{"operation":"document","citation":"CPF 12024013WL","title":"LEAF RIVER ENERGY CENTER LLC — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2024-02-15","effective_on":null,"summary":"CLOSED warning letter citing 191.22(c)(1)(iv), 192.12(a)(3), 192.12(c), 192.12(d)(4).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024013wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024013wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024013wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12024013WL","body":"Warning Letter involving LEAF RIVER ENERGY CENTER LLC. PHMSA's enforcement data identifies the cited regulations as 191.22(c)(1)(iv),  192.12(a)(3),  192.12(c),  192.12(d)(4). The case was opened on 2024-02-15 and is reported as closed as of 2024-02-15. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12024013WL_Operator Response to Notice_04102024_(23-264024).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024013WL/12024013WL_Operator%20Response%20to%20Notice_04102024_(23-264024).pdf\n\n12024013WL_Warning Letter_02152024_(23-264024).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024013WL/12024013WL_Warning%20Letter_02152024_(23-264024).pdf\n\n12024013WL_Warning Letter_02152024_(23-264024)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024013WL/12024013WL_Warning%20Letter_02152024_(23-264024)_text.pdf\n\n12024013WL_Warning Letter_02152024_(23-264024)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nFebruary 15, 2024\nMr. John Bremner\nVice President, Midstream\nLeaf River Energy Center LLC\n2500 City West Blvd, Suite 1050\nHouston, Texas 77042\nCPF 1-2024-013-WL\nDear Mr. Bremner:\nFrom August 15 to August 17, 2023, of the on-site inspection, representatives of the Pipeline and\nHazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States\nCode (U.S.C.) inspected Leaf River Energy Center LLC’s (LREC) Leaf River Energy Center\nUnderground Natural Gas Storage Facility in Smith County, Mississippi.\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. § 191.22 National Registry of Operators.\n(a) ...\n(c) Changes. Each operator of a gas pipeline, gas pipeline facility,\nUNGSF, LNG plant, or LNG facility must notify PHMSA electronically\nthrough the National Registry of Operators at\nhttps://portal.phmsa.dot.gov of certain events.\n(1) An operator must notify PHMSA of any of the following events\nnot later than 60 days before the event occurs:\n(i) ...\n(iv) Maintenance of a UNGSF that involves the plugging or\nabandonment of a well, or that requires a workover rig and costs\n$200,000 or more for an individual well, including its wellhead. If 60-\ndays' notice is not feasible due to an emergency, an operator must\n\n\n\npromptly respond to the emergency and notify PHMSA as soon as\npracticable.\nLREC failed to provide electronic notification to PHMSA of certain maintenance activities,\nincluding well work that required a workover rig and costs $200,000 or more, not later than 60\ndays before that activity started as required by § 191.22(c).\nDuring the inspection, PHMSA reviewed the annual reports submitted by LREC for its\nunderground natural gas storage facility for calendar years 2019, 2020, 2021 and 2022. The\ncalendar year 2022 annual report noted there was maintenance done on well CW #2 that included\nwellhead remediation and new production tubing installation. The initial cost assessment for this\nwas over $200,000, thereby requiring notification to PHSMA pursuant to § 191.22(c). LREC\nstated notification of this was not filed with PHMSA.\nTherefore, LREC failed to provide required electronic notification of changes to its system to\nPHMSA, as required by § 191.22(c).\n2. § 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.\nLREC failed to meet the provisions of API RP 1171, Section 8. Specifically, LREC failed to\ninclude and adequately evaluate potential threats and hazards impacting the cavern storage field in\nits risk management model in accordance with API RP 1171, Section 8.4.2 (Section 8.4.2).\nSection 8.4.2 states in part that “The operator shall evaluate the potential threats and hazards\nimpacting storage wells and reservoirs.”\nDuring the inspection, PHSMA reviewed LREC’s risk management model within its Gas Storage\nCavern and Well Risk Workbook. Based on its review, it was determined that potential threats and\nhazards impacting monitor well MW-01 had not been incorporated into the risk management\nmodel. Likelihood scoring and descriptors were also missing or inaccurate for multiple threats\nwithin the risk model. Finally, threats to the caverns from third party producing wells had not been\nadequately evaluated within the risk management model.