{"operation":"document","citation":"CPF 12024016WL","title":"BLUEWATER GAS STORAGE, LLC — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2024-02-27","effective_on":null,"summary":"CLOSED warning letter citing 192.12(b)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024016wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024016wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12024016wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12024016WL","body":"Warning Letter involving BLUEWATER GAS STORAGE, LLC. PHMSA's enforcement data identifies the cited regulation as 192.12(b)(2). The case was opened on 2024-02-27 and is reported as closed as of 2024-02-27. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12024016WL_Warning Letter_02272024_(23-264994).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024016WL/12024016WL_Warning%20Letter_02272024_(23-264994).pdf\n\n12024016WL_Warning Letter_02272024_(23-264994)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024016WL/12024016WL_Warning%20Letter_02272024_(23-264994)_text.pdf\n\n12024016WL_Warning Letter_02272024_(23-264994)_text.pdf\n\nWARNING LETTER\nOVERNIGHT EXPRESS DELIVERY\nFebruary 27, 2024\nMr. Dan Krueger\nPresident and Chief Executive Officer\nBluewater Gas Storage, LLC\n231 W. Michigan Street, P468\nMilwaukee, Wisconsin 53203\nCPF 1-2024-016-WL\nDear Mr. Krueger:\nFrom July 11, 2023 through July 13, 2023 of the on-site inspection, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United\nStates Code (U.S.C.) inspected Bluewater Gas Storage, LLC’s (Bluewater Gas Storage) Columbus\n3 and Kimball 27 Underground Natural Gas Storage (UNGS) facilities in St. Clair County,\nMichigan.\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\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\n\n\n\nBluewater Gas Storage failed to meet the provisions of API RP 1171, section 8. Specifically,\nBluewater Gas Storage failed to demonstrate how the effectiveness of the risk monitoring and risk\nmanagement was assessed in accordance with API 1171, Section 8.7.1.\nAPI 1171, Section 8.7.1 requires that “The operator shall assess the effectiveness of risk\nmonitoring and risk management programs and maintain a continual review and improvement\ncycle in risk management activities to provide functional integrity of the storage operation.”\nBluewater Gas Storage’s STANDARD 217 Storage Risk Management Plan Standard in 217.7.2\nFrequency, stated, “The operator shall define a review frequency for the risk assessment and\nperform a review and update of the risk assessment in accordance with the defined frequency. The\nrisk assessment will be reviewed and updated at least every three years.”\nDuring the inspection, Bluewater Gas Storage was unable to provide any records of risk monitoring\nand risk management reviews. Bluewater Gas Storage stated that a documented meeting is to be\nscheduled by the end of 3rd quarter in 2023.\nTherefore, Bluewater Gas Storage failed to meet the provisions of Section 8.7.1.\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.\nBluewater Gas Storage failed to meet the provisions of API RP 1171, Section 9. Specifically,\nBluewater Gas Storage failed to demonstrate that valves are maintained, repaired, or replaced in\naccordance with the valve maintenance program for isolation valves pursuant to API RP 1171\nSections 9.3.2 and 9.8.1.\nAPI RP 1171, Section 9.3.2 requires that “The valves shall be maintained, repaired, or replaced in\naccordance with the operator’s valve maintenance program for isolation valves.” API RP 1171,\nSection 9.8.1 requires that “Inspections, tests, patrols, or analyses shall be documented according\nto the operator’s procedures.”\nDuring the inspection, Bluewater Gas Storage was unable to provide any records demonstrating\nthat isolation valves had been repaired or replaced in accordance with its valve maintenance\nprogram. Bluewater Gas Storage stated that a work management system is to be developed in\n2024/2025 with WEC Energy Group, owner of Bluewater Gas Storage.\n\n\n\nTherefore, Bluewater Gas Storage failed to comply with § 192.12(b)(2) by failing to meet the\nprovisions of API RP 1171, Sections 9.3.2 and 9.8.1.\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\nBluewater Gas Storage, 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 1-2024-016-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":7662}