# GENESIS OFFSHORE HOLDINGS, LLC — Notice of Probable Violation

- **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:** Not available
- **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.
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- **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.

Official case documents:

420177007_Final Order_09072018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Final%20Order_09072018.pdf

420177007_Final Order_09072018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Final%20Order_09072018_text.pdf

420177007_NOPV PCP PCO_11222017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_NOPV%20PCP%20PCO_11222017.pdf

420177007_NOPV PCP PCO_11222017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_NOPV%20PCP%20PCO_11222017_text.pdf

420177007_Operator Response To Notice_01152018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420177007/420177007_Operator%20Response%20To%20Notice_01152018.pdf

420177007_Final Order_09072018_text.pdf

September 7, 2018
Mr. Grant E. Sims
Chief Executive Officer
Genesis Energy, LP
919 Milam Street
Houston, TX 77002
Re: CPF No. 4-2017-7007
Dear Mr. Sims:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary,
Genesis Offshore Holdings, LLC (Genesis). It makes findings of violation and assesses a civil
penalty of $39,300. This is to acknowledge receipt of payment of the full penalty amount, by
wire transfer, dated April 24, 2018. It further finds that Genesis has completed the actions
specified in the Notice to comply with the pipeline safety regulations. Therefore, 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. Jeffrey W. Gifford, Vice President, Health, Safety, Security, Environment, Genesis
Energy, LP, 919 Milam Street, Suite 2100, 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 )
Genesis Offshore Holdings, LLC, ) CPF No. 4-2017-7007
a subsidiary of Genesis Energy, LP, )
)
)
)
Respondent. )
____________________________________)
FINAL ORDER
From January 23 through August 25, 2017, pursuant to 49 U.S.C. § 60117, a representative 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 Genesis
Offshore Holdings, LLC (Genesis or Respondent), in Houston, Texas, and Houma, Louisiana.
Genesis is a subsidiary of Genesis Energy, LP.1 Genesis’ pipeline transportation division
consists of approximately 2,600 miles of pipeline in the Gulf of Mexico and provides
infrastructure to move oil and natural gas produced in the Gulf to onshore refining centers.2
As a result of the inspection, the Director, Southwest Region, OPS (Director), issued to
Respondent, by letter dated November 22, 2017, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (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
Genesis had committed three violations of 49 C.F.R. Part 195 and proposed assessing a civil
penalty of $39,300 for two of the alleged violations. The Notice also proposed ordering
Respondent to take certain measures to correct the alleged violations. The warning items
required no further action but warned the operator to correct the probable violations or face
possible future enforcement action.
After requesting and receiving an extension of time, Genesis Energy, LP, responded to the
Notice on behalf of Respondent, by letter dated January 15, 2018 (Response). The company did
not contest the allegations of violation but requested that the proposed civil penalty for two of the
alleged violations be reduced or eliminated. Respondent also provided information concerning
1 Securities and Exchange Commission website, available at
https://www.sec.gov/Archives/edgar/data/1022321/000102232118000024/gel12312017exhibit211 htm (last
accessed July 10, 2018).
2 Pipeline Safety Violation Report (Violation Report), (November 21, 2017), (on file with PHMSA), at 1.



