{"operation":"document","citation":"CPF 420177007","title":"GENESIS OFFSHORE HOLDINGS, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-11-22","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.452(b)(1), 195.452(b)(5), 195.452(i), 195.452(j)(2), 195.452(k), 195.561.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420177007.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420177007.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420177007","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420177007","body":"Notice of Probable Violation involving GENESIS OFFSHORE HOLDINGS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.452(b)(1),  195.452(b)(5),  195.452(i),  195.452(j)(2),  195.452(k),  195.561. The case was opened on 2017-11-22 and is reported as closed as of 2018-09-07. Proposed civil penalty: $39,300. Assessed civil penalty: $39,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420177007_Final Order_09072018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Final%20Order_09072018.pdf\n\n420177007_Final Order_09072018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Final%20Order_09072018_text.pdf\n\n420177007_NOPV PCP PCO_11222017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_NOPV%20PCP%20PCO_11222017.pdf\n\n420177007_NOPV PCP PCO_11222017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_NOPV%20PCP%20PCO_11222017_text.pdf\n\n420177007_Operator Response To Notice_01152018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Operator%20Response%20To%20Notice_01152018.pdf\n\n420177007_Final Order_09072018_text.pdf\n\nSeptember 7, 2018\nMr. Grant E. Sims\nChief Executive Officer\nGenesis Energy, LP\n919 Milam Street\nHouston, TX 77002\nRe: CPF No. 4-2017-7007\nDear Mr. Sims:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nGenesis Offshore Holdings, LLC (Genesis). It makes findings of violation and assesses a civil\npenalty of $39,300. This is to acknowledge receipt of payment of the full penalty amount, by\nwire transfer, dated April 24, 2018. It further finds that Genesis has completed the actions\nspecified in the Notice to comply with the pipeline safety regulations. Therefore, this\nenforcement action is now closed. Service of the Final Order by certified mail is effective upon\nthe date of mailing, as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Jeffrey W. Gifford, Vice President, Health, Safety, Security, Environment, Genesis\nEnergy, LP, 919 Milam Street, Suite 2100, Houston, TX 77002\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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 )\nGenesis Offshore Holdings, LLC, ) CPF No. 4-2017-7007\na subsidiary of Genesis Energy, LP, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom January 23 through August 25, 2017, pursuant to 49 U.S.C. § 60117, a representative of\nthe Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Genesis\nOffshore Holdings, LLC (Genesis or Respondent), in Houston, Texas, and Houma, Louisiana.\nGenesis is a subsidiary of Genesis Energy, LP.1 Genesis’ pipeline transportation division\nconsists of approximately 2,600 miles of pipeline in the Gulf of Mexico and provides\ninfrastructure to move oil and natural gas produced in the Gulf to onshore refining centers.2\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated November 22, 2017, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to\n49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nGenesis had committed three violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $39,300 for two of the alleged violations. The Notice also proposed ordering\nRespondent to take certain measures to correct the alleged violations. The warning items\nrequired no further action but warned the operator to correct the probable violations or face\npossible future enforcement action.\nAfter requesting and receiving an extension of time, Genesis Energy, LP, responded to the\nNotice on behalf of Respondent, by letter dated January 15, 2018 (Response). The company did\nnot contest the allegations of violation but requested that the proposed civil penalty for two of the\nalleged violations be reduced or eliminated. Respondent also provided information concerning\n1 Securities and Exchange Commission website, available at\nhttps://www.sec.gov/Archives/edgar/data/1022321/000102232118000024/gel12312017exhibit211 htm (last\naccessed July 10, 2018).\n2 Pipeline Safety Violation Report (Violation Report), (November 21, 2017), (on file with PHMSA), at 1.\n\n\n\nCPF No. 4-2017-7007\nPage 2\nthe corrective actions it had taken. Subsequently, on April 24, 2018, Genesis paid the proposed\nadministrative civil penalty of $39,300 by wire transfer, as provided under 49 C.F.R. § 190.227.