{"operation":"document","citation":"CPF 32021040WL","title":"BOE MIDSTREAM — Warning Letter","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-11-12","effective_on":null,"summary":"CLOSED warning letter citing 195.428(a), 195.438, 195.505(b), 195.505(e), 195.507(a), 195.507(b), 195.573(a)(1), 195.575(b), 195.589(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021040wl.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021040wl.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32021040wl","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32021040WL","body":"Warning Letter involving BOE MIDSTREAM. PHMSA's enforcement data identifies the cited regulations as 195.428(a),  195.438,  195.505(b),  195.505(e),  195.507(a),  195.507(b),  195.573(a)(1),  195.575(b),  195.589(c). The case was opened on 2021-11-12 and is reported as closed as of 2021-11-12. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32021040WL_Warning Letter_11122021_(21-200403).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021040WL/32021040WL_Warning%20Letter_11122021_(21-200403).pdf\n\n32021040WL_Warning Letter_11122021_(21-200403)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32021040WL/32021040WL_Warning%20Letter_11122021_(21-200403)_text.pdf\n\n32021040WL_Warning Letter_11122021_(21-200403)_text.pdf\n\nWARNING LETTER\nVIA ELECTRONIC MAIL TO: mos@everdesk.com and BMcDowell@BOEMidstream.com\nNovember 12, 2021\nMr. Michael O’Shaughnessy\nPresident/CEO\nBOE Midstream\n8301 E. 21st Street North, Suite 420\nWichita, KS 67206\nCPF 3-2021-040-WL\nDear Mr. O’Shaughnessy:\nOn January 26, March 10-12, March 29-31, April 6, and April 21-22, 2021, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), pursuant to Chapter 601 of 49 United States Code (U.S.C.) inspected BOE Midstream\n(BOE) records, procedures and facilities virtually and in Dickinson and Killdeer, North Dakota.\nAs a result of the inspection, it is alleged that BOE has committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n\n\n\n1. §195.428 Overpressure safety devices and overfill protection systems.\n(a) Except as provided in paragraph (b) of this section, each operator shall, at\nintervals not exceeding 15 months, but at least once each calendar year, or in the\ncase of pipelines used to carry highly volatile liquids, at intervals not to exceed 7½\nmonths, but at least twice each calendar year, inspect and test each pressure limiting\ndevice, relief valve, pressure regulator, or other item of pressure control equipment\nto determine that it is functioning properly, is in good mechanical condition, and is\nadequate from the standpoint of capacity and reliability of operation for the service\nin which it is used.\nBOE failed to create a record of the 2019 changeout of the thermal relief valve on the 10-inch\nTesoro line as noted during the virtual inspection of overpressure protection records.\nBOE failed to perform capacity checks of the Farris full flow relief valve at the Killdeer pump\nstation in 2019 and 2020, as noted during the virtual inspection of overpressure device testing\nand inspection records.\nThe operator acknowledged in an email they were not aware of this requirement. Subsequent to\nthe inspection, BOE provided to PHMSA offered imbalance records dated April 30, 2021 as\nevidence of capacity checks for 2019 and 2020. An imbalance check and associated records are\nnot the equivalent of a compliant inspection and test record for determining that a relief valve is\nfunctioning properly, is in good mechanical condition, and it adequate from the standpoint of\ncapacity and reliability of operation for the service for which a relief valve is used. BOE failed\nto provide any records to show that it had performed a capacity check on the Farris full flow\nrelief valve at the Killdeer pump station for the years 2019 and 2020, as required by the\nregulation.\n2. §195.438 Smoking or open flames\nEach operator shall prohibit smoking and open flames in each pump station area\nand each breakout tank area where there is a possibility of the leakage of a\nflammable hazardous liquid or of the presence of flammable vapors.\nBOE Midstream failed to post a “No Smoking” sign at the Killdeer pump station and tank farm.\nThis deficiency was noted by the PHMSA inspector during the April 6, 2021 field inspection.