# ENERGY XXI USA, INC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 420177001
- **title:** ENERGY XXI USA, INC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2017-05-16
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.402(a), 195.402(c)(13), 195.440(c), 195.505(b).
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-420177001.json
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- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-420177001
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/420177001
**body:**

Notice of Probable Violation involving ENERGY XXI USA, INC. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.402(c)(13),  195.440(c),  195.505(b). The case was opened on 2017-05-16 and is reported as closed as of 2018-06-15. Proposed civil penalty: $37,100. Assessed civil penalty: $37,100. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

420177001_Final Order_06152018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177001/420177001_Final%20Order_06152018.pdf

420177001_Final Order_06152018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177001/420177001_Final%20Order_06152018_text.pdf

420177001_NOPV PCP_05162017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177001/420177001_NOPV%20PCP_05162017.pdf

420177001_NOPV PCP_05162017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177001/420177001_NOPV%20PCP_05162017_text.pdf

420177001_Operator Response to Notice_06092017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177001/420177001_Operator%20Response%20to%20Notice_06092017.pdf

420177001_Final Order_06152018_text.pdf

June 15, 2018
Mr. Douglas E. Brooks
President and CEO
Energy XXI Gulf Coast, Inc.
1021 Main Street, Suite 2626
Houston, TX 77002
Re: CPF No. 4-2017-7001
Dear Mr. Brooks:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation and assesses a civil penalty of $37,100. This is to acknowledge receipt of payment of
the full penalty amount, by wire transfer, dated June 13, 2017. This enforcement action is now
closed. Service of the Final Order by certified mail is effective upon the date of mailing as
provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA
Mr. Keith Acker, Energy XXI USA, Inc., 1021 Main Street, Suite 2626,
Houston, TX 77002
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
Energy XXI USA, Inc., ) CPF No. 4-2017-7001
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From February 23 through April 14, 2016, pursuant to 49 U.S.C. § 60117, representatives of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Energy
XXI USA, Inc. (EXXI or Respondent), in the West Delta, Grand Isle, Grand Isle - South
Addition, West Delta - South Addition, South Pass - South and East Addition, and Mississippi
Canyon Areas in the Gulf of Mexico and Grand Isle, Louisiana. EXXI is a predecessor-in-
interest of Energy XXI Gulf Coast, Inc. (EGC), a situation resulting from Chapter 11 bankruptcy
petitions filed by EXXI and other predecessors-in-interest of EGC.1 EGC is an oil and natural
gas development and production company with assets located in the U.S. waters of the Gulf of
Mexico and onshore in Louisiana and Texas.2
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated May 16, 2017, a Notice of Probable Violation and Proposed Civil
Penalty (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance
with 49 C.F.R. § 190.207, the Notice proposed finding that EXXI had committed three violations
of 49 C.F.R. Part 195 and proposed assessing a civil penalty of $37,100 for the alleged
violations. The warning item required no further action, but warned the operator to correct the
probable violations or face possible future enforcement action.
EXXI responded to the Notice by letter dated June 9, 2017 (Response). The company did not
contest the allegations of violation and paid the proposed civil penalty of $37,100. In accordance
with 49 C.F.R. § 190.208(a)(1), such payment authorizes the Associate Administrator to make
findings of violation and to issue this final order without further proceedings.
1 Energy XXI Gulf Coast, Inc., Form 10-KT Transition Report filed February 22, 2017, available at
https://ir.energyxxi.com/annual-reports/content/0001144204-17-010398/0001144204-17-010398.pdf.
2 Energy XXI Gulf Coast, Inc.’s website, available at https://www.energyxxi.com/about (last accessed March 23,
2018).



