeline alongside an existing one when additional capacity is desired.
Lowering-in: the process of laying pipe in a ditch.
Lowering-up: the process of raising pipe and placing it on vertical support members in locations where frozen earth prevents normal burial of the line.

Manual welding: also known as stick welding, this process uses an electric arc that fuses the pipe ends with the metal of an electrode (stick) held by the welder. The electric current is supplied by portable or truck-mounted generators.
Marine lay: see lay barge construction.
Mill-coated pipe: pipe coated at the mill; as opposed to pipe coated over the ditch.

Nondestructive testing: testing designed to evaluate the quality of both production and field welds without altering their basic properties or affecting their future usefulness. The most common nondestructive test method is radiographic, or X-ray, testing.

"On the Line" coating: the success of any ìon the lineî or ìline travelî applied coating process depends upon the ability to achieve a clean working surface, and the smooth application of a quick-drying primer. This is achieved through the use of large machinery which consists of cleaning, coating and tape-wrapping equipment assisted by up to 4 or 5 side booms and tractors. As the machine moves along the pipeline, tractors support the pipe and the coating machine, and additional tractors lift the trailing end of the pipe while towing a sled containing the necessary coating materials.
Open-cut crossing: a road crossing in which the pipeline ditch cuts through the road instead of being bored under it.
Oxyacetylene welding: see acetylene welding.

Padding: screened or sifted dirt, clean gravel or foam placed in a ditch to protect the pipe from damage caused by rocky or rough soils.
Pearson holiday detector: a holiday detector that checks for coating defects, and metal debris near a buried pipeline.
Pig: in hydrostatic testing of a pipeline, a scraper used inside the line to push air out ahead of the test water and to push water out after the test.
Pig run: the trip of a pig through a pipeline.
Pilot hole: the hold drilled as the first step of a directionally drilled river crossing.
Pipe bending: the process of bending joints so that a pipeline will conform to the topography of a right-of-way.
Pipe-bending machine: a track-mounted, hydraulic machine that bends a joint to the precise angle specified by the bending engineer.
Pipe coating: a special material that coats pipelines and prevents water from coming into contact with the steel structure of the pipe.
Pipeline: a system of connected lengths of pipe, usually buried in the earth of laid on the seafloor, that is used for transporting petroleum, natural gas, water and other materials. A pipeline serves as both a conveyor and a temporary container.
Pipeline testing: the process of proving the structural integrity of an installed pipeline.
Pipe tensioner: a braking device used on a lay barge to control the descent rate of pipe.
Pipe wrapping: material applied on top of pipeline coating to protect the coating from damage. Materials used for wrapping include felt, fiberglass, reinforced felt, and kraft paper.
Pour point: the temperature at which a liquid ceases to flow.
Pup joint: a length of drill or line pipe, tubing, or casing shorter than 30 feet.
Push-in construction: a pipe-laying technique used in swamps and marshes in which the pipe is moved from a stationary point out into the ditch.

Radiographic testing: photographic record of corrosion damage obtained by transmitting X-rays into pipelines and pipeline welds.
Reel barge: a lay barge specially outfitted to lay pipe from an immense reel on deck.
Right-of-way: the legal right of passage over public land and privately owned property.
Riprap: the material used to hold soil in place.
River crossing: a type of special pipeline construction used when a pipeline must cross a river or stream.
Road crossing: laying of a pipeline under a roadbed or through a road.
Rock ditching: excavating a trench in rock or rocky soil
Root bead, or stringer bead: the initial welding pass made in uniting two pipe joints.