\nOperator corrected by April 30, 2021 as noted in a data response.\n2\n\n\n\n3. §195.505 Qualification program.\nEach operator shall have and follow a written qualification program. The program\nshall include provisions to:\n(b) Ensure through evaluation that individuals performing covered tasks are\nqualified;\n(e) Evaluate an individual if the operator has reason to believe that the individual is\nno longer qualified to perform a covered task;\n§195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the\natmosphere for evidence of atmospheric corrosion, as follows:\nBOE Midstream incorrectly classified surface oxidation as pitting in the September 26, 2019\natmospheric corrosion inspection records based on several pictures of classification surface\noxidation on different assets reviewed during the inspection interview.\n4. §195.507 Recordkeeping.\nEach operator shall maintain records that demonstrate compliance with this\nsubpart.\n(a) Qualification records shall include:\n(1) Identification of qualified individual(s);\n(2) Identification of the covered tasks the individual is qualified to perform;\n(3) Date(s) of current qualification; and\n(4) Qualification method(s).\n(b) Records supporting an individual's current qualification shall be maintained\nwhile the individual is performing the covered task. Records of prior qualification\nand records of individuals no longer performing covered tasks shall be retained for\na period of five years.\nBOE Midstream failed to provide a qualification record for the technician who performed the\nSeptember 1, 2019 monthly tank inspection task on Tank 1001. The records provided shows a\nqualification date of May 14, 2020 after the date of the task performance.\n5. §195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine whether cathodic\nprotection required by this subpart complies with § 195.571:\n3\n\n\n\n(1) Conduct tests on the protected pipeline at least once each calendar year, but with\nintervals not exceeding 15 months. However, if tests at those intervals are\nimpractical for separately protected short sections of bare or ineffectively coated\npipelines, testing may be done at least once every 3 calendar years, but with\nintervals not exceeding 39 months.\nBased on the inspection interview, BOE failed to conduct the November 5, 2020 annual cathodic\nprotection monitoring within 15 months of the July 12, 2019 monitoring. Specifically, the time\nlapse between monitoring cycles was 482 days or 15.9 months.\n6. §195.575 Which facilities must I electrically isolate and what inspections, tests, and\nsafeguards are required?\n(a) …\n(b) You must install one or more insulating devices where electrical isolation of a\nportion of a pipeline is necessary to facilitate the application of corrosion control.\nBased on field inspection observations at the Killdeer pump stations, BOE failed to separate the\ncarrier pipe from the supports by a dielectric isolator (these are suitable for the prevention of\ncorrosion cell formation). The absence of a dielectric isolator has allowed the formation of\nsurface rust at these locations.\n7. §195.589 What corrosion control information do I have to maintain?\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required by this\nsubpart in sufficient detail to demonstrate the adequacy of corrosion control\nmeasures or that corrosion requiring control measures does not exist. You must\nretain these records for at least 5 years, except that records related to Secs. 195.569,\n195.573(a) and (b), and 195.579(b)(3) and (c) must be retained for as long as the\npipeline remains in service.\n§195.569 Do I have to examine exposed portions of buried pipelines?\nWhenever you have knowledge that any portion of a buried pipeline is exposed, you must\nexamine the exposed portion for evidence of external corrosion if the pipe is bare, or if\nthe coating is deteriorated. If you find external corrosion requiring corrective action\nunder § 195.585, you must investigate circumferentially and longitudinally beyond the\nexposed portion (by visual examination, indirect method, or both) to determine whether\nadditional corrosion requiring remedial action exists in the vicinity of the exposed\nportion.