{"operation":"document","citation":"CPF 420081017","title":"GOLDEN PASS LNG TERMINAL LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2008-10-10","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.225.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420081017.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420081017.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420081017","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420081017","body":"Notice of Probable Violation involving GOLDEN PASS LNG TERMINAL LLC. PHMSA's enforcement data identifies the cited regulation as 192.225. The case was opened on 2008-10-10 and is reported as closed as of 2011-03-22. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420081017_FinalOrder_03222011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420081017/420081017_FinalOrder_03222011.pdf\n\n420081017_FinalOrder_03222011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420081017/420081017_FinalOrder_03222011_text.pdf\n\n420081017_nopvpco_10102008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420081017/420081017_nopvpco_10102008.pdf\n\n420081017_nopvpco_10102008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420081017/420081017_nopvpco_10102008_text.pdf\n\n420081017_FinalOrder_03222011_text.pdf\n\nMarch 22 2011\nMr. Raymond E. Jones\nPresident\nGolden Pass Pipeline LLC\n333 Clay Street\nSuite 801\nHouston, Texas 77002\nRe: CPF No. 4-2008-1017\nDear Mr. Jones:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws the\nalleged violation and proposed compliance order. Therefore, this matter is now closed. Service\nof the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Rod Seeley, Director, Southwest Region, PHMSA\nEvan J. Olson, Esq., Counsel, Golden Pass Pipeline, LLC\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED[7005 1160 0001 0041 3603]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n______________________________\n)\nIn the Matter of )\n)\nGolden Pass Pipeline, LLC, ) CPF No. 4-2008-1017\n)\nRespondent. )\n______________________________)\nFINAL ORDER\nBetween July and August 2008, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\ninspected a portion of the natural gas pipeline being constructed by Golden Pass Pipeline, LLC\n(Golden Pass or Respondent), in Sabine Pass, Texas. The Golden Pass pipeline, a joint venture\nof Qatar Petroleum and affiliates of Exxon Mobil Corporation and ConocoPhillips Pipeline\nCompany, consists of a 68.5-mile natural gas pipeline running from the Golden Pass LNG\nterminal in Sabine Pass to an interstate connection in Stark, Louisiana.\n1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated October 10, 2008, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Golden Pass had violated 49 C.F.R. § 192.225 and requiring Respondent to take\ncertain measures to correct the alleged violation.\nGolden Pass requested and was granted an extension of time to respond to the Notice, which it\ndid by letters dated December 1, 2008, and April 28, 2009 (collectively, Response). Respondent\ncontested the allegations and requested a hearing. The hearing was subsequently held on May\n12, 2009, in Houston, Texas, with an attorney from the Office of Chief Counsel, PHMSA,\npresiding. After the hearing, Respondent provided a post-hearing submission dated June 26,\n2009 (Brief).\nWITHDRAWAL OF VIOLATION\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.225, which states:\n§ 192.225 Welding procedures.\n1 http://www.goldenpasslng.com (last accessed February 9, 2011).\n\n\n\n2\n(a) Welding must be performed by a qualified welder in accordance\nwith welding procedures qualified under section 5 of API 1104\n(incorporated by reference, see § 192.7) or section IX of the ASME Boiler\nand Pressure Vessel Code “Welding and Brazing Qualifications”\n(incorporated by reference, see § 192.7) to produce welds meeting the\nrequirements of this subpart. The quality of the test welds used to qualify\nwelding procedures shall be determined by destructive testing in\naccordance with the applicable welding standard(s).\n(b) Each welding procedure must be recorded in detail, including the\nresults of the qualifying test. This record must be retained and followed\nwhenever the procedure is used.\nAllegation of Violation\nIn the Notice, OPS alleged that Respondent violated 49 C.F.R. § 192.225 by failing to perform\nwelding in accordance with procedures qualified under API 1104, 19th Edition, Appendix A.\nUnder § 192.225, operators must use welding procedures qualified under Section 5 of API 1104\n(API Standard) or section IX of the ASME Boiler and Pressure Vessel Code (ASME Code). A\nqualified welding procedure is “a tested and proven detailed method by which sound welds with\nsuitable mechanical properties can be produced.