ARRANGEMENT BETWEEN THE NATIONAL ENERGY BOARD AND THE PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION

I. PURPOSE

The National Energy Board (NEB) of Canada and the Pipeline and Hazardous Materials Safety Administration (PHMSA) of the U.S. Department of Transportation (DOT) (together, "the Participants") enter into this Arrangement to enhance cooperation and coordination between the Participants for the purpose of improving pipeline safety in both Canada and the United States.

II. BACKGROUND

NEB regulates aspects of the energy industry in Canada including the construction and operation of inter-provincial and international pipelines; pipeline traffic, tolls and tariffs; the construction and operation of international and designated inter-provincial power lines; the export and import of natural gas; the export of oil and electricity; and Frontier oil and gas activities.

PHMSA regulates safety, reliability, and environmental soundness in the design, construction, testing, operation, maintenance, and spill response planning for natural gas and hazardous liquid pipeline facilities used in or affecting U.S. interstate and foreign commerce.

The pipeline infrastructure in Canada and the United States is interconnected and the continued safe operation of this infrastructure is dependent on the adequacy and effectiveness of design, construction, operation, maintenance, and other aspects of pipeline transportation activities in both nations. The Participants recognize that the conduct of their responsibilities has and will in the future require them to examine, regulate, or otherwise oversee interconnecting pipeline facilities or activities. The Participants further recognize that appropriate cooperation in the development and implementation of regulatory programs will provide greater regulatory certainty to pipeline companies operating pipelines which cross the boundary between Canada and the United States.

III. PROVISIONS OF ARRANGEMENT

A. The Participants contemplate that cooperation may take the form of staff exchanges, emergency management planning and exercises, joint training initiatives, consultative regulatory development, and sharing of compliance data and reports. To the extent any investigation reports, findings, and company intelligence are shared in furtherance of the purposes of this Arrangement, each Participant should protect any non-public records or portions thereof provided by the other Participant from unauthorized disclosure in accordance with applicable law and should obtain the consent of the providing Participant before disclosing any confidential information. PHMSA further intends to specify when information it provides is being submitted "in confidence" so that that the NEB can refuse disclosure of that material in accordance with Canada's Access to Information Act.

B. The Participants contemplate that cooperation may take place on research and development activities. These activities can take the form of coordination meetings to identify mutual areas of research and the possible co-funding of identified research projects.

C. When either Participant undertakes a compliance audit on a pipeline that crosses the border between Canada and the United States, the Participant undertaking the audit should notify either the NEB Secretary or PHMSA's Assistant Administrator chief Safety Officer for Pipeline Safety as appropriate. Where appropriate, such notification may include an invitation to observe the audit.

D. When either Participant commences an enforcement action on a pipeline that crosses the border between Canada and the United States, the Participant commencing the action should notify either the NEB Secretary or PHMSA's Assistant Administrator/ Chief Safety Officer as appropriate.

E. If an Alaskan Natural Gas Pipeline is authorized by law to be designed, constructed and operated, the Participants will coordinate and collaborate in the manner described herein
as appropriate.

IV. OTHER PROVISIONS

A. Nothing in this Arrangement or any annex is intended to impose any funding obligations on either of the Participants. Nothing in this Arrangement or any annex is intended to diminish or otherwise affect the authority of either Participant to carry out its statutory, regulatory or other official functions or to commit either Participant to providing a particular service they would not otherwise provide in the scope of each Participant's individual mission and functions.

B. Nothing in this Arrangement or any annex shall be construed to conflict with current law, regulation, or directive of the NEB or the DOT. If a provision of this Arrangement or any annex is determined to be inconsistent with such authority, that provision shall not be considered to be applicable to the extent of the inconsistency.

C. Nothing in this Arrangement or any annex is intended to create any right or benefit, substantive or procedural, enforceable at law by any person or organization against either Participant, its agencies or officers, state agencies or officers canying out programs authorized under federal law, or any other person.

D. This Arrangement and any annexes hereto may be revised or modified at any time by the NEB and PHMSA.

V. PRINCIPAL CONTACTS

The Participants designate the principal contacts identified in Attachment A. Each Participant's contact may be changed at its discretion upon notice to the other Participant.

