{"operation":"document","citation":"CPF 320196001","title":"CALIBER NORTH DAKOTA LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-04-29","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.402(d)(3), 195.406(b), 195.505(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320196001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320196001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320196001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320196001","body":"Notice of Probable Violation involving CALIBER NORTH DAKOTA LLC. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.402(d)(3),  195.406(b),  195.505(b). The case was opened on 2019-04-29 and is reported as closed as of 2020-07-14. Proposed civil penalty: $67,600. Assessed civil penalty: $67,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320196001_Closure Letter_07142020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_Closure%20Letter_07142020.pdf\n\n320196001_Closure Letter_07142020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_Closure%20Letter_07142020_text.pdf\n\n320196001_Final Order_12022019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_Final%20Order_12022019.pdf\n\n320196001_Final Order_12022019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_Final%20Order_12022019_text.pdf\n\n320196001_NOPV PCP PCO_04292019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_NOPV%20PCP%20PCO_04292019.pdf\n\n320196001_NOPV PCP PCO_04292019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_NOPV%20PCP%20PCO_04292019_text.pdf\n\n320196001_Operator Response to Notice_07222019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320196001/320196001_Operator%20Response%20to%20Notice_07222019.pdf\n\n320196001_Final Order_12022019_text.pdf\n\nDecember 2, 2019\nMr. Daniel Werth\nChief Executive Officer\nCaliber Midstream Holdings, LP\n950 17th Street, Suite 1000\nDenver, Colorado 80202\nRe: CPF No. 3-2019-6001\nDear Mr. Werth:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolations, assesses a civil penalty of $67,600, and specifies actions that need to be taken by your\nsubsidiary Caliber North Dakota, LLC, to comply with the pipeline safety regulations. The\npenalty payment terms are set forth in the Final Order. When the civil penalty has been paid and\nthe terms of 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 effective upon\nthe date of mailing, as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Allan Beshore, Director, Central Region, Office of Pipeline Safety, PHMSA\nMs. Carol Butero, Director of Regulatory, Safety, and Compliance, Caliber Midstream\nHoldings, LP, 950 17th Street, Suite 1000, Denver, Colorado 80202\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_____________________________________________\nIn the Matter of )\nCaliber North Dakota, LLC, ) CPF No. 3-2019-6001\na subsidiary of Caliber Midstream Holdings, LP, )\n)\n)\n)\nRespondent. )\n_____________________________________________)\nOn March 8, 2017, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\ninspected the Safety-Related Condition Report (PHMSA Reference 20170019) (SRCR)1 of\nCaliber North Dakota, LLC (Caliber or Respondent), a subsidiary of Caliber Midstream\nHoldings, LP, pertaining to facilities near Alexander, North Dakota. Caliber Midstream\nHoldings’ services include crude oil and natural gas gathering, transportation, treating and\nprocessing; produced water transportation and disposal in Caliber operated injection wells; and\nfreshwater sourcing and transportation by pipeline linked to various points of supply.2\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated April 29, 2019, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that Caliber had committed three violations of 49 C.F.R. Part 195 and proposed\nassessing a civil penalty of $67,600 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct the alleged violations.\nAfter requesting and receiving an extension of time to respond, Caliber responded to the Notice\nby letter dated July 22, 2019 (Response). Caliber stated that it was “electing to contest the\nallegations” in the Notice, but failed to challenge the allegations relating to Items 1 and 3, as well\nas Item 3’s associated penalty.3 Caliber contested the allegation of violation for Item 2, and the\nproposed penalties associated with Items 1 and 2. On August 28, 2019, the company provided\nan email with additional information, admitting the violations for Items 1 and 2 (Supplemental\nResponse). Respondent did not request a hearing and therefore has waived its right to one.\nFINAL ORDER\n1 Pipeline Safety Violation Report (Violation Report), (Apr. 29, 2019) (on file with PHMSA), at Exhibit A.