\n”2 The pipeline safety regulations require\nwelding procedures to be qualified via destructive testing and certain parameters established\nbefore making production welds. Golden Pass elected to qualify its welding procedures under\nthe API Standard. In addition, the company elected to use Appendix A-Alternative Acceptance\nStandards for Girth Welds of the API Standard (Appendix A) to qualify the acceptance standards\nfor its automated welding procedures.\n3 Appendix A uses an analysis of fracture mechanics and\nfitness for purpose criteria to determine alternative acceptance standards for welds and\nspecifically requires that “any change in the essential variables….shall require requalification of\nthe welding procedure.”4\nThe Notice alleged that Golden Pass did not comply with the requirements of Appendix A\nbecause it failed to requalify its welding procedures when a change in an “essential variable”\noccurred. One of the “essential variables” specified in Appendix A is as a “change in the grade\nor manufacturer of the pipe material or a basic change in the chemical composition or processing\nby a single manufacturer.\nStandard or Appendix A.\n”5 The term “manufacturer,\n” however, is not defined in the API\nIn the Notice, OPS alleged that a change in pipe material sources or plate mills constitutes a\nchange in the manufacturer of the pipe material and is therefore an essential variable.\nAccording to OPS, Golden Pass should have qualified each potential combination of pipe from\n2 API Standard 1104, Section 3.2.10\n3 AM. PETROLEUM INST., STANDARD 1104, APPENDIX A (19th ed. 1999, errata October 31, 2001).\n4 Id. at A.3.1.\n5 Id.\n\n\n\n3\ndifferent plate mills. For this project, Golden Pass welded pipe segments of common diameter\n(42”), grade (X70), wall thickness (0.617”), and standard (5L) from one pipe mill, Welspun\nGujarat Stajl Rohen, Ltd. (Welspun) but from three different pipe material sources (Mittal,\nSalzgitter, & VoestAlpine), commonly known as plate mills.6 Accordingly, the Golden Pass\nproject included Mittal-Salzgitter, Mittal-Mittal, and Salzgitter-Salzgitter combinations of plate\nmill, yet Golden Pass only qualified two of them (i.e., Mittal-Salzgitter and VoestAlpine-\nVoestAlpine).\n7\nOPS contended that by not qualifying each plate mill combination, Golden Pass failed to address\nall of the pipe steel manufacturing procedures and practices, heat treating, or cooling processes\nof each individual plate mill which could affect the composition and weld qualities of the pipe\nmaterial. Since the company failed to provide documentation that it had qualified the automated\nwelding procedures for all combinations of plate, OPS alleges that Golden Pass violated\n§ 192.225.\nResponse\nIn its Response and at the hearing, Golden Pass asserted: 1) that the API Standard, Appendix A,\nrequired requalification of procedures after a change in pipe mill but not a change in plate mill;\n2) that the company’s welding qualification procedures exceeded the requirements of § 192.225;\n3) that the company’s approach was supported by a letter of interpretation issued by the Fracture\nMechanics Subcommittee of the API-AGA Joint Committee on Oil and Gas Pipeline Field\nWelding Practices; and 4) that OPS’ position was not supported by any statute, regulation,\nadvisory bulletin, or guidance document issued by PHMSA.\nFirst, Golden Pass argued that Appendix A only required a requalification of welding procedures\nafter a change in pipe mill, not plate mill. Although Golden Pass acknowledged that the term\n“manufacturer” is not defined in Appendix A, it argued that the term was defined in API\nSpecification 5L and because that standard was referenced in the API Standard, the definition\nused in the specification should control here. Under API 5L, a manufacturer is a “firm,\ncompany, or corporation responsible for making or marking the product in accordance with the\nrequirements of this International Standard…the manufacturer is, as applicable, a pipe mill,\nin API 5L and Golden Pass obtained pipe from a single pipe mill, Respondent argued that a\nprocessor, a maker of couplings, or a threader.”8 Since a manufacturer is defined as a pipe mill\nchange in manufacturer did not occur and therefore that requalification of the welding\nprocedures was not required.\nSecond, Golden Pass argued that the company’s welding qualification procedures exceeded the\nrequirements of § 195.225 and that any further testing would be redundant since it would not\nprovide any new information. In its presentation at the hearing, the company outlined its\nwelding procedure qualification for this particular project and indicated that at the outset of the\n6 A plate mill produces steel plate used to manufacture line pipe. A pipe mill combines the plates into a line pipe.\n7 Golden Pass confirmed at the hearing that the VoestAlpine plate was not used.\n8 AM. PETROLEUM INST., SPECIFICATION 5L, § 4.29 (44th ed. October 2007, errata January 2009).