\n4\n\n\n\nBOE Midstream failed to produce accurate records of inspection of exposed underground pipe\ncoating and external corrosion inspections. Specifically:\n Feature 733 (ILI run data 2.1 % dent - bottom of pipe not on weld and not on\nseam) was dug 10-26-20. Exposed pipe report from Feature 733 states\ndisbondment at feature with no corrosion. Pictures show coating holidays but no\ndisbondment. The exposed pipe report is incorrectly checked disbonded.\n ACVG dig anomaly 5 exposed pipe report shows that coating bond is good with\nno corrosion. Defects 1 and 2 from anomaly 5 show metal wall loss of 1.67 %\nand 2.70 % yet the form marked no corrosion\n8. §195.589 What corrosion control information do I have to maintain?\n(c) You must maintain a record of each analysis, check, demonstration,\nexamination, inspection, investigation, review, survey, and test required by this\nsubpart in sufficient detail to demonstrate the adequacy of corrosion control\nmeasures or that corrosion requiring control measures does not exist. You must\nretain these records for at least 5 years, except that records related to Secs. 195.569,\n195.573(a) and (b), and 195.579(b)(3) and (c) must be retained for as long as the\npipeline remains in service.\n§195.573 What must I do to monitor external corrosion control?\n(c) Rectifiers and other devices. You must electrically check for proper performance each\ndevice in the first column at the frequency stated in the second column. Rectifier -At\nleast six times each calendar year, but with intervals not exceeding 2 ½ months\nBased on the inspection interview, BOE failed to provide records proving inspection of the\nfollowing rectifiers within the stated inspection frequency:\n Killdeer piping, 31st St and 14 St Rectifiers – each over 2.5 months between following\nreadings\no April 7, 2017 & July 24, 2017, 108 days or 3.55 months\no August 7, 2018 & October 22, 2018, 76 days or 2.5 months\no April 22, 2019 & July 11, 2019, 80 days or 2.63 months\n Tank 1001 rectifier inspection over 2.5-month interval\no April 7, 2017 & August 9, 2017, 124 days or 4.08 months\n5\n\n\n\no August 7, 2018 & October 22, 2018, 76 days or 2.5 months\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for a\nrelated series of violations. For violation occurring on or after January 11, 2021 and before May\n3, 2021, the maximum penalty may not exceed $222,504 per violation per day the violation\npersists, up to a maximum of $2,225,034 for a related series of violations. For violation\noccurring on or after July 31, 2019 and before January 11, 2021, the maximum penalty may not\nexceed $218,647 per violation per day the violation persists, up to a maximum of $2,186,465 for\na related series of violations. For violation occurring on or after November 27, 2018 and before\nJuly 31, 2019, the maximum penalty may not exceed $213,268 per violation per day, with a\nmaximum penalty not to exceed $2,132,679. For violation occurring on or after November 2,\n2015 and before November 27, 2018, the maximum penalty may not exceed $209,002 per\nviolation per day, with a maximum penalty not to exceed $2,090,022. For violations occurring\nprior to November 2, 2015, the maximum penalty may not exceed $200,000 per violation per\nday, with a maximum penalty not to exceed $2,000,000 for a related series of violations. We\nhave reviewed the circumstances and supporting documents involved in this case, and have\ndecided not to conduct additional enforcement action or penalty assessment proceedings at this\ntime. We advise you to correct the items identified in this letter. Failure to do so will result in\nBOE Midstream being subject to additional enforcement action.\nNo reply to this letter is required. If you choose to reply, in your correspondence please refer to\nCPF 3-2021-040-WL . Be advised that all material you submit in response to this enforcement\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 the\ncomplete original document you must provide a second copy of the document with the portions\nyou believe qualify for confidential treatment redacted and an explanation of why you believe\nthe redacted information qualifies for confidential treatment under 5 U.S.C. 552(b).\nSincerely,\nGregory A. Ochs\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\nCC: Mr. Brandon McDowell, Director – ND Operations & Regulatory Compliance, 8301 E.\n21st Street North, Suite 420, Wichita, KS 67206, BMcDowell@BOEMidstream.com\n6","truncated":false,"body_characters":13063}