CPF No. 4-2017-7007
Page 2
the corrective actions it had taken. Subsequently, on April 24, 2018, Genesis paid the proposed
administrative civil penalty of $39,300 by wire transfer, as provided under 49 C.F.R. § 190.227.
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. Respondent did not request a hearing and therefore has waived its right to one.
FINDINGS OF VIOLATION
In its Response, Genesis did not contest the allegations in the Notice that it violated 49 C.F.R.
Part 195, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations and
maintenance activities and handling abnormal operations and emergencies.
This manual shall be reviewed at intervals not exceeding 15 months, but at
least once each calendar year, and appropriate changes made as necessary to
insure that the manual is effective. This manual shall be prepared before
initial operations of a pipeline system commence, and appropriate parts shall
be kept at locations where operations and maintenance activities are
conducted.
The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow for each
pipeline system a manual of written procedures for conducting normal operations and
maintenance activities and handling abnormal operations and emergencies. Specifically, the
Notice alleged that Genesis failed to follow its own Deficiency Reporting and Remedial Action
Development Procedure (GEN CP 09), Section 2.5, which requires that identified deficiencies be
corrected prior to the next required inspection cycle, as specified in the applicable regulatory
guidance. Genesis failed to follow its Atmospheric Corrosion Inspection Procedure (GEN CP
39), Section 4, which required that surface rust graded between 6-G and 3-S on the legend be
repaired before the next inspection cycle, which took place once every year, but with intervals
not exceeding 15 months. According to the Notice, Asset ID 11968 at Milepost (MP) 40.1402
was graded 4-G in 2015 and 4-S in 2016, but the company’s remedial action form showed that
the company did not complete remediation until June 4, 2017. Asset ID 10597 at MP 71.3701,
asset ID 12508 at MP 0.0000, and asset ID 14077 at MPs 113.3000 and 113.4000 were all
graded 5-S in 2015 and 2016, but no remediation occurred before the next inspection cycle.
Thus, at all five locations listed above, Genesis failed to remediate atmospheric corrosion within
the time period called for under its own procedures.3
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
3 Violation Report, at 5-6.



CPF No. 4-2017-7007
Page 3
of the evidence, I find that Respondent violated 49 C.F.R. § 195.402(a) by failing to follow for
each pipeline system its own manual of written procedures for conducting normal operations and
maintenance activities and handling abnormal operations and emergencies.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), which states:
§ 195.452 Pipeline integrity management in high consequence areas.
(a) . . . .
(b) What program and practices must operators use to manage pipeline
integrity? Each operator of a pipeline covered by this section must:
(1) Develop a written integrity management program that addresses the
risks on each segment of pipeline in the first column of the following table
not later than the date in the second column:
Pipeline Date
Category 1 ....................... March 31, 2002.
Category 2 ....................... February 18, 2003.
Category 3 ....................... 1 year after the date the
pipeline begins operation.
(2) . . . .
(5) Implement and follow the program.
The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5) by failing to implement
and follow its own written integrity management (IM) program. Specifically, the Notice alleged
that Genesis failed to complete the information analysis (IA) and periodic evaluation for the
Poseidon Pipeline, as required under § 195.452(g) and Genesis’s IM Procedure 601L,
“Information Analysis – Line Pipe,” Sections 1.1.2 – 1.2.2. This procedure required that the IA
be completed within three years of the completion of a segment’s integrity assessment.
Genesis’s records showed the IA for the Poseidon Pipeline had not been completed even though
the last assessment date for the line was August 2014. The required periodic evaluation of the
line’s integrity three years after the last assessment had also not been completed.
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. § 195.452(b)(5) by failing to
implement and follow its own written integrity management program.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(b)(5), as quoted
above, by failing to implement and follow its own written IM program. Specifically, the Notice
alleged that Genesis failed to follow its IM Process 600, “Determining Preventive and Mitigative
Measures Process,” Section 6.1.1, which required that the company’s IA process be utilized in
identifying when preventive and mitigative measures are appropriate to consider and which
measures to consider. According to the Notice, “cleaning pigs” were run monthly on
Respondent’s pipelines to remove water and biocides were also injected into the lines. Genesis
had allegedly been performing these activities as preventive and mitigative measures, yet the
September 27, 2017 IA record was incomplete and could not be utilized to substantiate these
measures, pursuant to IM Process 600, Section 6.1.1.