\nIn accordance with 49 C.F.R. § 190.208(a)(1), such payment authorizes the Associate\nAdministrator to make findings of violation and to issue this final order without further\nproceedings. Respondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nIn its Response, Genesis did not contest the allegations in the Notice that it violated 49 C.F.R.\nPart 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nThis manual shall be reviewed at intervals not exceeding 15 months, but at\nleast once each calendar year, and appropriate changes made as necessary to\ninsure that the manual is effective. This manual shall be prepared before\ninitial operations of a pipeline system commence, and appropriate parts shall\nbe kept at locations where operations and maintenance activities are\nconducted.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow for each\npipeline system a manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies. Specifically, the\nNotice alleged that Genesis failed to follow its own Deficiency Reporting and Remedial Action\nDevelopment Procedure (GEN CP 09), Section 2.5, which requires that identified deficiencies be\ncorrected prior to the next required inspection cycle, as specified in the applicable regulatory\nguidance. Genesis failed to follow its Atmospheric Corrosion Inspection Procedure (GEN CP\n39), Section 4, which required that surface rust graded between 6-G and 3-S on the legend be\nrepaired before the next inspection cycle, which took place once every year, but with intervals\nnot exceeding 15 months. According to the Notice, Asset ID 11968 at Milepost (MP) 40.1402\nwas graded 4-G in 2015 and 4-S in 2016, but the company’s remedial action form showed that\nthe company did not complete remediation until June 4, 2017. Asset ID 10597 at MP 71.3701,\nasset ID 12508 at MP 0.0000, and asset ID 14077 at MPs 113.3000 and 113.4000 were all\ngraded 5-S in 2015 and 2016, but no remediation occurred before the next inspection cycle.\nThus, at all five locations listed above, Genesis failed to remediate atmospheric corrosion within\nthe time period called for under its own procedures.3\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\n3 Violation Report, at 5-6.\n\n\n\nCPF No. 4-2017-7007\nPage 3\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow for\neach pipeline system its own manual of written procedures for conducting normal operations and\nmaintenance activities and handling abnormal operations and emergencies.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . . .\n(b) What program and practices must operators use to manage pipeline\nintegrity? Each operator of a pipeline covered by this section must:\n(1) Develop a written integrity management program that addresses the\nrisks on each segment of pipeline in the first column of the following table\nnot later than the date in the second column:\nPipeline Date\nCategory 1 ....................... March 31, 2002.\nCategory 2 ....................... February 18, 2003.\nCategory 3 ....................... 1 year after the date the\npipeline begins operation.\n(2) . . . .\n(5) Implement and follow the program.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement\nand follow its own written integrity management (IM) program. Specifically, the Notice alleged\nthat Genesis failed to complete the information analysis (IA) and periodic evaluation for the\nPoseidon Pipeline, as required under § 195.452(g) and Genesis’s IM Procedure 601L,\n“Information Analysis – Line Pipe,” Sections 1.1.2 – 1.2.2. This procedure required that the IA\nbe completed within three years of the completion of a segment’s integrity assessment.\nGenesis’s records showed the IA for the Poseidon Pipeline had not been completed even though\nthe last assessment date for the line was August 2014. The required periodic evaluation of the\nline’s integrity three years after the last assessment had also not been completed.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to\nimplement and follow its own written integrity management program.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), as quoted\nabove, by failing to implement and follow its own written IM program. Specifically, the Notice\nalleged that Genesis failed to follow its IM Process 600, “Determining Preventive and Mitigative\nMeasures Process,” Section 6.1.1, which required that the company’s IA process be utilized in\nidentifying when preventive and mitigative measures are appropriate to consider and which\nmeasures to consider. According to the Notice, “cleaning pigs” were run monthly on\nRespondent’s pipelines to remove water and biocides were also injected into the lines. Genesis\nhad allegedly been performing these activities as preventive and mitigative measures, yet the\nSeptember 27, 2017 IA record was incomplete and could not be utilized to substantiate these\nmeasures, pursuant to IM Process 600, Section 6.1.1.