{"operation":"document","citation":"CPF 32022037NOPV","title":"NAVAJO NATION OIL AND GAS COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-03-01","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.446(a), 195.446(c)(3), 195.446(e)(1), 195.446(h).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022037nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022037nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32022037nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32022037NOPV","body":"Notice of Probable Violation involving NAVAJO NATION OIL AND GAS COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.446(a),  195.446(c)(3),  195.446(e)(1),  195.446(h). The case was opened on 2022-03-01 and is reported as closed as of 2023-05-05. Proposed civil penalty: $22,800. Assessed civil penalty: $22,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32022037NOPV_Closure Letter_05052023_(21-201004).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_Closure%20Letter_05052023_(21-201004).pdf\n\n32022037NOPV_Closure Letter_05052023_(21-201004)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_Closure%20Letter_05052023_(21-201004)_text.pdf\n\n32022037NOPV_Final Order_10172022_(21-201004).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_Final%20Order_10172022_(21-201004).pdf\n\n32022037NOPV_Final Order_10172022_(21-201004)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_Final%20Order_10172022_(21-201004)_text.pdf\n\n32022037NOPV_Operator Response to Notice_05242022_(21-201004).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_Operator%20Response%20to%20Notice_05242022_(21-201004).pdf\n\n32022037NOPV_PCP PCO_03012022_(21-201004).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_PCP%20PCO_03012022_(21-201004).pdf\n\n32022037NOPV_PCP PCO_03012022_(21-201004)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32022037NOPV/32022037NOPV_PCP%20PCO_03012022_(21-201004)_text.pdf\n\n32022037NOPV_Final Order_10172022_(21-201004)_text.pdf\n\nOctober 17, 2022\nVIA ELECTRONIC MAIL TO: jmcclure@nnogoc.com\nMr. James McClure\nChief Executive Officer\nNavajo Nation Oil and Gas Company\nPO Box 4439\nWindow Rock, Arizona 86515\nRe: CPF No. 3-2022-037-NOPV\nDear Mr. McClure:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of\nthe allegations of violation, makes other findings of violation, assesses a civil penalty of $22,800,\nand specifies actions that need to be taken by Navajo Nation Oil and Gas Company to comply\nwith the pipeline safety regulations. The penalty payment terms are set forth in the Final Order.\nWhen the civil penalty has been paid and the terms of the compliance order completed, as\ndetermined by the Director, Central Region, this enforcement action will be closed. Service of\nthe Final Order by e-mail is effective upon the date of transmission and acknowledgement of\nreceipt 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. Gregory Ochs, Director, Central Region, Office of Pipeline Safety, PHMSA\nMr. Joseph P. Robertson, P.E., Vice-President, NNOGC, jrobertson@nnogc.com\nMs. Susan A. Olenchuk, Counsel for NNOGC, Van Ness Feldman, LLP, sam@vnf.com\nCONFIRMATION OF RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nNavajo Nation Oil and Gas Company, ) CPF No. 3-2022-037-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom May 24 to 28, 2021, 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 control room management procedures and records of Navajo Nation Oil and Gas\nCompany (NNOGC or Respondent) in Montezuma Creek, Utah. NNOGC operates the Running\nHorse Pipeline, an 88-mile, 16-inch diameter interstate pipeline transporting crude oil through\nColorado, New Mexico, and Utah.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated March 1, 2022, 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 NNOGC had committed four violations of 49 C.F.R. Part 195 and\nproposed assessing a civil penalty of $22,800 for the alleged violations. The Notice also\nproposed ordering Respondent to take certain measures to correct the alleged violations.\nNNOGC responded to the Notice by letter dated May 24, 2022 (Response). Respondent\ncontested one of the allegations and offered additional information in response to the Notice.\nRespondent did not request a hearing and therefore has waived its right to one.\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. § 195.446(a), which states in\nrelevant part:\n§ 195.446 Control room management.\n(a) General. This section applies to each operator of a pipeline facility\nwith a controller working in a control room who monitors and controls all\n\n\n\nor part of a pipeline facility through a SCADA system. Each operator must\nhave and follow written control room management procedures that\nimplement the requirements of this section. The procedures required by this\nsection must be integrated, as appropriate, with the operator’s written\nprocedures required by § 195.402 . . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(a) by failing to have and\nfollow written control room management procedures that implement the requirements of this\nsection. Specifically, the Notice alleged, Respondent failed and have and follow a procedure to\nverify correct safety-related set point values during the calibration of overfill protection systems\nin accordance with §§ 195.446(e)(3) and 195.428(d).1 The Notice alleged that NNOGC failed to\ncomplete field inspections of the overfill protection system to compare with SCADA values for\nbreakout tanks LT-1430, LT-1431, and LT-1432 for 2019 and 2020.\nIn its Response, NNOGC asserted that Item 1 should be withdrawn because the storage tanks at\nMontezuma Creek are not breakout tanks. Citing to the definition of breakout tank in § 195.2,\nRespondent explained that the tanks cannot receive surges from a regulated pipeline and that\nthey receive oil from gravity-fed pipelines that are not subject to the pipeline safety regulations\nin Part 195, other than reporting. NNOGC submitted supporting documentation.2\nIn a recommendation for final action submitted pursuant to § 190.209(b)(7), the Director\nrecommended withdrawing the alleged violation of § 195.446(a). Accordingly, after considering\nthe evidence and arguments presented, I hereby order that Item 1 be withdrawn.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(c)(3), which states:\n§ 195.446 Control room management.\n(a) . . . .\n(c) Provide adequate information. Each operator must provide its\ncontrollers with the information, tools, processes and procedures necessary\nfor the controllers to carry out the roles and responsibilities the operator has\ndefined by performing each of the following:\n(1) . . . .\n(3) Test and verify an internal communication plan to provide adequate\nmeans for manual operation of the pipeline safely, at least once each\ncalendar year, but at intervals not to exceed 15 months;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(c)(3) by failing to test and\nverify its internal communication plan for manual operation of the pipeline safely at least once\neach calendar year, but at intervals not exceeding 15 months for the years 2019 and 2020.\n1 Section 195.446(e)(3) requires each operator using a SCADA system to have a written alarm management plan\nthat includes provisions to verify the correct safety-related alarm set-point values. Section 195.428(d) requires each\noperator to inspect and test overfill protection systems.\n2 Respondent cited as support for its position a 2000 interagency agreement between OPS and EPA (known as the\n“Felder-Luftig Memo”). Respondent is advised that the Felder-Luftig Memo was terminated in 2013.\n\n\n\nRespondent did not contest this allegation of violation. Accordingly, based on a review of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.446(c)(3) by failing to test and verify\nits internal communication plan for manual operation of the pipeline safely at least once each\ncalendar year, but at intervals not exceeding 15 months.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(e)(1), which states:\n§ 195.446(e)(1) Control room management.\n(a) . . . .\n(e) Alarm management. Each operator using a SCADA system must\nhave a written alarm management plan to provide for effective controller\nresponse to alarms. An operator’s plan must include provisions to:\n(1) Review SCADA safety-related alarm operations using a process that\nensures alarm are accurate and support safe pipeline operations;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(e)(1) by failing to ensure\nSCADA safety-related alarms are accurate and support safety pipeline operations. Specifically,\nthe Notice alleged Respondent’s set points in its procedure did not match those in SCADA and\nsafety-related alarms were not properly identified.\nRespondent did not contest this allegation of violation. Accordingly, based on a review of all of\nthe evidence, I find that Respondent violated 49 C.F.R. § 195.446(e)(1) by failing to ensure\nSCADA safety-related alarms are accurate and support safety pipeline operations.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(h), which states:\n§ 196.446 Control room management.\n(a)\n(h) Training. Each operator must establish a controller training program\nand review the training program content to identify potential improvements\nat least once each calendar year, but at intervals not to exceed 15 months.