CPF No. 4-2017-7007
Page 4
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. § 195.452(b)(5) by failing to
implement and follow its own written IM program.
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.4 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 $39,300 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $20,300 for Respondent’s violation of 49 C.F.R.
§ 195.402(a), for failing to follow for each pipeline system a manual of written procedures for
conducting normal operations and maintenance activities and handling abnormal operations and
emergencies. In its Response, Genesis did not contest the allegation of violation but requested
that the penalty be reduced. Subsequently, on April 24, 2018, Genesis paid the proposed civil
penalty in full. Under 49 C.F.R. § 190.208(a)(1), such payment waives Genesis’ opportunity to
contest the penalty amount. Accordingly, having reviewed the record and considered the
assessment criteria, I assess Respondent a civil penalty of $20,300 for violation of 49 C.F.R.
§ 195.402(a).
Item 2: The Notice proposed a civil penalty of $19,000 for Respondent’s violation of 49 C.F.R.
§ 195.452(b), for failing to implement and follow its own written IM program. In its Response,
Genesis did not contest the allegation of violation but requested that the penalty be eliminated.
Subsequently, on April 24, 2018, Genesis paid the proposed civil penalty in full. Under 49
C.F.R. § 190.208(a)(1), such payment waives the company’s opportunity to contest the penalty
amount. Accordingly, having reviewed the record and considered the assessment criteria, I
assess Respondent a civil penalty of $19,000 for violation of 49 C.F.R. § 195.452(b)(5).
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 $39,300, which amount was paid
4 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. 4-2017-7007
Page 5
in full by wire transfer on April 24, 2018.
COMPLIANCE ORDER
The Notice proposed a compliance order with respect to Item 3 in the Notice for violation of
49 C.F.R. § 195.452(b)(5). Under 49 U.S.C. § 60118(a), each person who engages in the
transportation of hazardous liquids or who owns or operates a pipeline facility is required to
comply with the applicable safety standards established under chapter 601. The Director
indicates that Respondent has taken the following actions specified in the proposed compliance
order:
1. With respect to the violation of § 195.452(b)(5) (Item 3), Respondent has
completed its Information Analysis report and utilized the findings to identify the
appropriateness and adequacy of the preventive and mitigative measures in place.
Respondent has also implemented additional measures identified through this process.
Accordingly, I find that compliance has been achieved with respect to this violation. Therefore,
the compliance terms proposed in the Notice are not included in this Order.
WARNING ITEMS
With respect to Items 4, 5, 6, and 7, the Notice alleged probable violations of Part 195 but did
not propose a civil penalty or compliance order for these items. Therefore, these are considered
to be warning items. The warnings were for:
49 C.F.R. § 195.561(b) (Item 4) ─ Respondent’s alleged failure to repair coating
damage discovered on the pipeline after it had been exposed to allow a hot tap to
the line;
49 C.F.R. § 195.452(b)(5) (Item 5) ─ Respondent’s alleged failure to follow its
own written IM program, specifically, IM Procedure 601L, sections 1.1.2 and
1.1.3;
49 C.F.R. § 195.452(j)(2) (Item 6) ─ Respondent’s alleged failure to conduct a
periodic evaluation as frequently as needed to assure pipeline integrity; and
49 C.F.R. § 195.452(k) (Item 7) ─ Respondent’s alleged failure to include in its
IM program methods to measure whether the program is effective in assessing
and evaluating the integrity of each pipeline segment and in protecting the high
consequence areas.
Genesis presented information in its Response showing that it had taken certain actions to
address the cited items. If OPS finds a violation of any of these items in a subsequent inspection,
Respondent may be subject to future enforcement action.



CPF No. 4-2017-7007
Page 6
The terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
September 7, 2018
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety

420177007_NOPV PCP PCO_11222017_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
November 22, 2017
Jeffrey W. Gifford
Vice President Health,Safety,Security, Environmental
Genesis Offshore Holdings,LLC
919 Milam Street
Houston TX, 77002
CPF 4-2017-7007
Dear Mr. Gifford:
On January 23, 2017 through August 25, 2017, a representative of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), pursuant to Chapter
601 of 49 United States Code (U.S.C.) inspected your procedures for operations and maintenance
in Houston, Texas and Houma, Louisiana.
As a result of the inspection, it is alleged that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations (CFR). The items inspected
and the probable violations are:



