CHATTANOOGA GAS CO — Notice of Probable Violation

case documentOfficial PDF220123003_NOPV_PCO_10232012.pdf#

case documentOfficial PDF220123003_NOPV_PCO_10232012_text.pdf#

party submissionOfficial PDF220123003_Operator_response_11212012.pdf#

220123003_FinalOrder_04222013_text.pdf, page 1Official PDFAPRIL 22, 2013 Mr. Bryan Batson President Chattanooga Gas Company 10 Peachtree Place, NE Atlanta, GA 30309 Mr. James Pitts Vice President, Storage and Peaking Operations AGL Resources, Inc. 1200 Smith Street, Suite 900 Houston, TX 77002 Re: CPF No. 2-2012-3003 Dear Mr. Batson and Mr. Pitts: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and specifies actions that need to be taken by Chattanooga Gas Company to comply with the pipeline safety regulations. When the terms of the Compliance Order have been completed, as determined by the Director, Southern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Wayne T. Lemoi, Director, Southern Region, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS Mr. Richard R. Lonn, Director, Compliance Assurance, Chattanooga Gas Company CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

220123003_FinalOrder_04222013_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ____________________________________ ) In the Matter of ) ) Chattanooga Gas Company, ) CPF No. 2-2012-3003 a subsidiary of AGL Resources, Inc. ) ) Respondent. ) ____________________________________) FINAL ORDER From July 30 to August 1, 2012, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Chattanooga Gas Company’s (CGC or Respondent) liquefied natural gas (LNG) facility in Chattanooga, Tennessee. 1 The Chattanooga LNG facility holds the equivalent of 1.2 billion cubic feet (Bcf) of natural gas, is supplied by two pipelines, and delivers up to approximately 62,000 million cubic feet (Mcf) per day to the Chattanooga Gas market.2 As a result of the inspection, the Director, Southern Region, OPS (Director), issued to Respondent, by letter dated October 23, 2012, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that CGC had violated 49 C.F.R. §§ 193.2625(a) and 193.2625(b) and proposed ordering Respondent to take certain measures to correct the alleged violations. CGC responded to the Notice by letter dated November 21, 2012 (Response). The company did not contest the allegations of violation, but provided information concerning the corrective actions it had initiated. Respondent did not request a hearing and therefore has waived its right to one. 1 CGC is a subsidiary of Atlanta based AGL Resources, Inc. http://www.chattanoogagas.com/Universal/AboutUs.aspx (last visited April 4, 2013). 2 http://www.aglresources.com/about/LNG.aspx (last visited April 4, 2013).#

220123003_FinalOrder_04222013_text.pdf, page 32 FINDINGS OF VIOLATION In its Response, CGC did not contest the allegations in the Notice that it violated 49 C.F.R. Part 193, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a), which states: § 193.2625 Corrosion protection. (a) Each operator shall determine which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a) by failing to determine which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. Specifically, the Notice alleged that CGC did not determine that a 1.5-inch diameter galvanized foam line designed to retard vaporization of spilled LNG in the event of a leak in the LNG pump area could have its integrity or reliability adversely affected by corrosion prior to a corrosion leak at the pipe-to-soil interface which occurred on August 23, 2010. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(a) by failing to determine that a metallic component could, unless corrosion is controlled, have its integrity or reliability adversely affected by external, internal, or atmospheric corrosion during its intended service life. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(b), which states: § 193.2625 Corrosion protection. (a)… (b) Components whose integrity or reliability could be adversely affected by corrosion must be either— (1) Protected from corrosion in accordance with §§ 193.2627 through 193.2635, as applicable; or (2) Inspected and replaced under a program of scheduled maintenance in accordance with procedures established under § 193.2605. The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(b) by failing to protect a component whose integrity or reliability could be adversely affected by corrosion from corrosion in accordance with §§ 193.2627 through 193.2635, or inspect and replace the component under a program of scheduled maintenance in accordance with procedures established under § 193.2605. Specifically, the Notice alleged that CGC failed to protect the 1.5-inch diameter galvanized foam line from corrosion or inspect and replace the component under a program of scheduled maintenance and failed to inspect, protect from corrosion, and replace as necessary other areas of the line and similar pipe-to-soil interfaces.#

