{"operation":"document","citation":"CPF 420155017H","title":"CHAPARRAL ENERGY, LLC — Corrective Action Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2015-08-28","effective_on":null,"summary":"CLOSED corrective action order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420155017h.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420155017h.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420155017h","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420155017H","body":"Corrective Action Order involving CHAPARRAL ENERGY, LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2015-08-28 and is reported as closed as of 2019-12-03. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420155017H_Closure Letter_09162019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Closure%20Letter_09162019.pdf\n\n420155017H_Closure Letter_09162019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Closure%20Letter_09162019_text.pdf\n\n420155017H_Corrective Action Order_08282015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Corrective%20Action%20Order_08282015.pdf\n\n420155017H_Corrective Action Order_08282015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Corrective%20Action%20Order_08282015_text.pdf\n\n420155017H_Post-Hearing Decision Regarding CAO_10082015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Post-Hearing%20Decision%20Regarding%20CAO_10082015.pdf\n\n420155017H_Post-Hearing Decision Regarding CAO_10082015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420155017H/420155017H_Post-Hearing%20Decision%20Regarding%20CAO_10082015_text.pdf\n\n420155017H_Post-Hearing Decision Regarding CAO_10082015_text.pdf\n\nVIA CERTIFIED MAIL AND FAX TO: 405-425-8421\nMr. Mark A. Fischer\nChairman & CEO\nChaparral Energy, LLC\n701 Cedar Lake Blvd.\nOklahoma City, OK 73114\nRe: CPF No. 4-2015-5017H\nDear Mr. Fischer:\nPlease find enclosed the Post-Hearing Decision regarding the Corrective Action Order issued to\nChaparral Energy, LLC on August 28, 2015. The Decision confirms the Corrective Action\nOrder with respect to the Coffeyville pipeline. This Decision is being served by facsimile and\ncertified mail in accordance with 49 C.F.R. § 190.5. The terms of the decision are effective upon\nreceipt.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nMr. R.M. Seeley, Director, Southwest Region, OPS\nMr. Ahren Tryon, Tryon Law Firm (via email to atryon@tryonenergy.com)\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)\nChaparral Energy, LLC, ) CPF No. 4-2015-5017H\n)\nRespondent. )\n___________________________________ )\nPOST-HEARING DECISION CONFIRMING\nCORRECTIVE ACTION ORDER\nOn August 28, 2015, the Associate Administrator for Pipeline Safety, Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), issued a Corrective\nAction Order (CAO) under authority of 49 U.S.C. § 60112 and 49 C.F.R. § 190.233, finding that\ncontinued operation by Chaparral Energy, LLC (Chaparral or Respondent) of its Coffeyville\ncarbon dioxide (CO2) pipeline would be hazardous to life, property, or the environment. The\nCAO made preliminary findings that the hazards were associated with a failure of the pipeline\ndiscovered August 25, 2015, and the hazards would continue unless certain corrective measures\nwere taken. The CAO also found that failure to issue the order expeditiously without prior\nnotice would result in a likelihood of serious harm to life, property, or the environment.\nPursuant to § 190.233, Respondent requested expedited review of the CAO to determine whether\nthe order should remain in effect. In accordance with 49 C.F.R. §§ 190.211 and 190.233(c), a\nhearing was held October 1, 2015, in Houston, Texas, before a Presiding Official from the Office\nof Chief Counsel, PHMSA, who presided by video teleconference.\nAt the hearing, Respondent provided an overview of its pipeline system, discussed the\ncharacteristics of CO2, updated factual information about the pipeline accident, and argued the\nCAO should be terminated because there is not a hazardous condition. In the alternative,\nRespondent requested that the terms of the corrective action be amended.\nBackground\nOn August 25, 2015, at 9:00 a.m. CDT, Chaparral received a report from a landowner of a vapor\ncloud in the area of its Coffeyville CO2 pipeline. Chaparral personnel arrived on site shortly\nbefore 10:00 a.m. CDT and confirmed there was a pipeline leak. Personnel closed valves\nupstream and downstream of the failure and blew down the line between the two valves, a total\ndistance of 20 miles, by 12:35 p.m. CDT.\n\n\n\nCPF No. 4-2015-5017H\nPage 2\nIt is not known when the release started. The pipeline was not operating when the accident was\ndiscovered, but it was shut-in at operating pressure. After looking at pressure recording charts,\nRespondent initially believed the release started approximately 7 days prior to discovery.\nRespondent later revised that estimate to 2-3 days prior to discovery.