{"operation":"document","citation":"CPF 12025014WL","title":"NATIONAL FUEL GAS SUPPLY CORP — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2025-05-30","effective_on":null,"summary":"CLOSED warning letter citing 192.12(b)(2).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-12025014wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-12025014wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-12025014wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/12025014WL","body":"Warning Letter involving NATIONAL FUEL GAS SUPPLY CORP. PHMSA's enforcement data identifies the cited regulation as 192.12(b)(2). The case was opened on 2025-05-30 and is reported as closed as of 2025-05-30. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n12025014WL_Warning Letter_05302025_(24-296378).pdf: https://primis.phmsa.dot.gov/enforcement-documents/12025014WL/12025014WL_Warning%20Letter_05302025_(24-296378).pdf\n\n12025014WL_Warning Letter_05302025_(24-296378)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/12025014WL/12025014WL_Warning%20Letter_05302025_(24-296378)_text.pdf\n\n12025014WL_Warning Letter_05302025_(24-296378)_text.pdf\n\nWARNING LETTER\nVIA ELECTRONIC MAIL TO: KRAEMERR@NATFUEL.COM\nMay 30, 2025\nMr. Ronald Kraemer\nPresident and Chief Executive Officer\nNational Fuel Gas Supply Corporation\n6363 Main Street\nWilliamsville, New York 14221\nCPF 1-2025-014-WL\nDear Mr. Kraemer:\nOn June 3, 4 and 6, 2024, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected\nNational Fuel Gas Supply Corporation’s (NFG) Colden underground natural gas storage facility\nin Erie, New York.\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\nNFG failed to meet the provisions of American Petroleum Institute Recommended Practice 1171\n(API RP 1171), Section 11. Specifically, NFG failed to demonstrate adequate site security was\nprovided at each well location in accordance with API RP 1171, Section 11.9.1 (Section 11.9.1).\nSection 11.9.1 states in part that “The operator shall develop programs incorporating safeguards\nto the environment, site security, and safety and health into storage design, construction, and\noperations.”\nDuring the field inspection, well 1362i was observed to be located within an active commercial\nbusiness zone with significant vehicle traffic. NFG’s risk assessment of this well showed the\nWC01 consequence score (defined as safety hazard to company personnel and the public) was 100,\nindicating there are homes/businesses/places of gathering/campsites/marked trails within this\nwell’s safety zone. The gas pipeline, connected to the well, had bollards installed around it but\nthere were no barriers to protect the well. Additionally, during the field inspection PHMSA\ninspectors observed that six other wells (855I, 891I, 945I, 967I, 1043I, 1053I) with WC01\nconsequence scores of 100 did not have enclosures around them for site security.\nFollowing the inspection, NFG submitted documentation demonstrating that bollards had been\ninstalled around well 1362i.\nTherefore, NFG failed to demonstrate adequate site security was provided at each well location\nin accordance as required by Section 11.9.1, pursuant to section 192.12(b)(2).\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.\nNFG failed to meet the provisions of API RP 1171, Section 9. Specifically, NFG failed to perform\nannual valve isolation test of the master valve and wellhead pipeline isolation valve in accordance\nwith API RP 1171, Section 9.3.2 (Section 9.3.2).\nSection 9.3.2 states in part, “The operator shall test the operation of the master valve and\nwellhead pipeline isolation valve at least annually for proper function and ability to isolate the\nwell.”\nNFG’s Valve Isolation Testing procedure within its Storage Integrity Management Plan, Version\n2022.3, required that valve isolation tests be conducted every year, consistent with Section 9.3.2.\n\n\n\nDuring the inspection, PHMSA reviewed NFG’s records of wellhead valve isolation testing data.\nFor 2023, records indicated master valve isolation tests were not performed for multiple wells,\nincluding wells: 824i, 1067i, 1601i, 941i, 967i, 1117i, 1603i and 864i. Additionally, wellhead\npipeline isolation valve test was not done for wells 864i and 1553i in 2023. Subsequent to the\ninspection, NFG indicated plans to revise their procedures to ensure all wells connected to pipeline\nare valve isolation tested.\nTherefore, NFG failed to perform annual valve isolation test of the master valve and wellhead\npipeline isolation valve as required by Section 9.3.2, pursuant to section 192.12(b)(2).\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\nparagraph (c) of this section, by January 18, 2018, and must meet all\nprovisions of paragraph (d) of this section by March 13, 2021.