\n\n\n\nCPF No. 4-2017-7007\nPage 4\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to\nimplement and follow its own written IM program.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.4 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; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $39,300 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $20,300 for Respondent’s violation of 49 C.F.R.\n§ 195.402(a), for failing to follow for each pipeline system a manual of written procedures for\nconducting normal operations and maintenance activities and handling abnormal operations and\nemergencies. In its Response, Genesis did not contest the allegation of violation but requested\nthat the penalty be reduced. Subsequently, on April 24, 2018, Genesis paid the proposed civil\npenalty in full. Under 49 C.F.R. § 190.208(a)(1), such payment waives Genesis’ opportunity to\ncontest the penalty amount. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $20,300 for violation of 49 C.F.R.\n§ 195.402(a).\nItem 2: The Notice proposed a civil penalty of $19,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(b), for failing to implement and follow its own written IM program. In its Response,\nGenesis did not contest the allegation of violation but requested that the penalty be eliminated.\nSubsequently, on April 24, 2018, Genesis paid the proposed civil penalty in full. Under 49\nC.F.R. § 190.208(a)(1), such payment waives the company’s opportunity to contest the penalty\namount. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $19,000 for violation of 49 C.F.R. § 195.452(b)(5).\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $39,300, which amount was paid\n4 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n\n\n\nCPF No. 4-2017-7007\nPage 5\nin full by wire transfer on April 24, 2018.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 3 in the Notice for violation of\n49 C.F.R. § 195.452(b)(5). Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601. The Director\nindicates that Respondent has taken the following actions specified in the proposed compliance\norder:\n1. With respect to the violation of § 195.452(b)(5) (Item 3), Respondent has\ncompleted its Information Analysis report and utilized the findings to identify the\nappropriateness and adequacy of the preventive and mitigative measures in place.\nRespondent has also implemented additional measures identified through this process.\nAccordingly, I find that compliance has been achieved with respect to this violation. Therefore,\nthe compliance terms proposed in the Notice are not included in this Order.\nWARNING ITEMS\nWith respect to Items 4, 5, 6, and 7, the Notice alleged probable violations of Part 195 but did\nnot propose a civil penalty or compliance order for these items. Therefore, these are considered\nto be warning items. The warnings were for:\n49 C.F.R. § 195.561(b) (Item 4) ─ Respondent’s alleged failure to repair coating\ndamage discovered on the pipeline after it had been exposed to allow a hot tap to\nthe line;\n49 C.F.R. § 195.452(b)(5) (Item 5) ─ Respondent’s alleged failure to follow its\nown written IM program, specifically, IM Procedure 601L, sections 1.1.2 and\n1.1.3;\n49 C.F.R. § 195.452(j)(2) (Item 6) ─ Respondent’s alleged failure to conduct a\nperiodic evaluation as frequently as needed to assure pipeline integrity; and\n49 C.F.R. § 195.452(k) (Item 7) ─ Respondent’s alleged failure to include in its\nIM program methods to measure whether the program is effective in assessing\nand evaluating the integrity of each pipeline segment and in protecting the high\nconsequence areas.\nGenesis presented information in its Response showing that it had taken certain actions to\naddress the cited items. If OPS finds a violation of any of these items in a subsequent inspection,\nRespondent may be subject to future enforcement action.\n\n\n\nCPF No. 4-2017-7007\nPage 6\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nSeptember 7, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420177007_NOPV PCP PCO_11222017_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nNovember 22, 2017\nJeffrey W. Gifford\nVice President Health,Safety,Security, Environmental\nGenesis Offshore Holdings,LLC\n919 Milam Street\nHouston TX, 77002\nCPF 4-2017-7007\nDear Mr. Gifford:\nOn January 23, 2017 through August 25, 2017, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter\n601 of 49 United States Code (U.S.C.) inspected your procedures for operations and maintenance\nin Houston, Texas and Houma, Louisiana.