\nRespondent initially estimated that the amount of CO2 released as a result of the failure was\n2,648 barrels. At the hearing, Respondent explained this early estimate was made without\nbenefit of knowing the size of the hole. Based on more accurate information concerning the hole\nsize, Respondent believed the failure resulted in a release of only 28 barrels. Even if the release\noccurred for 7 days, Respondent stated the release would still be less than 100 barrels. The\nblowdown resulted in an additional 6,800 barrels of CO2 released. Respondent reported that\nproperty damage as a result of the release was less than $11,000.\nThe accident occurred in a remote location and did not cause any injuries, evacuations, or\nimpacts to the environment. Video of the release shows CO2 vapor rising through an opening in\nthe ground above the pipeline. As the vapor gets five to ten feet off the ground, it moves\ndownwind and then dissipates into the atmosphere. Respondent reported the plume of vapor was\napproximately 15 feet downwind.\nRespondent repaired the pipeline and returned it to service under a restart plan approved by the\nDirector pursuant to the terms of the CAO. The failed section of pipe was sent to a metallurgical\nlab for testing under protocols approved by the Director. An inline inspection was also\nperformed on the pipeline. The results of the metallurgical testing and inline inspection are\npending.\nPhotographs of the removed pipe show what appears to be localized external corrosion with two\npinholes. Respondent’s preliminary investigation leads the Company to believe the external\ncorrosion was caused by stray current from a nearby pipeline.\nThe Coffeyville pipeline was constructed in 2012 and consists of 8-inch, 0.220” nominal wall\nthickness, Grade X-65 pipe. The pipeline began operating in 2013. When Chaparral performed\na deformation tool run following construction, Respondent identified an area with 43% wall loss\nfrom external corrosion. The pipeline has experienced two failures since operations began, both\nseemingly caused by external corrosion. In addition to the failure discovered August 25, 2015,\nthere was an earlier failure discovered May 4, 2015.\nChaparral operates approximately 300 miles of pipeline transporting CO2 in Texas, Oklahoma,\nand Kansas. The Coffeyville pipeline is approximately 68 miles long and transports CO2 from\nthe Coffeyville Resources Nitrogen Fertilizer Plant in Coffeyville, Kansas, to the North Burbank\nproduction field near Shidler, Oklahoma. The pipeline travels through Montgomery County in\nKansas and the counties of Nowata, Washington, and Osage in Oklahoma. The failure occurred\nnear the end of the pipeline in proximity to Shidler, Oklahoma. The maximum operating\npressure (MOP) of the pipeline is 2,220 psig, established by hydrostatic test in 2013. The\npressure at the point of the failure was approximately 1,100 psig when the failure occurred.\n\n\n\nCPF No. 4-2015-5017H\nPage 3\nStandard for Reviewing Issuance of a Corrective Action Order\nThe authority for issuing a CAO is specified in 49 U.S.C. § 60112 and 49 C.F.R.\n§ 190.233. Under those provisions, the Associate Administrator may issue a CAO if a pipeline\nfacility is or would be hazardous to life, property, or the environment. Prior notice to the\noperator of the facility must be given before issuance of a CAO, but prior notice may be waived\nif the Associate Administrator finds that failure to do so would result in the likelihood of serious\nharm to life, property, or the environment. The CAO may include corrective measures including\nsuspended or restricted use of the facility, physical inspection, testing, repair, replacement, or\nother appropriate action.\nThe primary purpose of a hearing following issuance of a CAO without prior notice is to\ndetermine whether the CAO should remain in effect or be terminated or amended.1 If the\nAssociate Administrator finds the facility is or would be hazardous to life, property, or the\nenvironment, the Associate administrator confirms the CAO. If the Associate Administrator\ndoes not find the facility is or would be hazardous, the Associate Administrator terminates the\norder.\nIn making such a determination, the Associate Administrator must consider, if relevant: (1) the\ncharacteristics of the pipe and other equipment used in the pipeline facility, including its age,\nmanufacturer, physical properties (including its resistance to corrosion and deterioration), and\nthe method of its manufacture, construction or assembly; (2) the nature of the materials\ntransported (including their corrosive and deteriorative qualities), and the pressure required for\nsuch transportation; (3) the characteristics of the geographical areas in which the pipeline facility\nis located, in particular the climatic and geologic conditions (including soil characteristics)\nassociated with such areas, and the population density and population and growth patterns of\nsuch areas; and (4) any other factors the Associate Administrator consider appropriates. These\nfactors are considered below.