\n2 Caliber Midstream Holdings, LP, is a joint venture supported by capital contributions from BlackRock’s Global\nEnergy & Power Infrastructure Fund and Triangle Petroleum Corporation. http://www.calibermidstream.com/about\n(last accessed Sept. 18, 2019).\n3 Response, at 1.\n\n\n\nCPF No. 3-2019-6001\nPage 2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(d)(3), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies ...\n(b) ...\n(d) Abnormal operation. The manual required by paragraph (a) of this\nsection must include procedures for the following to provide safety when\noperating design limits have been exceeded:\n(1) ...\n(3) Correcting variations from normal operation of pressure and flow\nequipment and controls.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(d)(3) by failing to follow its\nmanual of written procedures for handling abnormal operations when it failed to correct\nvariations from normal operations of pressure equipment and controls on its Alex Crude Oil\nFacility. Specifically, the Notice alleged that in the mandated SRCR filed by Caliber on March\n3, 2017 that a subsequent PHMSA investigation revealed violations by Caliber employees that\nled to the Safety related condition, as defined in §195.55. The company indicated that on\nFebruary 27, while performing a lower-explosive-limit and hydrogen sulfide detector calibration,\na company instrumentation and electrical (I&E) technician acknowledged alarms, but failed to\ninspect and confirm the opening of the facility’s emergency shutdown valve. The valve\nremained closed, thereby creating an abnormal operation. Instead of correcting the variation\nfrom normal operations, the I&E technician continued his calibrations tests, which resulted in the\npipeline pressure rising to 522 pounds per square inch (psig) on its 150 psig normal operating\nsystem.\nAccording to the Notice, Caliber’s abnormal operations procedures (Rev. 5/12/2014), Section\n13.1, provides that “[a]ctivation of any safety device” constitutes an example of an abnormal\noperating condition. Under “Follow-up,” the procedure states: “After an abnormal operating\ncondition has been corrected, check variations from normal operation (at critical locations in the\nsystem) to determine continued integrity and safe operation.” The I&E technician nor any\nCaliber employee on scene did not follow the Caliber’s abnormal operating procedures after the\nAlex Crude Oil Facility experienced an activation of the emergency shut down safety device\nthereby allowing an overpressurization event to occur.\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. § 195.402(d)(3) by failing to follow its\nmanual of written procedures for handling abnormal operations when it failed to correct\nvariations from normal operations of pressure equipment and controls on its Alex Crude Oil\nFacility.\n\n\n\nCPF No. 3-2019-6001\nPage 3\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.406(b), which states:\n§ 195.406 Maximum operating pressure.\n(a) ....\n(b) No operator may permit the pressure in a pipeline during surges or\nother variations from normal operations to exceed 110 percent of the\noperating pressure limit established under paragraph (a) of this section.\nEach operator must provide adequate controls and protective equipment to\ncontrol the pressure within this limit.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(b) by failing to provide\nadequate controls and protective equipment to limit the pressure of its pipeline to 110 percent of\nmaximum operating pressure (MOP). Specifically, the Notice alleged that, on February 27,\n2017, Caliber’s pipeline rose to a recorded pressure of 522.75 psig and an estimated pressure of\n630 psig at its lowest elevation. The normal operating pressure was 150 psig and its maximum\nallowable pressure on this line was established as 500 psig. Therefore, the pipeline reached a\npressure of 126 percent MOP.\nIn its Response, Caliber contested this violation, stating that its operating pressure did not exceed\nMOP and that it therefore had adequate controls and protective equipment in place to control the\npressure.4 However, in its Supplemental Response, its Director of Regulatory, Safety and\nCompliance admitted that the Response was not correct and that “the original information\nsubmitted based on elevation calculation shows MOP was exceeded at the lowest elevation of the\nsystem.”5\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.406(b) by failing to provide adequate controls and protective equipment to limit the\npressure of its pipeline to 110 percent of MOP.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) ....