{"operation":"document","citation":"CPF 22024006NOPV","title":"BETA OFFSHORE — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2024-06-12","effective_on":null,"summary":"CLOSED notice of probable violation citing 199.105(b)(1), 199.225(a)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-22024006nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-22024006nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-22024006nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/22024006NOPV","body":"Notice of Probable Violation involving BETA OFFSHORE. PHMSA's enforcement data identifies the cited regulations as 199.105(b)(1),  199.225(a)(1). The case was opened on 2024-06-12 and is reported as closed as of 2024-11-01. Proposed civil penalty: $59,400. Assessed civil penalty: $59,400. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n22024006NOPV_Closure Letter_11012024_(24-302070).pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_Closure%20Letter_11012024_(24-302070).pdf\n\n22024006NOPV_Closure Letter_11012024_(24-302070)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_Closure%20Letter_11012024_(24-302070)_text.pdf\n\n22024006NOPV_Final Order_10252024_(24-302070).pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_Final%20Order_10252024_(24-302070).pdf\n\n22024006NOPV_Final Order_10252024_(24-302070)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_Final%20Order_10252024_(24-302070)_text.pdf\n\n22024006NOPV_Operator Response to Notice _08012024_(24-302070).pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_Operator%20Response%20to%20Notice%20_08012024_(24-302070).pdf\n\n22024006NOPV_PCP_06122024_(24-302070).pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_PCP_06122024_(24-302070).pdf\n\n22024006NOPV_PCP_06122024_(24-302070)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/22024006NOPV/22024006NOPV_PCP_06122024_(24-302070)_text.pdf\n\n22024006NOPV_Final Order_10252024_(24-302070)_text.pdf\n\nOctober 25, 2024\nVIA ELECTRONIC MAIL TO: martyn.willsher@amplifyenergy.com\nMartyn Willsher\nPresident and Chief Executive Officer\nAmplify Energy Corp.\n500 Dallas, Suite 1700\nHouston, Texas 77002\nRe: CPF No. 2-2024-006-NOPV\nDear Mr. Willsher:\nEnclosed please find the Final Order issued in the above-referenced case to Beta Offshore, a\nsubsidiary of Amplify Energy Corp. It makes findings of violations and assesses a civil penalty\nof $59,400. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. Service of the Final Order by e-mail is effective\nupon the date of transmission and acknowledgement of receipt as provided under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. James A. Urisko, Director, Southern Region, Office of Pipeline Safety, PHMSA\nMr. Daniel Furbee, Senior Vice President and Chief Operating Officer, Amplify Energy\nCorp., dan.furbee@amplifyenergy.com\n\n\n\nMr. Jeff Ortloff, Director of Facilities Engineering, Amplify Energy Corp.,\njeff.ortloff@amplifyenergy.com\nMr. Jason Moore, Vice President, Human Resources and Administration, Amplify\nEnergy Corp., jason.moore@amplifyenergy.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nBeta Operating Company, LLC, ) CPF No. 2-2024-006-NOPV\nd/b/a Beta Offshore, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 20 through March 21, 2024, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted a pipeline safety inspection of the facilities and records of Beta Offshore (Beta\nor Respondent) in Houston, Texas. PHMSA inspected Respondent’s Drug and Alcohol (D&A)\nprogram in relation to an October 1, 2021 accident (the Accident) that occurred on Beta’s crude\noil pipeline facility near Huntington Beach, California.\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated June 12, 2024, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nRespondent had committed two violations of 49 C.F.R. Part 199 and proposed assessing a civil\npenalty of $59,400 for the alleged violations.\nAmplify Energy Corp. responded to the Notice on behalf of Beta by letter dated August 1, 2024\n(Response).\n1 In its Response, Respondent did not contest the allegations of violation or the\nproposed civil penalty. However, Respondent did contest one of the statements of fact in the\nnarratives of Items 1 and 2 in the Notice. Respondent did not request a hearing and therefore has\nwaived its right to one.\nFINDINGS OF VIOLATION\nIn its Response, Respondent did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 199, as follows:\n1 Beta is a subsidiary of Amplify Energy Corp. See, Letter from Jason Moore, V.P., H.R & Admin., Amplify\nEnergy Corp., on behalf of Beta Offshore, to James A. Urisko, Southern Region Dir., PHMSA, RE: CPF 2-2024-\n006-NOPV (Aug. 1, 2024) (on file with PHMSA) [hereinafter Response].\n\n\n\nItem 1. The Notice alleged that Respondent violated 49 C.F.R. § 199.105(b)(1), which states:\n§ 199.105 Drug tests required.\n(a) .…\n(b) Post-accident testing.