{"operation":"document","citation":"CPF 32024032NOA","title":"ZENITH ENERGY TERMINALS JOLIET HOLDINGS LLC — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2024-05-06","effective_on":null,"summary":"CLOSED notice of amendment citing 195.402(a), 195.402(c)(2), 195.402(c)(3), 195.452(h)(1)(ii), 195.555, 195.64(c)(1)(iii), 195.64(c)(1)(iv).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32024032noa.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32024032noa.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32024032noa","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32024032NOA","body":"Notice of Amendment involving ZENITH ENERGY TERMINALS JOLIET HOLDINGS LLC. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.402(c)(2),  195.402(c)(3),  195.452(h)(1)(ii),  195.555,  195.64(c)(1)(iii),  195.64(c)(1)(iv). The case was opened on 2024-05-06 and is reported as closed as of 2024-06-11. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32024032NOA_Closure Letter_06112024_(22-233382).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32024032NOA/32024032NOA_Closure%20Letter_06112024_(22-233382).pdf\n\n32024032NOA_Closure Letter_06112024_(22-233382)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32024032NOA/32024032NOA_Closure%20Letter_06112024_(22-233382)_text.pdf\n\n32024032NOA_Notice of Amendment_05062024_(22-233382).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32024032NOA/32024032NOA_Notice%20of%20Amendment_05062024_(22-233382).pdf\n\n32024032NOA_Notice of Amendment_05062024_(22-233382)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32024032NOA/32024032NOA_Notice%20of%20Amendment_05062024_(22-233382)_text.pdf\n\n32024032NOA_Notice of Amendment_05062024_(22-233382)_text.pdf\n\nNOTICE OF AMENDMENT\nVIA ELECTRONIC MAIL TO: Jeff.armstrong@zenithterminals.com;\nShannon.caldwell@zenithterminals.com\nMay 6, 2024\nJeff Armstrong\nChief Executive Officer\nZenith Energy Terminals Joliet Holdings, LLC\n1 Highland Lane\nMetuchen, NJ 08840\nCPF 3-2024-032-NOA\nDear Mr. Armstrong:\nFrom September 12, 2022, through November 30, 2022, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United\nStates Code (U.S.C.), inspected Zenith Energy Terminals Joliet Holdings, LLC’s\n(Zenith Energy) procedures in Morris, Illinois.\nAs a result of the inspection, PHMSA has identified the apparent inadequacies found within\nZenith Energy’s plans or procedures. The items inspected and the inadequacies are described\nbelow:\n1. § 195.402 - Procedural manual for operations, maintenance, and emergencies.\n(a) . . . .\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(1) . . . .\n(3) Operating, maintaining, and repairing the pipeline system in accordance with\neach of the requirements of this subpart and subpart H of this part.\n\n\n\nZenith Energy’s procedure for the inspection and testing of Overpressure Safety Devices is\ninadequate to address the requirements of § 195.428(a). Specifically, subsection C.1 of Zenith\nEnergy’s procedure titled, \"Overpressure Safety Devices & Scraper Facilities,\" Version 3, dated\nOctober 15, 2021, did not adequately describe the requirement for recording “as-left” settings on\nrelief valves and control valves. Furthermore, subsection C.1 provided guidance for Protective\nShutdown Instrumentation testing that required the listing of the reset pressure in the case of\ndeviation only. However, as determined historically by PHMSA, a performance-based\nregulation, such as § 195.428(a), will generally establish a minimum level of safety which\noperators must meet or exceed. In this case, operators must annually determine that each pressure\nsafety device is \"functioning properly, is in good mechanical condition, and is adequate.\" Among\nother things, operators must be able to detect if the set point for an overpressure safety device is\ndrifting because, if that was occurring, the device would not be functioning properly. In addition,\nas prior enforcement history demonstrated,a documenting the \"as-found\" and \"as-left\" conditions\nof safety devices ensures compliance with this requirement. PHMSA concluded that there is an\nimportant safety reason for operators to record \"as-found\" and \"as-left\" settings during\ninspections in order to ensure each overpressure safety device is functioning properly, is in good\nmechanical condition, and is adequate from the standpoint of capacity and reliability of\noperation.