{"operation":"document","citation":"CPF 420117001","title":"NIPPON OIL EXPLORATION USA LIMITED — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-03-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.404(a)(3), 195.406(a)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420117001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420117001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420117001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420117001","body":"Notice of Probable Violation involving NIPPON OIL EXPLORATION USA LIMITED. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.404(a)(3),  195.406(a)(3). The case was opened on 2011-03-02 and is reported as closed as of 2011-12-19. Proposed civil penalty: $17,800. Assessed civil penalty: $17,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420117001_Final Order_12192011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Final%20Order_12192011.pdf\n\n420117001_Final Order_12192011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Final%20Order_12192011_text.pdf\n\n420117001_NOPV PCP_03022011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_NOPV%20PCP_03022011.pdf\n\n420117001_NOPV PCP_03022011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_NOPV%20PCP_03022011_text.pdf\n\n420117001_Operator Response to Notice_03302011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Operator%20Response%20to%20Notice_03302011.pdf\n\n420117001_Final Order_12192011_text.pdf\n\nDEC 19 2011\nMr. Steve Fly\nVice President of Land\nNippon Oil Exploration USA, Ltd.\n5847 San Felipe Road, Suite 2800\nHouston, Texas 77057\nRe: CPF No. 4-2011-7001\nDear Mr. Fly:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $17,800. This letter acknowledges receipt of payment of\nthe full penalty amount, by wire transfer, dated March 28, 2011. This enforcement action is now\nclosed. Service of the Final Order by certified mail is deemed effective upon the date of mailing,\nor as otherwise provided 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. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety,\nPHMSA\nMr. Rod M. Seeley, Director, Southwest Region, PHMSA\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164202979405]\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 )\nNippon Oil Exploration USA, Ltd., ) CPF No. 4-2011-7001\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn April 12-15, 2010, December 31, 2010, and January 26, 2011, pursuant to 49 U.S.C. § 60117,\na representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety (OPS), inspected Nippon Oil Exploration USA, Ltd.’s (Nippon)\noffshore liquid pipeline system located in Cameron, LA. Nippon operates three pipelines\nregulated by PHMSA in the Gulf of Mexico, Jefferson County, Texas and Cameron Parish,\nLouisiana. 1\nAs a result of these inspections, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated March 2, 2011, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nNippon had violated 49 C.F.R. § 195.406 and assessing a civil penalty of $17,800 for the alleged\nviolation. The Notice also proposed two warning items that required no further action, but\nwarned the operator to correct the probable violations.\nNippon responded to the Notice by letter dated March 30, 2011 (Response). Nippon did not\ncontest the probable violation and paid the proposed civil penalty of $17,800, as provided in\n49 C.F.R. § 190.227. Payment of the penalty serves to close the case with prejudice to\nRespondent.\nFINDING OF VIOLATION\nIn its Response, Nippon did not contest the allegation in the Notice that it violated 49 C.F.R.\n§ 195.406, as follows:\n1 OPS Pipeline Safety Violation Report (March 2, 2011), at 1.\n\n\n\n2\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.406, which states in\nrelevant part:\n§ 195.406 Maximum operating pressure.\n(a) Except for surge pressures and other variations from normal\noperations, no operator may operate a pipeline at a pressure that exceeds\nany of the following:\n(3) Eighty percent of the test pressure for any part of the pipeline\nwhich has been pressure tested under subpart E of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406 by operating the WC20 8-inch\npipeline on six separate occasions in April 2010 at pressures exceeding the established\nMaximum Operating Pressure (MOP). Respondent conducted a hydrotest on this line on May\n29, 2009, as part of the conversion to service requirements under Part 195. The test confirmed\nthat the MOP for the 8-inch line was 960 psig. However, Respondent operated the line as if it\nhad a MOP of 999 psig. On December 17, 2010, OPS issued a Request for Specific Information\nseeking Respondent’s pressure records. In response, Nippon provided the West Cameron 20\nDaily Operating Records between October 1, 2009 (the start of the operation) and April 30,\n2010. The documents indicated that Nippon exceeded the 960 psig MOP on six separate\noccasions in April 2010. Specifically, Nippon operated the line above the MOP on April 11,\nApril 12, April 13, April 29, and twice on April 28th. The pressure recorded ranged from 961 to\n972 psig.\nIn its Response, Nippon did not contest the violations and paid the proposed civil penalty.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.406 by operating its 8-inch pipeline at pressures exceeding the established MOP.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nItem 3: The Notice proposed a civil penalty of $17,800 for operating a pipeline above its MOP.\nNippon did not contest the violation and paid the proposed civil penalty in full. Although\nNippon sold this line to Black Elk Energy Offshore Operations, LLC on October 4, 2010,\nNippon was the operator of record at the time of the violation and is therefore liable for the\nproposed civil penalty.\n\n\n\n3\nThe civil penalty amount is based on the civil penalty assessment factors listed in\n49 C.F.R. § 190.225, including but not limited to, culpability, gravity, the duration of the\nviolation, and the prior enforcement history of the operator. Gravity was particularly relevant to\nthis proposed civil penalty as a violation of § 195.406 poses a significant threat to pipeline\nintegrity. The proposed civil penalty amount is lower than other civil penalties assessed for this\nviolation due to the fact that Nippon has not had any prior enforcement history for the last five\nyears. Having reviewed the penalty factors and the facts of this case, I find that the proposed\ncivil penalty of $17,800 is justified. Accordingly, I assess Respondent a civil penalty of $17,800,\nwhich has already been remitted.\nWARNING ITEMS\nThe Notice alleged probable violations of Part 195 specifically considered to be warning items.\nThe warnings were for:\n49 C.F.R. § 195.402 (Item 1) ─ Respondent’s alleged failure to review its\nOperations, Maintenance and Emergency Manual at intervals not\nexceeding 15 months, as required in § 195.402. Nineteen months elapsed\nbetween the February 2008 review and the implementation of a new\nmanual on September 29, 2009.\n49 C.F.R. § 195.404 (Item 2) ─ Respondent’s alleged failure to maintain\ncurrent maps and records for its pipeline systems that include the\nmaximum operating pressure of each pipeline. Nippon listed an incorrect\nMOP for its 6-inch and 8-inch lines on the MMS Compliance Inspection\nReport dated March 7, 2010. Although the MOP established by a\nhydrostatic test in May 2009 was 788 psig and 960 psig for the 6-inch and\n8-inch lines, respectively, Nippon listed the MOP as 800 psig and 999\npsig.\nIf OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject\nto future enforcement action.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":9112}