VI. COMMENCEMENT AND EXPIRATION

This Arrangement will commence on the date of signature by both of the Participants and will expire upon notification by either Participant.

John Donihee
Chief Operating Officer
National Energy Board

22 Nov 05
Date

Stacey L. Gerard
Acting Assistant Administrator/Chief Safety Officer
Pipeline and Hazardous Materials Safety Administration
U.S. Department of Transportation

11/18/05
Date

ATTACHMENT A: PRINCIPAL CONTACTS

The following are the principal initial contacts for each Participant:

National Energy Board
Gregory Lever
Business Leader
Operations Business Unit
444 Seventh Avenue SW
Calgary, Alberta T2P OX8
gleveraneb-one.gc.ca
403-292-2766
403-292-5876 (fax)

Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation

Jeff Wiese
Director of Program Development, OPS
400 Seventh Street SW, Room 2103
Washington, DC 20590
jeff.wiese@dot.gov
202-366-2036
202-366-4566 (fax)

MEMORANDUM OF UNDERSTANDING
AMONG THE
U.S. DEPARTMENT OF TRANSPORTATION
U.S. DEPARTMENT OF ENERGY
AND
NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

I. PURPOSE

The purpose of the Memorandum of Understanding (MOU) is to detail the responsibilities of the U.S. Department of Transportation (DOT), the U.S. Department of Energy (DOE), and the National Institute of Standards and Technology (NIST) (together, "the Participating Agencies") in a program of research, development, demonstration, and standardization to ensure the integrity of pipeline facilities. This MOU identifies program elements, as well as specific areas of agency expertise, and establishes a framework for coordination and collaboration by the Participating Agencies.

II. BACKGROUND

The United States is critically dependent on natural gas and petroleum liquids transported through pipelines. The pipeline infrastructure that currently transports these energy resources is facing age-related impacts on system integrity. While new pipelines are being constructed, pipeline operators typically plan on continued operation of the vast majority of existing pipeline mileage. Ensuring the long-term integrity and security of these existing pipelines through the application of improved technology is essential.

Section 12 of the Pipeline Safety Improvement Act of 2002 ("the Act"), Public Law 107-355, requires the Participating Agencies to carry out a program of research, development, demonstration, and standardization to ensure the integrity of pipeline facilities. Furthermore, the Act requires the Participating Agencies to enter into an MOU detailing their respective responsibilities, and to periodically report to Congress on program plans and implementation status.

The Participating Agencies recognize the need to work together to identify pipeline facility research priorities, discern the most promising research proposals, avoid duplication of research and development efforts, assure coordination and collaboration, advance technological solutions, and involve outside stakeholders. Consistent with the Act, and in recognition that pipeline integrity is a shared responsibility, the Participating Agencies enter into this MOU.

III. AUTHORITY

A. DOT enters into this MOU under authority of P.L. 107-355 §12,49 U.S.C. §§ 60101 et seq. and 322, and 49 C.F.R. §§ 1.45(a) and 1.53

B. DOE enters into this MOU under authority of P.L. 107-355 §12 and 42 U.S.C.§§ 7101 et seq.

C. NIST enters into this MOU under authority of P.L. 107-355 §12 and 15 U.S.C.§ 271 et seq.

IV. RESPONSIBILITIES OF PARTICIPATING AGENCIES

A. Program Elements: The Act requires the Participating Agencies to carry out a program that includes research, development, demonstration and standardization activities related to the following elements:

1. Material inspection;

2. Stress and fracture analysis detection of cracks. corrosion. abrasion and other abnormalities. inside pipelines that lead 10 pipeline failure, and development of new equipment or technologies that are inserted into pipelines to detect anomalies:

3. Internal inspection and leak detection technologies, including detection of leaks at very low volumes

4 Methods of analyzing content of pipeline throughput:

5. Pipeline security including improving the real time surveillance of pipeline rights of way, developing tools for evaluating and enhancing. pipeline security and infrastructure. reducing natural, technological and terrorists threat and protecting first response units and persons near an incident:

6, Risk assessment methodology. including vulnerability assessment and reduction of third-party damage;

