{"operation":"document","citation":"CPF 320111014","title":"KPC PIPELINE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-08-23","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.465(d), 192.476(c), 192.479(a), 192.481(a), 192.605(c)(4).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111014.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111014.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111014","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320111014","body":"Notice of Probable Violation involving KPC PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 192.465(d),  192.476(c),  192.479(a),  192.481(a),  192.605(c)(4). The case was opened on 2011-08-23 and is reported as closed as of 2016-05-30. Proposed civil penalty: $65,000. Assessed civil penalty: $65,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320111014_Closure Letter_05302016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Closure%20Letter_05302016.pdf\n\n320111014_Closure Letter_05302016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Closure%20Letter_05302016_text.pdf\n\n320111014_Decision on Petitions for Reconsideration_12052013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Decision%20on%20Petitions%20for%20Reconsideration_12052013.pdf\n\n320111014_Decision on Petitions for Reconsideration_12052013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Decision%20on%20Petitions%20for%20Reconsideration_12052013_text.pdf\n\n320111014_Final Order_06102013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Final%20Order_06102013.pdf\n\n320111014_Final Order_06102013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Final%20Order_06102013_text.pdf\n\n320111014_NOPV PCP PCO_08232011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_NOPV%20PCP%20PCO_08232011.pdf\n\n320111014_NOPV PCP PCO_08232011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_NOPV%20PCP%20PCO_08232011_text.pdf\n\n320111014_Operator Response and Request Time Extension_10112011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Operator%20Response%20and%20Request%20Time%20Extension_10112011.pdf\n\n320111014_Operator Response to Notice_12012011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Operator%20Response%20to%20Notice_12012011.pdf\n\n320111014_Petition for  Reconsideration_06282013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Petition%20for%20%20Reconsideration_06282013.pdf\n\n320111014_Petition for Reconsideration_07032013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111014/320111014_Petition%20for%20Reconsideration_07032013.pdf\n\n320111014_Final Order_06102013_text.pdf\n\nJUNE 10, 2013\nMr. Terry W. Carter, CEO\nPostRock Energy Corporation\n210 Park Ave #2750\nOklahoma City, Oklahoma 73102\nMr. Gary Navarro, President\nMV Purchasing, LLC\n8301 East 21st Street, Suite 370\nWichita, Kansas 67206\nRe: CPF No. 3-2011-1014\nGentlemen:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $65,000 against PostRock Energy Corporation, and specifies\nactions that need to be taken by MV Purchasing, LLC, the new owner of PostRock’s facilities, to\ncomply with the pipeline safety regulations. When the civil penalty has been paid and the terms\nof the compliance order completed, as determined by the Director, Central Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. David Barrett, Central Region Director, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL - RETURN 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____________________________________\n)\nIn the Matter of )\n)\nPostRock Energy Corporation, ) CPF No. 3-2011-1014\nf/d/b/a PostRock KPC Pipeline, LLC, )\n)\nRespondent, )\n)\nand )\n)\nMV Purchasing, LLC. )\n____________________________________)\nFINAL ORDER\nOn October 18-22, 25-28, and November 2-5, 2010, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of PostRock KPC Pipeline, LLC, a subsidiary of PostRock Energy Corporation\n(PostRock or Respondent), in Olathe, Kansas. As of the date of the OPS inspection, PostRock\noperated a 1,120-mile interstate pipeline transporting natural gas from northern Oklahoma and\nwestern Kansas to Wichita and Kansas City. In late 2012, the pipeline was sold and is now\noperated by MV Purchasing, LLC, a privately owned energy logistics company offering various\nenergy services to oil and gas producers and petroleum refiners throughout the United States.1\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated August 23, 2011, a Notice of Probable Violation and Proposed Compliance Order\n(Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with\n49 C.F.R. § 190.207, the Notice proposed finding that PostRock had committed various\nviolations of 49 C.F.R. Part 192, assessing a civil penalty of $65,000, and ordering Respondent\nto take certain measures to correct the alleged violations. The warning item required no further\naction, but warned the operator to correct the probable violation or face possible enforcement\naction.