# NIPPON OIL EXPLORATION USA LIMITED — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.402(a), 195.404(a)(3), 195.406(a)(3).
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- **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.

Official case documents:

420117001_Final Order_12192011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Final%20Order_12192011.pdf

420117001_Final Order_12192011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Final%20Order_12192011_text.pdf

420117001_NOPV PCP_03022011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_NOPV%20PCP_03022011.pdf

420117001_NOPV PCP_03022011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_NOPV%20PCP_03022011_text.pdf

420117001_Operator Response to Notice_03302011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420117001/420117001_Operator%20Response%20to%20Notice_03302011.pdf

420117001_Final Order_12192011_text.pdf

DEC 19 2011
Mr. Steve Fly
Vice President of Land
Nippon Oil Exploration USA, Ltd.
5847 San Felipe Road, Suite 2800
Houston, Texas 77057
Re: CPF No. 4-2011-7001
Dear Mr. Fly:
Enclosed please find the Final Order issued in the above-referenced case. It makes a finding of
violation and assesses a civil penalty of $17,800. This letter acknowledges receipt of payment of
the full penalty amount, by wire transfer, dated March 28, 2011. This enforcement action is now
closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing,
or as otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline Safety,
PHMSA
Mr. Rod M. Seeley, Director, Southwest Region, PHMSA
CERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164202979405]



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Nippon Oil Exploration USA, Ltd., ) CPF No. 4-2011-7001
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
On April 12-15, 2010, December 31, 2010, and January 26, 2011, pursuant to 49 U.S.C. § 60117,
a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA),
Office of Pipeline Safety (OPS), inspected Nippon Oil Exploration USA, Ltd.’s (Nippon)
offshore liquid pipeline system located in Cameron, LA. Nippon operates three pipelines
regulated by PHMSA in the Gulf of Mexico, Jefferson County, Texas and Cameron Parish,
Louisiana. 1
As a result of these inspections, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated March 2, 2011, a Notice of Probable Violation and Proposed Civil
Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
Nippon had violated 49 C.F.R. § 195.406 and assessing a civil penalty of $17,800 for the alleged
violation. The Notice also proposed two warning items that required no further action, but
warned the operator to correct the probable violations.
Nippon responded to the Notice by letter dated March 30, 2011 (Response). Nippon did not
contest the probable violation and paid the proposed civil penalty of $17,800, as provided in
49 C.F.R. § 190.227. Payment of the penalty serves to close the case with prejudice to
Respondent.
FINDING OF VIOLATION
In its Response, Nippon did not contest the allegation in the Notice that it violated 49 C.F.R.
§ 195.406, as follows:
1 OPS Pipeline Safety Violation Report (March 2, 2011), at 1.



2
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.406, which states in
relevant part:
§ 195.406 Maximum operating pressure.
(a) Except for surge pressures and other variations from normal
operations, no operator may operate a pipeline at a pressure that exceeds
any of the following:
(3) Eighty percent of the test pressure for any part of the pipeline
which has been pressure tested under subpart E of this part.
The Notice alleged that Respondent violated 49 C.F.R. § 195.406 by operating the WC20 8-inch
pipeline on six separate occasions in April 2010 at pressures exceeding the established
Maximum Operating Pressure (MOP). Respondent conducted a hydrotest on this line on May
29, 2009, as part of the conversion to service requirements under Part 195. The test confirmed
that the MOP for the 8-inch line was 960 psig. However, Respondent operated the line as if it
had a MOP of 999 psig. On December 17, 2010, OPS issued a Request for Specific Information
seeking Respondent’s pressure records. In response, Nippon provided the West Cameron 20
Daily Operating Records between October 1, 2009 (the start of the operation) and April 30,
2010. The documents indicated that Nippon exceeded the 960 psig MOP on six separate
occasions in April 2010. Specifically, Nippon operated the line above the MOP on April 11,
April 12, April 13, April 29, and twice on April 28th. The pressure recorded ranged from 961 to
972 psig.
In its Response, Nippon did not contest the violations and paid the proposed civil penalty.
Accordingly, based upon a review of all of the evidence, I find that Respondent violated
49 C.F.R. § 195.406 by operating its 8-inch pipeline at pressures exceeding the established MOP.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any
related series of violations. In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,
circumstances, and gravity of the violation, including adverse impact on the environment; the
degree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s
ability to pay the penalty and any effect that the penalty may have on its ability to continue doing
business; and the good faith of Respondent in attempting to comply with the pipeline safety
regulations. In addition, I may consider the economic benefit gained from the violation without
any reduction because of subsequent damages, and such other matters as justice may require.
Item 3: The Notice proposed a civil penalty of $17,800 for operating a pipeline above its MOP.
Nippon did not contest the violation and paid the proposed civil penalty in full. Although
Nippon sold this line to Black Elk Energy Offshore Operations, LLC on October 4, 2010,
Nippon was the operator of record at the time of the violation and is therefore liable for the
proposed civil penalty.



3
The civil penalty amount is based on the civil penalty assessment factors listed in
49 C.F.R. § 190.225, including but not limited to, culpability, gravity, the duration of the
violation, and the prior enforcement history of the operator. Gravity was particularly relevant to
this proposed civil penalty as a violation of § 195.406 poses a significant threat to pipeline
integrity. The proposed civil penalty amount is lower than other civil penalties assessed for this
violation due to the fact that Nippon has not had any prior enforcement history for the last five
years. Having reviewed the penalty factors and the facts of this case, I find that the proposed
civil penalty of $17,800 is justified. Accordingly, I assess Respondent a civil penalty of $17,800,
which has already been remitted.
WARNING ITEMS
The Notice alleged probable violations of Part 195 specifically considered to be warning items.
The warnings were for:
49 C.F.R. § 195.402 (Item 1) ─ Respondent’s alleged failure to review its
Operations, Maintenance and Emergency Manual at intervals not
exceeding 15 months, as required in § 195.402. Nineteen months elapsed
between the February 2008 review and the implementation of a new
manual on September 29, 2009.
49 C.F.R. § 195.404 (Item 2) ─ Respondent’s alleged failure to maintain
current maps and records for its pipeline systems that include the
maximum operating pressure of each pipeline. Nippon listed an incorrect
MOP for its 6-inch and 8-inch lines on the MMS Compliance Inspection
Report dated March 7, 2010. Although the MOP established by a
hydrostatic test in May 2009 was 788 psig and 960 psig for the 6-inch and
8-inch lines, respectively, Nippon listed the MOP as 800 psig and 999
psig.
If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject
to future enforcement action.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
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