7. Communication, control, and information systems surety:

8. Fire safety of pipelines

9. Improved excavation, construction, and repair technologies; and

10. Other appropriate elements

B. Areas of Agency Expertise: Each Participating Agency has primary responsibility for implementing program elements within its expertise:

1. DOT's Research and Special Programs Administration (RSPA) has the lead role in pipeline facility research, development, demonstration, and standardization as it pertains to natural gas and hazardous liquid pipeline safety, integrity management, and damage prevention. RSPA will focus its efforts on short-term to mid-term research and development projects that will quickly bring the results to industry and market. In addition, RSPA will lead the Participating Agencies in preparing and transmitting the five-year program plan to Congress. RSPA will carry out this responsibility through its Office of Pipeline Safety (OPS).

2. DOE has the lead role in pipeline facility research, development, demonstration, and standardization as it pertains to pipeline reliability, deliver ability, and surveillance. DOE will focus its research efforts on advanced and innovative, mid-term to long-term research and development on the next generation of infrastructure technologies.

3. NIST has the lead responsibility in pipeline material research, development, and demonstration, pipeline fire safety, and will serve as liaison with private sector consensus standards organizations as it pertains to natural gas and hazardous liquid pipeline safety, reliability, and damage prevention.

C. Program Plan

1. The Act requires the Secretary of Transportation, in coordination with the Secretary of Energy and the Director of NIST, to prepare and transit to Congress a five-year program plan not later than December 17, 2003. The program plan will guide program activities based on this MOU and take into account the related activities of other Federal agencies, including the U.S. Department of Interior's Minerals Management Service. The program plan will be submitted to RSPA's Technical Pipeline Safety Standards Committee and Technical Hazardous Liquid Pipeline Safety Standards Committee for review and will include the comments of the committees.

2. In preparing the program plan and establishing project priorities, the Secretary of Transportation will consult with appropriate representatives of the pipeline industry, utilities, manufacturers. academia, other Federal agencies, pipeline research institutes, national laboratories, State pipeline safety officials, labor organizations, environmental organizations, pipeline safety advocates, and
professional and technical societies.

D. Annual Reports to Congress: Not later than December 17, 2003, one year after enactment of the Act, and annually thereafter, the heads of the Participating Agencies must jointly transmit to Congress a report ont he status and results to date of the implementation of the program plan.

E. Coordination and Collaboration

1. The Participating Agencies agree to coordinate research, development, demonstration, and standardization activities in order to achieve an optimal division of labor and resources. This coordination may include:

• Preparation and early review of planned solicitations and competitive or sole-source announcements;
• Participation in reviewing research white papers and full proposals received by a Participating Agency;
• Consultation on on schedules for the solicitation of research projects;
• Exchange of technical information;
• Participation in workshops or technical sessions held by any of the Participating Agencies,.academia, research institutes or organizations, other government agencies or other entities involved in pipeline research, development, demonstration, or standardization.
• Joint conduct of workshops or technical sessions;
• Dissemination of technological solutions identified through research, development, and demonstration projects;
• Consultation on standardization issues;
• Exchange visits of individuals sponsored by the participating Agencies; and
• Review of research findings of international organizations involved in pipeline safety, integrity, and reliability research.

2. The Participating Agencies agree to disseminate in accordance with applicable law the technological solutions identified through research, development, and demonstration projects conducted to advance the safety, integrity, and reliability of the natural gas and hazardous liquid pipeline infrastructure. This may include dissemination through workshops, technical sessions, conferences, press releases, web sites, or standards. This also may include the development of public abstracts to clearly communicate research findings and interim results.

3. The Participating Agencies agree to work together on the development and application of performance measures to evaluate research effectiveness of pipeline facility research, development, and demonstration projects. This may include a requirement that those who respond to solicitations include measures of project effectiveness as part of the proposal.

V. GENERAL PROVISIONS

A. Program Funding. Nothing in this MOU obligates the Participating Agencies to request a certain budget level, request appropriations, enter into any contract or other obligation, or impose specific programming obligations on any party. All provisions in this MOU are subject to the availability of funds.

B. Amendment. This MOU may be amended by written agreement among the Participating Agencies.

C. Rights and Benefits. Nothing in this MOU is intended to diminish or otherwise affect the authority of any Participating Agency to carry out its statutory, regulatory, or other official functions, rights and responsibilities nor is it intended to create any right or benefit, substantive or procedural, enforceable at law by any party against the United States, its agencies or officers, or any other person.