220123003_FinalOrder_04222013_text.pdf, page 43 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(b) by failing to protect the 1.5-inch galvanized foam line whose integrity or reliability could be adversely affected by corrosion from corrosion in accordance with §§ 193.2627 through 193.2635, or inspect and replace the component under a program of scheduled maintenance in accordance with procedures established under § 193.2605. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to Items 1 and 2 in the Notice for violations of 49 C.F.R. §§ 193.2625(a) and 193.2625(b), respectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of LNG or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. In its Response, CGC provided information concerning the corrective actions it has taken to address the cited violations including replacing the below ground portion of the 1.5-inch galvanized foam line and improved monitoring of metallic components. Having reviewed this information, the Director has indicated that, among other things, Respondent has not submitted the required analyses or copies of the amended procedures and therefore has not fully satisfied the compliance terms. As for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 193.2625(a) (Item 1), Respondent must conduct an analysis of all metallic components within the LNG Plant and identify which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. The analysis must include consideration of potential internal or atmospheric corrosion threats for components that are not normally in service, such as the 1.5-inch galvanized foam line referred to in Item 1 of the Notice. 2. With respect to the violation of § 193.2625(b) (Item 2), Respondent must: A. Inspect and, if required, replace the components identified as a result of the analysis required by Item 1 above; and B. Include in CGC’s manual(s) of written procedures measures it will take to protect the components from corrosion in accordance with §§ 193.2627 through 193.2635, as applicable.#

220123003_FinalOrder_04222013_text.pdf, page 54 3. Complete Items 1 and 2 above within 60 days of receipt of this Order. 4. Provide written documentation to the Director demonstrating that Items 1 and 2 have been completed within 75 days of receipt of this Order. 5. It is requested (not mandated) that CGC maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. It is requested that these costs be reported in two categories: (1) total cost associated with preparation or revision of plans, procedures, studies, and analyses; and (2) total cost associated with repairs, replacements, additions, and other changes to physical pipeline facilities. The Director may grant an extension of time to comply with any of the required items upon a written request timely submitted by the Respondent and demonstrating good cause for an extension. Failure to comply with this Order may result in administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

220123003_closure letter_08282013_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED August 28, 2013 Mr. James Pitts Vice President, Storage and Peaking Operations AGL Resources 1200 Smith Street, Suite 900 Houston, TX 77002 CPF 2-2012-3003 Dear Mr. Pitts: On April 22, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) issued to Chattanooga Gas Company (CGC) a Final Order in the above-referenced case. The Final Order included an attached Compliance Order requiring CGC to undertake certain actions to ensure compliance with the federal pipeline safety regulations. The OPS Southern Region has received and reviewed three written responses to the Compliance Order from CGC including your last response dated August 23, 2013. Based on our reviews of these responses we have determined that CGC has complied with the terms of the Final Order. This case is now closed and no further action is necessary with respect to the matters involved in this case. Please be advised that this letter refers only to the above referenced order (CPF 2-2012-3003) and not to any other OPS cases, if any. Thank you for your cooperation in this matter. Sincerely, Wayne T. Lemoi Director, Office of Pipeline Safety PHMSA Southern Region#

220123003_Final Order_04222013.pdf, page 1Official PDFof Transportation U.S. Department 1200 New Jersey Avenue, SE Washington, D.C. 20590 Materials Safety Pipeline and Hazardous Administration APR 22 2013 Mr. Bryan Batson President Chattanooga Gas Company 10 Peachtree Place, NE Atlanta, GA 30309 Mr. James Pitts Vice President, Storage and Peaking Operations AGL Resources, Inc 1200 Smith Street, Suite 900 Houston, TX 77002 Re: CPF No. 2-2012-3003 Dear Mr. Batson and Mr. Pitts: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and specifies actions that need to be taken by Chattanooga Gas Company to comply with the pipeline safety regulations. When the terms of the Compliance Order have been completed, as determined by the Director, Southern Region, this enforcement action will be closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure Mr. Wayne T. Lemoi, Director, Southern Region, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS Mr. Richard R. Lonn, Director, Compliance Assurance, Chattanooga Gas Company CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

220123003_Final Order_04222013.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of Chattanooga Gas Company, a subsidiary of AGL Resources, Inc. CPF No. 2-2012-3003 Respondent. FINAL ORDER From July 30 to August 1, 2012, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Chattanooga Gas Company's (CGC or Respondent) liquefied natural gas (LNG) facility in Chattanooga, Tennessee.' The Chattanooga LNG facility holds the equivalent of 1.2 billion cubic feet (Bcf) of natural gas, is supplied by two pipelines, and delivers up to approximately 62,000 million cubic feet (Mct) per day to the Chattanooga Gas market.? As a result of the inspection, the Director, Southern Region, OPS (Director), issued to Respondent, by letter dated October 23, 2012, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that had violated 49C... 1932625(a) and 193.2625(b) and proposed ordering Respondent to take certain measures to correct the alleged violations. CGC responded to the Notice by letter dated November 21, 2012 (Response). The company did not contest the allegations of violation, but provided information concerning the corrective actions it had initiated. Respondent did not request a hearing and therefore has waived its right to one. ' CGC is a subsidiary of Atlanta based AGL Resources, Inc. http://www.chattanoogagas.com/Universal/AboutUs.aspx (last visited April 4, 2013). http://www.ag|resources.com/about/LNG.aspx (last visited April 4, 2013).#