\nPostRock responded to the Notice by letter dated December 1, 2011 (Response). Respondent did\n1 MV Purchasing, LLC, by letter dated November 12, 2010, informed PHMSA that it had purchased PostRock in\nOctober 2012. See http://www.pstr.com/ and http://www.mvpurchasing.com/news//view/4 (last accessed May 16,\n2013).\n\n\n\n2\nnot contest the allegations of violation but provided an explanation of its actions and requested\nthat the proposed civil penalty be reduced and the proposed compliance order be modified.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nIn its Response, PostRock did not contest the allegations in the Notice that it violated\n49 C.F.R. Part 192, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.465(d), which states:\n§ 192.465 External corrosion control: Monitoring.\n(a) Each pipeline that is under cathodic protection must be tested at\nleast once each calendar year, but with intervals not exceeding 15 months,\nto determine whether the cathodic protection meets the requirements of §\n192.463…\n(d) Each operator shall take prompt remedial action to correct any\ndeficiencies indicated by the monitoring.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.465(d) by failing to take prompt\nremedial action to correct deficiencies indicated by annual corrosion control monitoring.\nSpecifically, the Notice alleged that during its inspection, PHMSA discovered that between\ncalendar years 2006 and 2010 there were 12 test station locations on PostRock’s 8-inch P-80\npipeline that were either damaged or exhibited cathodic protection readings not meeting the\nminimum voltage criteria found in Appendix D to Part 192. Section 192.463 requires that each\ncathodic protection system required by this subpart must provide a level of cathodic protection\nthat complies with one or more of the applicable criteria contained in Appendix D. The Notice\nalleged that the deficiencies remained uncorrected on one or more subsequent annual\ninspections.\nRespondent did not contest this allegation of violation but noted that seven of the 12 deficiencies\noccurred prior to PostRock’s acquisition of line P-80 in 2007 and that its corrosion monitoring\nwork was actually performed by another operator having two other pipelines in the same right-\nof-way. PostRock, however, has a responsibility to correct external corrosion deficiencies if\nsuch problems are indicated at any time during its ownership and operation of the pipeline, and\nthat it bears such a responsibility regardless of what company or contractor is actually\nperforming the work on behalf of PostRock. Accordingly, based upon a review of all of the\nevidence, I find that Respondent violated 49 C.F.R. § 192.465(d) by failing to take prompt\nremedial action to correct deficiencies indicated by annual corrosion control monitoring.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.481(a), which states:\n\n\n\n3\n§ 192.481 Atmospheric corrosion control: Monitoring.\n(a) Each operator must inspect each pipeline or portion of pipeline\nthat is exposed to the atmosphere for evidence of atmospheric corrosion,\nas follows:\nIf the pipeline is located: Then the frequency of\ninspection is:\nOnshore\nAt least once every 3 calendar\nyears, but with intervals not\nexceeding 39 months. . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.481(a) by failing to perform\natmospheric corrosion inspections for onshore pipelines exposed to the atmosphere, within the\n39-month maximum interval. Specifically, the Notice alleged that PostRock did not perform\natmospheric corrosion inspections on 82 valves and 66 pipe spans exposed to the atmosphere\nwithin the 39-month maximum interval.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.481(a) by failing to perform\natmospheric corrosion inspections for onshore pipelines exposed to the atmosphere within the\n39-month maximum interval.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.479(a), which states:\n§ 192.479 Atmospheric corrosion control: General.\n(a) Each operator must clean and coat each pipeline or portion of\npipeline that is exposed to the atmosphere, except pipelines under\nparagraph (c) of this section.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.479(a) by failing to clean and coat\neach pipeline or portion of pipeline that is exposed to the atmosphere, except as otherwise\nprovided under paragraph (c) of § 192.479. Specifically, the Notice alleged that Respondent did\nnot coat exposed pipe at four creek crossings (MP 179 on the P-40 pipeline, MP 190 on the P-30\npipeline, MP 319 on the P-50 pipeline, and MP 104 on the P-20 pipeline) with a suitable material\nto prevent atmospheric corrosion.