{"operation":"document","citation":"CPF 32025004NOPV","title":"LAKES GAS COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2025-05-05","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.625(f), 192.723(b), 192.805(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-32025004nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-32025004nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-32025004nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/32025004NOPV","body":"Notice of Probable Violation involving LAKES GAS COMPANY. PHMSA's enforcement data identifies the cited regulations as 192.625(f),  192.723(b),  192.805(a). The case was opened on 2025-05-05 and is reported as closed as of 2025-11-04. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n32025004NOPV_Closure Letter_11042025_(23-264480).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_Closure%20Letter_11042025_(23-264480).pdf\n\n32025004NOPV_Closure Letter_11042025_(23-264480)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_Closure%20Letter_11042025_(23-264480)_text.pdf\n\n32025004NOPV_Final Order_08072025_(23-264480).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_Final%20Order_08072025_(23-264480).pdf\n\n32025004NOPV_Final Order_08072025_(23-264480)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_Final%20Order_08072025_(23-264480)_text.pdf\n\n32025004NOPV_PCO_05052025_(23-264480).pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_PCO_05052025_(23-264480).pdf\n\n32025004NOPV_PCO_05052025_(23-264480)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/32025004NOPV/32025004NOPV_PCO_05052025_(23-264480)_text.pdf\n\n32025004NOPV_Final Order_08072025_(23-264480)_text.pdf\n\nAugust 7, 2025\nVIA ELECTRONIC MAIL TO: thampton@lakesgasco.com\nMr. Trent Hampton\nChief Executive Officer\nLakes Gas Company\n26777 Fallbrook Ave,\nWyoming, Minnesota 55092\nRe: CPF No. 3-2025-004-NOPV\nDear Mr. Hampton:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken to comply with the pipeline safety\nregulations. When the terms of the compliance order are completed, as determined by the Acting\nDirector, Central Region, this enforcement action will be closed. Service of the Final Order by\ne-mail is effective upon the date of transmission and acknowledgement of receipt as provided\nunder 49 CFR § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nLinda Daugherty\nActing Associate Administrator\nfor Pipeline Safety\nEnclosures (Final Order and NOPV)\ncc: David Barrett, Acting Director, Central Region, Office of Pipeline Safety\nJason Hellendrung Manager of Physical Operations / Fleet Manager / Pipeline Manager,\njhellendrung@lakesgas.com\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 )\nLakes Gas Company, ) CPF No. 3-2025-004-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn May 5, 2025, pursuant to 49 CFR § 190.207, the Director, Central Region, Office of Pipeline\nSafety (OPS), issued a Notice of Probable Violation (Notice) to Lakes Gas Company\n(Respondent). The Notice proposed finding that Respondent had violated the pipeline safety\nregulations in 49 CFR Part 192. The Notice also proposed certain measures to correct the\nviolations. Respondent did not contest the allegations of violation or corrective measures.\nBased upon a review of all the evidence, pursuant to § 190.213, I find Respondent violated the\npipeline safety regulations listed below, as more fully described in the enclosed Notice, which is\nincorporated by reference:\n49 CFR § 192.625(f) (Item 1) ─ Respondent failed to assure the proper\nconcentration of odorant by failing to conduct periodic samplings of combustible\ngases using instruments capable of determining the percentage of gas in the air at\nwhich the odor becomes readily detectible.\n49 CFR § 192.723(b) (Item 2) ─ Respondent failed to have a leakage control\nprogram that takes into account the nature of the pipeline operations and local\nconditions.\n49 CFR § 192.805(a) (Item 3) ─ Respondent failed to follow its written\nqualification program to identify covered tasks.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCompliance Actions\nPursuant to 49 U.S.C. § 60118(b) and 49 CFR § 190.217, Respondent is ordered to take the\n\n\n\nactions proposed in the enclosed Notice to correct the violations. The Acting Director may grant\nan extension of time to comply with any of the required items upon a written request timely\nsubmitted by the Respondent and demonstrating good cause for an extension. Upon completion\nof the ordered actions, Respondent may request that the Acting Director close the case.\nRespondent previously submitted evidence to show appropriate actions have been taken to\ncorrect the violations. This evidence is currently under review by the Acting Director. Failure to\ncomply with this Order may result in the assessment of civil penalties under 49 CFR § 190.223\nor in referral to the Attorney General for appropriate relief in a district court of the United States.