195.402– Procedural Manual for operations, maintenance, and emergencies
(a) General. Each operator shall prepare and follow for each pipeline system a manual
of written procedures for conducting normal operations and maintenance activities
and handling abnormal operations and emergencies. This manual shall be reviewed
at intervals not exceeding 15 months, but at least once each calendar year, and
appropriate changes made as necessary to insure that the manual is effective. This
manual shall be prepared before initial operations of a pipeline system commence,
and appropriate parts shall be kept at locations where operations and maintenance
activities are conducted.
Genesis Offshore Holdings, LLC (Genesis) failed to follow its written Procedures on
corrosion prevention titled ‘Deficiency reporting and remedial action development” (GEN
CP 09) which requires in section 2.5 that identified deficiencies be corrected prior to the
next required inspection cycle, as specified by the applicable regulatory guidance.
Genesis’s atmospheric corrosion inspection procedure (GEN CP 39) in section 4 requires
that surface rust graded between 6-G and 3-S on the legend be repaired. However, the
atmospheric inspection records show that no remediation was carried out between
inspection cycles on the Poseidon system.
Asset ID 11968 at milepost 40.1402 that was graded a 4G in 2015 and 4S in 2016.
Remediation was not completed until June 4, 2017 as indicated on the remedial action form
provided for this asset.
Asset ID 10597 at milepost 71.3701 was graded a 5S in 2015 and 5S in 2016, Asset
ID12508 at milepost 0.0000 was graded a 5S in 2015 and 5S in 2016. Also, for CHOPS
Asset ID 14077 at mileposts 113.3000 and 113.4000 that were graded 5S in both 2015 and
2016.
For 5 locations identified here from the atmospheric corrosion inspection records provided
during the inspection, they all exceeded the inspection cycles without being remediated.
2. 195.452(b) – What program and practices must operators use to manage pipeline
integrity?
(1) Develop a written integrity management program that addresses the risks on each
segment of pipeline in the first column of the following table not later than the date
in the second column:
(5) Implement and follow the program
Genesis Offshore Holdings, LLC (Genesis) failed to complete the information analysis and
periodic evaluation for the poseidon pipeline integrity required under 195.452(g) of CFR
title 49 and section 1.1.2 – 1.2.2 of its Integrity management procedure 601L. The
procedure requires that the information analysis be completed within 3 years of the
completion of a segment’s integrity assessment. Records show that the Information
2



3. 4. Analysis for the Poseidon line is yet to be completed even when the last assessment date
for the line was in August 2014. This has also led to the non-completion of the required
periodic evaluation of the lines integrity 3 years after the last assessment.
Genesis Offshore Holding’s representative stated that the periodic evaluation had not been
conducted as it is dependent on the data from the information analysis which was still
pending at the time of this inspection. The information analysis form submitted for review
on 09/27/2017 was not complete. Also, the record submitted to PHMSA on 09/27/2017
shows the periodic evaluation to be pending the information analysis.
195.452(b) – What program and practices must operators use to manage pipeline
integrity?
(1) Develop a written integrity management program that addresses the risks on
each segment of pipeline in the first column of the following table not later than the
date in the second column:
(5) Implement and follow the program
(i) what preventive and mitigative measures must an operator take to protect the high
consequence area?
Genesis Offshore Holdings, LLC (Genesis) failed to follow it’s written procedure with
regards to the IMP process 600 which is titled “determining preventive and mitigative
measures process”. The procedure requires both in the introduction and section 6.1.1 that
the information analysis processes would be utilized in identifying what preventive and
mitigative measures and also when such measures may be appropriate. However, cleaning
pigs are being run on these pipelines monthly as a measure to remove water and also
biocides are being injected into the lines. Both activities are being carried out as preventive
and mitigative measures even when there’s been no informational analysis carried out that
would form the basis for the measures.
The record of Information analysis submitted to PHMSA on September 27, 2017 is
incomplete and cannot be utilized to substantiate the preventive measures in place.
195.561– When must I inspect pipe coating used for external corrosion control?
(a) You must inspect all external pipe coating required by 195.557 just prior to
lowering the pipe into the ditch or submerging the pipe.
(b) You must repair any coating damage discovered
Genesis Offshore Holdings, LLC (Genesis) failed to properly repair coating damage
discovered on the pipeline after it had been exposed to allow a hot tap to the line. A review
3