VI. AGENCY CONTACTS

The Participating Agencies designate the following principal contacts for each agency. These contacts may be changed at the discretion of the Participating Agency upon notice to the other
Participating Agencies.

Department of Transportation

Stacey Gerard
Associate Administrator, Office of Pipeline Safety
400 Seventh Street SW, Room 7128
Washington. DC 20590
Stacey.Gerard@rspa.dot.gov
202-366·4595
202-366-4566 (fax)

Department of Energy

James A. Slutz
Deputy Assistant Secretary, Office of Natural Gas
And Petroleum Technology
1000 Independence Avenue, S.W.
Washington, DC 20585
James.Slutz@hq.doe.gove
202-586·5600
202-586-6221 (fax)

National Institute of Standards and Technology

Dr. James E. Hill
Acting Director. Building and Fire- Research Laboratory
National institute of Standards and Technology
100 Bureau Drive, MS 8600
Gaithcrsburg, MD 20899-8600
jamcs.hill@nist.gov
301- 975-5900
301- 975-4032 (fax)

VII. DURATION OF THE MOU

This MOU is effective from the date of final signature of the Participating Agencies. and remains in effect for five (5) years, unless extended or terminated by a Participating Agency upon sixty (60) days written notice to the other Participating Agencies. Each of the signatories to this MOU has been authorized to sign the MOU on behalf of his respective Participating Agency.

Samuel Bonasso
Deputy Administrator
Research and Special Programs Administration
Department of Transportation

1/20/04
Date

Carl Michael Smith
Assistant Secretary, Office of Fossil Energy
Department of Energy

1/20/04
Date

Arden L. Bement. Jr.
Director, National Institute of Standards and Technology
National Institute for Standards and Technology

1/20/04
Date

INTERAGENCY AGREEMENT
AMONG THE
FEDERAL ENERGY REGULATORY COMMISSION
UNITED STATES COAST GUARD
AND
RESEARCH AND SPECIAL PROGRAMS ADMINISTRA nON
FOR THE SAFETY AND SECURITY REVIEW OF WATERFRONT IMPORTIEXPORT
LIQUEFIED NATURAL GAS FACILITIES

I. Introduction

The Federal Energy Regulatory Commission (FERC), the U.S. Coast Guard (USCG) within the U.S. Department of Homeland Security, and Office of Pipeline Safety (OPS) under the Research and Special Programs Administration (RSPA) within the U.S. Department of Transportation (Participating Agencies) are responsible for exercising regulatory authority over the siting, design, construction and operation of liquefied natural gas (LNG) facilities, and related land and marine safety and security issues.

The Purpose of this Interagency Agreement (IA) is to ensure that the Participating Agencies work in a coordinated manner to address issues regarding safety and security at waterfront LNG facilities, including the terminal facilities and tanker operations, to avoid duplication of effort, and to maximize the exchange of relevant information related to the safety and security aspects of LNG facilities and the related marine concerns.

Specifically, the Participating Agencies will work together to ensure that both land and marine safety and security issues are addressed in a coordinated and comprehensive manner. This includes LNG tankers traversing a waterway to the marine terminal, transfer of LNG to the onshore storage terminal, and terminal operations. The agencies agree that the information will be addressed in the FERC's study under the National Environmental Policy Act (NEPA) and disclosed to the public to the extent permitted by law. The FERC's regulations regarding Critical Energy Infrastructure Information, and Transportation Security Administration and Department of Transportation regulations may restrict disclosure of certain security sensitive information. The agencies also agree to identify and resolve any issues quickly during the study and to build a consensus on any hazard studies or other documents that provide criteria or the basis for conclusions regarding safety analyses.

II. Roles of the Participating Agencies

FERC. The FERC is responsible for authorizing the siting and construction of onshore LNG facilities under Section 3 of the Natural Gas Act (IS U.S.C. § 717 et seq). FERC also authorizes the construction and operation of interstate natural gas pipelines that may be associated with the LNG facilities under section 7 of the NGA.