\nAs a result of the inspection, it is alleged that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected\nand the probable violations are:\n\n\n\n195.402– Procedural Manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline system a manual\nof written procedures for conducting normal operations and maintenance activities\nand handling abnormal operations and emergencies. This manual shall be reviewed\nat intervals not exceeding 15 months, but at least once each calendar year, and\nappropriate changes made as necessary to insure that the manual is effective. This\nmanual shall be prepared before initial operations of a pipeline system commence,\nand appropriate parts shall be kept at locations where operations and maintenance\nactivities are conducted.\nGenesis Offshore Holdings, LLC (Genesis) failed to follow its written Procedures on\ncorrosion prevention titled ‘Deficiency reporting and remedial action development” (GEN\nCP 09) which requires in section 2.5 that identified deficiencies be corrected prior to the\nnext required inspection cycle, as specified by the applicable regulatory guidance.\nGenesis’s atmospheric corrosion inspection procedure (GEN CP 39) in section 4 requires\nthat surface rust graded between 6-G and 3-S on the legend be repaired. However, the\natmospheric inspection records show that no remediation was carried out between\ninspection cycles on the Poseidon system.\nAsset ID 11968 at milepost 40.1402 that was graded a 4G in 2015 and 4S in 2016.\nRemediation was not completed until June 4, 2017 as indicated on the remedial action form\nprovided for this asset.\nAsset ID 10597 at milepost 71.3701 was graded a 5S in 2015 and 5S in 2016, Asset\nID12508 at milepost 0.0000 was graded a 5S in 2015 and 5S in 2016. Also, for CHOPS\nAsset ID 14077 at mileposts 113.3000 and 113.4000 that were graded 5S in both 2015 and\n2016.\nFor 5 locations identified here from the atmospheric corrosion inspection records provided\nduring the inspection, they all exceeded the inspection cycles without being remediated.\n2. 195.452(b) – What program and practices must operators use to manage pipeline\nintegrity?\n(1) Develop a written integrity management program that addresses the risks on each\nsegment of pipeline in the first column of the following table not later than the date\nin the second column:\n(5) Implement and follow the program\nGenesis Offshore Holdings, LLC (Genesis) failed to complete the information analysis and\nperiodic evaluation for the poseidon pipeline integrity required under 195.452(g) of CFR\ntitle 49 and section 1.1.2 – 1.2.2 of its Integrity management procedure 601L. The\nprocedure requires that the information analysis be completed within 3 years of the\ncompletion of a segment’s integrity assessment. Records show that the Information\n2\n\n\n\n3. 4. Analysis for the Poseidon line is yet to be completed even when the last assessment date\nfor the line was in August 2014. This has also led to the non-completion of the required\nperiodic evaluation of the lines integrity 3 years after the last assessment.\nGenesis Offshore Holding’s representative stated that the periodic evaluation had not been\nconducted as it is dependent on the data from the information analysis which was still\npending at the time of this inspection. The information analysis form submitted for review\non 09/27/2017 was not complete. Also, the record submitted to PHMSA on 09/27/2017\nshows the periodic evaluation to be pending the information analysis.\n195.452(b) – What program and practices must operators use to manage pipeline\nintegrity?\n(1) Develop a written integrity management program that addresses the risks on\neach segment of pipeline in the first column of the following table not later than the\ndate in the second column:\n(5) Implement and follow the program\n(i) what preventive and mitigative measures must an operator take to protect the high\nconsequence area?\nGenesis Offshore Holdings, LLC (Genesis) failed to follow it’s written procedure with\nregards to the IMP process 600 which is titled “determining preventive and mitigative\nmeasures process”. The procedure requires both in the introduction and section 6.1.1 that\nthe information analysis processes would be utilized in identifying what preventive and\nmitigative measures and also when such measures may be appropriate. However, cleaning\npigs are being run on these pipelines monthly as a measure to remove water and also\nbiocides are being injected into the lines. Both activities are being carried out as preventive\nand mitigative measures even when there’s been no informational analysis carried out that\nwould form the basis for the measures.\nThe record of Information analysis submitted to PHMSA on September 27, 2017 is\nincomplete and cannot be utilized to substantiate the preventive measures in place.\n195.561– When must I inspect pipe coating used for external corrosion control?\n(a) You must inspect all external pipe coating required by 195.557 just prior to\nlowering the pipe into the ditch or submerging the pipe.