\n(1) Characteristics of the Pipe\nThe Coffeyville pipeline is relatively new. It was constructed in 2012 and began operating in\n2013. New pipe generally presents a lower risk of time dependent threats because such\nconditions, like external corrosion, usually take extended periods of time to develop and\npotentially lead to a failure.\nDespite being relatively new, Respondent’s pipeline has already experienced external corrosion\nsignificant enough to cause multiple failures. In addition to the August 25, 2015, failure that\ngave rise to this proceeding, Respondent’s pipeline experienced a failure in May 2015 that was\nalso preliminarily attributed to external corrosion. An estimated 4.5 barrels of CO2 were\nreleased as a result of that failure, with estimated property damage of approximately $13,000.\nBlowdown of the line after the May 2015 release resulted in the loss of 6,800 barrels of CO2.\n1 § 190.233(b).\n\n\n\nCPF No. 4-2015-5017H\nPage 4\nAlso, following construction of Respondent’s pipeline, Chaparral performed a deformation tool\nrun that identified an area with 43% wall loss due to external corrosion.\nThe Coffeyville pipeline is evidently not resistant to external corrosion at the level required for\nsafe operation of the facility. The rate at which Respondent’s new pipeline has developed\nsignificant wall loss from corrosion is concerning. Without immediate corrective action,\nincluding investigation and remediation, more corrosion and potential pipeline failures would\nlikely occur.\n(2) Nature of the Materials Transported\nRespondent reported that the CO2 transported by the Coffeyville pipeline is 99.984% pure and\ndoes not contain any flammable or toxic hydrocarbons. Respondent explained that CO2 is an\nodorless, colorless, non-flammable gas. It occurs naturally in the atmosphere, is used by plants,\nproduced by humans during respiration, and produced in various manufacturing and industrial\nfacilities. Respondent contended that the CO2 transported by the Coffeyville pipeline presents\nvery little hazard.\nAt atmospheric pressure CO2 is a gas. At higher pressures, CO2 enters a supercritical fluid state,\nresembling the density of a liquid. This occurs at a critical pressure of roughly over 1,000 psig.\nPipelines transporting CO2 are operated at very high pressures to keep the product in a\nsupercritical fluid state. Respondent stated that most CO2 pipelines are operated between 1,200\nand 3,000 psig. The maximum operating pressure of the Coffeyville pipeline is 2,220 psig.\nSince the line has no pump stations, pressure decreases as product moves downstream. Pressure\nat the failure location near the end of the pipeline was estimated to be 1,100 psig at the time of\nthe accident.\nRespondent produced information about CO2 from the Occupational Safety and Health\nAdministration (OSHA) website. The OSHA documentation confirmed CO2 is a colorless,\nodorless, non-flammable gas. It is also classified as an asphyxiant gas.2 In the atmosphere, CO2\nnormally exists at concentrations between 300-700 ppm. The OSHA permissible exposure limit\nis 5,000 ppm. Exposure to higher concentrations can result in increased respiratory rate,\nheadache, convulsions, dizziness or narcosis. At 30,000 ppm there may be loss of\nconsciousness; at 40,000 ppm, CO2 becomes immediately dangerous to life.3\nChaparral argued the risk of such harm resulting from a pipeline release is very low, since the\nrelease would be in the open air. Respondent noted that the August 25, 2015, release resulted in\na released concentration of CO2 of just under 3,100 ppm, which is less than the OSHA\npermissible exposure limit. Respondent also cited a presentation by an individual from the\nUniversity of Texas who concluded the likelihood of a fatality from a CO2 pipeline failure was\n2 Chaparral Pre-hearing Submission, Supporting Documentation (SD) at 97.\n3 Chaparral SD at 93.\n\n\n\nCPF No. 4-2015-5017H\nPage 5\nless than the likelihood of a fatality from a lightning strike.4 In conclusion, Respondent argued\nthe nature of CO2 does not support finding Respondent’s pipeline is or would be hazardous to\nlife, property, or the environment.\nPHMSA agrees the information presented by Respondent demonstrates CO2 does not pose the\nsame risk as hazardous liquids that are flammable or toxic. PHMSA notes the pipeline safety\nregulations in 49 C.F.R. Part 195 define hazardous liquids to include petroleum, petroleum\nproducts, anhydrous ammonia, and ethanol, but supercritical CO2 is not included in that\ndefinition.\nWhen PHMSA initially proposed amending the safety regulations in 1989 to include CO2\npipelines, the Agency noted that CO2 differed from flammable and toxic substances already\nregulated under the definition of hazardous liquid.5 Therefore, PHMSA proposed to regulate\nCO2 pipelines in Part 195 without calling CO2 a hazardous liquid.