\nZenith Energy, therefore, had to review and amend its procedure to ensure that it adequately\nprovides guidance for recording “as-left” settings on overpressure safety devices to comply with\nthe requirements of § 195.428(a). Following the PHMSA inspection, Zenith Energy amended its\nprocedure to reflect that the requirements have the “as‐left” setting on the inspection records and\nto include reinforced language for supervisory roles and responsibilities in ensuring that the task\nis completed correctly, that required elements of records are documented, and that the record is\nstored properly. The inadequacies outlined above appear to have been corrected in the procedure\nwith no further action necessary for Item 1.\n2. § 195.402 - Procedural manual for operations, maintenance, and emergencies.\n(a) . . . .\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(1) . . . .\n(3) Operating, maintaining, and repairing the pipeline system in accordance with\neach of the requirements of this subpart and subpart H of this part.\nZenith Energy’s written procedures for conducting operations, maintenance, emergency\npreparedness, and response activities were inadequate to ensure safe operation of a pipeline\nfacility, in accordance with § 195.402(c)(3). Specifically, Zenith Energy’s “Emergency Response\nTraining And Protocols” procedure, Version 3, dated October 15, 2021, required taking\na PHMSA has brought multiple enforcement actions demonstrating the importance of documenting the \"as-found\"\nand \"as-left\" settings of safety devices to ensure compliance with § 195.428(a). See, Explorer Pipeline Company,\nCPF No. 3-2013-5010M-NOA, Item 1, Order Directing Amendment (Jul. 9, 2015)\n\n\n\nappropriate remedial actions promptly in response to extreme weather events and natural\ndisasters. But it failed to define the term “prompt,” which is necessary to establish compliance\nwith the requirements of § 195.414(d). Moreover, the process described in the “Emergency\nResponse Training And Protocols” procedure did not adequately establish remedial action\nrequirements since the appropriate remedial actions that are required following the initial\ninspection of an area affected by an extreme weather event or a natural disaster did not include\nperforming additional surveys and patrols and submitting notifications to the affected\ncommunities as described by § 195.414(d)(4) and (6).\nZenith Energy’s procedure had to, therefore, be amended to properly describe what a prompt\nremedial action is and to adequately detail remedial action requirements to comply with the\nrequirements of § 195.414(d). Following the PHMSA inspection, Zenith Energy revised its\nprocedure to establish a definition for taking remedial actions promptly and to expand on the\nremedial actions requirements by including additional surveys and patrols and notifying the\naffected communities of the steps that can be taken to ensure public safety. The inadequacies\noutlined above appear to have been corrected in the aforementioned procedure warranting no\nfurther action necessary for Item 2.\n3. § 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(h) What actions must an operator take to address integrity issues?\n(1) General requirements. An operator must take prompt action to address all\nanomalous conditions in the pipeline that the operator discovers through the\nintegrity assessment or information analysis. In addressing all conditions, an\noperator must evaluate all anomalous conditions and remediate those that could\nreduce a pipeline's integrity, as required by this part. An operator must be able to\ndemonstrate that the remediation of the condition will ensure that the condition is\nunlikely to pose a threat to the long-term integrity of the pipeline. An operator must\ncomply with all other applicable requirements in this part in remediating a\ncondition. Each operator must, in repairing its pipeline systems, ensure that the\nrepairs are made in a safe and timely manner and are made so as to prevent damage\nto persons, property, or the environment. The calculation method(s) used for\nanomaly evaluation must be applicable for the range of relevant threats.\n(i) . . . .\n(ii) Long-term pressure reduction. When a pressure reduction exceeds 365 days, the\noperator must notify PHMSA in accordance with paragraph (m) of this section and\nexplain the reasons for the delay. An operator must also take further remedial\naction to ensure the safety of the pipeline.