LAMBDA ENERGY GATHERING LLC — Notice of Amendment

party submissionOfficial PDF32023024NOA_Operator Response to Notice_01022024_(23-264767).pdf#

32023024NOA_Notice of Amendment_12272023_(23-264767)_text.pdf, page 1Official PDFNOTICE OF AMENDMENT VIA ELECTRONIC MAIL TO: hfaulkner@lambdaoil.com; jmcgrath@lambdaenergyllc.com; jstalmack@lambdaenergyllc.com December 27, 2023 Harry Faulkner President/CEO Lambda Energy Gathering LLC 12012 Wickchester LN Suite 300 Houston, Texas 77079 CPF No. 3-2023-024-NOA Dear Mr. Faulkner: From July 25, 2023 through July 27, 2023, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Lambda Energy Gathering LLC’s (LEG) Operations, Maintenance and Emergencies (O&ME) Manual of procedures in Kalkaska, Michigan. As a result of the inspection, PHMSA has identified the apparent inadequacies found within LEG’s procedures. The items inspected and the inadequacies are described below: 1. § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) . . . . (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) . . . . (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. LEG did not have adequate procedures addressing the requirement to protect against ignitions arising out of static electricity, lightning, and stray currents during operation and maintenance activities involving aboveground breakout tanks in accordance with API RP 2003, as required by#

32023024NOA_Notice of Amendment_12272023_(23-264767)_text.pdf, page 249 C.F.R. § 195.405(a). Specifically, the information provided in section 7.0 of LEG’s O&ME Manual for protecting aboveground breakout tanks against static electric hazards during operation and maintenance activities was general and broad in nature, and did not elaborate on the activities or practices for controlling and minimizing the static electric hazards. Furthermore, there was no safety process developed or guidance provided in section 7.0 of the O&ME Manual for the protection of aboveground breakout tanks against ignitions arising out of lightning and stray currents. LEG must therefore review and amend its procedures to address these deficiencies by applying the provisions of the code-referenced edition of API RP 2003, specifically the control measures in sections 4.5, 5.0, and 6.0 for controlling and reducing the ignition hazards associated with static electricity, lightning strikes, and stray currents. Following the PHMSA inspection, LEG revised section 7.0 of the O&ME Manual and incorporated the applicable recommended practices found under the aforementioned sections of API RP 2003. The outlined inadequacies appear to have been corrected with no further action necessary for Item 1. 2. § 195.402 Procedural manual for operations, maintenance, and emergencies. (a) . . . . (c) Maintenance and normal operations. The manual required by paragraph (a) of this section must include procedures for the following to provide safety during maintenance and normal operations: (1) . . . . (3) Operating, maintaining, and repairing the pipeline system in accordance with each of the requirements of this subpart and subpart H of this part. LEG procedures did not address the requirement for maintaining adequate firefighting equipment at breakout tank areas, as required by 49 C.F.R. § 195.430. Specifically, no process was defined in section 7.0 of LEG’s O&ME Manual that addresses the requirement for maintaining adequate firefighting equipment at breakout tank areas as well as the requirements outlined under (a), (b), and (c) of 49 C.F.R. § 195.430. Therefore, LEG must review and amend its procedures to address firefighting equipment maintenance, inspection and location at breakout tank areas. Following the PHMSA inspection, LEG modified its procedures under the O&ME Manual by providing adequate and consistent guidance on firefighting equipment requirements at breakout tank areas and pumps stations, and identifying the appropriate OSHA regulations for the placement, maintenance, and testing of portable fire extinguishers. Thus, no further action is necessary for Item 2. Response to this Notice This Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Enforcement Proceedings. Please refer to this document and note the response options. Be advised that all material you#

32023024NOA_Notice of Amendment_12272023_(23-264767)_text.pdf, page 3submit in response to this enforcement action is subject 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). Following the receipt of this Notice, you have 30 days to submit written comments, amended procedures, or a request for a hearing under § 190.211. As mentioned above, LEG has already submitted amended procedures to PHMSA which reflect the amendments required by this Notice. These amended procedures were reviewed and found to be adequate by PHMSA, therefore, no further action or response is required. If no additional response is received within 30 days of receipt of this Notice, this enforcement will be automatically closed. It is requested that LEG maintain documentation of the safety improvement costs associated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures) and submit the total to Gregory A. Ochs, Director, Central, Pipeline and Hazardous Materials Safety Administration. In correspondence concerning this matter, please refer to CPF 3-2023-024-NOA and, for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Gregory A. Ochs Director, Central Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration cc: James McGrath, Michigan Plant and Pipeline Manager, jmcgrath@lamdaenergyllc.com John Stalmack, Regulatory Compliance Manager, jstalmack@lambdaenergyllc.com Enclosure: Response Options for Pipeline Operators in Enforcement Proceedings#

32023024NOA_Closure Letter_01162024_(23-264767)_text.pdf, page 1Official PDFVIA ELECTRONIC MAIL TO: hfaulkner@lambdaoil.com; jmcgrath@lambdaenergyllc.com; jstalmack@lambdaenergyllc.com January 16, 2024 Harry Faulkner President/CEO Lambda Energy Gathering LLC 12012 Wickchester LN Suite 300 Houston, Texas 77079 RE: CPF No. 3-2023-024-NOA Dear Mr. Faulkner: From July 25, 2023 through July 27, 2023, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C.), inspected Lambda Energy Gathering LLC’s (LEG) Operations, Maintenance and Emergencies (O&ME) Manual of procedures in Kalkaska, Michigan. As a result of the inspection, LEG was issued a Notice of Amendment on December 27, 2023, which proposed amendment of LEG’s Procedures. LEG submitted its response to the Notice on January 2, 2024. In its response, LEG stated that the amended procedures had been previously submitted to PHMSA. My staff has confirmed that the amended procedures were received, and it appears that the inadequacies outlined in this Notice of Amendment have been corrected. This letter is to inform you no further action is necessary and this case is now closed. Thank you for your cooperation. Sincerely, Gregory A. Ochs Director, Central Region, Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration cc: James McGrath, Michigan Plant and Pipeline Manager, jmcgrath@lamdaenergyllc.com#

32023024NOA_Closure Letter_01162024_(23-264767)_text.pdf, page 2John Stalmack, Regulatory Compliance Manager, jstalmack@lambdaenergyllc.com Enclosure: Response Options for Pipeline Operators in Enforcement Proceedings#