SUMMARY OF THE GEOSTOCK REPORT 2.1 Basis of the Report

The Geostock Report has the objective of conducting a qualitative and quantitative risk assessment of certain facilities on the prooosed Soligaz site. The salient facilities are the underground storage caverns, and the associated above-ground structures to receive, store, and ship liquified gas. The Geostock analysis excludes the transport of these products via engineering characteristics of the underground caverns to store the LNG/LPG, the methods for receiving LNG/LPG, the methods for supplying gas after storage, as well as the procedures adopted for assuring safety of operations.

Risk Block: This Block determines the qualitative and quantitative aspects of the hazards, probabilities, and consequences associated with fires from a release of stored or transported liquified gas, under initially high

pressure. It includes the development of cases in which accidents cari occur. Risk, R, is defined to be equal to the union of the two elements of the couplet (Probability, Gravity), which equals R. The acceptability of risk is determined through the couplet (probability, gravity), determined for the cases chosen for analysis, and compared to an established set of acceptable values.

Natural Events Block: This Block consists of determining what effects natural hazards cari have on the supply, storage, and on-site distribution of LNG/LPG gas.

2.2 Discussion of Geostock’s Approach

The risk assessment conducted by Geostock cari be characterized as

semiquantitative because the analyses do not include formal use of fault- trees, event-trees, and probabilistic methods such as hazard functions.

this matrix (a six by six matrix), six couplets cari be selected for further analysis because these couplets correspond to unacceptable risks. This approach, which is equivalent to a “screening level” analysis, corresponds to other screening approaches adopted in the USA, and provides a practical method for selecting cases for more detailed assessments. A principal difference between some of the model-based approaches and the Geostock method is that Geostock emphasis gravity over probability.

The Geostock approach -- as Geostock recognizes -- emphasizes

professional judgement. This approach is somewhat less common in some countries where screening analyses consist of quantitative assessments based on simple models and explicit conservative approximations;

technical judgement is always important and plays a central rote in any risk assessment. An advantage of using simple models is that the

assumptions cari be more readily assessed, and that sensitivity analysis cari identify couplets that the semiquantitative method may miss. The

engineering information provided by Geostock are discussed for the sole purpose of determinina the effect of inclusion and exclusions on the soundness of the risk assessment.

The discussion that follows provides a summary Review of the principal areas of the Geostock Report for the purpose of risk assessment. Further comments are provided in the section titled Additional Discussions: The envelope of risks.

Descriotion of Underoround Storaae Facilities

This section is clear and accurate; it provides descriptions of the geology, groundwater flows, hydrostatic pressure, and other pertinent parameters to formulate an opinion on such parameters a permeability of those facilities. Geostock has done a thorough and professional job. The information provided about the pipe system between the underground storage cavities and the surface facilities is very well described.

Descriotion of Surface Equipment and Operating Characteristics

Geostock has described the elements of the systems and equipment for introducing gas into the caverns, and the technical and operating

characteristics of equipment (e.g., separators, heaters, refrigerating units, and other) on the surface. This section also describes the docking system and the system for unloading the LNGILPG, the operating

characteristics, and the transfering system for storage in the relevant caverns, by type of product. The delivery of these gases to trucks and to railroad cars is also described, as is the appurtenant equipment (e.g., pumps and SO on). The systems discussed range from temporary storage to the treatment system for the water extracted from the caverns. The operating characteristics include temperature and pressure; information is also provided on the type of material used.

Risk Assessment: Cases. Gravitv and Probability

Geostock has adopted a risk assessment method that include qualitative and quantitative components. Its “classification” of adverse events is based on the NORMAL CONDITION OF USE. Rather than defininq this

condition, Geostock has opted to develop a number of cases and outcomes.

By not defining normal events it has failed to define or consider ABNORMAL CONDITIONS, resulting in ambiguity.

The qualitative risk assessment describes the details of nine types of

higher the contribution from the subsequent event.

The choice of events results from the experience and judgment of

the volumes of gaseous releases. The initiating events include corrosion, ruptures, blockages, disconnected joints, fissures, unexpected openings, and selected combinations of these events resulting in specific accident case. Geostock has identified 16 of these cases. Case Number 11 is described as a:

“Fissure occurring in a tank-truck at the loading dock, from faulty weld, and resulting in the full discharge of 60 cubic

meters of gas in the liquid phase.” (Geostock Report, at 27)

The quantitative aspect of the initiating events associated with those cases include: a)1 cm. squared corrosion crack, b) the formation of a and with different thermodynamic characteristics. Geostock determines the “a of an event from these considerations. The gravity of any gaseous or liquid discharge is determined on the basis of mass release rate, potential energy, critical plume dimensions, evaporation rate, lethal risk, and other considerations such as the potential for an unconfined

“levels of probability” which consist of qualitative descriptions of ranges, The “probabilitv levels” are determined on the basis of several parameters

The quantitative assessment consists of establishing a level of gravity and a level of probability according to a method that has been accepted “in principle” by the French Ministry of the Environment, and deemed to be

of Quebec. (Geostock Report, at 28) Conclusions

Geostock has concluded that the risks associated with the proposed Soligaz facility are “satisfactory.” This review does not fully concur and raises objections that should be answered before concurrence.

The principal objection raised in this review are developed in the section titled Additional Discussion: The envelope of risks.

Geostock’s methods and results are acceptable for the stated purpose of identifying areas of concern and for further study. More complete methods cari be used to determine the potential risks associated with the storage of LNG/LPG products at the Soligaz site. The experience of Geostock is an important and crucial element of their risk assessment. But it is not a substitute for a coaent discussion that their method is oatimal relative to other model-based aoproaches. Although the stated acceptance of the approach developed by Geostock by various agencies is a positive fact that lessens the requirement that any method of study be subject to public scrutiny in the open literature, nevertheless a literature review is

necessary. Whether Geostock has submitted their work for publication in peer reviewed journals is not evident since its Report -- as made

available for this Review -- does not provide a single reference

Moreover, Geostock should determine whether the methods of reliability analysis, if used, would alter their conclusions.

The results obtained by Geostock suppose NORMAL operations. Geostock should also determine if ABNORMAL events -- properly and exhaustively determined (in particular events that exceed their hypotheses) -- would change its conclusion.

3.0 REVIEW OF THE CONCORD REPORT