\nZenith Energy’s written Integrity Management Program (IMP), Revision 2.22, had an inadequate\nprocess for notifying PHMSA of long-term pressure reductions taken to address anomalous\nconditions in the pipeline, discovered through the integrity assessment or information analysis, as\nrequired by § 195.452(h)(1)(ii). Specifically, IMP section 5.6, titled “Process – Repairs,” limited\nthe requirement for notifying PHMSA of a pressure reduction exceeding 365 days to the\nimmediate repair conditions described in § 195.452(h)(4)(i). However, the same notification\n\n\n\nrequirement also applies to a long-term pressure reduction taken for safety reasons in conjunction\nwith other pipeline anomalous conditions, discovered through the integrity assessment or\ninformation analysis, when the schedule for evaluation and remediation of such conditions cannot\nbe met.\nZenith Energy had to, therefore, amend its procedure contained in IMP section 5.6 by requiring\nPHMSA notification when a pressure reduction associated with pipeline anomalous conditions\ndiscovered through the integrity assessment or information analysis will exceed 365 days to\ncomply with § 195.452(h)(1)(ii). Following the PHMSA inspection, Zenith Energy revised its\nIMP and added language that includes other conditions and scheduling that are not immediate\nconditions, but which may evolve past scheduling into long-term pressure reductions from\ntemporary pressure reductions. The inadequacy outlined above appears to have been corrected in\nthe IMP with no further action necessary for Item 3.\n4. § 195.402 - Procedural manual for operations, maintenance, and emergencies.\n(a) . . . .\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(1) . . . .\n(2) Gathering of data needed for reporting accidents under subpart B of this part in\na timely and effective manner.\nZenith Energy’s written procedures for conducting operations, maintenance, and emergency\npreparedness and response activities were inadequate to assure safe operation of a pipeline\nfacility in accordance with § 195.402(c)(2). Specifically, Zenith Energy’s “Telephonic Reporting\nAnd Written Accident Reports Procedure,” Version 3, dated October 15, 2021, did not include a\nprovision to provide the notice required under § 195.52(a) for reporting a release resulting in an\nevent described in § 195.50 no later than one hour following the discovery of a release.\nZenith Energy’s procedure, therefore, had to be amended to address the requirement for\nimmediately reporting accidents meeting the criteria in § 195.52(a) in a prompt manner.\nFollowing the PHMSA inspection, Zenith Energy amended its procedure to provide notice to the\nNational Response Center no later than one hour after confirmed discovery of an accident. The\ninadequacy outlined above appears to have been corrected in the aforementioned procedure with\nno further action necessary for Item 4.\n5. § 195.402 – Procedural manual for operations, maintenance, and emergencies.\n(a) . . . .\n(c) Maintenance and normal operations. The manual required by paragraph (a) of\nthis section must include procedures for the following to provide safety during\nmaintenance and normal operations:\n(1) . . . .\n\n\n\n(2) Gathering of data needed for reporting accidents under subpart B of this part in\na timely and effective manner.\nZenith Energy’s written procedures for conducting operations, maintenance, and emergency\npreparedness and response activities were inadequate to assure safe operation of a pipeline\nfacility in accordance with § 195.402(c)(2). Specifically, Zenith Energy’s “Telephonic Reporting\nAnd Written Accident Reports Procedure,” did not include a provision to revise or confirm its\ninitial telephonic notice made to the National Response Center (NRC) within 48 hours after the\nconfirmed discovery of an accident as required by § 195.52(d).\nZenith Energy’s procedure, therefore, had to be amended to address the requirement for\nproviding new information to the NRC in accordance with § 195.52(d). Following the PHMSA\ninspection, Zenith Energy modified its procedure to require the revision or confirmation of an\ninitial notice made to NRC within 48 hours after the confirmed discovery of an accident. The\ninadequacy outlined above appears to have been corrected in the aforementioned procedure with\nno further action necessary for Item 5.\n6. § 195.64 National Registry of Operators.\n(a) . . . .\n(c) Changes. Each operator must notify PHMSA electronically through the National\nRegistry of Operators at https://portal.phmsa.dot.gov, of certain events.\n(1) An operator must notify PHMSA of any of the following events not later than 60\ndays before the event occurs:\n(i) . . . .