\n(b) Ensure through evaluation that individuals performing covered tasks\nare qualified…\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to follow its\nwritten operator qualification program to ensure, through evaluation, that individuals performing\ncovered tasks are qualified. Specifically, the Notice alleged that on February 13 or 16 and 21,\n2017, an unqualified technician performed the covered task (Task ID 661) of “Launching and\nReceiving Internal Devices (pigs)” on the Skevolds to Alexander 16-inch Oil Line without being\ndirected and observed by a qualified individual.\n4 Response, at 2.\n5 Supplemental Response, at 1.\n\n\n\nCPF No. 3-2019-6001\nPage 4\nCaliber’s Operator Qualification Plan in Section 1.0 Scope states: “Caliber OQ Program is\ndesigned to ensure that all individuals working on Caliber DOT-regulated pipeline facilities are\nOQ-qualified to perform specific covered tasks, to document that qualification and to reduce the\nprobability and consequences of incidents and accidents. All Caliber employees as well as\nContractors performing these covered tasks will be OQ-qualified under this Program before they\nperform any covered tasks.”\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. § 195.505(b) by failing to follow its\nwritten operator qualification program to ensure, through evaluation, that individuals performing\ncovered tasks are qualified.\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.6 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $67,600 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $22,400 for Respondent’s violation of 49 C.F.R.\n§ 195.402(d)(3), for failing to follow its manual of written procedures for handling abnormal\noperations when it failed to correct variations from normal operations of pressure equipment and\ncontrols on its Alex Crude Oil Facility.\nIn its Response, Caliber contested the proposed penalty and requested that it be reduced. The\ncompany contended that the Violation Report incorrectly stated, under Part E5 “Circumstances,”\nthat “PHMSA or a State Partner discovered the violation.” Caliber claimed, on the contrary, that\nPHMSA became aware of the violation through Caliber’s own self-reported Safety-Related\nCondition Report.7 Therefore, Caliber asserted that since it had disclosed the over-pressure\nevent through the SRCR, it was entitled to a reduced penalty under Part E5 of the Violation\nReport and penalty worksheet.\nI disagree. The language in the Violation Report is clear. Part E5 states, in boldface type, that\nthe lower penalty for self-reporting “Does not apply to operator post-accident/incident self-\n6 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n7 Response, at 1.\n\n\n\nCPF No. 3-2019-6001\nPage 5\nreporting.” Operators are required to promptly file post-accident reports and SRCRs, as was\ndone in this case, and the violation was discovered by PHMSA through a routine review of such\nreports. Therefore, the selection of “PHMSA or a State Partner discovered the violation” in Part\nE5 is correct and the company does not qualify for a reduced penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $22,400 for violation of 49 C.F.R. § 195.402(d)(3).\nItem 2: The Notice proposed a civil penalty of $22,400 for Respondent’s violation of 49 C.F.R.\n§ 195.406(b), for failing to provide adequate controls and protective equipment to limit the\npressure on its pipeline to 110 percent of MOP.\nCaliber contested the proposed penalty and requested that it be eliminated or reduced. The\ncompany repeated its argument regarding whether a SRCR is considered a “self-report” when\ncalculating a penalty under Part E5 “Circumstances” of the Violation Report. I have rejected this\nargument above.\nIt also argued that the Violation Report failed to recognize under Part E5 “Circumstances” that\nthe violation had ended and was not “ongoing.” Caliber stated that it “promptly began an\ninternal investigation of the event and voluntarily began putting corrective procedures in place.”\nCaliber, however, did not take into account the rest of Part E5, which states: “If the violation was\nnot remedied before the end of inspection activities, enter the last known date of the violation…\nand indicate Ongoing.” The violation was not remedied by March 8, 2017, the end date of the\ninspection activities, so therefore the Violation Report is accurate.\nCaliber also claimed that the Violation Report was incorrect in stating under “Circumstances”\nthat the duration of the violation was over 10 days. Caliber argued that “[t]he entire event was\nresolved in 6.5 hours. The controls were in place prior to the surge event to prevent a surge\nevent that would have constituted a violation.” Caliber misunderstands the extent of the\nviolation. Section 195.406(b) requires that the operator not allow its pipeline pressure to exceed\n100 percent of the operating pressure limit, and also that each operator provide adequate controls\nand protective equipment to control the pressure within this limit. While the pressure surge in\nthis case may have only lasted 6.5 hours, Caliber did not complete its check or correct the\nproblem through the addition of certain alarms until March 10, 2017, which was more than 10\ndays after the February 27 event. I am therefore unpersuaded by this argument.