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.479(a) by failing to clean and\ncoat each pipeline or portion of pipeline that is exposed to the atmosphere, except as otherwise\nprovided under paragraph (c) of § 192.479.\n\n\n\n4\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 192.605, which states, in\nrelevant part:\n§ 192.605 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each\npipeline, a manual of written procedures for conducting operations and\nmaintenance activities and for emergency response. For transmission lines,\nthe manual must also include procedures for handling abnormal\noperations. This manual must be reviewed and updated by the operator at\nintervals not exceeding 15 months, but at least once each calendar year.\nThis manual must be prepared before operations of a pipeline system\ncommence. Appropriate parts of the manual must be kept at locations\nwhere operations and maintenance activities are conducted. . .\n(c) Abnormal operation. For transmission lines, the manual required\nby paragraph (a) of this section must include procedures for the following\nto provide safety when operating design limits have been exceeded: . . .\n(4) Periodically reviewing the response of operator personnel to\ndetermine the effectiveness of the procedures controlling abnormal\noperation and taking corrective action where deficiencies are found.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.605(c)(4) by failing to prepare and\nfollow a manual of written procedures for conducting operations and maintenance activities and\nfor emergency response. Specifically, it alleged that PostRock failed to prepare and follow\nwritten procedures for periodically reviewing the response of its personnel to determine the\neffectiveness of its procedures for abnormal operations and taking corrective action where\ndeficiencies were found. Specifically, the Notice alleged that PostRock had instances of\nunintended activations of emergency compressor shutdowns that PostRock did not regard as\nabnormal operations as long as the pipeline did not exceed the maximum allowable operating\npressure (MAOP).\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 192.605(c)(4) by failing to prepare\nand follow a manual of written procedures for conducting operations and maintenance activities\nand for emergency response.\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$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\n\n\n\n5\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $65,000 for the violations cited above.\nRespondent requested that the proposed penalties for Items 1 and 3 be reduced because all or a\nportion of the alleged violations occurred prior to its ownership of the P-80 pipeline and because\nthe corrosion monitoring work had been performed by an operator other than PostRock.\nHowever, as discussed above, such circumstances do not negate an operator’s responsibility to\ncomply with the pipeline safety regulations at all times it actually owns or operates a pipeline or\nto ensure that all work performed by contractors is done properly and in a timely manner. For\nthese reasons, I see no basis to reduce either penalty.\nItem 1: The Notice proposed a civil penalty of $28,900 for Respondent’s violation of\n49 C.F.R. § 192.465(d), for failing to take prompt remedial action to correct deficiencies\nindicated by annual corrosion control monitoring. Respondent did not contest the allegation but\nrequested a penalty reduction. Section 192.465 is intended to minimize the risk of external\ncorrosion that can cause failures and injuries to people and the environment, by requiring\noperators to take prompt and effective action to address integrity threats. Accordingly, having\nreviewed the record and considered the assessment criteria, as discussed above, I assess\nRespondent a civil penalty of $28,900 for violation of 49 C.F.R. § 192.465(d).\nItem 3: The Notice proposed a civil penalty of $22,700 for Respondent’s violation of\n49 C.F.R. § 192.481(a), for failing to perform, within the 39-month maximum interval,\natmospheric corrosion inspections on each pipeline exposed to the atmosphere. Respondent did\nnot contest the allegation but requested a penalty reduction. Operators are required to inspect\ntheir pipelines for atmospheric corrosion to prevent pipe failures that could cause injury to\npeople, property, or the environment. Accordingly, having reviewed the record and considered\nthe assessment criteria, as discussed above, I assess Respondent a civil penalty of $22,700 for\nviolation of 49 C.F.R. § 192.481(a).\nItem 4: The Notice proposed a civil penalty of $13,400 for Respondent’s violation of\n49 C.F.R. § 192.479(a), for failing to clean and coat each pipeline or portion of pipeline that is\nexposed to the atmosphere, unless excepted under paragraph (c) of § 192.479. Respondent did\nnot contest the allegation. Proper cleaning and coating of each pipeline is vital to preventing and\ncontrolling corrosion and ensuring safe operation of the pipeline. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $13,400\nfor violation of 49 C.F.R. § 192.479(a).\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 $65,000.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n\n\n\n6\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $65,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 3, 4, and 5 in the Notice for\nviolations of 49 C.F.R. §§ 192.465, 192.481, 192.479, and 192.605, respectively. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or\noperates a pipeline facility is required to comply with the applicable safety standards established\nunder chapter 601. The Director has indicated that Respondent has taken the following\ncorrective actions:\n1. Item 1 – The Proposed Compliance Order required that PostRock identify and\nrepair all broken test stations, and remediate known deficiencies in cathodic\nprotection voltage criteria found through its annual corrosion control monitoring\nprogram. PostRock provided evidence that it had identified and repaired all\nbroken test stations and remediated all known deficiencies.\n2. Item 4 – A portion of the Proposed Compliance Order required that Respondent\nassess the integrity of the pipe at the four locations outlined in Item 4, make\nnecessary repairs, clean and coat the pipe at each location, and furnish PHMSA\nwith a report on the completed actions. PostRock provided evidence that it had\nassessed the integrity of the four locations cited in Notice and made the necessary\nrepairs.\n3. Item 5 – The Proposed Compliance Order required that Respondent establish and\nmaintain a specific record or log, in accordance with its operating procedures to\ndocument abnormal operations. PostRock provided evidence that it had\nestablished and maintained such a log. This addresses a portion of the proposed\ncompliance terms for Item 5 of the Notice.\nAccordingly, I find that compliance has been achieved with respect to Item 1 and portions of\nItems 4 and 5 of the Notice. Therefore, the compliance terms proposed for these Items are not\nincluded in this Order.\n\n\n\n7\nAs for the remaining compliance terms, MV Purchasing, LLC, is expected to take the following\nactions to ensure compliance with the pipeline safety regulations applicable to its operations.\nUpon the request of Respondent and pursuant to the authority of 49 U.S.C. § 60118(b) and\n49 C.F.R. § 190.217: PHMSA requests MV Purchasing, LLC, to take the following actions:\n1. With respect to the violations of §§ 192.481(a) and 192.479(a) (Items 3 and 4),\nMV Purchasing, LLC, must establish a plan to identify, inspect, and perform\nnecessary repairs to all creek crossings, spans, and pipe exposed by soil erosion,\naccording to a prioritized schedule. The operator must furnish a copy of the plan to\nthe Director for review and must complete all such work by January 31, 2014.\n2. With respect to the violation of § 192.605(c)(4) (Item 5), MV Purchasing, LLC,\nmust:\ni. Make modifications to its Operations and Maintenance procedures so that\nit is clear that exceeding “operating design limits” applies to all applicable\nsystem design parameters, including unintended emergency shutdowns\nand any other mechanical or electrical parameters associated with\n§ 192.605(c)(1)(i) through (v). The procedures must make clear that\nexceeding MAOP is not the sole criteria for determining when abnormal\noperations have occurred.\nii. Identify five types of abnormal operations specific to its compressor\nstations and conduct training and testing for all operations personnel and\nsubmit copies of the related records to the Director.\niii. Upon the issuance of this Final Order and continuing until the case is\nclosed, MY Purchasing, LLC, must provide semi-annual reports to the\nDirector, describing any significant abnormal operations that have\noccurred and how they have been resolved.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\nto exceed $100,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of 49 C.F.R. Part 192 but did not\npropose a civil penalty or compliance order for this item. Therefore, this is considered to be\nwarning item. The warning was for:\n49 C.F.R. § 192.476(c) (Item 2) ─ Respondent’s alleged failure to evaluate the\nimpact of change on internal corrosion risk to its pipeline upon the proposed\nreconfiguration of its P-100, P-110, P-30 and P-40 lines.\n\n\n\n8\nIf OPS finds a violation of this provision in a subsequent inspection, MV Purchasing, LLC, may\nbe subject to future enforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of this Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all\nother terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n320111014_Closure Letter_05302016_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMay 30, 2016\nMr. Lee Bullock\nPresident\nKPC Pipeline, LLC\n19970 West 161st Street\nOlathe, Kansas 66062\nRe: CPF 3-2011-1014\nDear Mr. Bullock:\nOn June 10, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to KPC Pipeline, LLC, formerly PostRock Energy Corporation, a Final Order in the\nabove-referenced case. This Order included a Compliance Order and Civil Penalty assessment.