\nThis is not to say CO2 pipelines are without risk. The primary hazard of CO2, as noted by\nPHMSA in the proposed rule, is the potential for asphyxiation if a high concentration is\naccidentally released from a pipeline. PHMSA noted that Congressional concerns over the\nsafety of CO2 pipelines were reflected in the Pipeline Safety Reauthorization Act of 1988, which\ndirected the Agency to amend Part 195 to ensure the safety of CO2 pipelines. As documented in\nthe proposed rule, Congress recognized despite “its pervasive nature and absolute necessity to\nlife, CO2 has the potential to be as lethal as any other gas when it is present in concentrations\ngreater than 10 percent. This could happen if a CO2 pipeline ruptured.”6\nSince then, PHMSA has applied the pipeline safety regulations to supercritical CO2 pipelines\nand hazardous liquid pipelines in essentially the same manner. For example, integrity\nmanagement regulations require “each hazardous liquid pipeline and carbon dioxide pipeline that\ncould affect a high consequence area” to be covered by an integrity management program (IMP)\ndesigned to ensure greater safety in those areas.7 Operators must design, test, operate, and\nmaintain CO2 pipelines to prevent accidental release just as they must for hazardous liquids\npipelines. Accidents must be reported for both hazardous liquid and carbon dioxide pipelines.8\nRespondent has made a strong case that the risks of CO2 are generally considered to be less than\nother hazardous liquids, but there are still risks. PHMSA has determined through rulemaking\n4 Chaparral SD at 149.\n5 Transportation of Carbon Dioxide by Pipeline, 54 Fed. Reg. 41912, 41914 (proposed Oct. 12, 1989).\n6 54 Fed. Reg. at 41913.\n7 § 195.452. Respondent noted that some high consequence areas, namely unusually sensitive\nenvironmental areas, are only applicable to hazardous liquid pipelines. Populated areas, which are of\nimportance here, are applicable to both hazardous liquid pipelines and CO2 pipelines.\n8 §§ 195.50 and 195.52.\n\n\n\nCPF No. 4-2015-5017H\nPage 6\nthat the risks inherent to the transportation of CO2 by pipeline must be managed to protect life\nand property. The nature of the CO2 transported by Respondent’s pipeline is no less hazardous.\n(3) Characteristics of the Geographical Areas in Which the Pipeline Facility Is Located\nRespondent’s pipeline is approximately 68 miles long and travels through the high consequence\narea (HCA) of Coffeyville, Kansas, at the very beginning of the pipeline. There are two other\nHCAs that could be affected by the pipeline. South Coffeyville, Oklahoma, is 471 feet from\nRespondent’s pipeline near the beginning of the line. Shidler, Oklahoma, is 0.51 miles from the\npipeline near the end. All three HCAs are populated areas.\nThe remainder of the 68-mile pipeline, including the location of the failure, is rural. Pictures\nfrom the location of the failure show flat, grassy land in all four directions. The Director noted\nthat Respondent’s pipeline traverses ravines and low-lying areas, which could pose a risk of CO2\npooling in higher concentrations.\nRespondent argued that if corrosion is being caused by stray current, then the risk of corrosion is\nconfined to the later portion of the Coffeyville pipeline where a third-party pipeline runs parallel.\nRespondent noted that both pipeline failures and wall loss anomaly occurred in the later portion\nof the Coffeyville line. Respondent reasoned that the HCAs near the beginning of the pipeline\nare not subject to the same risk. Respondent also questioned whether its pipeline could actually\naffect the HCA near the end of the line.\nPHMSA notes that the cause of the external corrosion has not yet been determined to be stray\ncurrent from the parallel pipeline. Until such a decision is reached, PHMSA cannot discount the\npossibility that additional corrosion could develop and lead to failure affecting an HCA. Also\nthe risks to persons and property from a CO2 pipeline release in a rural area cannot be entirely\ndiscounted. In fact, the August 25, 2015, failure was discovered by a local land owner.\n(4) Other Appropriate Factors\nRespondent presented several other arguments to support its position that the CAO should be\nterminated. Firstly, Respondent noted that the August 25, 2015, accident did not meet the\nregulatory threshold for immediate telephonic reporting.\nPHMSA recognizes the revised volume of product released would not have exceeded the\nthreshold for immediate telephonic reporting. Respondent initially believed the release resulted\nin the loss of 2,648 barrels, which exceeds the threshold for immediate reporting. It should be\nnoted that Respondent was still required to file a written accident report under § 195.50, because\nthe accident resulted in the loss of more than 5 barrels of product.