The FERC conducts environmental, safety, and security reviews of LNG plants and related pipeline facilities, and as the Lead Federal Agency prepares the overall NEPA documentation (18 CPR Part 380). In conjunction with the NEPA review, the FERC conducts a cryogenic design review of the proposed facilities. A summary of that review, including conclusions and recommendations, is included in the NEPA document. FERC can impose safety requirements to ensure or enhance operational reliability after the LNG facilities within its jurisdiction.

During construction of the LNG facilities, the FERC conducts periodic inspections to ensure compliance with conditions attached to the FERC authorizations.

Once the LNG facilities are in operation, the FERC conducts inspections of the LNG plant, focusing on equipment, operation, and safety. As part of the inspection program, the FERC maintains a Cryogenic Design Inspection Manual for each jurisdictional facility.

RSPA. RSPA has authority to promulgate and enforce safety regulations and standards for the transportation and storage of LNG in or affecting interstate or foreign commerce under the
pipeline safety laws (49 U.S.C. Chapter 601).

RSPA's authority extends to the siting, design, installation, construction, initial inspection, initial testing, operation, maintenance of LNG facilities. Operation and maintenance includes fire prevention and security planning for LNG facilities under 49 CFR Part 193. OPS inspects and enforces compliance with these regulations through a broad range of administrative and judicial actions.

USCG. The USCG exercises regulatory authority over LNG facilities which affect the safety and security of port areas and navigable waterways under E.O.10173, the Magnuson Act (50 V.S.C. § 191), the Ports and Waterways Safety Act of 1972, as amended (33 U.S.C. § 1221, et seq.) and the Marine Transportation Security ACt of 2002 (46 V.S,C Section 701). The USCG is responsible for matters related to navigation safety, vessel engineering and safety standards, and all matters pertaining to the safety of facilities or equipment located in or adjacent to navigable waters up to the last valve immediately before the receiving tanks. The USCG also has authority for LNG facility security plan review, approval and compliance verification as provided in Title 33 CFR Part l05, and siting as it pertains to the management of vessel traffic in and around the LNG facility.

III. Responsibilities of the Participating Agencies

A. Siring and Approval. The FERC will be the lead agency responsible for the preparation of the analysis and decisions required under NEPA for the approval of new facilities. The scope of this review includes all aspects of the project including: tanker operation; marine facilities; and terminal construction and operation, environmental and cultural impacts. The USCG and RSPA agree to participate as cooperating agencies so that the NEPA document conveys complete information to the involved stakeholders. The FERC NEPA document is also intended to meet the needs of the Participating Agencies, as well as other cooperating agencies, such that any necessary permits can be issued concurrently with the FERC authorizations.

1. Prepare and Review the Safety and Related Aspects of the NEPA Document. The FERC will notify the other Participating Agencies as early as possible of pending start of the NEPA review of LNG facilities, including meetings with potential applicants. The FERC will then establish a schedule for the project review process, including key times for consultation. Such schedule will be as expeditious as possible and consistent with the periods for analysis and response that are required by the statutes and regulations applicable to the proposed project. To facilitate participation, the FERC will coordinate with the Participating Agencies regarding the scheduling of scoping or other meetings.

2. Develop and Share Data. The Participating Agencies will share the information gathered, considered and relied upon by each Item Specifically, the Participating Agencies agree to:

a. Provide the necessary support for the NEPA analysis to assess and evaluate:

• LNG tanker operation and potential hazards;
• Operating; controls to mitigate hazards;
• Project·specific operating plans;
  
• Potential hazards and risks to nearby populace;
• Marine terminal operation and risks; and
• Land terminal and risks.

b. Cooperate in the preparation of requests for additional studies or data, avoid duplicative requests, and compile a consistent set of information on which all Participating Agencies will rely.

c. Identify and develop information at the level of detail required to complete the environmental review.

d. Cooperate in evaluating alternative sites, safety zones, docking areas, port locations.

e. Cooperate in assessing mitigation measures that will be conditions of approval of the project. FERC will work to ensure that conditions of approval and/or project mitigation's assessed by Participating Agencies and provided to FERC during the NEPA-proceedings, and engineering and operations reviews are considered.

f Attend public scoping and other meetings, as appropriate, to make presentations, get comments, and answer questions on roles and responsibilities.