5. of the Maintenance reports from September 27, 2016 and October 10, 2016 both concur
with the picture of the line from a post coating repair carried out showing visible holidays
on the line. No other records showing the complete repair of the holidays after the October
10, 2016 date were presented during the inspection.
Form 140 maintenance report used to document all maintenance activities and repairs on
the pipeline from September 29, 2016 and October 10, 2016 both indicate that the coating
was “fully bonded to the pipe but had visible holidays”. These reports concur with the
picture from September 12, 2016 showing the “Post coating” on the Poseidon line. All
three records show that a post coating repair was carried out on the pipeline but still had
visible holidays. While Genesis personnel stated the coatings were repaired there’s been
no record presented to substantiate the statement. Genesis failed to repair the visible
holidays on the pipeline coating.
195.452(b) – What program and practices must operators use to manage pipeline
integrity?
(1) Develop a written integrity management program that addresses the risks on each
segment of pipeline in the first column of the following table not later than the date
in the second column:
(5) Implement and follow the program
Genesis Offshore Holdings, LLC (Genesis) is yet to complete an Information analysis
required in section 1.1.2 and 1.1.3 of its Integrity management procedure 601L. The
procedure requires that the information analysis be completed within 3 years of the
completion of a segment’s integrity assessment. Records show that the CHOPS 24” line
with ID 13972 was assessed in June, August, and October 2014 while the segment with
line ID 13987 was assessed between July and November 2014. The operator’s
representative stated that the informational analysis had not been completed. Also an
incomplete form for the information analysis was provided on September 27, 2017.
Results of the in-line inspection carried out on the CHOPS 24” line with ID 13972 show
the assessment was conducted in June, August, and October of 2014 while the assessment
for the line segment with ID 13987 was completed between July and November 2014.
While some segments of this line have met the 3 years’ deadline some are yet to meet the
deadline in a matter of weeks. However, no record of any Information analysis was
presented during the inspection as the operator’s representative stated that it had not been
completed. Also an incomplete form for the information analysis was provided on
September 27, 2017.
4



6. 7. 195.452(j) – What is a continual process of evaluation and assessment to maintain a
pipeline’s integrity?
(2) Evaluation: An operator must conduct a periodic evaluation as frequently as
needed to assure pipeline integrity. An operator must base the frequency of evaluation
on risk factors specific to its pipeline, including the factors specified in paragraph (e)
of this section. The evaluation must consider the results of the baseline and periodic
integrity assessments, information analysis (paragraph (g) of this section), and
decisions about remediation and preventive and mitigative actions (paragraphs (h)
and (i) of this section).
Genesis Offshore Holdings, LLC (Genesis) is yet to complete the evaluation of the pipeline
integrity for its pipelines as required under 195.452(j) and section 1.2.2 of Genesis Integrity
management procedure (IMP) 601L due to the non-completion of the information analysis.
The evaluation required in section 1.2.2 of the IMP procedure 601L is dependent on the
results from the information analysis. At the time of this inspection no records were
presented showing any completed periodic evaluation for the pipelines as the operator’s
representative stated that it had not been completed. A response from the operator on
September 27, 2017 to the post inspection verbal briefing confirmed that the evaluation
was still pending.
Operator’s representative stated that the periodic evaluation had not been conducted as it
is dependent on the data from the information analysis which was still pending at the time
of this inspection.
195.452(k) – What methods to measure program effectiveness must be used?
An operator’s program must include methods to measure whether the program is
effective in assessing and evaluating the integrity of each pipeline segment and in
protecting the high consequence areas.
A review of the IMP performance measures forms completed and dated January 30, 2017
for 2016 does not provide any information concerning the effectiveness of the program for
which it is intended to measure. Omitted from the forms are 7 corrosion selected activity
measures as required in section 1.2.1 of Genesis IM Procedure 701L. The review also does
not include any data or reports for the ongoing preventive and mitigative measures as
required in section 1.2.2.12.1 of the same procedure nor is the safety performance goal
identified or stated in the report.
Since most of the data required on this form is unavailable at this time and may not be for
some time as the lines were recently acquired in 2015 consideration needs to be made to
temporarily change the evaluation from just a system level to a program level that would
incorporate all the systems within the Genesis Energy group program and provide a more
5



