UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

TO THE HONORABLE SAM SPARKS:

Plaintiff Intervenor the City of Austin files this Response to the Third Supplemental Status Report filed by Longhorn Partners Pipeline, L.P. on October 17, 2001. The City has a number of concerns about representations made in the Status Report and by way of this Response brings those concerns to the Court’s attention.

I.

In paragraph I of the Third Supplemental Status Report, Longhorn states that its Proof of Concept Test "has now been successfully completed." It also states, in Exhibit A attached to the Status Report, that "[a]ll activities related to the 4.08 miles of pipe replacement will be conducted in accordance with the requirements of Site Development Permit No. SP-01-0344D which Longhorn voluntarily agreed to file and process with the City of Austin." These representations are misleading if not inaccurate, and Longhorn’s Status Report must be evaluated in a more complete context.

II.

On October 17, 2001, engineers for Longhorn prepared an "Interim Report from Longhorn Pipeline Proof of Concept Tests," a copy of which was provided to the City and which is attached to this Response as Exhibit 1. In that report Longhorn sets out three criteria for success; if the three criteria indicate that the trench seal prevents direct infiltration of a material volume of water over the test period, the Proof of Concept test will be considered a success by Longhorn. Exhibit 1, page 3. The report concludes that "the trench construction and sealing methods developed and implemented in POC 2 were successful in preventing a material volume of fluid from infiltrating into any recharge features exposed in the trench." Exhibit 1, page 6.

III.

Unfortunately, the report raises far more questions than it answers and, from the City’s perspective, the test results are hardly encouraging. Even in the small-scale, tightly controlled conditions of the proof of concept regimen, three separate tests were necessary, none was entirely successful, and the most that even Longhorn and its engineers can conclude is that the third prevented "a material volume of fluid from infiltrating into an recharge features exposed in the trench" in the first 24 hours. Among the City’s many questions and concerns are the following:

A. What is meant by "a material volume of fluid"? Where, if anywhere, is this term defined? Was the goal of the U.S. Fish & Wildlife Service, in requiring a sealed trench over the Edwards Aquifer Recharge and Contributing Zones, merely "to prevent a material volume of fluid from infiltrating into any recharge features exposed in the trench"?

B. Were the tests performed consistently with the Phase Two Biological Assessment submitted by Longhorn to the Fish & Wildlife Service (and on which the Service’s letter of concurrence is subsequently based)? The City believes the tests deviated in substantial detail from the commitments made by Longhorn in the Biological Assessment, and while some changes were clearly improvements, there was no official oversight or approval by any party of any of the changes made. What standards will now be applied to the actual trench and who will insure that those standards are implemented? If implemented, will those standards be adequate to insure the safety of Austin’s residents and water supply? For example, after the trench test failed for a second time, Longhorn "incorporated [for the first time] two additional components to improve the seal between the wall and floor"—an epoxy concrete bonding agent and a flexible, polyurethane coating. Exhibit 1, page 5. Nowhere is there any indication that these components have been tested or approved for their compatibility with petroleum products under the present circumstances, or for their effectiveness over either the short- or long-term for the purposes in question.

C. The deviations from the Biological Assessment in turn permitted Longhorn to revise its test methodology as circumstances dictated, running the tests a number of times under best possible conditions and redefining "success" after completion of the tests. Indeed, Longhorn appears to have gone to extremes to conduct the tests under conditions that will not be or cannot be duplicated during construction of the actual trench. In the test trench:

• All voids and vuggy areas were carefully filled—by hand—with rocks, soil and mortar prior to applying the Gunnite in order to provide adequate backing to support the Gunnite.
• The surface of the trench interior was washed down and then allowed to dry, apparently to provide a better surface for the Gunnite to stick to.

• Following rain showers, work was stopped for several days in order to permit the surface to dry, based on Longhorn’s concerns about applying Gunnite to wet or damp soils.

The City believes it highly unlikely that Longhorn will stop work on the replacement trench each time it rains, or that Longhorn will take the time to do all other things it has done to provide the best possible conditions for the proof of concept test. In a normal bench scale test, this may not be a problem, since one would normally do an operational evaluation as well. However, in this case there will be no operational evaluation of the effectiveness of Longhorn’s large-scale construction methods unless and until there is a significant or catastrophic failure of the pipeline.

In a September 8, 2000 letter to the Fish & Wildlife Service, Longhorn committed to "prevent communication between the trench and any potential passages which could permit escaped product to travel from the trench into the recharge zone" (emphasis added). The goal thus changed significantly in the last year from preventing any fuel from leaving the trench where it might encounter recharge features at or below the surface of the trench to merely preventing a material volume of fluid from infiltrating into any recharge features exposed in the trench.

D. In previous correspondence, Longhorn made clear that it never intended to test the ability of the trench to contain and transmit along its length a worst-case spill event. Regardless of Longhorn’s intent, the City believes that it is critical to test whether or not Longhorn’s unproven containment design will work under flow rates and pressures that are representative of the pipeline at full capacity.

