{"operation":"document","citation":"CPF 12022034WL","title":"STAGECOACH GAS SERVICES LLC — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-03-16","effective_on":null,"summary":"CLOSED warning letter citing 192.12(a)(3), 192.12(b)(2), 192.12(d)(4).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022034wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022034wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022034wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12022034WL","body":"Warning Letter involving STAGECOACH GAS SERVICES LLC. PHMSA's enforcement data identifies the cited regulations as 192.12(a)(3),  192.12(b)(2),  192.12(d)(4). The case was opened on 2022-03-16 and is reported as closed as of 2022-03-16. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12022034WL_Operator Response to Notice_04252022_(21-200482).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022034WL/12022034WL_Operator%20Response%20to%20Notice_04252022_(21-200482).pdf\n\n12022034WL_Warning Letter_03162022_(21-200482).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022034WL/12022034WL_Warning%20Letter_03162022_(21-200482).pdf\n\n12022034WL_Warning Letter_03162022_(21-200482)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022034WL/12022034WL_Warning%20Letter_03162022_(21-200482)_text.pdf\n\n12022034WL_Warning Letter_03162022_(21-200482)_text.pdf\n\nWARNING LETTER\nVIA ELECTRONIC MAIL TO: kenneth grubb@kindermorgan.com\nMarch 16, 2022\nMr. Kenneth Grubb\nChief Executive Officer\nStagecoach Gas Services, LLC\n1001 Louisiana Street, Suite 1000\nHouston, Texas 77002\nCPF 1-2022-034-WL\nDear Mr. Grubb:\nFrom June 21st to 25th, 2021, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected\nCrestwood Midstream Partners, LP’s (CMP) Thomas Corners, Steuben, and Seneca Underground\nGas Storages in Corning, New York. Effective July 9, 2021, CMP was acquired by Stagecoach\nGas Services, LLC (SGS).\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) Salt cavern UNGSFs.\n(1) …\n(3) Each UNGSF that uses a solution-mined salt cavern for natural\ngas storage and was constructed on or before July 18, 2017, must meet\nthe provisions of API RP 1170 (incorporated by reference, see §192.7),\nsections 9, 10, and 11, and paragraph (c) of this section, by January 18,\n2018, and must meet all provisions of section 8 of API RP 1171\n(incorporated by reference, see §192.7) that are applicable to the\nphysical characteristics and operations of a solution-mined salt cavern\nUNGSF, and paragraph (d) of this section, by March 13, 2021.\nSGS failed to meet the provisions of API RP 1171, Section 9. Specifically, SGS failed to test and\ncalibrate the pressure gauges and transmitters for the Seneca Lake storage cavern annually in\n\n\n\nCPF 1-2022-034-WL\naccordance with API RP 1170, Section 9.4.11\n.\nDuring the inspection, SGS’s records for Seneca Lake showed three pressure gauges were\ninstalled, tested, and calibrated on January 2017. SGS was not able to provide any records of\ntesting and calibration of these pressure gauges in 2018, 2019 and 2020.\nTherefore, SGS failed to meet the provisions of Section 9.4.1 (Section 9.4.1).\n2. § 192.12 Underground natural gas storage facilities.\n(a) …\n(b) Depleted hydrocarbon and aquifer reservoir UNGSFs.\n(1) …\n(2) Each UNGSF that uses a depleted hydrocarbon reservoir or an\naquifer reservoir for natural gas storage and was constructed on or\nbefore July 18, 2017, must meet the provisions of API RP 1171\n(incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\nSGS failed to meet the provisions of API RP 1171, Section 9. Specifically, SGS’s records did not\ndemonstrate that functional integrity of reservoirs were maintained in an ongoing basis in\naccordance with API RP 1171, Section 9.2.12\n.\nDuring the inspection, SGS records were not able to demonstrate the stability of the reservoir gas\ninventory at Steuben and Thomas Corners storage fields. The storages did not have a long enough\nshut-in period to establish a stabilized pressure. Due to the lack of stabilization during shut-ins for\nthe storage fields, SGS could not demonstrate functional integrity.\nTherefore, SGS failed to meet the provisions of API RP 1171, Section 9.2.1.\n3. § 192.12 Underground natural gas storage facilities.\n(a) …\n(b) Depleted hydrocarbon and aquifer reservoir UNGSFs.\n(1) …\n(2) Each UNGSF that uses a depleted hydrocarbon reservoir or an\naquifer reservoir for natural gas storage and was constructed on or\nbefore July 18, 2017, must meet the provisions of API RP 1171\n(incorporated by reference, see §192.7), sections 8, 9, 10, and 11, and\n1 API RP 1170, Section 9.4.1 General\nWellhead gauges, transmitters, and safety devices should be tested and calibrated at least annually to ensure they are\nproperly calibrated and function as intended. Any malfunctioning equipment shall be repaired or replaced. If the\ndevices cannot be calibrated to within manufacturer’s specifications they shall be replaced.