# BLUEWATER GAS STORAGE, LLC — Notice of Amendment

- **operation:** document
- **citation:** CPF 12024017NOA
- **title:** BLUEWATER GAS STORAGE, LLC — Notice of Amendment
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2024-03-19
- **effective on:** Not available
- **summary:** CLOSED notice of amendment citing 192.12(c), 192.12(d)(4).
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- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-12024017noa
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/12024017NOA
**body:**

Notice of Amendment involving BLUEWATER GAS STORAGE, LLC. PHMSA's enforcement data identifies the cited regulations as 192.12(c),  192.12(d)(4). The case was opened on 2024-03-19 and is reported as closed as of 2024-05-01. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

12024017NOA_Closure Letter_05012024_(23-263994).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024017NOA/12024017NOA_Closure%20Letter_05012024_(23-263994).pdf

12024017NOA_Closure Letter_05012024_(23-263994)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024017NOA/12024017NOA_Closure%20Letter_05012024_(23-263994)_text.pdf

12024017NOA_Notice of Amendment_03192024_(23-263994).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024017NOA/12024017NOA_Notice%20of%20Amendment_03192024_(23-263994).pdf

12024017NOA_Notice of Amendment_03192024_(23-263994)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024017NOA/12024017NOA_Notice%20of%20Amendment_03192024_(23-263994)_text.pdf

12024017NOA_Operator Response to Notice_04162024_(23-263994).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12024017NOA/12024017NOA_Operator%20Response%20to%20Notice_04162024_(23-263994).pdf

12024017NOA_Closure Letter_05012024_(23-263994)_text.pdf

CPF 1-2024-017-NOA
Dear Mr. Hesselbach:
On July 11, 2023 through July 13, 2023, a representative from the Pipeline and Hazardous
Materials Safety Administration (PHMSA), pursuant to chapter 601 of 49 United States Code,
conducted an on-site pipeline safety inspection of Bluewater Gas Storage, LLC's (Bluewater Gas
Storage) procedures in St. Clair Co., Michigan. As a result of the inspection, Bluewater Gas
Storage was issued a Notice of Amendment on March 19, 2024, which proposed amendment of
your procedures.
Bluewater Gas Storage submitted its amended procedures on April 16, 2024. My staff reviewed
the amended procedures, and it appears that the inadequacies outlined in this Notice of Amendment
have been corrected.
This letter is to inform you no further action is necessary and this case is now closed. Thank you
for your cooperation.
Sincerely,
P.P.
VIA ELECTRONIC MAIL TO: andrew.hesselbach@wecenergygroup.com
May 1, 2024
Mr. Andy Hesselbach
President and Chief Executive Officer
Bluewater Gas Storage, LLC
231 W. Michigan Street, P468
Milwaukee, Wisconsin 53203
Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration
Cc: Jeff Westrick jeffrey.westrick@wecenergygroup.com

12024017NOA_Notice of Amendment_03192024_(23-263994)_text.pdf

NOTICE OF AMENDMENT
OVERNIGHT EXPRESS DELIVERY
March 19, 2024
Mr. Dan Krueger
President and Chief Executive Officer
Bluewater Gas Storage, LLC
231 W. Michigan Street, P468
Milwaukee, Wisconsin 53203
CPF 1-2024-017-NOA
Dear Mr. Krueger:
From July 11, 2023 through July 13, 2023 of the on-site inspection, a representative of the Pipeline
and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United
States Code (U.S.C.) inspected Bluewater Gas Storage, LLC’s (Bluewater Gas Storage)
procedures for the Columbus 3 and Kimball 27 Underground Natural Gas Storage (UNGS)
facilities in St. Clair County, Michigan.
As a result of the inspection, PHMSA has identified the apparent inadequacies found within
Bluewater Gas Storage’s plans or procedures. The items inspected and the inadequacies are
described below:
1. 49 CFR § 192.12 Underground natural gas storage facilities.
(a) ….
(c) Procedural manuals. Each operator of a UNGSF must prepare
and follow for each facility one or more manuals of written procedures
for conducting operations, maintenance, and emergency preparedness
and response activities under paragraphs (a) and (b) of this section.
Each operator must keep records necessary to administer such
procedures and review and update these manuals at intervals not
exceeding 15 months, but at least once each calendar year. Each
operator must keep the appropriate parts of these manuals accessible
at locations where UNGSF work is being performed. Each operator