\nAn operator’s program must provide for training each controller to carry out\nthe roles and responsibilities defined by the operator. In addition, the\ntraining program must include the following elements:\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(h) by failing to establish a\ncontroller training program and review the content to identify potential improvements at least\nonce each calendar year, but at intervals not to exceed 15 months. Specifically, the Notice\nalleged that Respondent’s procedures described a structured on-the-job training (OJT) program,\nhowever the existing training was not structured, and the operator had not developed a formal\ntraining program with defined plans, milestones, assessments and training content. In addition,\nRespondent failed to review the training content during the years 2018, 2019, and 2020.\nRespondent did not contest this allegation of violation. Accordingly, based on a review of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.446(h) by failing to establish a\n\n\n\ncontroller training program and review the content to identify potential improvements at least\nonce each calendar year, but at intervals not to exceed 15 months.\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.3\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $22,800 for the violations cited above.\nItem 2: The Notice proposed a civil penalty of $22,800 for Respondent’s violation of 49 C.F.R.\n§ 195.446(c)(3) for failing to test and verify its internal communication plan for manual\noperation of the pipeline safely at least once each calendar year, but at intervals not exceeding 15\nmonths for the years 2019 and 2020. NNOGC neither contested the allegation nor presented any\nevidence or argument justifying a reduction in the proposed penalty. Accordingly, having\nreviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of\n$22,800 for violation of 49 C.F.R. § 195.446(c)(3).\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,\nOklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $22,800 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.\n3 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 3, and 4 in the Notice for\nviolations of 49 C.F.R. §§ 195.446(a), 195.446(e)(1), and 195.446(h), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. As discussed above, Item 1 has been withdrawn. Therefore, the\ncompliance terms proposed in the Notice for that Item are not included in this Order.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.446(e)(1) (Item 3), Respondent must\nidentify all safety related points and alarms, rationalize all alarms to establish\nthe appropriate set points and verify the alarm descriptions are correct. Part of\nthe process must be to apply, in the database, the appropriate alarm priority\nlevel as defined by procedure, along with verification of the color presentation\nand any audible alerts and animation (flashing) for alarms. Additionally,\nsafety related points and alarms must be defined in the SCADA master\ndatabase (if capabilities for this exist) and, at a minimum, distinguish in the\nalarm description if the alarm is safety related. This must be completed within\n90 days of receipt of the Final Order.\n2. With respect to the violation of § 195.446(h) (Item 4), Respondent must\nimplement a structured on the job training plan that includes, at a minimum:\nidentification specific training content, web based or instructor led training,\nassessments for training courses and periodic progress. This must be provided\nfor all positions, defined in the control room, who will maintain operator\nqualification to operate a console for either assigned shift rotation or to fill a\ntemporary vacancy. The training plan should be developed so that the\nindividual trainee, mentor, and supervisor understand the requirements and\ncan track progress. This must be completed within 180 days of receipt of the\nFinal 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.\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\n\n\n\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (see 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. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing of a\npetition automatically stays the payment of any civil penalty assessed. The other terms of the\norder, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nOctober 17, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n32022037NOPV_Closure Letter_05052023_(21-201004)_text.pdf\n\nVIA ELECTRONIC MAIL TO: jmcclure@nnogc.com and jrobertson@nnogc.com\nMay 5, 2023\nMr. James McClure, CEO\nNavajo Nation Oil and Gas\nPO Box 4439\nWindow Rock, AZ 86515\nRE: CPF 3-2022-037-NOPV\nDear Mr. McClure:\nOn October 17, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Navajo Nation Oil and Gas a Final Order in the above-referenced case. This Order\nincluded a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation you provided and confirmation of payment of the civil penalty, it has been\ndetermined 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,\nGregory A. Ochs\nDirector, Central Region, Offices of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":19402}