\n\n\n\n4\nproject, it was aware that Welspun used plate from multiple plate mills to make line pipe.\nTherefore, the company prepared a line pipe specification to ensure that its pipe would exhibit\nuniform mechanical properties and weldability, regardless of which plate mill produced the\nplate.9 According to Respondent, its onshore welding specification included additional\nrequirements, including impact testing of the weld deposit and heat-affected zone, macrosection\nexamination, microhardness surveying, specific repair-welding procedure specifications, test\njoints, and destructive testing.10\nThe company also presented evidence that it had selected specific pipe joint combinations to test\nplate materials from each plate mill.11 Each of the three heat-affected zones were tested once\nthat it had effectively tested all three plate mills. The company contended that the consistency\nunnecessary.\nand the weld metal toughness and strength were tested twice.12 and chemical composition among the different plate manufacturers were so similar that retests of\neach and every plate combination would not yield any additional information and therefore were\nIn doing so, Golden Pass argued\nThird, Golden Pass presented a technical interpretation from the Fracture Mechanics\nSubcommittee of the API-AGA Joint Committee to support its position.\nletter, API answered ‘no’ to the following question:\n13 In the interpretation\nFor qualification of welding procedure specifications (WPS) according\nto API Std 1104 19th Edition Appendix A for use of a mechanized\nwelding system to produce 5G joints in a pipeline segment from API\nSpec 5L line pipe supplied from a single pipe manufacturer designated\nas manufacturer A, that procured plate to the same specification from\ntwo plate manufacturers, designated as 1 and 2 so that each pipe could\nbe classified as either A1 or A2, with no other changes in essential\nvariables, is preparing and destructively testing three sets of test joints\ndescribed as A1-A1, A1-A2, or A2-A2, with each set including a test\njoint with high heat input (HHI) and a test joint with low heat input\n(LHI), specifically required by the standard to allow for welding of all\nplate manufacturer combinations?14\nFinally, Golden Pass argued in its Brief that the allegations in the Notice contravened the\nagency’s enforcement authority. Specifically, the company contended that PHMSA presented\nthis particular interpretation of § 192.225 for the first time in the context of the Notice issued to\n9 Response, 2.\n10 Id.\n11 Response, 3.\n12 Brief, 3.\n13 Response, Attachments 3 & 4.\n14 Response, Attachment 4.\n\n\n\n5\nGolden Pass and not in a regulation or guidance material. Respondent argued that such action\nwas contrary to the notice and comment requirements of the federal Administrative Procedure\nAct (APA).\nAnalysis\nI have reviewed the evidence and arguments presented. First, I do not find any merit in\nRespondent’s argument that just because an operator may not obtain any additional data by\nqualifying all potential plate mill combinations, it is therefore unnecessary to requalify the\ncompany’s welding procedures under Appendix A. If an operator fails to meet the requirements\nof the pipeline safety regulations, the fact that subsequent testing may create minimal safety\nconcerns does not eradicate the violation. If PHMSA accepted such an approach, the pipeline\nsafety enforcement program would only focus on accidents, rather than preventive measures to\navoid pipeline failures.\nSecond, I also do not find persuasive the argument that the Notice was outside OPS’ legal\nauthority. PHMSA frequently issues regulatory interpretations in its Final Orders.15 Federal\ncourts have held that an order issued in an adjudicatory proceeding is not subject to the notice\nand comment procedures of the APA.16 Further, an agency is “not precluded from announcing\nnew principles in an adjudicative proceeding.\n”17\nThird, I do not find a technical interpretation by the Fracture Mechanics Subcommittee of the\nAPI-AGA Joint Committee to be determinative. Although PHMSA has incorporated 60\nstandards by reference in its pipeline safety regulations, it is important to recognize that\nincorporation by reference of a particular standard into a regulation does not limit or affect\nPHMSA’s ability or duty to interpret and enforce that regulation. PHMSA is not bound by an\nindustry group’s interpretation of the pipeline safety regulations, but makes its own independent\nanalysis of whether a violation has occurred.