\nRespondent also analyzed past data on CAOs, telephonic reports, and PHMSA accident reports\nto demonstrate the relatively low risk of CO2 pipeline failures and the absence of past\nenforcement by the Agency similar to this case. For example, Respondent looked at all CAOs\nissued since 2005, and found virtually all involved either fire, evacuation, environmental\n\n\n\nCPF No. 4-2015-5017H\nPage 7\ndamage, affected water, closure of roadway, or a high consequence area. Respondent’s pipeline\nfailure did not involve any of those.\nRespondent analyzed telephonic reports to the National Response Center since 1990, including\nall 24 reports involving releases of CO2 from a pipeline. None involved a fatality, injury, or\ndamage to wildlife or the environment. Only one involved an evacuation, and Chaparral\ntheorized this was due to the presence of hydrogen sulfate with the CO2.\nRespondent then analyzed PHMSA 7000.1 Accident Reports filed by operators since 1994,\nincluding all 71 reports involved CO2 pipeline released. Respondent found zero fatalities,\ninjuries, fires, damage to environment, evacuations, or third-party property damage.\nThe data submitted by Respondent demonstrates the Agency does not have a history of issuing\nCAOs for pipeline failures involving CO2. The Parties can only postulate as to the reasons for\nan absence of enforcement. The assumption of Chaparral that this could be due to the lack of\nserious consequences associated with CO2 accidents is a plausible explanation.\nIn reviewing the issuance of the CAO in this case, however, PHMSA must evaluate the facts of\nthis particular accident to determine if the Coffeyville pipeline is or would be hazardous. The\ndata provided by Respondent, while informative of past Agency practice, has limited relevance\nto this evaluation because it does not concern the actual facts of this case. I find it more relevant\nto consider the characteristics of the Coffeyville pipeline, the nature of CO2 transported by the\npipeline, and the geographical areas through which the pipeline travels.\nAnalysis and Finding of Hazardousness\nAs noted above, the characteristics of Respondent’s pipeline are concerning. The pipeline has\nalready experienced two corrosion failures and another significant corrosion anomaly in the short\nperiod of time it has been in operation. The cause of the corrosion has not yet been determined,\nand therefore has not been remediated. The evidence suggests Respondent’s pipeline is\nexperiencing corrosion at an usually high rate and the pipeline would likely experience more\nfailures caused by corrosion until appropriate corrective action is taken. Such failures could\naffect populated areas.\nThere are documented risks of CO2 in elevated concentrations even if the product does not\npresent the same level of risk as flammable and toxic liquids. A CO2 pipeline experiencing\nperiodic failures resulting in uncontrolled releases of product at very high pressures is a\nhazardous condition that must be promptly addressed to ensure safety. Given all of these\nconsiderations, the evidence in the record demonstrates there is a hazardous condition that\nwarrants continuation of the CAO.\nWhether the Terms of the CAO Should Be Amended\nRespondent requested, in the alternative, that the CAO be amended. Specifically, at the hearing\nChaparral requested the pressure restriction be modified. Following the hearing, Chaparral\nsubmitted a document requesting several other modifications.\n\n\n\nCPF No. 4-2015-5017H\nPage 8\n(1) Pressure Restriction\nThe pressure restriction in Paragraph 3 of the CAO states that when Chaparral returns the\nCoffeyville pipeline to service “the operating pressure must not exceed eighty percent (80%)\nof the actual operating pressure in effect immediately prior to the Failure.”\nRespondent argued this pressure restriction is problematic from a technical standpoint because it\nwould prevent Respondent from delivering CO2 in a supercritical state. The pipeline was\noperating at approximately 1,100 psig at the location of the failure when the accident occurred.\nEighty percent of that pressure is approximately 880 psig, which is below the pressure required\nfor CO2 in a supercritical state. Chaparral suggested that a revised pressure restriction should be\n80% of MOP.\nFrom a legal perspective, Respondent also argued the pressure restriction would be problematic\nbecause the pipeline safety regulations in 49 C.F.R. Part 195 apply to pipelines that transport\nCO2 in a supercritical state. Respondent contended that if at any point in time the CO2 is not in\na supercritical state, the pipeline cannot be subject to Part 195.\nOperating a pipeline at no more than 80% of the highest pressure the line was safely operated or\ntested is a long-established method of ensuring an appropriate safety margin. For example,\nunder Part 195, pipelines may be operated at a pressure up to 80% of their test pressure.9 When\na pipeline failure occurs, the terms of any CAO will regularly require a similar margin of safety\nbased on the level of pressure on the line when the failure occurred.