GAS RECOVERY SYSTEMS, LLC — Notice of Probable Violation

party submissionOfficial PDF320111015_Operator Response to Notice_11172011.pdf#

320111015_NOPV PCP PCO_10202011_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED October 20, 2011 Mr. Anthony J. Falbo Vice President / General Manager Fortistar Company / Gas Recovery Systems, LLC 5087 Junction Road Lockport, New York 14094 CPF 3-2011-1015 Dear Mr. Falbo: On June 7-8, 2011, a representative of the Ohio Public Utilities Commission (OH-PUC) acting as an inter-state agent for the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected your records and facilities for Gas Recovery Systems, LLC in Toledo, OH. As a result of the inspection, it appears that you have committed a probable violation of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The item inspected and the probable violation is:#

320111015_NOPV PCP PCO_10202011_text.pdf, page 21. §192.616 Public Awareness (a) Except for an operator of a master meter or petroleum gas system covered under paragraph (j) of this section, each pipeline operator must develop and implement a written continuing public education program that follows the guidance provided in the American Petroleum Institute's (API) Recommended Practice (RP) 1162 (incorporated by reference, see § 192.7). (b) The operator's program must follow the general program recommendations of API RP 1162 and assess the unique attributes and characteristics of the operator's pipeline and facilities. (c) The operator must follow the general program recommendations, including baseline and supplemental requirements of API RP 1162, unless the operator provides justification in its program or procedural manual as to why compliance with all or certain provisions of the recommended practice is not practicable and not necessary for safety. (d) The operator's program must specifically include provisions to educate the public, appropriate government organizations, and persons engaged in excavation related activities on: (1) Use of a one-call notification system prior to excavation and other damage prevention activities; (2) Possible hazards associated with unintended releases from a gas pipeline facility; (3) Physical indications that such a release may have occurred; (4) Steps that should be taken for public safety in the event of a gas pipeline release; and (5) Procedures for reporting such an event. (e) The program must include activities to advise affected municipalities, school districts, businesses, and residents of pipeline facility locations. (f) The program and the media used must be as comprehensive as necessary to reach all areas in which the operator transports gas. (g) The program must be conducted in English and in other languages commonly understood by a significant number and concentration of the non-English speaking population in the operator's area. 2#

320111015_NOPV PCP PCO_10202011_text.pdf, page 3(h) Operators in existence on June 20, 2005, must have completed their written programs no later than June 20, 2006. The operator of a master meter or petroleum gas system covered under paragraph (j) of this section must complete development of its written procedure by June 13, 2008. Upon request, operators must submit their completed programs to PHMSA or, in the case of an intrastate pipeline facility operator, the appropriate State agency. (i) The operator's program documentation and evaluation results must be available for periodic review by appropriate regulatory agencies. Gas Recovery Systems LLC (GRS) did not develop and implement a written continuing public education program as required by §192.616 that followed the guidance provided in the American Petroleum Institute's (API) Recommended Practice (RP) 1162. GRS was required to have a public awareness plan by June 20, 2006. As of the standard inspection in June 2011, there was no plan and no records showing the identification of stakeholders, the implementation of required baseline measures, the annual implementation review and the four year effectiveness evaluation of the plan. GRS did not provide the required notifications to the four stakeholder audiences within the pipeline facilities to inform them of the characteristics and hazards of landfill gas. Additionally, there was no notification and education of the public and appropriate government organizations on how to recognize and react to possible pipeline incidents. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of $1,000,000 for any related series of violations. The Compliance Officer has reviewed the circumstances and supporting documentation involved in the above probable violation and has recommended that you be preliminarily assessed a civil penalty of $27,800. Proposed Compliance Order With respect to item one pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to Gas Recovery Systems, LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance Proceedings. Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is 3#

320111015_NOPV PCP PCO_10202011_text.pdf, page 4subject to being made publicly available. If you believe that any portion of your responsive material qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation of why you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 3-2011-1015 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, David Barrett Director, Central Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings 4#