\n(b) You must repair any coating damage discovered\nGenesis Offshore Holdings, LLC (Genesis) failed to properly repair coating damage\ndiscovered on the pipeline after it had been exposed to allow a hot tap to the line. A review\n3\n\n\n\n5. of the Maintenance reports from September 27, 2016 and October 10, 2016 both concur\nwith the picture of the line from a post coating repair carried out showing visible holidays\non the line. No other records showing the complete repair of the holidays after the October\n10, 2016 date were presented during the inspection.\nForm 140 maintenance report used to document all maintenance activities and repairs on\nthe pipeline from September 29, 2016 and October 10, 2016 both indicate that the coating\nwas “fully bonded to the pipe but had visible holidays”. These reports concur with the\npicture from September 12, 2016 showing the “Post coating” on the Poseidon line. All\nthree records show that a post coating repair was carried out on the pipeline but still had\nvisible holidays. While Genesis personnel stated the coatings were repaired there’s been\nno record presented to substantiate the statement. Genesis failed to repair the visible\nholidays on the pipeline coating.\n195.452(b) – What program and practices must operators use to manage pipeline\nintegrity?\n(1) Develop a written integrity management program that addresses the risks on each\nsegment of pipeline in the first column of the following table not later than the date\nin the second column:\n(5) Implement and follow the program\nGenesis Offshore Holdings, LLC (Genesis) is yet to complete an Information analysis\nrequired in section 1.1.2 and 1.1.3 of its Integrity management procedure 601L. The\nprocedure requires that the information analysis be completed within 3 years of the\ncompletion of a segment’s integrity assessment. Records show that the CHOPS 24” line\nwith ID 13972 was assessed in June, August, and October 2014 while the segment with\nline ID 13987 was assessed between July and November 2014. The operator’s\nrepresentative stated that the informational analysis had not been completed. Also an\nincomplete form for the information analysis was provided on September 27, 2017.\nResults of the in-line inspection carried out on the CHOPS 24” line with ID 13972 show\nthe assessment was conducted in June, August, and October of 2014 while the assessment\nfor the line segment with ID 13987 was completed between July and November 2014.\nWhile some segments of this line have met the 3 years’ deadline some are yet to meet the\ndeadline in a matter of weeks. However, no record of any Information analysis was\npresented during the inspection as the operator’s representative stated that it had not been\ncompleted. Also an incomplete form for the information analysis was provided on\nSeptember 27, 2017.\n4\n\n\n\n6. 7. 195.452(j) – What is a continual process of evaluation and assessment to maintain a\npipeline’s integrity?\n(2) Evaluation: An operator must conduct a periodic evaluation as frequently as\nneeded to assure pipeline integrity. An operator must base the frequency of evaluation\non risk factors specific to its pipeline, including the factors specified in paragraph (e)\nof this section. The evaluation must consider the results of the baseline and periodic\nintegrity assessments, information analysis (paragraph (g) of this section), and\ndecisions about remediation and preventive and mitigative actions (paragraphs (h)\nand (i) of this section).\nGenesis Offshore Holdings, LLC (Genesis) is yet to complete the evaluation of the pipeline\nintegrity for its pipelines as required under 195.452(j) and section 1.2.2 of Genesis Integrity\nmanagement procedure (IMP) 601L due to the non-completion of the information analysis.\nThe evaluation required in section 1.2.2 of the IMP procedure 601L is dependent on the\nresults from the information analysis. At the time of this inspection no records were\npresented showing any completed periodic evaluation for the pipelines as the operator’s\nrepresentative stated that it had not been completed. A response from the operator on\nSeptember 27, 2017 to the post inspection verbal briefing confirmed that the evaluation\nwas still pending.\nOperator’s representative stated that the periodic evaluation had not been conducted as it\nis dependent on the data from the information analysis which was still pending at the time\nof this inspection.\n195.452(k) – What methods to measure program effectiveness must be used?\nAn operator’s program must include methods to measure whether the program is\neffective in assessing and evaluating the integrity of each pipeline segment and in\nprotecting the high consequence areas.