\nBased on our review of the documentation you provided and confirmation of payment of the\ncivil penalty, it has been determined that you have complied with the terms of this 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,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\ncc: Mr. Terry W. Carter\nMr. Gary Navarro\n\n320111014_NOPV PCP PCO_08232011_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nAugust 23, 2011\nMr. Tom Saunders\nPostRock (KPC) Pipeline, LLC\n9520 North May Avenue\nSuite 300\nOklahoma City, Oklahoma 73120\nDear Mr. Saunders: CPF 3-2011-1014\nOn October 18-22, 25-28, and November 2-5, 2010, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49\nUnited States Code inspected your records and facilities in Olathe, Kansas.\nAs a result of the inspection, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected\nand the probable violations are:\n1. §192.465 External corrosion control: Monitoring.\n(d) Each operator shall take prompt remedial action to correct any\ndeficiencies indicated by the monitoring.\nPostRock did not take prompt remedial action to correct deficiencies indicated by\nannual corrosion control monitoring. PHMSA discovered during the records\nreview that between the 2006 and 2010 calendar years there were 12 test station\nlocations on PostRock’s 8-inch P-80 pipeline that were either damaged or exhibited\ncathodic protection readings that did not meet minimum voltage criteria found in\nAppendix B to Part 192. These deficiencies remained uncorrected on one or more\nsubsequent annual inspections as shown by the table below.\n\n\n\nMilepost Deficiency Subsequent annual\ninspections remaining\nuncorrected\n105 38+52 low cathodic potentials 2 years (2009-2010)\n130 01+45 low cathodic potentials 1 year (2009)\n140 10+23 low cathodic potentials 3 years (2008-2010)\n141 15+82 low cathodic potentials 3 years (2008-2010)\n255 18+25 broken test station 4 years (2007-2010)\n291 06+28 broken test station 1 year (2006)\n296 40+88 low cathodic potentials 1 year (2006)\n297 23+80 broken test station 1 year (2006)\n299 20+95 low cathodic potentials 1 year (2007)\n301 15+27 broken test station 1 year (2006)\n302 45+34 broken test station 1 year (2006)\n354 37+15 broken test station 1 year (2007)\n2. §192.476 Internal corrosion control: Design and construction of transmission\nline.\n(c) Change to existing transmission line. When an operator changes the\nconfiguration of a transmission line, the operator must evaluate the impact of\nthe change on internal corrosion risk to the downstream portion of an existing\nonshore transmission line and provide for removal of liquids and monitoring\nof internal corrosion as appropriate.\nPostRock did not perform an evaluation of the impact of reconfiguring its P-100,\nP-110, P-30, and P-40 pipelines prior to placing the pipelines into service for\nbidirectional flow. PHMSA discovered during the records inspection that\nPostRock had reconfigured the pipelines for reverse flow in September, 2010;\nhowever, no evaluation had been initiated. Subsequent to the inspection, PostRock\nagreed to perform additional internal corrosion monitoring.\n3. §192.481 Atmospheric corrosion control: Monitoring.\n(a) Each operator must inspect each pipeline or portion of pipeline that is\nexposed to the atmosphere for evidence of atmospheric corrosion, as follows:\nIf the pipeline is located: Then the frequency of inspection is:\nOnshore…………………. At least once every 3 calendar years, but\nwith intervals not exceeding 39 months\nOffshore…………………. At least once each calendar year, but with\nintervals not exceeding 15 months\n2\n\n\n\nBetween the 2006 and 2010 calendar years (CY) PostRock did not perform\natmospheric corrosion inspections on 148 pipe locations exposed to the atmosphere\nwithin the 39 month maximum interval. PHMSA found during the records\ninspection that many atmospheric corrosion reports were missing. Subsequent to\nPHMSA’s inspection, PostRock provided an itemized log of completed\natmospheric corrosion inspections. The log showed that 82 valves and 66 pipe\nspans had not been inspected within the 3 CY frequency. Many inspections\nexceeded the 39 month maximum interval by 1 or more full years because they had\nlast been inspected in CY 2002, 2003, or 2004.\n4. §192.479 Atmospheric corrosion control; General.\n(a) Each operator must clean and coat each pipeline or portion of pipeline\nthat is exposed to the atmosphere, except pipelines under paragraph (c) of this\nsection.