must have written procedures in place before commencing
operations or beginning an activity not yet implemented.
Bluewater Gas Storage’s written procedures for conducting operations and maintenance activities
were inadequate to ensure safe operation of a pipeline facility. Specifically, Bluewater Gas
Storage’s OM608 Valves Manual did not include procedures outlining the replacement process for
valves pursuant to API 1171, Section 9.3.2.
API 1171, Section 9.3.2 requires that “[t]he valves shall be maintained, repaired, or replaced in
accordance with the operator’s valve maintenance program for isolation valves.”
During the inspection, Bluewater Gas Storage’s OM608 Valves Manual was reviewed and
determined to not address the method in which valves shall be replaced within their valve
maintenance program, such as a procedure specifying how valve replacements, or incidental
repairs to valves, are to be performed and recorded.
Therefore, Bluewater Gas Storage’s OM608 Valves Manual was inadequate. Bluewater Gas
Storage must revise its written procedures to address valve replacement within its valve
maintenance program.
2. 49 CFR § 192.12 Underground natural gas storage facilities.
(a) ….
(c) Procedural manuals. Each operator of a UNGSF must prepare
and follow for each facility one or more manuals of written procedures
for conducting operations, maintenance, and emergency preparedness
and response activities under paragraphs (a) and (b) of this section.
Each operator must keep records necessary to administer such
procedures and review and update these manuals at intervals not
exceeding 15 months, but at least once each calendar year. Each
operator must keep the appropriate parts of these manuals accessible
at locations where UNGSF work is being performed. Each operator
must have written procedures in place before commencing operations
or beginning an activity not yet implemented.
Bluewater Gas Storage’s written procedures for conducting operations and maintenance activities
were inadequate to ensure safe operation of a pipeline facility. Specifically, Bluewater Gas
Storage’s procedure, Standard 222 - Well Integrity Inspection, failed to include sufficient detail
on the options for type and timing of the next mechanical integrity tests based on the results of
initial and prior mechanical integrity testing.
API 1171, Section 9.3.1 requires that “[a]ctive well mechanical integrity evaluations shall include
initial and subsequent evaluations as determined using the risk assessment and the information
derived from the initial evaluation.”
During the inspection, Bluewater Gas Storage’s Standard 222 - Well Integrity Inspection was
reviewed and found to lack adequate specificity and established criteria addressing the process for



determining the frequency and the methods of subsequent mechanical integrity tests, which are to
be determined after review of initial and prior mechanical integrity testing.
Therefore, Bluewater Gas Storage’s Standard 222 - Well Integrity Inspection was inadequate.
Bluewater Gas Storage must revise its Well Integrity Inspection to specify process for the next
mechanical integrity test.
3. 49 CFR § 192.12 Underground natural gas storage facilities.
(a) …
(d) Integrity management program--
(1) …
(4) Integrity management procedures and recordkeeping. Each
UNGSF operator must establish and follow written procedures to carry
out its integrity management program under API RP 1171
(incorporated by reference, see § 192.7), section 8 ("Risk Management
for Gas Storage Operations"), and this paragraph (d). The operator
must also maintain, for the useful life of the UNGSF, records that
demonstrate compliance with the requirements of this paragraph (d).
This includes records developed and used in support of any
identification, calculation, amendment, modification, justification,
deviation, and determination made, and any action taken to implement
and evaluate any integrity management program element.
Bluewater Gas Storage’s written procedures for carrying out its integrity management program
were inadequate to ensure safe operation of a pipeline facility. Specifically, Bluewater Gas
Storage’s written integrity management procedures failed to include a requirement or process for
the baseline risk assessments for all reservoirs and wells for each UNGSF to be completed in
accordance with the timeframes and prioritization required by § 192.12(d)(2).
Section 192.12(d)(2) requires that “[n]o later than March 13, 2024, each UNGSF operator must
complete the baseline risk assessments of all reservoirs and caverns, and at least 40% of the
baseline risk assessments for each of its UNGSF wells (including wellhead assemblies), beginning
with the highest-risk wells, as identified by the risk analysis process. No later than March 13, 2027,
an operator must complete baseline risk assessments on all its wells (including wellhead
assemblies).” Section 192.12(d)(4) specifies, in part, that each UNGSF operator must establish
and follow written procedures to carry out its integrity management program under this paragraph
(d), to include the requirements addressing the relevant risk assessment deadlines and thresholds
cited above.
During the inspection, Bluewater Gas Storage’s Standard 222 - Well Integrity Inspection Standard
was reviewed and determined to not address the requirement that the baseline assessment for all
reservoirs and 40% of the wells shall be completed by March 13, 2024 and 100% of the wells by
March 13, 2027.
Therefore, Bluewater Gas Storage’s Standard 222 - Well Integrity Inspection Standard was
inadequate. Bluewater Gas Storage must revise its Well Integrity Inspection Standard to address