\nThe terms and conditions of this order are effective upon service in accordance with 49 CFR\n§ 190.5.\n___________________________________ _________________________\nLinda Daugherty Date Issued\nActing Associate Administrator\nfor Pipeline Safety\n\n\n\nNOTICE OF PROBABLE VIOLATION\nand\nPROPOSED COMPLIANCE ORDER\nVIA ELECTRONIC MAIL TO: thampton@lakesgasco.com; jhellendrung@lakesgas.com\nMay 5, 2025\nMr. Trent Hampton\nChief Executive Officer\nLakes Gas Company\n26777 Fallbrook Ave,\nWyoming, Minnesota 55092\nCPF 3-2025-004-NOPV\nDear Mr. Hampton:\nFrom September 11 to September 15, 2023, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code (U.S.C.), inspected Lakes Gas Company’s (Lakes) petroleum gas\nsystem in Sturgeon Bay, Wisconsin.\nAs a result of the inspection, it is alleged that Lakes has committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n1. § 192.625 Odorization of gas.\n(a) . . . .\n(f) To assure the proper concentration of odorant in accordance with this section,\neach operator must conduct periodic sampling of combustible gases using an\ninstrument capable of determining the percentage of gas in air at which the odor\nbecomes readily detectable. Operators of master meter systems may comply with\nthis requirement by-\n(1) Receiving written verification from their gas source that the gas has the proper\nconcentration of odorant; and\n(2) Conducting periodic \"sniff\" tests at the extremities of the system to confirm that\nthe gas contains odorant.\n\n\n\nLakes failed to assure the proper concentration of odorant in accordance with § 192.625(f).\nSpecifically, Lakes failed to conduct periodic sampling of combustible gases using an instrument\ncapable of determining the percentage of gas in air at which the odor becomes readily\ndetectable.1 Lakes’ “Operation and Maintenance Procedure” (O&M Procedure), section\n192.625, “Odorization of Gas,” stated, “Odorators are available to determine that the level of\nstench is detectable at a minimum of 1/5 the lower explosion level (LEL). This method of\nodorant detection needs to be performed quarterly and recorded.” However, based on PHMSA’s\nreview of Lakes’ records, odorator reading detection levels were never performed or recorded on\nthe Propane Odorization Form, which Lakes used to record this information. Furthermore,\nLakes, during the inspection, stated it did not have an odorator to determine the percentage of gas\nin the air at which the odor would become readily detectable. Therefore, Lakes failed to conduct\nperiodic sampling of combustible gases using an instrument capable of determining the\npercentage of gas in air at which the odor becomes readily detectable, per the requirements of §\n192.625(f).\n2. § 192.723 Distribution systems: Leakage surveys.\n(a) . . . .\n(b) The type and scope of the leakage control program must be determined by the\nnature of the operations and the local conditions, but it must meet the following\nminimum requirements:\nLakes failed to have a leakage control program determined by the nature of the operations and\nthe local conditions, per the requirements of § 192.723(b). Specifically, Lakes’ leakage control\nprogram did not utilize survey methods determined by the nature of operating subsurface\npetroleum gas pipelines.\nFrom a review of Lakes’ records, PHMSA determined that leak surveys conducted on July 15,\n16, and 17, 2020, were only performed above the ground surface, despite Lakes’ petroleum gas\nsystem being subsurface. Petroleum gas vapor’s gravity range is 1.6 to 2.0 times heavier than\nair.\n2 Consequently, when petroleum gas vapor escapes it has a tendency to settle in low places,\nand to move along the bottom of ditch lines and substructures unless substantial air movement\ndissipates it.3 Under normal conditions, it does not vent to the surface.4 Additionally, under\ncertain conditions (e.g., during conditions where topsoil is extremely wet or freezes) the gas may\nbe trapped underground, unable to be detected by surface leak detection methods.5 The Lakes’\nTraining Exercise 708 Leak Surveys only instructed employees how to conduct surface gas\ndetection surveys. Lakes’ procedures did not require any subsurface leak surveys, despite Lakes’\nsystem having subsurface petroleum gas pipelines.\n1 Since Lakes was not operating a master meter system, the only acceptable method of complying was to use an\ninstrument capable of determining the percentage of gas in air at which the odor becomes readily detectable.\n2 See The Guide for Gas Transmission, Distribution, and Gathering Piping Systems, American Gas Association, Gas\nPiping Technology Committee Z380 (2022) (hereinafter “GPTC Guide”), at 922.\n3 Id.\n4 Id.