\n2 API RP 1171, Section 9.2.1 Integrity Maintenance\nThe operator shall maintain functional integrity of storage wells and reservoirs. Storage wells and reservoirs can\nhave different characteristics resulting in unique requirements in approaching integrity demonstration, verification,\nand monitoring.\n12022034WL_Warning Letter_03162022_(21-200482)_text Page 2 of 4\n\n\n\nCPF 1-2022-034-WL\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\nSGS failed to meet the provisions of API RP 1171, Section 9. Specifically, SGS failed to maintain\nrecords demonstrating how it had established its threshold level for annular gas determined from\nwell integrity evaluation and from risk assessment, in accordance with API RP1171, Section 9.3.23\n(Section 9.3.2).\nDuring the inspection, SGS reported their threshold for annular gas was 100 psi less than injection\nor withdrawal pressure plus tracking synchronously with storage gas pressure movement. SGS was\nunable to demonstrate how this threshold was determined from well integrity evaluation and from\nrisk assessment.\nTherefore, SGS failed to meet the provisions of API RP 1171, Section 9.3.2.\n4. § 192.12 Underground natural gas storage facilities.\n(a) …\n(d) Integrity management program—\n(1) …\n(4) Integrity management procedures and recordkeeping. Each\nUNGSF operator must establish and follow written procedures to carry\nout its integrity management program under API RP 1171\n(incorporated by reference, see § 192.7), section 8 (\"Risk Management\nfor Gas Storage Operations\"), and this paragraph (d). The operator\nmust also maintain, for the useful life of the UNGSF, records that\ndemonstrate compliance with the requirements of this paragraph (d).\nThis includes records developed and used in support of any\nidentification, calculation, amendment, modification, justification,\ndeviation, and determination made, and any action taken to implement\nand evaluate any integrity management program element.\nSGS failed to follow its written procedures to carry out its integrity management program under\nAPI RP 1171, Section 8. Specifically, SGS failed to perform an annual review of its 2020 risk\nassessments in accordance with its SIMP, section 2.2.1 procedural requirement, developed\npursuant to API RP 1171, Section 8.5.24\n.\nDuring the inspection, SGS was not able to provide records of the annual review of the 2020 risk\nassessments for the Steuben and Thomas Corners depleted hydrocarbon reservoir storage fields.\nSGS was also unable to provide the same 2020 risk assessment annual review records for its Seneca\nLake salt cavern storage field. SGS’s SIMP section 2.2.1 specified a requirement of an annual risk\n3 API RP 1171, Section 9.3.2 Well Integrity Monitoring\nThe operator shall evaluate each annular gas occurrence that exceeds operator- or regulatory-defined threshold\nlevels determined from well integrity evaluation and from risk assessment.\n4 API RP 1171, Section 8.5.2 Methodology\nThe operator shall review the results of the risk assessment to determine whether the risk assessment, resulting\nprioritization, or ranking represents its facilities and characterizes the risks.\n12022034WL_Warning Letter_03162022_(21-200482)_text Page 3 of 4\n\n\n\nCPF 1-2022-034-WL\nassessment review. Additionally, SGS was not able to provide the 2020 risk assessment records of\nRaish 2A well from Steuben field and Mullins 4 from Thomas Corners field.\nTherefore, SGS failed to follow its SIMP, Section 2.2.1 requirement as required by § 192.12(d)(4).\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a related\nseries of violations. For violation occurring on or after January 11, 2021 and before May 3, 2021,\nthe maximum penalty may not exceed $222,504 per violation per day the violation persists, up to\na maximum of $2,225,034 for a related series of violations. For violation occurring on or after\nJuly 31, 2019 and before January 11, 2021, the maximum penalty may not exceed $218,647 per\nviolation per day the violation persists, up to a maximum of $2,186,465 for a related series of\nviolations. For violation occurring on or after November 27, 2018 and before July 31, 2019, the\nmaximum penalty may not exceed $213,268 per violation per day, with a maximum penalty not to\nexceed $2,132,679. For violation occurring on or after November 2, 2015 and before November\n27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum\npenalty not to exceed $2,090,022.\nWe have reviewed the circumstances and supporting documents involved in this case and have\ndecided not to conduct additional enforcement action or penalty assessment proceedings at this\ntime. We advise you to correct the items identified in this letter. Failure to do so will result in\nStagecoach Gas Services, LLC being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 1-2022-034-WL. Be advised that all material you submit in response to this enforcement\naction is subject to being made publicly available. If you believe that any portion of your\nresponsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nSincerely,\nRobert Burrough\nDirector, Eastern Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\n12022034WL_Warning Letter_03162022_(21-200482)_text Page 4 of 4","truncated":false,"body_characters":10830}