\nFinally, Caliber argued that it did not receive proper credit under Part E5 “Culpability” of the\nViolation Report for actions it took following the incident. It reiterated that the Violation Report\nis incorrect because Caliber does not agree that PHMSA discovered the violation. Rather, it\nbelieves that since the violation is based on Caliber’s SRCR, Caliber should receive credit for\nself-reporting. It also stated that “[p]rior to its submittal of its SRCR Caliber identified, planned,\nscheduled and timely completed seven different follow-up / corrective actions. These follow-up\n/ corrective actions were listed [in the] SRCR.”8\nI have already rejected Caliber’s argument that the SRCR was a “self-report.” Likewise, Caliber\nis required to follow Federal pipeline safety regulations. While the actions taken by Caliber\n8 Response, at 2.\n\n\n\nCPF No. 3-2019-6001\nPage 6\nfollowing the incident are commendable, they are actions that any prudent operator would be\nexpected to take in the aftermath of a safety-related condition. It cannot expect to receive credit\nfor steps taken to come into compliance with requirements it must follow by law. I therefore\nreject this argument.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $22,400 for violation of 49 C.F.R. § 195.406(b).\nItem 3: The Notice proposed a civil penalty of $22,800 for Respondent’s violation of 49 C.F.R.\n§ 195.505(b), for failing to follow its written qualification program provisions to ensure, through\nevaluation, that individuals performing covered tasks are qualified. Caliber did not contest the\nproposed penalty associated with this violation. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $22,800 for violation of\n49 C.F.R. § 195.505(b).\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 $67,600.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $67,600 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 Item 2 in the Notice for the violation of\n49 C.F.R. § 195.406(b). Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601. Pursuant to the\nauthority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the\nfollowing actions to ensure compliance with the pipeline safety regulations applicable to its\noperations:\n1. With respect to the violation of § 195.406(b) (Item 2), Respondent must test\nits failsafe system to ensure that it functions properly. Documentation of this\ntesting procedure(s) must be provided to PHMSA for review and approval.\nResults of this testing must also be provided to PHMSA.\n\n\n\nCPF No. 3-2019-6001\nPage 7\n2. Caliber shall submit its procedures for testing its system within 60 days after\nreceipt of the Final Order, with completion of testing and documentation\nsubmitted within 120 days after receipt of the Final Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nIt is requested (not mandated) that Respondent maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories: (1) total cost associated\nwith preparation/revision of plans, procedures, studies and analyses; and (2) total cost associated\nwith replacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United 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, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service, in accordance with 49\nC.F.R. § 190.5.\nDecember 2, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n320196001_NOPV PCP PCO_04292019_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nApril 29, 2019\nDaniel Werth,\nChief Executive Officer\nCaliber Midstream\n950 17th Street, Suite 1000,\nDenver, CO 80202\nCPF 3-2019-6001\nDear Mr. Werth:\nOn March 8, 2017, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49\nUnited States Code inspected your Safety Related Condition Report (PHMSA Reference\n20170019) pertaining to facilities near Alexander, ND.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violation(s) are:\n\n\n\n1. § 195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system\na manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies . . .\n(b) . . .\n(d) Abnormal operation. The manual required by paragraph (a) of this section\nmust include procedures for the following to provide safety when operating\ndesign limits have been exceeded:\n(1) . . .\n(3) Correcting variations from normal operation of pressure and flow\nequipment and controls.