{"operation":"document","citation":"CPF 12022051WL","title":"SOUTHERN CALIFORNIA GAS CO — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-05-03","effective_on":null,"summary":"CLOSED warning letter citing 192.12(b)(2), 192.12(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022051wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022051wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12022051wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12022051WL","body":"Warning Letter involving SOUTHERN CALIFORNIA GAS CO. PHMSA's enforcement data identifies the cited regulations as 192.12(b)(2),  192.12(c). The case was opened on 2022-05-03 and is reported as closed as of 2022-05-03. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12022051WL_Warning Letter_05032022_(21-231340).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022051WL/12022051WL_Warning%20Letter_05032022_(21-231340).pdf\n\n12022051WL_Warning Letter_05032022_(21-231340)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12022051WL/12022051WL_Warning%20Letter_05032022_(21-231340)_text.pdf\n\n12022051WL_Warning Letter_05032022_(21-231340)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nMay 3, 2022\nMr. Scott Drury\nPresident and Chief Executive Officer\nSouthern California Gas Co\n555 West Fifth Street\nLos Angeles, California 90013\nCPF 1-2022-051-WL\nDear Mr. Drury:\nFrom October 11 through 15, 2021, an inspector from the California Geologic Energy\nManagement Division (CalGEM), acting as an agent for the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.)\ninspected Southern California Gas Company’s (SoCal) procedures for Aliso Canyon, Honor\nRancho, and Playa Del Rey Underground Natural Gas Storage Facilities (UNGSF) located in Los\nAngeles County, California and their La Goleta UNGSF located in Santa Barbara County,\nCalifornia.\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(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\n\n\n\nCPF 1-2022-051-WL\nparagraph (c) of this section, by January 18, 2018, and must meet\nall provisions of paragraph (d) of this section by March 13, 2021.\nSCG failed to meet the provisions of API RP 1171, Section 9. Specifically, SCG’s defined annular\ngas threshold levels were not determined from well integrity evaluations and from risk assessments\nin accordance with API RP 1171, Section 9.3.2 (Section 9.3.2).\nSection 9.3.2 states in part, “The operator shall evaluate each annular gas occurrence that exceeds\noperator- or regulatory-defined threshold levels determined from well integrity evaluation and\nfrom risk assessment.”\nDuring the inspection, CalGEM reviewed SCG’s tubing-casing annulus pressure threshold limits,\ncontained within its Gas Standard 224.119, and found that the threshold limits were set at 1250\npounds per square inch (psi) for La Goleta UNGSF (La Goleta) and at 1500 psi for Honor Rancho\nUNGSF (Honor Rancho). The maximum anticipated operating pressure (MAOP) for La Goleta\nwas 1000 psi while the MAOP for Honor Rancho was 985 psi. Annulus pressure thresholds set\nabove the MAOP are not practical as the threshold cannot be reached, even with a full release of\npressure from the production tubing to the production casing annular space.\nTherefore, SCG failed to meet the provisions of Section 9.3.2 regarding determination of annual\ngas occurrence threshold levels.\n2. § 192.12 Underground natural gas storage facilities.\n(a) …\n(c) Procedural manuals. Each operator of a UNGSF must prepare\nand follow for each facility one or more manuals of written procedures\nfor conducting operations, maintenance, and emergency preparedness\nand response activities under paragraphs (a) and (b) of this section.\nEach operator must keep records necessary to administer such\nprocedures and review and update these manuals at intervals not\nexceeding 15 months, but at least once each calendar year. Each\noperator must keep the appropriate parts of these manuals accessible\nat locations where UNGSF work is being performed. Each operator\nmust have written procedures in place before commencing operations.\nSCG failed to follow its manual of written procedures. Specifically, SGC failed to follow its Gas\nStandard 224.000 Testing and Inspection of Safety Valves and Wellhead Valves Gas (Standard\n224.000) Sections 6 and 6.2 by not including instances of wellhead corrosion in its MAXIMO\nwork orders used to document annual wellhead inspections for leaks.\nSection 6 stated in part, “Results of annual inspection of Wellhead Assembly and testing of\nWellhead Valves are documented and maintained in MAXIMO work orders (Job Plan Number\nUCPM-WELLHEAD-A).”\nSection 6.2 stated in part, “Inspect wellhead assembly for paint condition and signs of corrosion.”\n12022051WL_Warning Letter_05032022_(21-231340)_text Page 2 of 5\n\n\n\nCPF 1-2022-051-WL\nDuring the inspection, CalGEM visited well sites at the La Goleta UNGSFs and witnessed that\nstorage well Todd 1 had noticeable corrosion and missing paint. SCG was not able to provide a\nwork order that addressed the condition. CalGEM also reviewed the monthly wellhead inspection\nwork orders and found that the corrosion and lack of paint were not noted as required in Section\n6.2.\nTherefore, SCG failed to follow its Standard 224.000, Section 6 regarding documentation of\nannual wellhead inspections.