requiring baseline risk assessments for all reservoirs and wells by the dates specified above.
4. 49 CFR § 192.12 Underground natural gas storage facilities.
(a) …
(d) Integrity management program--
(1) …
(4) Integrity management procedures and recordkeeping. Each
UNGSF operator must establish and follow written procedures to carry
out its integrity management program under API RP 1171
(incorporated by reference, see § 192.7), section 8 ("Risk Management
for Gas Storage Operations"), and this paragraph (d). The operator
must also maintain, for the useful life of the UNGSF, records that
demonstrate compliance with the requirements of this paragraph (d).
This includes records developed and used in support of any
identification, calculation, amendment, modification, justification,
deviation, and determination made, and any action taken to implement
and evaluate any integrity management program element.
Bluewater Gas Storage’s written procedures for carrying out its integrity management program
were inadequate to ensure safe operation of a pipeline facility. Specifically, Bluewater Gas
Storage’s procedure Standard 217 - Storage Risk Management Plan failed to require that the
interval for risk assessments for each reservoir, cavern, and well be determined using the results
from earlier assessments and updated risk analyses pursuant to § 192.12(d)(3).
Section 192.12(d)(3) requires that “[t]he operator must determine the appropriate interval for risk
assessments under API RP 1171 (incorporated by reference, see § 192.7), subsection 8.7.1, and
this paragraph (d) for each reservoir, cavern, and well, using the results from earlier assessments
and updated risk analyses. The re-assessment interval for each reservoir, cavern, and well must not
exceed seven years from the date of the baseline assessment for each reservoir, cavern, and well.”
During the inspection, Bluewater Gas Storage’s Standard 217 - Storage Risk Management Plan
was reviewed and found to require in Section 217.7.2 that a review and update to the risk
assessment will take place at least every three years. Bluewater Gas Storage’s Standard 217 -
Storage Risk Management Plan did not require that the appropriate interval for risk assessments
be defined using the results from earlier assessments and updated risk analyses, as is specified in
§ 192.12(d)(3).
Therefore, Bluewater Gas Storage’s Standard 217 - Storage Risk Management Plan was
inadequate. Bluewater Gas Storage must revise its Storage Risk Management Plan to address the
inadequacy outlined above.
Response to this Notice
This Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as
part of this Notice is a document entitled Response Options for Pipeline Operators in Enforcement
Proceedings.



Please refer to this document and note the response options. Be advised that all material you
submit in response to this enforcement action is subject to being made publicly available. If you
believe that any portion of your responsive material qualifies for confidential treatment under 5
U.S.C. § 552(b), along with the complete original document you must provide a second copy of
the document with the portions you believe qualify for confidential treatment redacted and an
explanation of why you believe the redacted information qualifies for confidential treatment under
5 U.S.C. § 552(b).
Following the receipt of this Notice, you have 30 days to submit written comments, revised
procedures, or a request for a hearing under § 190.211. If you do not respond within 30 days of
receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice
and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice
without further notice to you and to issue an Order Directing Amendment. If your plans or
procedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans
or procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this
Notice, we propose that you submit your amended procedures to my office within 30 days of
receipt of this Notice. This period may be extended by written request for good cause. Once the
inadequacies identified herein have been addressed in your amended procedures, this enforcement
action will be closed.
It is requested (not mandated) that Bluewater Gas Storage maintain documentation of the safety
improvement costs associated with fulfilling this Notice of Amendment (preparation/revision of
plans, procedures) and submit the total to Robert Burrough, Director, Eastern Region, Pipeline and
Hazardous Materials Safety Administration. In correspondence concerning this matter, please refer
to CPF 1-2024-017-NOA and, for each document you submit, please provide a copy in electronic
format whenever possible.
Sincerely,
Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration
Enclosure: Response Options for Pipeline Operators in Enforcement Proceedings
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