\n(1) As soon as possible but no later than 32 hours after an accident, an\noperator must drug test each surviving covered employee whose\nperformance of a covered function either contributed to the accident or\ncannot be completely discounted as a contributing factor to the accident. An\noperator may decide not to test under this paragraph but such a decision\nmust be based on specific information that the covered employee's\nperformance had no role in the cause(s) or severity of the accident.\nThe Notice alleged that Respondent violated 49 C.F.R. § 199.105(b)(1) by failing to drug test for\nthe presence of a prohibited drug, as soon as possible but no later than 32 hours after an accident,\neach surviving covered employee whose performance of a covered function either contributed to\nthe Accident or cannot be completely discounted as a contributing factor to the Accident.\nSpecifically, Beta did not conduct any post-accident drug testing on any covered employees after\nthe Accident.\nRespondent did not contest the alleged violation or the accompanying civil penalty. However,\nRespondent did contest one of the statements in the Notice’s narrative for Item 1 and requested\nPHMSA clarification of such in this Final Order.2 The statement at issue in the Notice quotes\nthe National Transportation Safety Board (NTSB) report3 addressing the Accident, explaining\nthat “[a]ccording to the NTSB report, ‘pipeline controllers contributed to the 14-hour delay in\nstopping the pipeline’s shipping pumps, which consequently increased the volume of crude oil\nreleased, following the first leak alarm.’”4 Respondent states that “[t]his statement in isolation\nsuggests that Beta never shut off the pumps over the course of 14 hours . . . the NTSB report\nmakes it clear that Beta did not run the pumps that entire time.”5 Respondent requested PHMSA\nclarify in this Final Order “that Beta did not run the pumps for 14 hours after the first alarm\nindications, and instead shut down and restarted the pipeline several times as part of its efforts to\nattempt to determine the cause of the alarm.”6\nI acknowledge Beta’s statements that during the Accident its personnel stopped the pumps at\ndifferent junctures and attempted to determine the cause of the alarms, as is reflected in the\n2 See Response, at 1-2.\n3 NTSB Report MIR-24-01 (Jan. 2, 2024), available at\nhttps://www.ntsb.gov/investigations/AccidentReports/Reports/MIR2401.pdf.\n4 Id., at 6.\n5 Response, at 2.\n6 Id., at 3.\n\n\n\nNTSB report.7 However, that acknowledgment does not affect the allegation in Item 1 of the\nNotice. I note the statement PHMSA quoted from in the NTSB report in Item 1 reflects NTSB’s\nconclusion in relation to controller training that their actions contributed to the amount of crude\noil released. That statement supports the allegation in Item 1 that these employees should have\nbeen subject to post-accident drug testing under § 199.105, and Beta also did not prepare and\nmaintain a decision stating the reasons why the testing was not conducted as required.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 199.105(b)(1) by failing to drug test each surviving covered employee whose performance of a\ncovered function either contributed to the Accident or could not be completely discounted as a\ncontributing factor to the Accident.\nItem 2. The Notice alleged that Respondent violated 49 C.F.R. § 199.225(a)(1), which states:\n§ 199.225 Alcohol tests required.\nEach operator must conduct the following types of alcohol tests for\nthe presence of alcohol:\n(a) Post-accident.\n(1) As soon as practicable following an accident, each operator must\ntest each surviving covered employee for alcohol if that employee's\nperformance of a covered function either contributed to the accident or\ncannot be completely discounted as a contributing factor to the accident.\nThe decision not to administer a test under this section must be based on\nspecific information that the covered employee's performance had no role\nin the cause(s) or severity of the accident.\nThe Notice alleged that Respondent violated § 199.225(a)(1) failed to test for the presence of\nalcohol, as soon as practicable following an accident, each surviving covered employee whose\nperformance of a covered function either contributed to the Accident or cannot be completely\ndiscounted as a contributing factor to the Accident. Specifically, the Notice alleged that\nRespondent failed to conduct any alcohol testing on any covered employees following the\nAccident.\nRespondent did not contest the alleged violation in Item 2 or the proposed civil penalty.\nHowever, Respondent did contest one of the statements of fact in the narrative of the allegations\nfor Item 2.\n8 The statement at issue is the same statement discussed above, “[a]ccording to the\nNTSB report, ‘pipeline controllers contributed to the 14-hour delay in stopping the pipeline’s\nshipping pumps, which consequently increased the volume of crude oil released, following the\nfirst leak alarm.’”9 Respondent requested PHMSA clarify in this Final Order that “Beta did not\n7 NTSB Report MIR-24-01, at 1, 4-7.