\nAfter considering Respondent’s technical position, PHMSA finds the hazardous condition\nrequires the same margin of safety until Respondent can demonstrate it is safe to resume\noperations on the Coffeyville pipeline at its pre-failure level. The Director has authority under\nthe existing terms of the CAO to modify the pressure restriction upon a showing that a pressure\nincrease is safe.\nWith regard to the legal argument, PHMSA disagrees with Respondent’s contention that the\npipeline would not be subject to Part 195 at a lower pressure. The Coffeyville pipeline is subject\nto the pipeline safety regulations by virtue of its regular transport of CO2 in a supercritical state.\nThe pipeline remains subject to those regulations, including applicable maintenance\nrequirements, during any temporary conditions involving lowered pressure, shutdown, idling, or\npurging of product.\n(2) Other Amendments\nFollowing the hearing, Respondent submitted a document requesting additional amendments to\nthe terms of the CAO. These amendments were not discussed at the hearing.\n9 § 195.406.\n\n\n\nCPF No. 4-2015-5017H\nPage 9\nPressure test or ILI in lieu of pressure restriction. As an alternative to its proposal for a revised\npressure restriction, Respondent requested to return the pipeline to service either after\nperforming a pressure test or submitting certain ILI data. Since these proposals were not\ndiscussed at the hearing, PHMSA finds no basis to amend the CAO at this time. The Director\nhas authority under the existing terms of the CAO to remove or modify the pressure restriction\nupon a showing that a pressure increase is safe.\nTime periods. Respondent requested to change the 90-day time period to 150 days for\nperforming a root cause failure analysis and for developing a remediation work plan. Chaparral\nalso requested to delay the start date for quarterly reporting. No reason was given for these\nrequested extensions. PHMSA finds no basis to amend the CAO in this regard. The Director\nhas authority under the existing terms of the CAO to grant an extension of time for compliance\nwith any of the terms in the order upon a written request timely submitted demonstrating good\ncause for an extension.\nCompleted actions. Respondent requested to eliminate a provision in the CAO regarding the\nremedial work plan because the Company has already performed the required ILI tool run.\nPHMSA finds no reason to amend the CAO to eliminate provisions that are satisfied; by\ndefinition, completed terms require no further action.\nScope of remedial work plan. Respondent requested to eliminate a provision regarding the\nremedial work plan that requires Chaparral to determine if conditions similar to those\ncontributing to the August 25, 2015, failure are likely to exist elsewhere within the Company’s\npipeline systems. Respondent did not provide an argument for why Chaparral should not be\nrequired to perform this action. PHMSA finds no support to eliminate this provision.\nConclusion\nThe CAO issued to Chaparral Energy, LLC on August 28, 2015, is confirmed and will remain in\neffect without change to its terms or deadlines.\n_______________________________ _______________________\nJeffrey D. Wiese, Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420155017H_Corrective Action Order_08282015_text.pdf\n\nAugust 28, 2015\nVIA CERTIFIED MAIL AND FAX TO: 405-425-8421\nMr. Mark A. Fischer\nChairman & CEO\nChaparral Energy, LLC\n701 Cedar Lake Blvd.\nOklahoma City, OK 73114\nRe: CPF No. 4-2015-5017H\nDear Mr. Fischer:\nEnclosed is a Corrective Action Order issued in the above-referenced case. It requires Chaparral\nEnergy, LLC, to take certain corrective actions with respect to its Coffeyville CO2 line that\nfailed on August 25, 2015, near Shidler, Oklahoma. Service is being made by certified mail and\nfacsimile. Service of the Corrective Action Order by electronic transmission is deemed complete\nupon transmission and acknowledgement of receipt, or as otherwise provided under 49 C.F.R.\n§ 190.5. The terms and conditions of this Order are effective upon completion of service.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nMr. Rodrick Seeley, Southwest Regional Director, OPS\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 )\nChaparral Energy, LLC, ) CPF No. 4-2015-5017H\n)\n)\n)\nRespondent. )\n____________________________________)\nCORRECTIVE ACTION ORDER\nPurpose and Background:\nThis Corrective Action Order (Order or CAO) is being issued, under the authority of 49 U.S.C.\n§ 60112, to require Chaparral Energy, LLC (Chaparral or Respondent), to take the necessary\ncorrective action to protect the public, property, and the environment from potential hazards\nassociated with the recent failure on Chaparral’s Coffeyville carbon dioxide (CO2) pipeline.