\nCaliber failed to follow its manual of written procedures for handling abnormal\noperations when it failed to correct variations from normal operations of pressure\nequipment and controls on its Alex Crude Oil Facility. Specifically, as reported in\ntheir Safety Related Condition Report, “At approximately 11:20 AM CST on\n02/27/2017 the Alex Oil Facility experienced an emergency shut down (ESD) where\nthe inlet control valve closed as a result of lower explosive limit (LEL) and hydrogen\nsulfur (H2S) calibration. The I&E technician performing the calibrations onsite\nacknowledged the LEL and H2S alarms from the local HMI (as a result of his\noperations). The I & E technician failed to inspect and confirm the opening of the\nESD valve upon acknowledgement and the ESD valve remained latched as a result of\nrelays not being reset, a failsafe at the facility.” The I&E technician continued to\nperform calibrations tests onsite without addressing the abnormal condition. As a\nresult, the pipeline pressure rose to 522 psig on its 150 psig normal operating system.\nThe increased pressure was not corrected to normal operations until 5:50 p.m.\nMultiple technicians from other operating groups and shutting down of facilities\nsupplying the line with product were required to rectify the abnormal operation.\nCaliber’s operations and maintenance procedures (Rev. 5/12.2014) regarding abnormal\noperations in Section 13.1 includes “13. 7 Activation of any safety device” as an\nabnormal operating condition example and under “Follow-up” states, “After an\nabnormal operating condition has been corrected, check variations from normal\noperation (at critical locations in the system) to determine continued integrity and safe\noperation.” The technician failed to follow this procedure after creating the abnormal\noperation by activating the LEL and H2S safety devices.\n2\n\n\n\n2. §195.406 Maximum operating pressure.\n(a) ….\n(b) No operator may permit the pressure in a pipeline during surges or other\nvariations from normal operations to exceed 110 percent of the operating\npressure limit established under paragraph (a) of this section. Each operator\nmust provide adequate controls and protective equipment to control the\npressure within this limit.\nCaliber North Dakota LLC (Caliber) did not provide adequate controls and protective\nequipment to limit the pressure to 110 percent of maximum operating pressure (MOP).\nOn February 27, 2017, Caliber’s pipeline rose to a recorded pressure of 522.75 psig\nand an estimated pressure of 630 psig at its lowest elevation. The normal operating\npressure was 150 psig and its maximum allowable pressure on this line was established\nas 500 psig. Therefore, the pipeline reached a pressure of 126% MOP which is a\nviolation of the 110% limit of §195.406(b).\nAdditionally, pressure sources to the Alexander facility failed to have adequate\ncontrols or protective equipment to control the pressure within the 110% limit.\nSpecifically, PIT-100 pressure transmitter was visible via SCADA and the local HMI,\nbut did not have the correct alarm tags tied within the programming. As a result,\nSCADA and the program were looking at alarm tags that weren’t tied to the value of\nPIT-100. Also, alarm set points on LACT units were confirmed in April 2016, but\naltered so that pressure on the pipeline rose higher than intended.\n3. Section 195.505 Qualification program.\nEach operator shall have and follow a written qualification program. The\nprogram shall include provisions to:\n(a) . . . .\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified;\nCaliber North Dakota LLC did not follow its written qualification program provisions\nto ensure through evaluation that individuals performing covered tasks are qualified.\nCaliber’s Operator Qualification Plan in Section 1.0 Scope states, “Caliber OQ\nProgram is designed to ensure that all individuals working on Caliber DOT- regulated\npipeline facilities are OQ – qualified to perform specific covered tasks, to document\nthat qualification and to reduce the probability and consequences of incidents and\naccidents. All Caliber employees as well as Contractors performing these covered\ntasks will be OQ-qualified under this Program before they perform any covered tasks.”\nSpecifically, on February 13th or 16th (discrepancy in actual date in operator records)\nand 21st, 2017, an unqualified technician for Caliber performed the covered task (Task\n3\n\n\n\nID 661) of “Launching and Receiving Internal Devices (pigs)” on the Skevolds to\nAlexander 16” Oil Line without being directed and observed by a qualified individual.