3. Participate in Studies. The Participating Agencies agree to cooperate and provide input and feedback into any studies which the FERC undertakes to address safety and security issues; including the modeling of LNG spills on water and methods to assess risks and hazards of transport by tankers to a marine terminal.

B. Operation and Inspection. The Participating Agencies further agree to cooperate in the inspection and operational review of LNG facilities, as appropriate. The FERC will invite the other Participating Agencies to participate in FERC sponsored LNG facility inspections and technical conferences with facility operators. Each agency will designate representatives to participate in the inspections and conferences.

C. Informal Communication. The Participating Agencies agree to communicate informally throughout the process to ensure that issues are discussed as soon as possible and shared among all agencies.

D. Dispute Resolution. Disputes regarding existing statutory requirements will be resolved by the relevant Agencies using existing dispute resolution methods and in accordance with existing statutory authorities. If a Participating Agency identifies such a dispute with the procedures of the IA, it will notify all other and make every attempt to resolve the issue.

IV. General Provisions

A. This IA does not obligate or commit funds and does not serve as the basis for the transfer of funds. All provisions in this IA are subject to the availability of funds.

B. This IA does not supersede existing agreements among any of the signatories, including the 1985 Memorandum of Understanding between the FERC and the Department of
Transportation On LNG facilities.

C. This IA may be modified or amended upon written request of any Participating Agency hereto and the subsequent written concurrence of all of the Participating Agencies. Participation in this IA may be terminated sixty (60) days after a Participating Agency provides written notice of such termination to the other Participating Agencies.

D. This IA is intended only to ensure complete assessment of all facility operations and hazards and to improve the cooperation among the Participating Agencies. It is not intended to, nor does it, create any right, benefit, or trust responsibility, substantive or procedural, enforceable at law or equity by any person or party against the United States, its agencies, its officers, or any other person. This IA is not intended to direct or bind any person outside the Participating Agencies.

E. This IA neither expands nor is in derogation of those powers and authorities vested in the Participating Agencies by applicable law.

F. This IA does not affect any guidelines related to information quality issued by the Participating Agencies in connection with section 515 of the Treasury and General Government Appropriations Act for FY 2001 (P.L. 106-554). Information disseminated pursuant to this IA will be subject to the information quality guidelines of the Participating Agency that disseminates the information.

G. This lA is solely for the purpose of establishing internal procedures for the Participating Agencies to consider and deal with the various environmental, security, and safety responsibilities in the context of applications submitted pursuant to section 3 of the NGA, and nothing in this IA shall be construed to create a cause of action.

V. Principal Contacts

The Participating Agencies designate agency contacts identified in Attachment A. These contacts may be changed at the Participating Agency's discretion upon notice to the other Participating Agencies.

VI. Effective Date and Duration:

This IA is effective upon the date of the last signatory unless extended or terminated earlier by mutual agreement of the Participating Agencies.

Patrick Wood, III
Chairman
Federal Energy Regulatory Commission

28 Jan 2004
Date

Admiral Thomas H. Collins
Commandant, United States Coast Guard
Department of Homeland Security

FEB 10 2004
Date

Samuel G. Bonasso, P.E.
Deputy Administrator, Research and Special
Programs Administration
Department of Transportation

2.3.04
Date

Attachment A: Participating Agency Contacts

The following are the principle initial contacts for each agency:

Federal Energy Regulatory Commission

Mark Robinson, Director
Office of Energy Projects
Federal Energy Regulatory Commission
888 I" Street, NE
WashingtOn, DC 20426
Mark.robinsoll@fcrc.gov
202-502-8700 (voice)
202-219-0205 (fax)

United States Coast Guard

Captain David L. Scott
Office of Operating and Environmental Standards
United States Coast Guard
2100 2nd Street NW
Washington, DC 20593-0001
dlscon@comdt.uscg.mil
202-267-0212 (voice)
202-267-4510 (fax)

Department of Transportation

Stacey Gerard
Associate Administrator
Research and Special Programs Administration/Office of Pipeline Safety
400 71t1 Street. SW, Suite 7128
Washington, DC 20590
stacey. gcrard@rspa.dot.gov
202-366-3844 (voice)
202-366-4566 (fax)