320111015_NOPV PCP PCO_10202011_text.pdf, page 5PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Gas Recovery Systems, LLC a Compliance Order incorporating the following remedial requirements to ensure the compliance of Gas Recovery Systems, LLC with the pipeline safety regulations: 1. In regard to Item Number One of the Notice pertaining to the Public Awareness Plan, Gas Recovery Systems, LLC must develop and implement a Public Awareness Plan in accordance to §192.616. 2. The Public Awareness Plan must be completed and submitted to the Central Region Director and the Pipeline Safety Program Manager of the Ohio Public Utilities Commission within 30 days of the receipt of the Final Order. Additionally, the Plan must be implemented immediately upon completion. Gas Recovery Systems, LLC will submit quarterly reports to the Central Region Director and the Pipeline Safety Program Manager of the Ohio Public Utilities Commission detailing the progress of the implementation for a period of 365 days after the implementation of the program. 3. It is requested (not mandated) that Gas Recovery Systems, LLC maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to David Barrett, Director, Central Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 5#

320111015_Closure_12102014_text.pdf, page 1Official PDFCERTIFIED MAIL - RETURN RECEIPT REQUESTED December 10, 2014 Mr. Mark Comora President Gas Recovery Systems, LLC One North Lexington Avenue White Plains, New York 10601 CPF 3-2011-1015 Dear: Mr. Comora On October 18, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued to Gas Recovery Systems, LLC a Final Order in the above-referenced case. This Order included a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you provided and confirmation of payment of the civil penalty, it has been determined that you have complied with the terms of this Order. Accordingly, this case is now closed and no further action is contemplated with respect to the matters involved in this case. Thank you for your cooperation in this matter. Sincerely, Allan C. Beshore Director, Central Region Pipeline and Hazardous Materials Safety Administration#

320111015_Final Order_10182012_text.pdf, page 1Official PDFOCTOBER 18, 2012 Mr. Mark Comora President Gas Recovery Systems, LLC One North Lexington Avenue White Plains, New York 10601 Re: CPF No. 3-2011-1015 Dear Mr. Comora: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation, assesses a civil penalty of $27,800, and specifies actions that need to be taken by Gas Recovery Systems, LLC, to comply with the pipeline safety regulations. The penalty payment terms are set forth in the Final Order. When the civil penalty has been paid and the terms of the compliance order completed, as determined by the Director, Central 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. David Barrett, Central Region Director, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS Mr. Anthony J. Falbo, Senior Vice President – Operations, Gas Recovery Systems, LLC, 5087 Junction Road, Lockport, New York 14094 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

320111015_Final Order_10182012_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 ) ) Gas Recovery Systems, LLC, ) CPF No. 3-2011-1015 ) ) Respondent. ) ____________________________________) FINAL ORDER On June 7-8, 2011, pursuant to 49 U.S.C. § 60117, a representative of the Ohio Public Utilities Commission (OH-PUC), acting as interstate agent for 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 Gas Recovery Systems, LLC (GRS), in Toledo, Ohio. GRS, a subsidiary of Fortistar, LLC, operates a group of renewable energy gas projects, including a 3.2-mile pipeline that transports methane from a landfill in Ohio to a General Motors facility.1 As a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent, by letter dated October 20, 2011, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that GRS had violated 49 C.F.R. § 192.616, and proposed assessing a civil penalty of $27,800 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. FINDING OF VIOLATION The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.616, which states, in relevant part: § 192.616 Public awareness. (a) Except for an operator of a master meter or petroleum gas system covered under paragraph (j) of this section, each pipeline operator must 1 Fortistar, LLC home page, http://www.fortistar.com/default.aspx (last visited Sept. 20, 2012).#