\n5 See PHMSA Advisory Bulletin, ADB-02-05, 67 Fed. Reg, 57,484, 57,485 (Sept. 10, 2022),\nhttps://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2020-06/02-22952.pdf (hereinafter “Advisory Bulletin”).\n\n\n\nThe American Gas Association has developed industry guidance on leakage survey methods\nwhich may be employed by operators of subsurface petroleum gas systems that take into account\nthe nature of transporting petroleum gas subsurface.6 PHMSA has advised owners and operators\nof liquified petroleum gas distribution systems to ensure that their procedures emphasize\nmeasurement of gas below the surface of the soil or pavement and are adequate to detect leaks of\nheavier-than-air gas.7\nLakes’ leak survey program—which only consisted of surface gas detection surveys to detect\npetroleum gas leaks on subsurface pipeline facilities—did not reflect Lakes’ subsurface system\nand failed to take into account the nature of operating subsurface petroleum gas pipelines and the\nlocal conditions of the system, per the requirements of § 192.723(b).\n3. § 192.805 Qualification program.\nEach operator shall have and follow a written qualification program. The program\nshall include provisions to:\n(a) Identify covered tasks;\nLakes failed to follow its written qualification program to identify covered tasks, per the\nrequirements of § 192.805(a). On November 25, 2019, PHMSA issued to Lakes a Notice of\nAmendment, CPF No. 3-2019-0007M-NOA, which required Lakes’ qualification program to be\nmodified to include the tasks of “valve inspection” and “pipe fitting” as part of the covered task\nlist. On March 27, 2020, Lakes sent a response to PHMSA stating the modifications to the\nqualification program had been made to include those required tasks. However, from a review of\nLakes’ operator qualification training records, PHMSA found that Lakes never implemented\n\"Training Exercise NO. 717 Jurisdictional Pipeline: Pipe Fitting Inspection\" or \"Training\nExercise NO. 718 Jurisdictional Pipeline: Valve Inspection\" as outlined in its March 27, 2020\nresponse to CPF 3-2019-0007M. Furthermore, Lakes also failed to update its OQ task list to\ninclude either task as required. Therefore, Lakes failed to follow its written qualification\nprogram to identify covered tasks, as required by § 192.805(a).\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$272,926 per violation per day the violation persists, up to a maximum of $2,729,245 for a\nrelated series of violations. For violation occurring on or after December 28, 2023 and before\nDecember 30, 2024 the maximum penalty may not exceed $266,015 per violation per day the\nviolation persists, up to a maximum of $2,660,135 for a related series of violations. For violation\noccurring on or after January 6, 2023 and before December 28, 2023 the maximum penalty may\nnot exceed $257,664 per violation per day the violation persists, up to a maximum of $2,576,627\nfor a related series of violations. For violation occurring on or after March 21, 2022 and before\n6 See GPTC Guide at 922.\n7 See Advisory Bulletin (explaining that usually “bar holing” and examination of below ground areas, such as\nmanholes, storm drains, and basements is used as a leakage survey method).\n\n\n\nJanuary 6, 2023 the maximum penalty may not exceed $239,142 per violation per day the\nviolation persists, up to a maximum of $2,391,412 for a related series of violations. For violation\noccurring on or after May 3, 2021 and before March 21, 2022 the maximum penalty may not\nexceed $225,134 per violation per day the violation persists, up to a maximum of $2,251,334 for\na related series of violations. For violation occurring on or after January 11, 2021 and before\nMay 3, 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.\nWe have reviewed the circumstances and supporting documents involved in this case and have\ndecided not to propose a civil penalty assessment at this time.\nProposed Compliance Order\nWith respect to Items 1, 2, and 3, pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Lakes. Please refer to\nthe Proposed Compliance Order, which is enclosed and made a part of this Notice.\nResponse to this Notice\nThis Notice is issued in accordance with 49 CFR § 190.207(c). Any response you may have\nsubmitted to the original Notice is no longer applicable. You must respond as set forth below.\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Enforcement Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If\nyou believe that any portion of your responsive material qualifies for confidential treatment\nunder 5 U.S.C. § 552(b), along with the complete original document you must provide a second\ncopy of the document with the portions you believe qualify for confidential treatment redacted\nand an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. § 552(b).