220123003_Final Order_04222013.pdf, page 32 FINDINGS OF VIOLATION In its Response, CGC did not contest the allegations in the Notice that it violated 49 C.F.R. Part 193, as follows: Item I: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a), which states: § 193.2625 Corrosion protection. (a) Each operator shall determine which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely intended service life. affected by external, internal, or atmospheric corrosion during their The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(a) by failing to determine which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. Specifically, the Notice alleged that CGC did not determine that a 1.5-inch diameter galvanized foam line designed to retard vaporization of spilled LNG in the event of a leak in the LNG pump area could have its integrity or reliability adversely affected by corrosion prior to a corrosion leak at the pipe-to-soil interface which occurred on August 23, 2010. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(a) by failing to determine that a metallic component could, unless corrosion is controlled, have its integrity or reliability adversely affected by external, internal, or atmospheric corrosion during its intended service life. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(b), which states: § 193.2625 Corrosion protection. (a)... (b) Components whose integrity or reliability could be adversely affected by corrosion must be either— (1) Protected from corrosion in accordance with §§ 193.2627 through 193.2635, as applicable; or (2) Inspected and replaced under a program of scheduled maintenance in accordance with procedures established under § 193.2605. The Notice alleged that Respondent violated 49 C.F.R. § 193.2625(b) by failing to protect a component whose integrity or reliability could be adversely affected by corrosion from corrosion in accordance with §§ 193.2627 through 193.2635, or inspect and replace the component under a program of scheduled maintenance in accordance with procedures established under § 193.2605. Specifically, the Notice alleged that CC failed to protect the 1.5-inch diameter galvanized foam line from corrosion or inspect and replace the component under a program of scheduled maintenance and failed to inspect, protect from corrosion, and replace as necessary other areas of the line and similar pipe-to-soil interfaces.#

220123003_Final Order_04222013.pdf, page 43 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 193.2625(b) by failing to protect the 1.5-inch galvanized foam line whose integrity or reliability could be adversely affected by corrosion from corrosion in accordance with §$ 193.2627 through 193.2635, or inspect and replace the component under a program of scheduled maintenance in accordance with procedures established under § 193.2605. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a Compliance Order with respect to Items 1 and 2 in the Notice for violations of 49 C.F.R. §§ 193.2625(a) and 193.2625(b), respectively. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of LNG or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. In its Response, CGC provided information concerning the corrective actions it has taken to address the cited violations including replacing the below ground portion of the 1.5-inch galvanized foam line and improved monitoring of metallic components. Having reviewed this information, the Director has indicated that, among other things, Respondent has not submitted the required analyses or copies of the amended procedures and therefore has not fully satisfied the compliance terms. As for the remaining compliance terms, pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to ensure compliance with the pipeline safety regulations applicable to its operations: 1. With respect to the violation of § 193.2625(a) (Item 1), Respondent must conduct an analysis of all metallic components within the LNG Plant and identify which metallic components could, unless corrosion is controlled, have their integrity or reliability adversely affected by external, internal, or atmospheric corrosion during their intended service life. The analysis must include consideration of potential internal or atmospheric corrosion threats for components that are not normally in service, such as the 1.5-inch galvanized foam line referred to in Item 1 of the Notice. 2. With respect to the violation of § 193.2625(b) (Item 2), Respondent must: A. Inspect and, if required, replace the components identified as a result of the analysis required by Item 1 above; and B. Include in CG's manual(s) of written procedures measures it will take to protect the components from corrosion in accordance with §§ 193.2627 through 193.2635, as applicable.#

220123003_Final Order_04222013.pdf, page 54 3. Complete Items 1 and 2 above within 60 days of receipt of this Order. 4. Provide written documentation to the Director demonstrating that Items 1 and 2 have been completed within 75 days of receipt of this Order. 5. It is requested (not mandated) that CC maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to the Director. It is requested that these costs be reported in two categories: (1) total cost associated with preparation or revision of plans, procedures, studies, and analyses; and (2) total cost associated with repairs, replacements, additions, and other changes to physical pipeline facilities. The Director may grant an extension of time to comply with any of the required items upon a extension. written request timely submitted by the Respondent and demonstrating good cause for an Failure to comply with this Order may result in administrative assessment of civil penalties not to exceed $100,000 for each violation for each day the violation continues or in referral to the Attorney General for appropriate relief in a district court of the United States. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. Sacre APR 22 2013 Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#