Scraper: any device that is used to remove deposits (such as scale or paraffin) from tubing, casing, rods, flow lines, or pipelines.
Semiautomatic welding: rather than an electric arc, this process uses a continuous stream of gas, usually CO2, between an electrode and the pipe. The gas arc heats the pipe, melts the electrode wire, and supplies the filler metal for the weld. While the welding itself is automatic, the rate of gas and the feed of electrode are controlled by the welder so the process is considered semiautomatic.
Shielded-arc welding: a welding technique in which the road coating involves an inert gas shield that protects the weld from oxidation.
Shoofly: a special access road constructed to link a right-of-way with existing roads. Shooflies are usually necessary only in remote construction areas.
Shooting rock: the process of using explosives to clear rock from a pipeline right-of-way.
Slack looping: the process of laying pipe alternately on opposite sides of a ditch to counter the effects of pipe contraction and expansion caused by extreme variations in daily temperature.
Slick boring: a boring technique sometimes used for road crossings in which a large amount of liquid is pumped into the hole outside of the pipe to reduce friction.
Slurry: a mixture in which solids are suspended in a liquid.
Spoil: excavated dirt.
Spread: the necessary equipment and crew needed to build a pipeline. Modern spreads, which are like moving assembly lines, can consist of more than one hundred pieces of equipment and over five hundred workers.
Stick welding: see manual welding.
Stovepipe assembly: in laying pipe, an assembly on lay barges in which pipe joints are assembled in a continuous string.
Stringer bead: see root bead.
Stringing: the process of delivering and distributing line pipe where and when it is needed on a right-of-way.
Submerged-arc welding: an automatic welding process which utilizes a continuous wire feed and a shielding medium of fusible granular flux.
Suction dredge: in pipe laying, a type of trenching machine used on river crossings when the channel cannot be diverted or when the volume to material to be removed is large. A suction pump rapidly forces large amounts of soil into a discharge pipe for deposit on the adjacent bank.

Tape coating: a type of coating usually made of polyethylene. Tape coating is applied while ìon the line,î ensuring that its integrity can be easily verified and any necessary repairs made immediately. Other tape coatings currently available include polyvinyl, coal tar base, and butyl mastic adhesives.
Taping machine: a machine that moves along the pipe, wrapping joints with tape in overlapping segments.
Tie-in: collective term for the construction tasks bypassed by regular crews on pipeline construction.
Topsoiling: the technique of placing topsoil in a spoil bank separate from the rest of the excavated materials from pipeline construction so that it can be replaced in its original strata during backfilling operations.
Tunnel: in pipeline construction, to penetrate or pierce manually.

Uncased crossing: a road crossing bored without casing. In an uncased crossing, the carrier pipe is pushed under the roadbed by the boring machine.

Vent: a device installed on one end of the portion of a pipeline that crosses under a road. The vent marks the boundary of the highway right-of-way and provides an exit for any fluids should the pipeline develop a leak.
Vertical support member: H-shaped device that supports a pipeline above the ground.

War emergency pipelines: a government-financed, nonprofit corporation of eleven oil and pipeline companies established during World War II to build desperately needed pipelines such as Big Inch and Little Big Inch.
Well point: a device installed in waterlogged soil to dry out areas along the ditch line.
Wet boring: a boring technique similar to slick boring that is used for small-diameter pipelines. Water is the lubricant in wet boring.

Attachment D


Pipeline Rehabilitation 1 - Over ditch coating removal a key to cutting rehab costs, Oil & Gas Journal, February 7, 1994.

Pipeline Rehabilitation - Conclusion - Two projects highlight water, air processes for reconditioning pipeline surfaces, Oil & Gas Journal, February 14, 1994.

Brico Industries, Inc., Advertisement for Depend - O - Lock in Engineering News Record, February 26, 1996.

Lamson Vylon Pipe, Cleveland, OH - Manufacturers of Vylon PVC Slipliner Pipe - Marketing materials received 5/22/96.

Pipeline Construction, by Max Hosmanek, published by Petroleum Extension Service, Division of Continuing Education, The University of Texas at Austin; Austin, Texas, 1984.

Pipeline Transportation Systems: An Underwriting Overview, Published by Inland Marine Underwriters Association, 1991.

Natural Gas Transmission Pipeline Safety, Engineering and Safety Service Report, Fastman.

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