\n8 See Response, at 1-2.\n9 NTSB Report MIR-24-01, at 6.\n\n\n\nrun the pumps for 14 hours after the first alarm indications, and instead shut down and restarted\nthe pipeline several times as part of its efforts to attempt to determine the cause of the alarm.”10\nConsistent with Item 1 above, I acknowledge Beta’s statements that during the Accident its\npersonnel stopped the pumps at different junctures and attempted to determine the cause of the\nalarms, as is reflected in the NTSB report.11 However, that acknowledgment does not affect the\nallegation in Item 2 of the Notice. I note the statement PHMSA quoted from in the NTSB report\nin Item 2 reflects NTSB’s conclusion in relation to controller training that their actions\ncontributed to the amount of crude oil released. That statement supports the allegation in Item 2\nthat these employees should have been subject to post-accident alcohol testing under § 199.225,\nand Beta also did not prepare and maintain its decision stating the reasons why the testing was\nnot conducted as required.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 199.225(a)(1) by failing to conduct alcohol testing each surviving covered employee for\nalcohol if that employee's performance of a covered function either contributed to the Accident\nor cannot be completely discounted as a contributing factor to the Accident.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.12\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $59,400 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $29,700 for Respondent’s violation of 49 C.F.R.\n§ 199.105(b)(1) for failing to drug test each surviving covered employee whose performance of a\ncovered function either contributed to the Accident or could not be completely discounted as a\n10 Response, at 2.\n11 Id., at 1, 4-7.\n12 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\ncontributing factor to the Accident. Respondent did not contest the alleged violation or the\nproposed civil penalty, and did not present any information justifying a reduction in or\nelimination of the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $29,700 for violation of 49 C.F.R.\n§ 199.105(b)(1).\nItem 2: The Notice proposed a civil penalty of $29,700 for Respondent’s violation of 49 C.F.R.\n§ 199.225(a)(1) for failing to conduct alcohol testing each surviving covered employee for\nalcohol if that employee's performance of a covered function either contributed to the Accident\nor cannot be completely discounted as a contributing factor to the Accident. Respondent did not\ncontest the alleged violation or proposed civil penalty, and did not present any information\njustifying a reduction in or elimination of the proposed penalty. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $29,700\nfor violation of 49 C.F.R. § 199.225(a)(1).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $59,400.\nFailure to pay the civil penalty will result in accrual of interest at the current annual rate in\naccordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those\nsame authorities, a late penalty charge of six percent (6%) per annum will be charged if payment\nis not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in\nreferral of the matter to the Attorney General for appropriate action in a district court of the\nUnited States.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nbrief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing\nof a petition automatically stays the payment of any civil penalty assessed. The other terms of\nthe order, including any corrective action, remain in effect unless the Associate Administrator,\nupon request, grants a stay. If Respondent submits payment of the civil penalty, the Final Order\nbecomes the final administrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nOctober 25, 2024\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n22024006NOPV_Closure Letter_11012024_(24-302070)_text.pdf\n\nVIA ELECTRONIC MAIL TO: Brent.Chalmers@amplifyenergy.com;\nJeff.Ortloff@amplifyenergy.com; martyn.willsher@amplifyenergy.com\nNovember 1, 2024\nMartyn Willsher\nPresident and Chief Executive Officer\nAmplify Energy Corp.\n500 Dallas, Suite 1700\nHouston, Texas 77002\nRe: CPF No. 2-2024-006-NOPV\nDear Mr. Willsher:\nOn October 25, 2024, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Beta Operations a Final Order in the above-referenced case. This Order included a\nrequirement to pay the proposed civil penalty. Based on our records and the receipt of payment,\nit has been determined that you have complied with the terms of this Final Order.\nAccordingly, this case is now closed, and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nJames A. Urisko\nDirector, Southern Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":17442}