320111015_Final Order_10182012_text.pdf, page 32 develop and implement a written continuing public education program that follows the guidance provided in the American Petroleum Institute's (API) Recommended Practice (RP) 1162 (incorporated by reference, see § 192.7). (b) The operator's program must follow the general program recommendations of API RP 1162 and assess the unique attributes and characteristics of the operator's pipeline and facilities. (c) The operator must follow the general program recommendations, including baseline and supplemental requirements of API RP 1162, unless the operator provides justification in its program or procedural manual as to why compliance with all or certain provisions of the recommended practice is not practicable and not necessary for safety. (d) The operator's program must specifically include provisions to educate the public, appropriate government organizations, and persons engaged in excavation related activities on: (1) Use of a one-call notification system prior to excavation and other damage prevention activities; (2) Possible hazards associated with unintended releases from a gas pipeline facility; (3) Physical indications that such a release may have occurred; (4) Steps that should be taken for public safety in the event of a gas pipeline release; and (5) Procedures for reporting such an event. (e) The program must include activities to advise affected municipalities, school districts, businesses, and residents of pipeline facility locations. (f) The program and the media used must be as comprehensive as necessary to reach all areas in which the operator transports gas. (g) The program must be conducted in English and in other languages commonly understood by a significant number and concentration of the non-English speaking population in the operator's area. (h) Operators in existence on June 20, 2005, must have completed their written programs no later than June 20, 2006. . . . The Notice alleged that Respondent violated 49 C.F.R. § 192.616 by failing to develop and implement a written continuing public education program that followed the guidance provided in API RP 1162. GRS was required to have completed its written program by June 20, 2006. 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. § 192.616 by failing to develop and implement a written continuing public education program that followed the guidance provided in API RP 1162. This finding of violation will be considered a prior offense in any subsequent enforcement action taken against Respondent.#

320111015_Final Order_10182012_text.pdf, page 43 Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any related series of violations. In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $27,800 for the violation cited above. Item 1: The Notice proposed a civil penalty of $27,800 for Respondent’s violation of 49 C.F.R. § 192.616, for failing to develop and implement a written continuing public education program that followed the guidance provided in API RP 1162. GRS neither contested the allegation nor presented any evidence or argument justifying a reduction in the proposed penalty. The record shows that the Respondent did not create any kind of a public awareness plan for its facilities. A public awareness plan is a critical component in protecting the public and an operator’s own facilities in the event of a failure. The transmission line runs almost entirely in a populated area that includes a school and several residential subdivisions. PHMSA considers this area to be a High Consequence Area, as defined in § 192.903. Due to the high population density, public awareness is necessary to educate the public about the location of the pipeline, the identification of potential leaks and the actions needed in response to a potential failure. GRS requested that PHMSA waive the civil penalty on the ground of financial hardship, due to the fact that the facility in question was a poor financial performer. In its Response, GRS explained that the line lost $102,000 over the past three years and asked that PHMSA “waive the civil penalty and allow us to spend available financial resources for safety and environmental programs…”2 Fortistar, however, is a large corporation with roughly 58 different energy projects in the U.S. and Canada.3 Given the responsibility of all pipeline operators to carry out effective public awareness programs, I see no reason to reduce or eliminate the proposed penalty in this case. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $27,800 for violation of 49 C.F.R. § 192.616. In summary, having reviewed the record and considered the assessment criteria for the Item cited above, I assess Respondent a total civil penalty of $27,800. Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed ASSESSMENT OF PENALTY 2 Response at 2. 3 Fortistar website, supra.#

320111015_Final Order_10182012_text.pdf, page 54 instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial Operations Division telephone number is (405) 954-8893. Failure to pay the $27,800 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a district court of the United States. COMPLIANCE ORDER The Notice proposed a compliance order in the Notice for violation of 49 C.F.R. § 192.616. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. 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 § 192.616 (Item 1), Respondent must take the following action: a. 2. GRS must develop and implement a Public Awareness Plan in accordance with § 192.616. b. The Public Awareness Plan must be completed and submitted to the Central Region Director and the Pipeline Safety Program manager of the Ohio Public Utilities Commission within 30 days of the receipt of this Order. Additionally, the Plan must be implemented immediately upon completion. GRS will submit quarterly reports to the Central Region Director and the Pipeline Safety Program Manager of the OH-PUC detailing its progress for a period of 365 days after beginning implementation of the program. With respect to the violation of § 192.616 (Item 1), Respondent is requested to maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to David Barrett, Director, Central Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revisions of plans, procedures, studies and analyses; and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure.#

320111015_Final Order_10182012_text.pdf, page 65 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. Under 49 C.F.R. § 190.215, Respondent has a right to submit a Petition for Reconsideration of this Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions received no later than 20 days after receipt of service of this Final Order by the Respondent, provided they contain a brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of any civil penalty assessed. Unless the Associate Administrator, upon request, grants a stay, all other 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#