\nNFG failed to meet the provisions of API RP 1171, Section 9. Specifically, NFG failed to maintain,\nrepair, or replace leaking isolation valves in accordance with their maintenance program, as\nspecified under API RP 1171, Section 9.3.2.\nSection 9.3.2 states in part,\n“The operator shall test the operation of the master valve and wellhead\npipeline isolation valve at least annually for proper function and ability to isolate the well. The\nvalves shall be maintained, repaired, or replaced in accordance with the operator’s valve\nmaintenance program for isolation valves.”\nNFG’s Valve Maintenance program within its Supply and Empire Operation and Maintenance\nProcedure required valve deficiencies to be reported via a work order form.\nDuring the inspection, PHMSA reviewed records of well valve isolation testing data from 2023\nand 2024. The documents reviewed indicated that multiple wells had significant leaks from their\nmaster valve, with some wells showing as high as a 100% pressure change (including wells 867i,\n1048i and 1047i). NFG could not provide records of work order forms for these leaking isolation\nvalves. Subsequent to the inspection, NFG indicated they are working on a new process, along\nwith having provided refresher training on its current procedures to ensure data accuracy from well\nvalve isolation testing.\nTherefore, NFG failed maintain, repair, or replace leaking isolation valves in accordance with their\nmaintenance program as required by Section 9.3.2, pursuant to section 192.12(b)(2).\n4. § 192.12 Underground natural gas storage facilities.\n(a) …\n\n\n\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.\nNFG failed to meet the provisions of API RP 1171, Section 9. Specifically, NFG failed to\ndemonstrate that its risk assessments were used in determining integrity demonstration and\nverification tasks of well subsurface conditions in accordance with API RP 1171, Section 9.2.2\n(Section 9.2.2).\nSection 9.2.2 states in part that “Risk assessments shall be used as a basis for developing the\nintegrity demonstration, verification, and monitoring tasks and evaluating their frequency\nrequirements.”\nDuring the inspection, it was noted through NFG’s risk assessments that 17 wells had production\ncasings with no surface casing and with homes / businesses / places of gathering / campsites /\nmarked trails within their safety zone. Surface casing is generally used to protect groundwater\nfrom communication with gas and fluids from other sources. From these 17 wells, there were 5\nwells with no records stating that the production casing was cemented to surface. Cement bond\nlogs can be used to determine cement location and whether adequate formation and production\ncasing bonding had been achieved to prevent migration of gas and fluids between zones such as\ngroundwater. NFG did not have cement bond log records of these wells as part of the integrity\ndemonstration and verification.\nTherefore, NFG failed to demonstrate that risk assessments were used in determining integrity\ndemonstration and verification tasks of well subsurface conditions as required by Section 9.2.2,\npursuant to section 192.12(b)(2).\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$272,926 per violation per day the violation persists, up to a maximum of $2,729,245 for a related\nseries of violations. For violation occurring on or after December 28, 2023 and before December\n30, 2024, the maximum penalty may not exceed $266,015 per violation per day the violation\npersists, up to a maximum of $2,660,135 for a related series of violations. For violation occurring\non or after January 6, 2023 and before December 28, 2023, the maximum penalty may not exceed\n$257,664 per violation per day the violation persists, up to a maximum of $2,576,627 for a related\nseries of violations. For violation occurring on or after March 21, 2022 and before January 6,\n2023, the maximum penalty may not exceed $239,142 per violation per day the violation persists,\nup to a maximum of $2,391,142 for a related series of violations. For violation occurring on or\nafter May 3, 2021 and before March 21, 2022, the maximum penalty may not exceed $225,134\nper violation per day the violation persists, up to a maximum of $2,251,334 for a related series of\nviolations. For violation occurring on or after January 11, 2021 and before May 3, 2021, the\nmaximum penalty may not exceed $222,504 per violation per day the violation persists, up to a\n\n\n\nmaximum of $2,225,034 for a related series of violations. For violation occurring on or after July\n31, 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.\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\nNational Fuel Gas Supply Corp 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 1-2025-014-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":12242}