\nOn August 25, 2015, a reportable accident occurred on the Coffeyville CO2 line, resulting in the\nrelease of approximately 2,648 barrels of carbon dioxide (Failure). The Coffeyville CO2 line\n(Coffeyville Line) is an 8-inch diameter pipeline approximately 65.7 miles in length that\ntransports carbon dioxide from the Coffeyville Resources Nitrogen Fertilizer Plant in\nCoffeyville, Kansas, to the North Burbank production fields near Shidler, Oklahoma. The cause\nof the Failure has not yet been determined. Pursuant to 49 U.S.C. § 60117, the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), initiated\nan investigation of the accident. The preliminary findings of the ongoing investigation are as\nfollows.\nPreliminary Findings:\n• Chaparral is a privately owned company with oil and gas operations and 480 employees\noperating in Oklahoma, the Texas Panhandle and Southwest Kansas.1\n• The Coffeyville Pipeline System consists of 67.5 miles of 8\" carbon dioxide pipeline\nrunning from the Coffeyville Resources Nitrogen Fertilizer Plant in Coffeyville, Kansas,\nto the North Burbank production field near Shidler, Oklahoma. The pipeline originates in\nMontgomery County, Kansas, and travels through Nowata, Washington, and Osage\n1 See http://www.chaparralenergy.com/operations. Current as of August 27, 2015.\n\n\n\nCPF No. 4-2015-5017H\nPage 2\nCounties, Oklahoma, a distance of approximately 67.5 miles (Affected Segment). The\nFailure occurred 1.7 miles east of mainline valve (MLV) 14 between milepost (MP) 67\nand MP 66 near Shidler, Oklahoma (Failure Site).\n• The Coffeyville Line was installed in 2012 and began operating in 2013. The Affected\nSegment consists of 8-inch diameter, 0.220” wall thickness and Grade X65 pipe. The\npipe was manufactured in 2011, and the pipe at the Failure Site has not had any changes\nin material since its installation.\n• The maximum operating pressure (MOP) of the pipeline is 2,220 psig, as established by\nhydrostatic test in 2013. At the time of the Failure, the pipeline was not operating.\nChaparral received a report from a landowner regarding a potential leak on the\ncompany’s Coffeyville Line at 9:00 a.m. CST on August 25, 2015. Chaparral personnel\narrived on site shortly before 10 a.m. CST and confirmed the leak and resulting release of\napproximately 2,648 barrels of carbon dioxide from the pipeline. Review of data\nindicates the leak may have started as early as August 18, 2015. The Failure occurred in a\nremote location, and was reported to the National Response Center (NRC Report No.\n1126631) on August 25, 2015, at approximately 10:36 a.m. CST.\n• The Coffeyville Line was shut-in at the time of the Failure since the source plant at\nCoffeyville was offline. After notification from the landowner regarding a vapor cloud,\nChaparral responded to the site and closed the valves immediately upstream and\ndownstream of the failure location. The MLV at valve location 12 was closed at 11:55 am\nCST, and the MLV at valve location 13 was closed at 12:35 p.m. CST. Chaparral “blew\ndown” the line from both valve locations (MLV 12 & MLV 13) at 12:35 p.m. CST, a\ntotal distance of 20 miles.\n• The Failure occurred in a remote location so PHMSA was the only agency to respond to\nthe scene.\n• The cause of the Failure is unknown and the investigation is ongoing. The Coffeyville\nLine was installed in 2012 and began operating in 2013. Since the line has been in\nservice, there has been both a reported corrosion failure on May 4, 2015, and an\nexcavated dig site that identified a section of pipe with a 43% wall loss. Preliminary\nindications from the Failure also indicate the presence of external corrosion on the\npipeline. Chaparral did not have adequate cathodic protection on the line until the year\nfollowing initial construction. The pipeline currently remains out of service.\n• The accident did not cause any known injuries and no one was evacuated. There are no\nimpacts to any water body. A vapor cloud was formed from released CO2, but has since\ncleared.\n• Following construction of the pipeline, a deformation in-line inspection tool was run\nthrough the pipeline. The tool run resulted in the identification of 19 anomalies.\nChaparral has recently completed the investigation of those anomalies and made repairs\nto all but one of the anomalies as required. One of the anomalies identified by the pre-\noperational dent tool indicated a 43% wall loss due to external corrosion.\n\n\n\nCPF No. 4-2015-5017H\nPage 3\nDetermination of Necessity for Corrective Action Order and Right to Hearing:\nSection 60112 of Title 49, United States Code, provides for the issuance of a Corrective Action\nOrder, after reasonable notice and the opportunity for a hearing, requiring corrective action,\nwhich may include the suspended or restricted use of a pipeline facility, physical inspection,\ntesting, repair, replacement, or other action, as appropriate. The basis for making the\ndetermination that a pipeline facility is or would be hazardous, requiring corrective action, is set\nforth both in the above-referenced statute and 49 C.F.R. § 190.233, a copy of which is enclosed.