\n(iii) Reversal of product flow direction when the reversal is expected to last more\nthan 30 days. This notification is not required for pipeline systems already designed\nfor bi-directional flow; or\n(iv) A pipeline converted for service under § 195.5, or a change in commodity as\nreported on the annual report as required by § 195.49. (2) Gathering of data needed\nfor reporting accidents under subpart B of this part in\na timely and effective manner.\nZenith Energy’s written procedures for providing notifications to the National Registry was\ninadequate, per the requirements of § 195.64(c)(iii) and (iv). Specifically, section B.6.2 of Zenith\nEnergy’s Operations & Maintenance Core (O&M) Manual, Version 3, dated October 15, 2021,\nwas not updated to include the regulatory provisions from the latest amendment to § 195.64,\nwhich renamed the regulatory section title from “National Registry of Pipeline and LNG\nOperators” to “National Registry of Operators” (see 85 Fed. Reg. 8104 (Feb. 12, 2020)).\nFurthermore, Zenith Energy’s manual incorrectly listed the online address for notifying PHMSA\nelectronically through the National Registry of Operators of the certain events described under\n§ 195.64(c) and failed to require the notification of PHMSA of the events described specifically\nby § 195.64(c)(1)(iii) and (iv).\n\n\n\nTherefore, Zenith Energy had to revise its manual to adequately address these regulatory\nrequirements. Following the PHMSA inspection, Zenith Energy amended its O&M Manual\nsection B.6 to include (1) the correct name “National Registry of Operators,” (2) missing content\ndescribed under § 195.64(c)(1)(iii) and (iv), and (3) the address for notifying PHMSA. The\ninadequacies outlined above appear to have been corrected in the aforementioned procedure with\nno further action necessary for Item 6.\n7. § 195.555 What are the qualifications for supervisors?\nYou must require and verify that supervisors maintain a thorough knowledge of\nthat portion of the corrosion control procedures established under §195.402(c)(3)\nfor which they are responsible for insuring compliance.\nZenith Energy failed to establish adequate procedures for requiring supervisors to maintain a\nthorough knowledge of the corrosion control procedures established under § 195.402(c)(3) for\nwhich they are responsible for ensuring compliance, per § 195.555. Specifically, Zenith Energy’s\nprocedure titled “Corrosion - General Requirements,” Version 3, dated October 15, 2021,\nrequired the Maintenance Manager to maintain familiarity with the corrosion control procedures.\nHowever, Zenith Energy’s written process did not establish the methods or qualifications used\nfor acquiring and maintaining thorough knowledge of corrosion control procedures for the\nsupervisors, or a method to verify a supervisor’s compliance with the established qualification\ncriteria, such as NACE certification, professional engineering or suitable experience, or practical\ntraining.\nZenith Energy needed to develop an adequate process to comply with § 195.555, which includes\ncriteria to establish levels of knowledge and experience of corrosion control procedures for its\nsupervisors and a method to verify a supervisor’s compliance with the established criteria.\nFollowing the PHMSA inspection, Zenith Energy revised its procedure to include language that\nrequires the Area/Terminal Manager to annually verify and document that the Maintenance\nManager holds a current NACE certification, has at least five years of practical experience in the\ncorrosion control arena, and that they also conduct the annual O&M Procedural review, which\nhouses the procedures established under § 195.402(c)(3) for corrosion control. The inadequacies\noutlined above appear to have been corrected in the aforementioned procedure with no further\naction necessary for Item 7.\n8. § 195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall be\nreviewed at intervals not exceeding 15 months, but at least once each calendar year,\nand appropriate changes made as necessary to insure that the manual is effective.\nThis manual shall be prepared before initial operations of a pipeline system\ncommence, and appropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\nZenith Energy’s procedures for maintenance and normal operations were inadequate to ensure\n\n\n\nthe safe operation of a pipeline facility per the requirements of § 195.402(a). Specifically, Zenith\nEnergy failed to make appropriate changes that were deemed necessary as a result of the review\nof its O&M procedure, entitled “Operation & Maintenance - General,” Version 3, dated October\n15, 2021, in accordance with § 195.402(a). Section D of this procedure covered the performance\nof normal operations and was outdated as it incorrectly indicated that National Center for\nConstruction Education and Research (NCCER) training modules were being utilized for\ncovered tasks training and performance. Zenith Energy had, in fact, transitioned from the\ncovered task list administered by NCCER on December 15, 2020, to the common covered task\nlist managed by Veriforce.