\nPostRock did not clean and coat four locations where its pipelines were exposed to\nthe atmosphere at creek crossings. PostRock did not perform tests or investigations\nto demonstrate that the atmospheric corrosion would not affect the safe operation of\nthe pipeline per the exception in §192.479(c). During the field verification the\nexposed pipe at four creek crossings were observed by PHMSA to be in a condition\nthat was not coated with a suitable material to prevent atmospheric corrosion. The\nfollowing locations were observed to have exhibited atmospheric corrosion: MP\n179 on the P-40 pipeline, MP 190 on the P-30 pipeline, MP 319 on the P-50\npipeline, and MP 104 on the P-20 pipeline.\n5. §192.605 Procedural manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline, a\nmanual of written procedures for conducting operations and maintenance\nactivities and for emergency response. For transmission lines, the manual\nmust also include procedures for handling abnormal operations.\n(c) Abnormal operation. For transmission lines, the manual required by\nparagraph (a) of this section must include procedures for the following to\nprovide safety when operating design limits have been exceeded:\n(4) Periodically reviewing the response of operator personnel to\ndetermine the effectiveness of the procedures controlling abnormal\noperation and taking corrective action where deficiencies are found.\n3\n\n\n\nPostRock did not conduct reviews of its abnormal operations. PostRock personnel\ninformed PHMSA during the records review that they did not have abnormal operations\nrecords or reviews because they never exceeded the pipeline “design limits.\n” However,\nduring the field inspection, PHMSA discovered recorded instances of unintended\nactivations of safety devices, such as emergency compressor shut downs (ESD’s). ESD’s\nare abnormal operations; however, PostRock personnel did not regard the ESD’s and other\nsafety device actuations as abnormal operations as long as the pipeline did not exceed\nmaximum allowable operating pressure (MAOP). Exceeding “operating design limits”\ndoes not exclusively mean exceeding MAOP/design pressure of pipe or pipeline system\ncomponents. Operating design limits include all control parameters, procedures, or\nsettings relevant to §192.605(c)(1).\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$100,000 for each violation for each day the violation persists up to a maximum of\n$1,000,000 for any related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violations\nand has recommended that you be preliminarily assessed a civil penalty of $65,000 as\nfollows:\nItem number PENALTY\n1 $28,900\n3 $22,700\n4 $13,400\nProposed Compliance Order\nWith respect to item numbers 1, 3, 4 and 5 pursuant to 49 United States Code § 60118, the\nPipeline and Hazardous Materials Safety Administration proposes to issue a Compliance\nOrder to PostRock (KPC) Pipeline, LLC. Please refer to the Proposed Compliance Order,\nwhich is enclosed and made a part of this Notice.\nWarning Items\nWith respect to item number 2 we have reviewed the circumstances and supporting\ndocuments involved in this case and have decided not to conduct additional enforcement\naction or penalty assessment proceedings at this time. We advise you to promptly correct\nthis item. Be advised that failure to do so may result in PostRock being subject to\nadditional enforcement action.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the\nresponse options. Be advised that all material you submit in response to this enforcement\n4\n\n\n\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\nthe complete original document you must provide a second copy of the document with the\nportions you believe qualify for confidential treatment redacted and an explanation of why\nyou believe the redacted information qualifies for confidential treatment under 5 U.S.C.\n552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a\nwaiver of your right to contest the allegations in this Notice and authorizes the Associate\nAdministrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 3-2011-1014 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n5\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to PostRock KPC Pipeline, LLC a Compliance\nOrder incorporating the following remedial requirements to ensure the compliance of\nPostRock KPC Pipeline, LLC with the pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to deficiencies in\ncorrosion control monitoring on its P-80 pipeline, PostRock must identify\nand repair all broken test stations, and remediate known deficiencies in\ncathodic protection voltage criteria found through the annual corrosion\ncontrol monitoring program.\nA plan to accomplish this Item shall be furnished to PHMSA within 30 days\nof issuance of the Final Order for approval by the Director, Central Region.