Government Industry R&D Forum 22-24 March 2005

1. Government Industry R&D Forum22-24 March 2005 Pipeline Design & Construction Near Term Focus Future Gaps & Opportunities

2. DC&O Mission Statement Develop safe, environmentally responsible, cost-effective and reliable solutions for the design, construction, and operation of energy pipelines

3. DC&O Key Emphasis Areas • Offshore • Onshore and Arctic • Damage Prevention and Protection • Reliability Based Design and Prevention • Integrity Practice Standardization

4. Technical Programs (2001 – 2004) 1. Prevention of Third Party Damage $1,305k 2. Implementing Integrity Standards $3,060k 3. Reliability-Based Design Alternatives $918k 4. Determination of Max. Safe Surface Loads $994k 5. Leak Detection and Notification $350k 6. Prevention of Critical Pipeline Strains $1,363k 7. Solutions for Adverse Crossings $245k $8,235k

5. Future Needs • Geological events • Adverse environments • Environmental impacts • Reliable operations

6. Geological Events Fault creep, landslides, settlement, earthquakes • Traditional approach is excessive conservatism • Reduce cost associated with overly conservative designs and maintenance protocols • Need engineering procedures, methods and models to mitigate effect of pipe-soil interactions • Ground movement • Stresses as pipe-soil couple responds to displacement • Support and loading configurations • Material properties • Corrosion

7. Geological Events • Continuity of service • Mitigate life and property threatening incidents • Landslides & other large displacements • Need methodologies and tools to • Identify high risk regions • Estimate risk of pipeline failure • Preclude extended damage to pipeline operation

8. Adverse Environments • Reliable Design, Construction and Operation • Arctic & Sub-Arctic RegionsNeed better understanding of terrain influence on pipeline construction & maintenance • Need numerical & engineering models • Design, construction & integrity analysis • Axial loading due to thermal effects • Freeze-thaw cycles of permafrost induce transverse cyclic bending • More aggressive environmental protection standards • Maintenance of rights of way

9. Environmental Impact • Mitigate delays in permitting for new construction • Mitigate environmental concerns over right of way maintenance • Need for standardized design methodologies, simplified information exchange and recommended practices • Disposition of hydrotest waters • Habitat fragmentation • Vegetation management • Integration

10. Reliable Operation • Third Party Damage • 32% of all hazardous accidents were direct result of third party damage • 9 deaths, 38 injuries, USD 91M • Need to demonstrate feasibility of and gain acceptance for feasible methods of right of way management • Real time reliable detection • Viability of available technologies • Critical safety • Economics • Need to commercialize viable options

11. Reliable Operation • Safe Loads For Buried Pipelines • Need design and engineering tools to assess atypical loading conditions • Need validated method to replace costly full scale geotechnical tests • Shallow buried pipe • Heavy equipment & blasting • Database of physical test results including scaling factors

12. Future Needs • Four major categories • Geological events • Adverse environments • Environmental impacts • Reliable operations