\n3. § 192.12 Underground natural gas storage facilities.\n(a) …\n(c) Procedural manuals. Each operator of a UNGSF must prepare\nand follow for each facility one or more manuals of written procedures\nfor conducting operations, maintenance, and emergency preparedness\nand response activities under paragraphs (a) and (b) of this section.\nEach operator must keep records necessary to administer such\nprocedures and review and update these manuals at intervals not\nexceeding 15 months, but at least once each calendar year. Each\noperator must keep the appropriate parts of these manuals accessible\nat locations where UNGSF work is being performed. Each operator\nmust have written procedures in place before commencing operations.\nSCG failed to keep appropriate parts of its Emergency Action Plan (EAP) accessible at a location\nwhere UNGSF work was being performed in accordance with § 192.12(c).\nDuring the inspection, CalGEM visited SCG’s WEZU 18E well site at the Honor Rancho Storage\nfield where well work was occurring. SCG was not able to demonstrate that the EAP was\naccessible at the well site.\nTherefore, SCG failed to keep appropriate parts of its manuals accessible at locations where\nUNGSF work is being performed as required by § 192.12(c).\n4. § 192.12 Underground natural gas storage facilities.\n(a) …\n(c) Procedural manuals. Each operator of a UNGSF must prepare\nand follow for each facility one or more manuals of written procedures\nfor conducting operations, maintenance, and emergency preparedness\nand response activities under paragraphs (a) and (b) of this section.\nEach operator must keep records necessary to administer such\nprocedures and review and update these manuals at intervals not\nexceeding 15 months, but at least once each calendar year. Each\noperator must keep the appropriate parts of these manuals accessible\nat locations where UNGSF work is being performed. Each operator\nmust have written procedures in place before commencing operations.\nSCG failed to follow its manual of written procedures. Specifically, SCG failed to follow its Gas\n12022051WL_Warning Letter_05032022_(21-231340)_text Page 3 of 5\n\n\n\nCPF 1-2022-051-WL\nInventory Assessment in Underground Storage Reservoirs (Gas Standard 244.070) Sections\n4.4.4.1 and 4.4.4.8 by failing to perform a gas storage field measurement audit and prepare a report\nafter a discrepancy in the P/Z (reservoir pressure/compressibility factor) versus Inventory\nrelationship of 5% of the working gas volume or more.\nGas Standard 244.070, Section 4.4.4.1 stated in part:\nWhen Storage Engineering identifies a consistent discrepancy in the pressure or P/Z\nversus Inventory relationship of 5% of the working gas volume or more at a storage field\nthat cannot be explained by known leaks such as gas vented to the atmosphere, liquid\nproduction or other reservoir changes, they request an audit of the gas measurement\nsystems at the storage field by the Measurement, Regulation and Control (MRC) group of\nGas Engineering.\nGas Standard 244.070, Section 4.4.4.8 stated in part:\nMRC Measurement Technology to issue final report to Storage Field, MRC and MDO\nsummarizing all findings, quantifying all measurement errors and detailing any revisions\nrequired to MCS Ledgers or Company Drawings.\nDuring the inspection, SCG reported to CalGEM that there was a 17% discrepancy in the P/Z\nversus Inventory relationship for the November 2018 shut-in test. SCG was not able to provide an\naudit report for the discrepancy.\nTherefore, SCG failed to follow its Gas Standard 224.070, Sections 4.4.4.1 and 4.4.4.8.\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$239,142 per violation per day the violation persists, up to a maximum of $2,391,142 for a related\nseries of violations. For violation occurring on or after May 3, 2021 and before March 21, 2022,\nthe maximum penalty may not exceed $225,134 per violation per day the violation persists, up to\na maximum of $2,251,334 for a related series of violations. For violation occurring on or after\nJanuary 11, 2021 and before May 3, 2021, the maximum penalty may not exceed $222,504 per\nviolation per day the violation persists, up to a maximum of $2,225,034 for a related series of\nviolations. For violation occurring on or after July 31, 2019 and before January 11, 2021, the\nmaximum penalty may not exceed $218,647 per violation per day the violation persists, up to a\nmaximum of $2,186,465 for a related series of violations. For violation occurring on or after\nNovember 27, 2018 and before July 31, 2019, the maximum penalty may not exceed $213,268 per\nviolation per day, with a maximum penalty not to exceed $2,132,679. For violation occurring on\nor after November 2, 2015 and before November 27, 2018, the maximum penalty may not exceed\n$209,002 per violation per day, with a maximum penalty 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\nSouthern California Gas Co being subject to additional enforcement action.\n12022051WL_Warning Letter_05032022_(21-231340)_text Page 4 of 5\n\n\n\nCPF 1-2022-051-WL\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 1-2022-051-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\n12022051WL_Warning Letter_05032022_(21-231340)_text Page 5 of 5","truncated":false,"body_characters":11615}