{"operation":"document","citation":"CPF 120200004W","title":"SOUTHERN CALIFORNIA GAS CO — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-05-28","effective_on":null,"summary":"CLOSED warning letter citing 192.12(d).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120200004w.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120200004w.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120200004w","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120200004W","body":"Warning Letter involving SOUTHERN CALIFORNIA GAS CO. PHMSA's enforcement data identifies the cited regulation as 192.12(d). The case was opened on 2020-05-28 and is reported as closed as of 2020-05-28. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120200004W_Operator Response to Notice_07072020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120200004W/120200004W_Operator%20Response%20to%20Notice_07072020.pdf\n\n120200004W_Warning Letter_05282020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120200004W/120200004W_Warning%20Letter_05282020.pdf\n\n120200004W_Warning Letter_05282020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120200004W/120200004W_Warning%20Letter_05282020_text.pdf\n\n120200004W_Warning Letter_05282020_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nMay 28, 2020\nMs. Debra Reed\nPresident & CEO\nSouthern California Gas Company\n555 West Fifth Street\nLos Angeles, CA 90013\nCPF 1-2020-0004W\nDear Ms. Reed:\nFrom October 29 – November 1, 2019, inspectors from the California Geologic Energy\nManagement Division (CalGEM), acting as an Agent for the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code (U.S.C.) inspected Southern California Gas Company (SCG)’s underground\nnatural gas storage program and records for the Aliso Canyon (AC), Honor Rancho (HR) and Playa\nDel Rey (PDR) storage fields in Los Angeles County, California.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. § 192.12 Underground natural gas storage facilities.\n(a) ….\n(d) Each underground natural gas storage facility that uses a\ndepleted hydrocarbon reservoir or an aquifer reservoir for gas storage,\nincluding those constructed not later than July 18, 2017 must meet the\noperations, maintenance, integrity demonstration and verification,\nmonitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and\nrecordkeeping requirements and recommendations of API RP 1171,\nsections 8, 9, 10, and 11 (incorporated by reference, see §192.7) by\n\n\n\nCPF 1-2020-0004W\nJanuary 18, 2018.1\nSCG failed to meet the applicable requirements and recommendations of API RP 1171, Section 8.\nSpecifically, SCG’s records did not show that plugged and abandoned third party wells were\nincluded in its assessments in accordance with API RP 1171, Section 8.3.2 Data Sources (Section\n8.3.2).\nSection 8.3.2 states in part:\nThe operator shall use available information such as performance data collected\nthrough the field history, operations and maintenance (O&M) activities, geotechnical\ndata such as well logs, engineering data, and completion reports to determine\nsusceptibility to threat and hazard-related events and to assess threat and hazard\ninteraction.\nAt the time of the inspection, SCG’s records did not address plugged and abandoned third-party\nwells. Therefore, SCG failed to meet the requirements of Section 8.3.2.\n2. § 192.12 Underground natural gas storage facilities.\n(a) …\n(d) Each underground natural gas storage facility that uses a\ndepleted hydrocarbon reservoir or an aquifer reservoir for gas storage,\nincluding those constructed not later than July 18, 2017 must meet the\noperations, maintenance, integrity demonstration and verification,\nmonitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and\nrecordkeeping requirements and recommendations of API RP 1171,\nsections 8, 9, 10, and 11 (incorporated by reference, see §192.7) by\nJanuary 18, 2018.\nSCG failed to meet the applicable requirements and recommendations of API RP\n1171, Section 9. Specifically, SCG’s records did not demonstrate that site specific\ncharacteristics of the reservoir and wells were all accounted for as required by API\nRP 1171, Section 9.2.1, Integrity Maintenance (Section 9.2.1).\nSection 9.2.1 states in part:\nThe operator shall maintain functional integrity of storage wells and reservoirs. Storage\nwells and reservoirs can have different characteristics resulting in unique requirements\nin approaching integrity demonstration, verification, and monitoring.\n1 The final rule, Pipeline Safety: Safety of Underground Natural Gas Storage Facilities, 85 FR 8104 (February 12,\n2020), revised § 192.12. The requirement cited in this Warning Letter is still present but is now codified in\n§ 192.12(b)(2).\n120200004W_Warning Letter_05282020_text Page 2 of 5\n\n\n\nCPF 1-2020-0004W\nSCG’s records insufficiently addressed site specific characteristics amongst the reservoir\ncompartments and fault blocks, along with the characteristics of wells, including construction,\nintegrity testing and workover histories. Those unique characteristics were insufficiently\nincorporated into risk calculations, rankings and risk mitigation protocols contained within the\noperator’s risk management plans (RMPs) submitted to CalGEM on April 1, 2019. Therefore, SCG\nfailed to meet the requirements of Section 9.2.1.\n3. § 192.12 Underground natural gas storage facilities.\n(a) ….\n(d) Each underground natural gas storage facility that uses a\ndepleted hydrocarbon reservoir or an aquifer reservoir for gas storage,\nincluding those constructed not later than July 18, 2017 must meet the\noperations, maintenance, integrity demonstration and verification,\nmonitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and\nrecordkeeping requirements and recommendations of API RP 1171,\nsections 8, 9, 10, and 11 (incorporated by reference, see § 192.7) by\nJanuary 18, 2018.\nSCG failed to meet the applicable requirements and recommendations of API RP 1171, Section 9.