\nTherefore, LREC failed to meet the provisions of API RP 1171, Section 8.4.2.\n\n\n\n3. § 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.\nLREC failed to meet the provisions of section 8 of API RP 1171 and 192.12(d) by March 13, 2021.\nSpecifically, LREC’s risk management procedure, risk management model and integrity\nmanagement program elements were created past the March 13, 2021, deadline required by\n§ 192.12(a)(3).\nSection 192.12(d) requires in part that:\nThe integrity management program for each UNGSF under this paragraph (d) must consist,\nat a minimum, of a framework developed under API RP 1171 (incorporated by\nreference, see § 192.7), section 8 (“Risk Management for Gas Storage Operations”)…\nThe integrity management program must include the following elements:\n…\n(iv) A plan for how staff will be trained in awareness and application of the procedures\nrequired by this paragraph (d);\n…\nLREC’s Storage Integrity Management Program (SIMP), section 1.11.3 Training in SIMP\nProcedures and Assessment of SIMP Procedure Adequacy and Effectiveness, states in part:\nThe SVP Engineering and Operations shall verify that the SIMP procedures training program\nimplementation schedules include: The SIMP procedures on which specific roles and/or\npersonnel are to be trained and the initial and refresh period for training.\nDuring the inspection, LREC’s SIMP and procedures required as part of it were reviewed. Its\nUnderground Storage Integrity Management Program Plan was effective on January 1, 2023. The\nplan prior to this, Asset Management Plan Revision 0 was effective December 2021, but was not\nin compliance with all the requirements of API RP 1171 Section 8 and the elements required within\n§ 192.12(d) Integrity management program. The procedures used to meet provisions of section 8\nof API RP 1171 such as the Cavern and Well Risk Management Procedure SOP 192.12 (e) 19\nRevision 1 were effective on 12/1/22.\n\n\n\nTherefore, LREC failed to meet the provisions of section 8 of API RP 1171 and § 192.12(d) by\nMarch 13, 2021, as required by § 192.12(a)(3).\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\nor beginning an activity not yet implemented.\nLeaf River Energy Center (LREC) failed to review its manuals of written procedures at intervals\nnot exceeding 15 months, but at least once each calendar year. Specifically, LREC failed to review\nits blowout contingency plan during 2021 and 2022.\nDuring the inspection, PHMSA requested records demonstrating that LREC had reviewed its\nmanuals required by § 192.12(c). LREC stated that reviews of its Blowout Contingency Plan titled\nWell Control Emergency Response Plan were not done in 2021 and 2022 thereby no records of\nreview pertaining to them.\nTherefore, LREC failed to review its manuals of written procedures at least once each calendar\nyear during 2021 and 2022, as required by § 192.12(c).\n5. § 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\nor beginning an activity not yet implemented.\nLREC failed to follow its manual of written procedures for conducting activities under\n§ 192.12(a)(3). Specifically, LREC failed to perform an annual effectiveness review of its Integrity\nMonitoring Program in accordance with its Annual API 1170 Cavern Integrity Review and\n\n\n\nAnalysis Procedure (Annual Review Procedure), Revision 0, developed pursuant to API RP 1170,\nSection 10.3 (Section 10.3).\nSection 10.3 states in part that “[t]he outcome of this holistic and comprehensive approach shall\nbe a formal written Integrity Monitoring Program that shall contain, at a minimum, the following\ncomponents: … periodic review of the program for effectiveness.”\nLREC’s Annual Review Procedure, section 1 Purpose, stated in part that “This procedure is\ndesigned to formalize the steps required to prepare the Annual API 1170 Integrity Review and\nAnalysis for all Leaf River caverns. This annual review and analysis is due in August of each\ncalendar year.” Additionally, the Annual Review Procedure, section 8 Documentation, stated in\npart “[t]he Annual API 1170 Cavern Integrity Review and Analysis shall be documented on LREC\n192 Form 67 – API 1170 Integrity Review and Analysis. The form and the associated records shall\nbe maintained at the following location for life of the facility.”