CPF No. 4-2017-7001
Page 2
FINDINGS OF VIOLATION
In its Response, EXXI did not contest the allegations in the Notice that it violated 49 C.F.R. Part
195, as follows:
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c), which states:
§ 195.440 Public awareness.
(a) . . . .
(c) The operator must follow the general program recommendations,
including baseline and supplemental requirements of [American Petroleum
Institute Recommended Practice (API RP)] 1162, unless the operator
provides justification in its program or procedural manual as to why
compliance with all or certain provisions of the recommended practice is
not practicable and not necessary for safety.
The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c) by failing to follow the
general program recommendations, including baseline and supplemental requirements of API RP
1162, unless the operator provides justification in its program or procedural manual as to why
compliance with all or certain provisions of the recommended practice is not practicable and not
necessary for safety. Specifically, the Notice alleged that EXXI failed to perform a review of its
Public Awareness Plan (PAP) to measure effectiveness at the intervals required by API RP 1162
and the PAP. The Notice alleged that EXXI failed to conduct reviews of its PAP to measure
effectiveness, no more than four years apart, as required by Sections 8.4 and 8.5 of API RP 1162
and by Section 13 of EXXI’s PAP. EXXI’s PAP was reviewed and updated on November 24,
2011. EXXI’s Review and Revision Log (RRL), Version 1, noted that a subsequent review of
the PAP was due by April 1, 2015. However, Version 3 of the RRL, dated August 2014,
changed the due date of the subsequent PAP review to November 1, 2017, nearly six years after
the initial review of the PAP. Respondent did not provide any explanation for the change in due
date. EXXI did not complete a subsequent review of its PAP until March 3, 2016.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.440(c) by failing to follow the
general program recommendations, including baseline and supplemental requirements of API RP
1162, unless the operator provides justification in its program or procedural manual as to why
compliance with all or certain provisions of the recommended practice is not practicable and not
necessary for safety.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b), which states:
§ 195.505 Qualification program.
Each operator shall have and follow a written qualification program.
The program shall include provisions to:
(a) . . . .
(b) Ensure through evaluation that individuals performing covered tasks
are qualified[.]



CPF No. 4-2017-7001
Page 3
The Notice alleged that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure that
individuals performing covered tasks were qualified. Specifically, the Notice alleged that EXXI
conducted an internal inspection of Tank 2052 on February 17, 2012, pursuant to API Standard
653. EXXI only provided PHMSA with a copy of the sign-in/out log for the inspection.
Respondent did not provide any documentation to demonstrate that contractors performing the
inspection and maintenance of Tank 2052 were qualified individuals, the dates of current
qualification, identification of the covered tasks performed, or qualification methods used.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.505(b) by failing to ensure that
individuals performing covered tasks were qualified.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.3
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; 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. The Notice proposed a total civil penalty of $37,100 for the violations cited above.
Item 2: The Notice proposed a civil penalty of $11,200 for Respondent’s violation of 49 C.F.R.
§ 195.440(c), for failing to follow the general program recommendations, including baseline and
supplemental requirements of API RP 1162, unless the operator provides justification in its
program or procedural manual as to why compliance with all or certain provisions of the
recommended practice is not practicable and not necessary for safety. EXXI neither contested
the allegation nor presented any evidence or argument justifying a reduction in the proposed
penalty. Accordingly, having reviewed the record and considered the assessment criteria, I
assess Respondent a civil penalty of $11,200 for violation of 49 C.F.R. § 195.440(c).
Item 3: The Notice proposed a civil penalty of $25,900 for Respondent’s violation of 49 C.F.R.
§ 195.505(b), for failing to ensure that individuals performing covered tasks were qualified.
EXXI neither contested the allegation nor presented any evidence or argument justifying a
reduction in the proposed penalty. Accordingly, having reviewed the record and considered the
3 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum
Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).



CPF No. 4-2017-7001
Page 4
assessment criteria, I assess Respondent a civil penalty of $25,900 for violation of 49 C.F.R.
§ 195.505(b).
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $37,100. Respondent paid the
total civil penalty amount of $37,100 by wire transfer on June 13, 2017.
WARNING ITEM
With respect to Item 1, the Notice alleged a probable violation of Part 195 but did not propose a
civil penalty or compliance order for this item. Therefore, this is considered to be a warning
item. The warning was for:
49 C.F.R. § 195.402(a) (Item 1) ─ Respondent’s alleged failure to follow
procedures requiring EXXI to periodically review the work done by operator
personnel to determine the effectiveness of the procedures.
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.
June 15, 2018
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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