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to\nexceed $213,268 per violation per day the violation persists, up to a maximum of $2,132,679\nfor a related series of violations. For violation occurring on or after November 2, 2015 and\nbefore November 27, 2018, the maximum penalty may not exceed $209,002 per violation per\nday, with a maximum penalty not to exceed $2,090,022. For violations occurring prior to\nNovember 2, 2015, the maximum penalty may not exceed $200,000 per violation per day,\nwith a maximum penalty not to exceed $2,000,000 for a related series of violations. The\nCompliance Officer has reviewed the circumstances and supporting documentation involved\nin the above probable violations and has recommended that you be preliminarily assessed a\ncivil penalty of $67,600 as follows:\nItem number PENALTY\n1 $22,400\n2 $22,400\n3 $22,800\nProposed Compliance Order\nWith respect to item 2 pursuant to 49 United States Code § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Caliber North\nDakota LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart of this Notice.\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 response\noptions. All material you submit in response to this enforcement action may be made publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\ntreatment under 5 U.S.C. 552(b), along with the complete original document you must provide\na second copy of the document with the portions you believe qualify for confidential treatment\nredacted and an explanation of why you believe the redacted information qualifies for\nconfidential treatment under 5 U.S.C. 552(b). If you do not respond within 30 days of receipt\nof this Notice, this constitutes a waiver of your right to contest the allegations in this Notice\nand authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this\nNotice without further notice to you and to issue a Final Order.\nIn your correspondence on this matter, please refer to CPF 3-2019-6001 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\n4\n\n\n\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Response 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 Caliber North Dakota LLC (Caliber) a\nCompliance Order incorporating the following remedial requirements to ensure the\ncompliance of with the pipeline safety regulations:\n1. 2. 3. In regard to Item Number 2 of the Notice pertaining to providing adequate\ncontrols and protective equipment to limit the pressure to 110 percent of\nmaximum operating pressure (MOP) for the entire system, Caliber must test\ntheir failsafe system to ensure that it functions properly. Documentation of this\ntesting procedure(s) must be provided to PHMSA for review and approval.\nResults of this testing must also be provided to PHMSA.\nCaliber shall submit its procedures for testing its system within 60 days after\nreceipt of the Final Order with completion of testing and documentation\nsubmitted within 120 days after receipt of the Final Order.\nIt is requested (not mandated) that Caliber maintain documentation of the\nsafety improvement costs associated with fulfilling this Compliance Order and\nsubmit the total to Allan C. Beshore, Director, Central Region, OPS, Pipeline\nand Hazardous Materials Safety Administration. It is requested that these costs\nbe reported in two categories: 1) total cost associated with preparation/revision\nof plans, procedures, studies and analyses, and 2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n6\n\n320196001_Closure Letter_07142020_text.pdf\n\nVIA ELECTRONIC MAIL TO: dwerth@calibermidstream.com and\ncbutero@calibermidstream.com\nJuly 14, 2020\nDaniel Werth,\nChief Executive Officer\nCaliber Midstream\n950 17th Street, Suite 1000,\nDenver, CO 80202\ndwerth@calibermidstream.com\nRe: CPF 3-2019-6001\nDear Mr. Werth:\nOn March 8, 2017, a representative of the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter 601 of 49 United States Code inspected\nyour Safety Related Condition Report (PHMSA Reference 20170019) pertaining to facilities near\nAlexander, North Dakota. As a result of the inspection, the Director, Central Region, OPS issued a\nNotice of Probable Violation, Proposed Civil Penalty and Proposed Compliance Order (Notice) on April\n29, 2019. On December 2, 2019, PHMSA issued a Final Order, which made findings of violation,\nassessed a civil penalty, and ordered Caliber Midstream to take certain compliance measures.\nThe records show that Caliber Midstream paid the civil penalty, in addition to submitting testing\nprocedures, completing the testing and documentation. My staff has reviewed these documents and\ndetermined that the terms of the Compliance Order have been met. This case is now closed. Thank you\nfor your cooperation in this matter.\nSincerely,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nCopy: Carol Butero, Director of Regulatory, Safety, and Compliance, Caliber Midstream\nEmail: Carol Butero <cbutero@calibermidstream.com>","truncated":false,"body_characters":34951}