\nSpecifically, SCG failed to request third-party well integrity evaluation data, as required by API\nRP 1171, Section 9.3.1 Well Integrity Evaluation (Section 9.3.1).\nSection 9.3.1 states in part:\nThe operator shall evaluate the mechanical integrity of each active well, including each\nthird-party well, that penetrates the storage reservoir and buffer zone or areas\ninfluenced by storage operations.\nWell integrity evaluation methods typically used by operators include but are not\nlimited to review of design, completion, and well work records, wellhead and downhole\ninspection, well pressure monitoring and testing, and gas sampling.\nThe operator shall request well integrity evaluation data from third-party well\nowner/operators following the frequency established using conclusions from the risk\nassessment.\nActive well mechanical integrity evaluations shall include initial and subsequent\nevaluations as determined using the risk assessment and the information derived from\nthe initial evaluation\nDuring the inspection, SCG was asked to provide records showing that they had requested third-\nparty well integrity information. SCG could not provide any records documenting that they\nrequested this information. Therefore, SCG failed to meet the requirements of Section 9.3.1.\n4. § 192.12 Underground natural gas storage facilities.\n(a) …\n120200004W_Warning Letter_05282020_text Page 3 of 5\n\n\n\nCPF 1-2020-0004W\n(d) Each underground natural gas storage facility that uses a\ndepleted hydrocarbon reservoir or an aquifer reservoir for gas storage,\nincluding those constructed not later than July 18, 2017 must meet the\noperations, maintenance, integrity demonstration and verification,\nmonitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and\nrecordkeeping requirements and recommendations of API RP 1171,\nsections 8, 9, 10, and 11 (incorporated by reference, see §192.7) by\nJanuary 18, 2018.\nSCG failed to meet the applicable requirements and recommendations of API RP 1171, Section 9.\nSpecifically, SCG failed to demonstrate that it evaluated each occurrence of annular gas that\nexceeded operator defined threshold levels in accordance with API RP 1171, Section 9.3.2, Well\nIntegrity Monitoring (Section 9.3.2).\nSection 9.3.2 states in part:\nThe operator shall evaluate each annular gas occurrence that exceeds operator- or\nregulatory-defined threshold levels determined from well integrity evaluation and from\nrisk assessment.\nDuring the inspection, SCG was unable to provide documentation of the evaluation of each\noccurrence of annular gas that exceeded operator-defined threshold levels. Therefore, SCG failed\nto meet the requirements of Section 9.3.2.\n5. § 192.12 Underground natural gas storage facilities.\n(a) …\n(d) Each underground natural gas storage facility that uses a\ndepleted hydrocarbon reservoir or an aquifer reservoir for gas storage,\nincluding those constructed not later than July 18, 2017 must meet the\noperations, maintenance, integrity demonstration and verification,\nmonitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and\nrecordkeeping requirements and recommendations of API RP 1171,\nsections 8, 9, 10, and 11 (incorporated by reference, see §192.7) by\nJanuary 18, 2018.\nSCG failed to meet the applicable requirements and recommendations of API RP 1171, Section 9.\nSpecifically, SCG failed to document the notable corrosion on the WEZU C2A wellhead during\nits monthly inspections conducted in accordance with API RP 1171, Section 9.3.2.\nSection 9.3.2 states in part, “The operator shall visually inspect each wellhead assembly at least\nannually for leaks.”\nDuring the field inspection, CalGEM observed and photographed significant corrosion on a valve\nflange on well WEZU C2A. CalGEM also established that SCG performs monthly visual wellhead\n120200004W_Warning Letter_05282020_text Page 4 of 5\n\n\n\nCPF 1-2020-0004W\ninspections. However, SCG’s monthly inspection records for well WEZU C2A did not note the\npresence of corrosion, nor did they provide comments on evaluating the origin of the corrosion or\nthe potential for a leaking valve flange.\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for a related\nseries of violations. For violation occurring on or after November 27, 2018 and before July 31,\n2019, the maximum penalty may not exceed $213,268 per violation per day, with a maximum\npenalty not to exceed $2,132,679. For violation occurring on or after November 2, 2015 and before\nNovember 27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a\nmaximum penalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015,\nthe maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty\nnot to exceed $2,000,000 for a related series of violations.\nBe advised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you must\nprovide a second copy of the document with the portions you believe qualify for confidential\ntreatment redacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b). We have reviewed the circumstances and supporting\ndocuments involved in this case, and have decided not to conduct additional enforcement action\nor penalty assessment proceedings at this time. We advise you to correct the item(s) identified in\nthis letter. Failure to do so will result in SCG being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, please submit all correspondence in this\nmatter to Robert Burrough, Director, PHMSA Eastern Region, 840 Bear Tavern Road, Suite 300,\nWest Trenton, NJ 08628. Please refer to CPF 1-2020-0004W on each document you submit, and\nwhenever possible provide a signed PDF copy in electronic format. Smaller files may be emailed\nto robert.burrough@dot.gov. Larger files should be sent on USB flash drive accompanied by the\noriginal paper copy to the Eastern Region Office.\nSincerely,\nRobert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nCC: Troy Bauer, Pipeline Safety & Compliance Manager, Southern California Gas Company\n(via email)\n120200004W_Warning Letter_05282020_text Page 5 of 5","truncated":false,"body_characters":12635}