E. The trench tests otherwise failed to simulate actual operational conditions:

• Given its minimal (30-foot) length, the test trench may not represent the kind of variability in subsurface features that will be encountered along the actual pipeline trench.
• Although Longhorn increased the test duration to 24 hours, the City believes that the trench will have to contain large volumes of gasoline for considerably longer periods of time in the event of a spill.
• The 3,000 gallon test volume is not adequate to carry dye to the aquifer in the case that the sealing procedure fails. Thus, monitoring at Barton Springs and nearby wells is unlikely to detect any dye that leaked during the tests.
• The 10 pounds or less of tracer used was far less a tracer mass than is necessary both to simulate a spill or to reach Barton Springs from a random area of aquifer where no natural recharge features are known to be present.
• The connection of the test site to Barton Springs has not been definitively established, the timing of dye movement from the test trenches to Barton Springs has not been established, and the volume of water necessary to flush dye from the trenches to the water table and Barton Springs has not been established to know if monitoring Barton Springs is even appropriate.

F. Contrary to Longhorn’s assertion that the tests have been completed, the proof of concept tests have not been completed. The last dye test of the trench was performed October 8, 2001, and monitoring of Barton Springs was to continue for 30 days. Monitoring, which is part of the proof of concept tests, could not be complete unless it has been halted prematurely.

G. If the fluid loss or leak rate over 30 feet of trench length is 1 gallon per hour, what will be the fluid loss or leak rate over 4 miles? 19 miles?

IV.

The City has shared its concerns with the U.S. Fish & Wildlife Service in correspondence addressed to David Frederick, Austin-area Supervisor, dated July 11, 2001 and October 5, 2001. See Exhibits 2 and 3 attached to this Response. Longhorn’s responses, dated August 24, 2001 and October 25, 2001, are attached as Exhibits 4 and 5.

The City has not yet had an opportunity to fully review and analyze Longhorn’s October 25, 2001 response, which it received October 26, 2001. However, a quick review reveals answers that are generally too vague or beside the point to be meaningful. For example, Longhorn states that "it was in regular communication with the Service with regard to changes made to the POC Test regimen," Exhibit 5, page 5, yet Longhorn fails to explain precisely what changes were made, who approved the changes, and where or how they will be incorporated into an enforceable agreement. (As in the EA process itself, Longhorn’s communications with the Service were entirely private, with no public input or scrutiny allowed.) Rather than provide any test data with respect to the epoxy bonding agent and polyurethane coating belatedly added to the test regimen, Longhorn provides the conclusory statement: "there is no reason to believe that the [products] will fail to meet the project design life requirements" in support of its use of the products in question. Exhibit 5, page 2. It likewise fails to address the manual filling of the voids, faults and fractures used in the 30-feet test trenches, stating only that it "will apply one or more of the sealing elements described above"—the expoxy bonding agent and/or the polyurethane coating—in the actual, much longer trenches. Exhibit 5, page 2.

V.

On January 16, 2001, Longhorn filed with the City an application for a Site Development Permit concerning the proposed 4.08 mile pipeline replacement. Longhorn requested that the City suspend processing of this application in April 2, 2001, but on August 15, 2001 requested that the City reinitiate processing.

As of Friday, October 26, 2001, Longhorn has not obtained a Site Development Permit for the proposed project. While many of the City’s "comments" on Longhorn’s application have been "cleared" by Longhorn, several significant comments or issues between Longhorn and the City remain to be resolved. Consistent with its treatment of other applicants for site development permits, the City will require that these "comments" be "cleared" prior to granting Longhorn a Site Development permit.

VI.

Longhorn has chosen to proceed with the pipeline replacement project and implementation of other mitigation measures at its own risk. Its Third Supplemental Status Report should be evaluated in that context and in the context of the questions and concerns raised by the City herein.

This is to certify that I have served a copy of the foregoing pleading on all parties, or their attorneys of record, in compliance with the Federal Rules of Civil Procedure, this 29^th day of October, 2001, as follows:

R. James George, Jr. Patricia L. Akers

Ben J. Cunningham Bickerstaff, Heath, Smiley, Pollan, Kever &

George & Donaldson, L.L.P. McDaniel, L.L.P.

1100 Norwood Tower 1700 Frost Bank Plaza

114 West Seventh Street 816 Congress Avenue

Austin, Texas 78701 Austin, Texas 78701-2443

Max Renea Hicks James N. Rader

800 Norwood Tower Lower Colorado River Authority

114 West Seventh Street P.O. Box 220

Austin, Texas 78701 Austin, Texas 78767-0220

Anthony P. Hoang Barry F. Cannaday

United States Dept. of Justice Gary Zausmer

Environmental and Natural Jenkens & Gilchrist

Resources Division 1445 Ross Avenue, Suite 3200

General Litigation Section Dallas, Texas 75202

P.O. Box 663

Washington, D.C. 20044-0663

Exhibit 1: Interim Report from Longhorn Pipeline Proof of Concept Tests

Exhibit 2: July 11, 2001 letter from City of Austin to David Frederick

Exhibit 3: October 5, 2001 letter from City of Austin to David Frederick

Exhibit 4: August 24, 2001 letter from Longhorn Pipeline to City of Austin

Exhibit 5: October 25, 2001 letter from Longhorn Pipeline to David Frederick