\nA review of the IMP performance measures forms completed and dated January 30, 2017\nfor 2016 does not provide any information concerning the effectiveness of the program for\nwhich it is intended to measure. Omitted from the forms are 7 corrosion selected activity\nmeasures as required in section 1.2.1 of Genesis IM Procedure 701L. The review also does\nnot include any data or reports for the ongoing preventive and mitigative measures as\nrequired in section 1.2.2.12.1 of the same procedure nor is the safety performance goal\nidentified or stated in the report.\nSince most of the data required on this form is unavailable at this time and may not be for\nsome time as the lines were recently acquired in 2015 consideration needs to be made to\ntemporarily change the evaluation from just a system level to a program level that would\nincorporate all the systems within the Genesis Energy group program and provide a more\n5\n\n\n\nmeaningful result.\nThe IMP performance measures forms presented shows the pipeline and HCA mileages\nand also the results from the last ILI results. Every other data required to be included such\nas the selected activity measures and failure measures all had a zero-value inputted. Some\nrequired corrosion activity data within the selected activity measures as required in the “IM\nProcedure 701L – measure IMP effectiveness procedure” and evaluation of preventive and\nmitigative measures were not included in the report. The report does not convey any\ninformation on the effectiveness of the integrity program.\nProposed Civil Penalty\nUnder 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed\n$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related\nseries of violations. The Compliance Officer has reviewed the circumstances and supporting\ndocumentation involved in the above probable violations and has recommended that you be\npreliminarily assessed a civil penalty of $39,300 as follows:\nItem number\nPENALTY\n1\n2\n$20,300\n$19,000\nWarning Items\nWith respect to items 4,5,6 and 7 we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct these items. Failure to\ndo so may result in additional enforcement action.\nProposed Compliance Order\nWith respect to Item 3, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous\nMaterials Safety Administration proposes to issue a Compliance Order to Genesis Offshore\nHoldings,LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a\npart of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in\nCompliance Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If you\nbelieve that any portion of your responsive material qualifies for confidential treatment under 5\nU.S.C. 552(b), along with the complete original document you must provide a second copy of the\ndocument with the portions you believe qualify for confidential treatment redacted and an\n6\n\n\n\nexplanation of why you believe the redacted information qualifies for confidential treatment under\n5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, or request a\nhearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,\nthis constitutes a waiver of your right to contest the allegations in this Notice and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order. If you are responding to this Notice, we propose that you\nsubmit your correspondence to my office within 30 days from receipt of this Notice. This period\nmay be extended by written request for good cause.\nIn your correspondence on this matter, please refer to CPF 4-2017-7007 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nFrank Causey\nActing Director, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Response Options for Pipeline Operators in Compliance Proceedings\n7\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to Genesis Offshore Holdings,LLC a Compliance\nOrder incorporating the following remedial requirements to ensure the compliance of Genesis\nOffshore Holdings,LLC (Genesis) with the pipeline safety regulations:\n1. 2. 4. In regard to Item Number 3 of the Notice pertaining to the preventive and mitigative\nmeasures already being implemented, Genesis shall complete it’s Information\nAnalysis report and utilize the findings to identify the appropriateness and adequacy\nof the preventive and mitigative measures in place. Also any additional measures\nidentified through this process shall be implemented.\nItem 1 shall be completed within 60 days of this notice and all pertinent records\nsubmitted to PHMSA no later than 90 days from the date on this notice.\nIt is requested (not mandated) that Genesis Offshore Holdings,LLC maintain\ndocumentation of the safety improvement costs associated with fulfilling this\nCompliance Order and submit the total to Terri J Binns, Acting Director, Southwest\nRegion, Pipeline and Hazardous Materials Safety Administration. It is requested\nthat these costs be reported in two categories: 1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses, and 2) total cost\nassociated with replacements, additions and other changes to pipeline\ninfrastructure.\n8","truncated":false,"body_characters":32978}