\nPursuant to the National Technology Transfer and Advancement Act of 1995 (“the Act”),\nPHMSA incorporates certain industry consensus standards by reference in its regulations.18 The\nAct directs federal agencies to use voluntary consensus standards instead of government-\ndeveloped technical standards, unless inconsistent with law or otherwise impracticable.19\nAs\npart of its obligations under the Act, PHMSA reviews and adopts many consensus standards that\nare applicable to pipeline design, construction, maintenance, inspection, and repair. Prior to\n15 See In the Matter of ANR Pipeline Company, Final Order, CPF No. 3-2007-1006)(available at\nwww.phmsa.dot.gov/pipeline/enforcement).\n16 R/T 182, LLC v. FAA, 519 F.3d 307, 310 (6th Cir. 2008)\n17 NLRB v. Bell Aerospace Co., 416 U.S. 267, 292-94 (1974).\n18 15 U.S.C. 3701 (1996).\n19 The Office of Management and Budget (OMB) Circular A-119: “Federal Participation in the Development and\nUse of Voluntary Consensus Standards” sets the policies on Federal use of voluntary consensus standards. See\nhttp://www.whitehouse.gov/omb/rewrite/circulars/a119/a119.html#2.\n\n\n\n6\nadopting any such standard, PHMSA reviews each new edition to determine whether it should be\nincorporated in whole or in part or whether it should be incorporated at all into the pipeline\nsafety regulations. When PHMSA determines that some aspect of a new or revised standard is\ninconsistent or conflicts with the Pipeline Safety Laws and regulations, it will not incorporate the\nnew edition. PHMSA has the ultimate responsibility to ensure the best interests of public safety\nare served.\nFinally, although Golden Pass had to demonstrate compliance with the 19th edition of the API\nStandard as of the date of the inspection, it is important to note the changes to the standard in the\n20th edition and PHMSA’s recent acceptance of this new edition. The 20th edition, issued in\n2005 and incorporated by reference into the pipeline safety regulations in 2009, made substantive\nchanges to the definition of an essential variable.20 Under the new edition, a “change in the\nmanufacturing process of the pipe material” is now considered a change in an essential variable\ninstead of “manufacturer of pipe material.\n”21 This change reflects a focus on the manufacturing\nprocess, i.e. the pipe mill, and not on manufacturers of pipe material. PHMSA issued a Stay of\nEnforcement a few months after the inspection of the Golden Pass project, which permitted\noperators to use the 20th edition of API 1104 in lieu of the 19th edition.22 The Stay acknowledged\nthat “this new edition of API 1104 includes more conservative acceptance criteria for pipeline\nwelding, in particular for higher strength steels.”23 Although Golden Pass was required to meet\nthe 19th edition at the time of the inspection, this modification gives credence to Respondent’s\nargument that requalification is only required when there has been a change in pipe mills.24\nNotwithstanding these findings, I have reviewed the record and weighed the arguments presented\nby the parties. I find that the facts and evidence presented by OPS do not support a violation of\nthe pipeline safety regulations. Although the operator and OPS have both provided credible\narguments as to the meaning of the phrase “manufacturer of pipe material,\n” as referenced in\nAppendix A, OPS bears the burden of proving by a preponderance of the evidence that its\ninterpretation of the language in Appendix A is the correct one.\n25 In this case, OPS did not\n20 AM. PETROLEUM INST., STANDARD 1104, APPENDIX A (20th ed. 2005, errata July 2007).\n22 PHMSA Stay of Enforcement – API 5L and API 1104, December 23, 2008.\n21 Id.\n23 Id.\n24 On April 14, 2009, PHMSA issued a Direct Final Rule permitting the use of either the 19th or 20th edition of API\n1104. See “Pipeline Safety: Incorporation by Reference Update: American Petroleum Institute (API) Standards 5L\nand 1104”, 74 Fed. Reg. 17099 (April 14, 2009). On August 11, 2010, by Final Rule, PHMSA eliminated the use of\nthe 19th edition. See “Pipeline Safety: Periodic Updates of Regulatory References to Technical Standards and\nMiscellaneous Edits”, 75 Fed. Reg. 48593,48597 (August 11, 2010).\n25 Although PHMSA’s enforcement proceedings under 49 C.F.R. Part 190 are not “formal adjudications” under the\nAPA (5 U.S.C. §§ 554 and 556), the Supreme Court has found that the burden of proof in formal adjudications\nincludes the burden of persuasion and that the standard of proof is the preponderance-of-the-evidence standard.\nDir., Office of Workers’ Comp. Programs, Dep’t of Labor v. Greenwich Collieries, 512 U.S. 267, 276 (1994) and\nSteadman v. SEC, 450 U.S. 91, 102 (1981).\n\n\n\n7\nprovide any evidence at the hearing beyond the facts and statements in the Notice and Violation\nReport and did not meet its burden of proof.\nAccordingly, based upon a review of all of the evidence, I hereby withdraw the allegation in Item\n1 of the Notice.\nCOMPLIANCE ORDER\nSince Item 1 is withdrawn, it is unnecessary to include any of the terms of the Proposed\nCompliance Order in this Final Order.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":19591}