\nForm 67 was used for the Integrity Monitor Program’s analysis of data and periodic review for\neffectiveness. During the inspection, PHMSA requested records of this for each year. LREC was\nnot able to provide records of this review for 2020 and 2021 and stated this review was only done\nin 2019.\nTherefore, LREC failed to comply with § 192.12(c) by not following its written procedures.\n6. § 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.\nLREC failed to follow its written procedures to carry out its integrity management program under\nAPI RP 1171, Section 8. Specifically, LREC failed to perform an annual review of its 2022 risk\nassessments in accordance with its Leaf River Energy Center (LREC) Asset Management Plan\n(AMP), Section 4.9 procedural requirement, developed pursuant to API RP 1171, Section 8.5.2.\nAPI RP 1171 Section 8.5.2 states in part that “The operator shall review the results of the risk\nassessment to determine whether the risk assessment, resulting prioritization, or ranking represents\n\n\n\nits facilities and characterizes the risks.” The AMP, Section 4.9 RCP Recommendations, #8\nrequired that LREC “[r]eview risk annually and refine the risk treatment options discussions.”\nThe AMP was effective in December 2021. This plan was later updated to Gas Storage Cavern\nand Well Risk Workbook in October 2022. During the inspection, LREC was not able to provide\nrecords of the annual review of the 2022 risk assessments for the Leaf River Energy Center salt\ncavern storage field along with the four wells within it. Scoring of certain well threats were not\nupdated from maintenance work done on well CW-01 in 2021 and well CW-02 in 2022.\nTherefore, LREC failed to follow its AMP, Section 4.9 as required by § 192.12(d)(4).\n7. § 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.\nLREC failed to follow its written procedures to carry out its integrity management program under\nAPI RP 1171, Section 8. Specifically, LERC failed to perform risk monitoring and risk\nmanagement effectiveness reviews in accordance with its Cavern and Well Risk Management\nProcedure, SOP 192.12 (e) 19 (Risk Management Procedure), Rev 1, developed pursuant to API\nRP 1171, Section 8.7.1 (Section 8.7.1).\nSection 8.7.1 states in part “[t]he operator shall assess the effectiveness of risk monitoring and risk\nmanagement programs and maintain a continual review and improvement cycle in risk\nmanagement activities to provide functional integrity of the storage operation.”\nLREC’s Risk Management Procedure, section 14.1 Risk Management Review Period, stated in\npart:\nThe SVP Engineering and Operations should lead a periodic review of the risk management\nprocess, at an interval of 15 months but at least once each calendar year, of the storage\nintegrity management program effectiveness at achieving the risk management goals,\nobjectives, and targets…\n\n\n\nDuring the inspection, LREC did not have records pertaining to calendar year 2022 demonstrating\nthat a review had been conducted of storage management program’s effectiveness at achieving\nrisk management goals and objectives.\nTherefore, LREC failed to follow its Risk Management Procedure, 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$266,015 per violation per day the violation persists, up to a maximum of $2,660,135 for a related\nseries of violations. For violation occurring on or after January 6, 2023 and before December 28,\n2023, the maximum penalty may not exceed $257,664 per violation per day the violation persists,\nup to a maximum of $2,576,627 for a related series of violations. For violation occurring on or\nafter March 21, 2022 and before January 6, 2023, the maximum penalty may not exceed $239,142\nper violation per day the violation persists, up to a maximum of $2,391,142 for a related series of\nviolations. For violation occurring on or after May 3, 2021 and before March 21, 2022, the\nmaximum penalty may not exceed $225,134 per violation per day the violation persists, up to a\nmaximum 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.\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\nLeaf River Energy Center 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 1-2024-013-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","truncated":false,"body_characters":18534}