\nSection 60112 and the regulations promulgated thereunder provide for the issuance of a\nCorrective Action Order, without prior notice and opportunity for hearing, upon a finding that\nfailure to issue the Order expeditiously would result in the likelihood of serious harm to life,\nproperty, or the environment. In such cases, an opportunity for a hearing and expedited review\nwill be provided as soon as practicable after the issuance of the Order.\nAfter evaluating the foregoing preliminary findings of fact, I find that continued operation of the\npipeline without corrective measures is or would be hazardous to life, property, or the\nenvironment. Additionally, having considered the release of product from the pipeline that\nresulted in a vapor cloud that could have affected the public and would be a problem in a\nsubsequent release (the line originates in a populated area and traverses through populated areas\nand CO2 is an asphixyant), the risk to the environment which would result in frostbite to skin\nand eyes or the formation of frozen ground during a high pressure release from the pipeline, and\na history of known problems on this pipeline, I find that a failure to issue this Order\nexpeditiously to require immediate corrective action would result in the likelihood of serious\nharm to life, property, or the environment.\nAccordingly, this Corrective Action Order mandating immediate corrective action is issued\nwithout prior notice and opportunity for a hearing. The terms and conditions of this Order are\neffective upon receipt.\nWithin 10 days of receipt of this Order, Respondent may contest its issuance and obtain\nexpedited review, either by answering in writing or requesting a hearing under 49 C.F.R.\n§ 190.211, to be held as soon as practicable under the terms of such regulation, by notifying the\nAssociate Administrator for Pipeline Safety in writing, with a copy to the Director, Southwest\nRegion, PHMSA (Director). If Respondent requests a hearing, it will be held telephonically or\nin-person in the Southwest Region office or Washington, D.C.\nAfter receiving and analyzing additional data in the course of this investigation, PHMSA may\nidentify other corrective measures that need to be taken. In that event, PHMSA will notify\nRespondent of any additional measures that are required and an amended Order issued, if\nnecessary. To the extent consistent with safety, Respondent will be afforded notice and an\nopportunity for a hearing prior to the imposition of any additional corrective measures.\nRequired Corrective Actions:\nThe “Affected Segment” means the entire 67.8 miles of Chaparral’s 8-inch pipeline from its\norigination in Coffeyville, Kansas, to Chaparral’s North Burbank production field near Shidler,\n\n\n\nCPF No. 4-2015-5017H\nPage 4\nOklahoma. The pipeline originates in Montgomery County, Kansas, and travels through Nowata,\nWashington, and Osage Counties, Oklahoma.\nThe \"Isolated Segment\" means the 20-mile segment of Chaparral’s 8-inch Line from the\ncompany’s MLV at valve location 12 to MLV 13. It is the portion of the \"Affected Segment\" that\nwas shut-in after the Failure on August 25, 2015, by closing main line valves MLV 12 (upstream\nof the Failure Site) and MLV 13 (downstream of the Failure Site) and that must remain shut-in\nuntil a restart plan is approved by the Director.\nThe \"Director\" means the Director, Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety, Southwest Region. The Director’s address is 8701 S.\nGessner, Suite 1110, Houston, Texas 77074.\nPursuant to 49 U.S.C. § 60112, I hereby order Chaparral to immediately take the following\ncorrective actions for the Affected Segment and Isolated Segment, as applicable:\nCORRECTIVE ACTIONS:\n1. 2. Shutdown of Pipeline. Chaparral must not operate the Affected Segment until authorized to\ndo so by the Director.\nRestart Plan. Prior to resuming operation of the Affected Segment, develop and submit a\nwritten Restart Plan to the Director for prior approval.\na. The Director may approve the Restart Plan incrementally without approving the entire\nplan but the Affected Segment cannot resume operation until the Restart Plan is approved\nin its entirety.\nb. Once approved by the Director, the Restart Plan will be incorporated by reference into\nthis Order.\nc. d. e. f. g. The Restart Plan must provide for adequate patrolling of the Affected Segment during the\nrestart process and must include incremental pressure increases during start up, with each\nincrement to be held for at least two hours.\nThe Restart Plan must include sufficient surveillance of the pipeline during each pressure\nincrement to ensure that no leaks are present when operation of the line resumes.\nThe Restart Plan must specify a day-light restart and include advance communications\nwith local emergency response officials.\nThe Restart Plan must provide for a review of the Affected Segment for conditions similar\nto those of the Failure, including a review of construction, operating and maintenance\n(O&M) and integrity management records such as in-line insp","truncated":true,"body_characters":52905}