May 22, 2015 – Condensed Patrick Hodgins Press Conference Talking Points

Below is a condensed summary of talking points used by Plains representative Patrick Hodgins in connection with press conference held on May 22, 2015:

  • We consider ourself a very competent, experienced operator.  Just as airline companies and every individual that drives an automobile, we have a goal of zero incidents.  That said, despite the best planning and execution efforts, incidents do occur.
  • Plains is one of the largest companies in the midstream crude oil business.  Based on the Department of Transportation website, the media has accurately reported that over a roughly 10 year time period, Plains Pipeline has reported 175 incidents which does rank 5th among the other companies on the DOT’s list.
  • Plains has a goal of zero incidents, but pipeline companies do have incidents.  As one of the largest midstream companies, the number of reported releases Plains has are higher than many of the smaller companies.  It is worth noting that 99% of the other reporting companies were not only smaller than Plains, substantially all of these smaller companies had less than half the number of miles of pipeline that Plains does.  To put it in even sharper perspective, Plains is approximately 10 times larger than 92% of the other entities listed.
  • Again, our goal is zero incidents and we are constantly striving to achieve that objective. Without trying to minimize the importance of achieving our zero incident goal, I wanted to share with you some important facts on the incidents included on the PHMSA website:
  • First, over 50% of the 175 incidents were classified as very small, involving releases of 5 barrels or less.
    • 26 of those incidents on the website were classified as 0 barrels spilled, because PHMSA rounds anything less than 21 gallons down to 0 barrels spilled.
    • 20 incidents involved a release of 1 barrel.
    • 16 incidents involved a release of 2 barrels.
  • The reported “Property Damage” amount includes a variety of factors, including our estimate of the economic impact on our assets and operations.  Without burdening you with all of the many details, the vast majority of the $23.8 million reported on the website was not associated with damage to the public or third party property, but was instead the economic impact on Plains Pipeline.