\nPostRock must complete necessary repairs as delineated in the approved\nplan within 90 days of the director’s approval.\n2. In regard to Item Numbers 3 and 4 of the Notice pertaining to the\ndeficiencies in atmospheric corrosion monitoring and control, PostRock\nmust accomplish the following within 30 days of issuance of the Final\nOrder:\ni. Assess the integrity of the pipe at the four locations outlined in Item\n4 of the Notice, make necessary repairs, clean and coat the pipe at\neach location, and furnish to PHMSA a report of the completed\nactions.\nii. Establish a plan to identify, inspect, and perform necessary repairs\nto all creek crossings, spans, and pipe exposed by soil erosion\naccording to a 12-month prioritized schedule and furnish to the\nDirector, Central Region a copy of the plan for review.\n3. In regard to Item Number 5 of the Notice pertaining to PostRock’s failure to\nreview its abnormal operations, within 90 days of the issuance of the Final\nOrder PostRock must:\n6\n\n\n\ni. Make modifications to its Operations and Maintenance procedures\nso that it is clear that exceeding “operating design limits” applies to\nall applicable system design parameters, including unintended\nESD’s and any other mechanical or electrical parameters associated\nwith §192.605(c)(1)(i) through (v). The procedures must make it\nclear that exceeding MAOP is not the sole criteria for determining\nwhen abnormal operations have occurred. Establish and maintain a\nspecific record or log, in association with operating procedures, in\norder to document abnormal operations. Identify abnormal\noperations (based on the modified procedures) that have occurred\nwithin the 36 months prior to the issuance of the Final Order, and\nincorporate the related records into the log required by ii above.\nii. Perform a review of the personnel responses to the abnormal\noperations identified in the log required by ii and iii above in order\nto determine the effectiveness of procedures, and supply to the\nDirector, Central Region the results of the review. The results shall\ninclude a plan to take necessary corrective actions based on the\nfindings of the review.\niii. Hold training meetings as necessary so that the changes to abnormal\noperations procedures and documentation required by this Item are\nwell understood by all applicable personnel, and submit a roster of\nall personnel who received the training to the Director, Central\nRegion.\n4. It is requested (not mandated) that PostRock maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order\nand submit the total to David Barrett, Director, Central Region, Pipeline and\nHazardous Materials Safety Administration. It is requested that these costs\nbe reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2) total\ncost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n7\n\n320111014_Decision on Petitions for Reconsideration_12052013_text.pdf\n\nDECEMBER 5, 2013\nMr. Terry W. Carter, CEO\nPostRock Energy Corporation\n210 Park Ave #2750\nOklahoma City, Oklahoma 73102\nMr. Gary Navarro, President\nMV Purchasing, LLC\n8301 East 21st Street, Suite 370\nWichita, Kansas 67206\nRe: CPF No. 3-2011-1014\nGentlemen:\nEnclosed please find the Decision on Petitions for Reconsideration issued in the above-\nreferenced case. It grants the Petition for Reconsideration, in part, to the extent that PostRock\nEnergy Corporation requests to be removed as a party to this proceeding is granted. Further, the\njoint petition filed by MV Purchasing and KPC Pipeline, LLC is granted, in part, and denied in\npart. MV Purchasing’s petition for dismissal from the proceeding is granted. However, the\nrequest for a reduction of the civil penalties is denied. The Decision upholds the findings of\nviolation and the civil penalty set forth in the Final Order. Service of the Decision by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R.\n§ 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Linda Daugherty, Central Region Director, OPS\nCERTIFIED MAIL - RETURN 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____________________________________\n)\nIn the Matter of )\n)\nPostRock KPC Pipeline, LLC, ) CPF No. 3-2011-1014\nnow known as KPC Pipeline, LLC , )\n)\nRespondent. )\n___________________________________ )\nDECISION ON PETITIONS FOR RECONSIDERATION\nOn June 10, 2013, pursuant to 49 U.S.C. § 60122 and 49 C.F.R. § 190.213, the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), issued a\nFinal Order in this proceeding, finding that PostRock Energy Corporation (PostRock Energy)\ncommitted various violations of the Pipeline Safety Regulations in 49 C.F.R. Part 192. The Final\nOrder assessed a civil penalty of $65,000 and specified actions that needed to be taken by MV\nPurchasing, LLC (MV Purchasing), the current owner of the pipeline system, to comply with the\nPipeline Safety ","truncated":true,"body_characters":49904}