{"operation":"document","citation":"CPF 12020010WL","title":"KATY STORAGE & TRANSPORTATION LP — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2020-10-23","effective_on":null,"summary":"CLOSED warning letter citing 192.12(d).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020010wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020010wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12020010wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12020010WL","body":"Warning Letter involving KATY STORAGE & TRANSPORTATION LP. PHMSA's enforcement data identifies the cited regulation as 192.12(d). The case was opened on 2020-10-23 and is reported as closed as of 2020-10-23. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12020010WL_Warning Letter_10232020_(20-173111).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020010WL/12020010WL_Warning%20Letter_10232020_(20-173111).pdf\n\n12020010WL_Warning Letter_10232020_(20-173111)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12020010WL/12020010WL_Warning%20Letter_10232020_(20-173111)_text.pdf\n\n12020010WL_Warning Letter_10232020_(20-173111)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nOctober 23, 2020\nPaul Bieniawski\nCEO\nKaty Storage & Transportation LP\n10375 Richmond Avenue, Suite 1900\nHouston, TX 77042\nCPF 1-2020-010-WL\nDear Mr. Bieniawski,\nFrom February 25 – 27, 2020, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected\nKaty Storage & Transportation LP’s (KST) Enstor Katy underground natural gas storage facility\nin Katy, TX.\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,\n\n\n\nCPF 1-2020-010-WL\nsections 8, 9, 10, and 11 (incorporated by reference, see§ 192.7) by\nJanuary 18, 2018.1\nKST failed to meet the requirements of API RP 1171, Section 8. Specifically, KST failed to use\navailable information to determine susceptibility to threat and hazard-related events as required by\nAPI RP 1171, Section 8.3.2 Data Sources (Section 8.3.2).\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, KST reported that the data gathered to calculate the well risk scores\nat the Enstor Katy Facility had not been entered into KST’s risk model. KST also reported that\nwell and reservoir data was never entered into the previous risk model that was used by KST in\n2018 and 2019. Therefore, KST 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.\nKST failed to meet the requirements of API RP 1171, Section 8. Specifically, KST failed to\nevaluate the potential threats and hazards impacting the storage reservoir as required by API RP\n1171, Section 8.4.2 Methodology (Section 8.4.2).\nSection 8.4.2 states in part:\nThe operator shall evaluate the potential threats and hazards impacting storage wells\nand reservoirs.\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).\n12020010WL_Warning Letter_10232020_(20-173111)_text Page 2 of 3\n\n\n\nCPF 1-2020-010-WL\nAt the time of the inspection, KST reported that the presence of plugged and abandoned wells\nwithin the storage reservoir had not been included as a threat or hazard impacting the storage\nreservoir. Therefore, KST failed to evaluate a potential threat or hazard impacting the storage\nreservoir in accordance with Section 8.4.2.\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. We have reviewed the circumstances\nand supporting documents involved in this case, and have decided not to conduct additional\nenforcement action or penalty assessment proceedings at this time. We advise you to correct the\nitem(s) identified in this letter. Failure to do so will result in Katy Storage & Transportation LP\nbeing subject to additional enforcement action.\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).\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 1-2020-010-WL 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: Todd Cash; Director, Compliance (via email)\n12020010WL_Warning Letter_10232020_(20-173111)_text Page 3 of 3","truncated":false,"body_characters":7153}