\nAs a regulatory requirement of the annual review of the maintenance and normal operations\nprocedures, Zenith Energy had to amend its procedure to comply with § 195.402(a) by properly\naddressing the transition to the Veriforce training modules as one of the primary training\nresources for covered tasks, as well as deeming these modules as company procedures when\nneeded in the absence of specific written company procedures for a particular covered task.\nFollowing the PHMSA inspection, Zenith Energy revised its procedure to include a statement\nthat acknowledges the use of Veriforce training modules in the process of qualifying personnel\nfor covered tasks performance and as company procedures, when deemed necessary, due to the\nabsence of specific written Company procedures for particular covered tasks. The inadequacies\noutlined above appears to have been corrected in the aforementioned procedure with no further\naction necessary for Item 8.\nResponse to this Notice\nThis Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as\npart of this Notice is a document entitled Response Options for Pipeline Operators in\nEnforcement Proceedings.\nPlease refer to this document and note the response options. Be advised that all material you\nsubmit in response to this enforcement action is subject to being made publicly available. If you\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. § 552(b), along with the complete original document you must provide a second copy of\nthe document with the portions you believe qualify for confidential treatment redacted and an\nexplanation of why you believe the redacted information qualifies for confidential treatment\nunder 5 U.S.C. § 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, amended\nprocedures, or a request for a hearing under § 190.211. As mentioned above, Zenith Energy has\nalready submitted amended procedures to PHMSA which reflect the amendments required by\nthis Notice. These amended procedures were reviewed and found to be adequate by PHMSA,\ntherefore, no further action or response is required. If no additional response is received within\n30 days of receipt of this Notice, this enforcement will be automatically closed.\n\n\n\nIt is requested that Zenith Energy maintain documentation of the safety improvement costs\nassociated with fulfilling this Notice of Amendment (preparation/revision of plans, procedures)\nand submit the total to Gregory A. Ochs, Director, Central, Pipeline and Hazardous Materials\nSafety Administration.\nIn correspondence concerning this matter, please refer to CPF 3-2024-032-NOA and, for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Shannon Caldwell, VP of HSE and Regulatory, Zenith Energy,\nShannon.Caldwell@zenithterminals.com\nEnclosure: Response Options for Pipeline Operators in Enforcement Proceedings\n\n32024032NOA_Closure Letter_06112024_(22-233382)_text.pdf\n\nVIA ELECTRONIC MAIL TO: Jeff.armstrong@zenithterminals.com;\nShannon.caldwell@zenithterminals.com\nJune 11, 2024\nJeff Armstrong\nChief Executive Officer\nZenith Energy Terminals Joliet Holdings, LLC\n1 Highland Lane\nMetuchen, NJ 08840\nRE: CPF 3-2024-032-NOA\nDear Mr. Armstrong:\nFrom September 12, 2022, through November 30, 2022, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United\nStates Code (U.S.C.), inspected Zenith Energy Terminals Joliet Holdings, LLC’s\n(Zenith Energy) procedures in Morris, Illinois. As a result of the inspection, Zenith Energy was\nissued a Notice of Amendment on May 6, 2024, which proposed amendment of your procedures.\nZenith Energy submitted its amended procedures which were reviewed by my staff, and it\nappears that the inadequacies outlined in the Notice of Amendment have been corrected.\nThis letter is to inform you that no further action is necessary, and this case is now closed.\nThank you for your cooperation.\nSincerely,\nGregory A. Ochs\nDirector, Central Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Shannon Caldwell, VP of HSE and Regulatory, Zenith Energy,\nShannon.Caldwell@zenithterminals.com","truncated":false,"body_characters":23254}