\nFollowing your receipt of this Notice, you have 30 days to respond as described in the enclosed\nResponse Options. If you do not respond within 30 days of receipt of this Notice, this constitutes\na waiver of your right to contest the allegations in this Notice and authorizes the Associate\nAdministrator for Pipeline Safety to find facts as alleged in this Notice without further notice to\nyou and to issue a Final Order. If you are responding to this Notice, we propose that you submit\nyour correspondence to my office within 30 days from receipt of this Notice. The Region\nDirector may extend the period for responding upon a written request timely submitted\ndemonstrating good cause for an extension.\n\n\n\nIn your correspondence on this matter, please refer to 3-2025-004-NOPV 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: Jason Hellendrung Manager of Physical Operations / Fleet Manager / Pipeline Manager,\njhellendrung@lakesgas.com\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Enforcement Proceedings\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 Lakes a Compliance Order incorporating the\nfollowing remedial requirements to ensure the compliance of Lakes with the pipeline safety\nregulations:\nA. B. C. D. In regard to Item 1 of the Notice, pertaining to Lakes’ failure to assure the proper\nconcentration of odorant in accordance with § 192.625(f), Lakes must (1) conduct sampling\nof combustible gases using an instrument capable of determining the percentage of gas in\nair at which the odor becomes readily detectable on the jurisdictional systems within 60\ndays of receipt of the Final Order, and (2) provide the Central Region Director with records\nof the instrumented sampling that include odorator reading detection levels within 90 days\nof receipt of the Final Order.\nIn regard to Item 2 of the Notice, pertaining to Lakes’ failure to have a leakage control\nprogram determined by the nature of the operations, per the requirements of § 192.723(b),\nLakes must develop site-specific procedures for a leakage control program determined by\noperating subsurface petroleum gas pipelines and provide the amended procedures to the\nCentral Region Director for review and approval within 60 days of receipt of the Final\nOrder. Lakes may turn to PHMSA’s Advisory Bulletin to Owners and Operators of\nLiquified Petroleum Gas Distribution Systems8 and the GPTC Guide for Gas Transmission,\nDistribution, and Gathering Piping Systems 9 for further information on developing\nadequate leak survey programs for subsurface petroleum gas pipelines. Furthermore, Lakes\nmust conduct leak surveys with the newly amended procedures on the jurisdictional\nsystems and provide the Central Region Director with the leak survey records for review\nand approval within 180 days of receipt of the Final Order.\nIn regard to Item 3 of the Notice, pertaining to Lakes’ failure to follow their written\nqualification program to identify covered tasks, Lakes must implement its procedures,\nTraining Exercise NO. 717 Jurisdictional Pipeline Pipe Fitting Inspection and Training\nExercise NO. 718 Jurisdictional Pipeline Valve Inspection, within 90 days of receipt of the\nFinal Order. Furthermore, Lakes must provide the training records and the amended\nprocedures to the Central Region Director within 90 days of receipt of the Final Order for\nthe Directors review and approval.\nIt is requested (not mandated) that Lakes maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total to\nGregory A. Ochs, Director, Central Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: (1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses, and (2)\ntotal cost associated with replacements, additions and other changes to pipeline\ninfrastructure.\n8 PHMSA Advisory Bulletin, ADB-02-05, 67 Fed. Reg, 57,484, 57,485 (Sept. 10, 2022),\nhttps://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2020-06/02-22952.pdf\n9 The Guide for Gas Transmission, Distribution, and Gathering Piping Systems, American Gas Association, Gas\nPiping Technology Committee Z380 (2022).\n\n32025004NOPV_Closure Letter_11042025_(23-264480)_text.pdf\n\nVIA ELECTRONIC MAIL TO: thampton@lakesgasco.com; jhellendrung@lakesgas.com\nNovember 4, 2025\nMr. Trent Hampton\nChief Executive Officer\nLakes Gas Company\n26777 Fallbrook Ave,\nWyoming, Minnesota 55092\nRE: CPF 3-2025-004-NOPV\nDear Mr. Hampton:\nOn August 7, 2025, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Lakes Gas Company a Final Order, pursuant to 49 CFR § 190.213. This Order included a\nCompliance Order. Based on our review of the documentation provided, it has been determined\nthat Lakes Gas Company has complied with the terms of the 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,\nDavid Barrett\nActing Director, Central Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: Jason Hellendrung Manager of Physical Operations / Fleet Manager / Pipeline Manager,\njhellendrung@lakesgas.com","truncated":false,"body_characters":20930}