meaningful result.
The IMP performance measures forms presented shows the pipeline and HCA mileages
and also the results from the last ILI results. Every other data required to be included such
as the selected activity measures and failure measures all had a zero-value inputted. Some
required corrosion activity data within the selected activity measures as required in the “IM
Procedure 701L – measure IMP effectiveness procedure” and evaluation of preventive and
mitigative measures were not included in the report. The report does not convey any
information on the effectiveness of the integrity program.
Proposed Civil Penalty
Under 49 U.S.C. § 60122 and 49 CFR § 190.223, you are subject to a civil penalty not to exceed
$209,002 per violation per day the violation persists up to a maximum of $2,090,022 for a related
series of violations. The Compliance Officer has reviewed the circumstances and supporting
documentation involved in the above probable violations and has recommended that you be
preliminarily assessed a civil penalty of $39,300 as follows:
Item number
PENALTY
1
2
$20,300
$19,000
Warning Items
With respect to items 4,5,6 and 7 we have reviewed the circumstances and supporting documents
involved in this case and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct these items. Failure to
do so may result in additional enforcement action.
Proposed Compliance Order
With respect to Item 3, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous
Materials Safety Administration proposes to issue a Compliance Order to Genesis Offshore
Holdings,LLC. Please refer to the Proposed Compliance Order, which is enclosed and made a
part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in
Compliance Proceedings. Please refer to this document and note the response options. All
material you submit in response to this enforcement action may be made publicly available. If you
believe that any portion of your responsive material qualifies for confidential treatment under 5
U.S.C. 552(b), along with the complete original document you must provide a second copy of the
document with the portions you believe qualify for confidential treatment redacted and an
6



explanation of why you believe the redacted information qualifies for confidential treatment under
5 U.S.C. 552(b).
Following the receipt of this Notice, you have 30 days to submit written comments, or request a
hearing under 49 CFR § 190.211. If you do not respond within 30 days of receipt of this Notice,
this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order. If you are responding to this Notice, we propose that you
submit your correspondence to my office within 30 days from receipt of this Notice. This period
may be extended by written request for good cause.
In your correspondence on this matter, please refer to CPF 4-2017-7007 and, for each document
you submit, please provide a copy in electronic format whenever possible.
Sincerely,
Frank Causey
Acting Director, Southwest Region
Pipeline and Hazardous Materials Safety Administration
Enclosures: Response Options for Pipeline Operators in Compliance Proceedings
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PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to Genesis Offshore Holdings,LLC a Compliance
Order incorporating the following remedial requirements to ensure the compliance of Genesis
Offshore Holdings,LLC (Genesis) with the pipeline safety regulations:
1. 2. 4. In regard to Item Number 3 of the Notice pertaining to the preventive and mitigative
measures already being implemented, Genesis shall complete it’s Information
Analysis report and utilize the findings to identify the appropriateness and adequacy
of the preventive and mitigative measures in place. Also any additional measures
identified through this process shall be implemented.
Item 1 shall be completed within 60 days of this notice and all pertinent records
submitted to PHMSA no later than 90 days from the date on this notice.
It is requested (not mandated) that Genesis Offshore Holdings,LLC maintain
documentation of the safety improvement costs associated with fulfilling this
Compliance Order and submit the total to Terri J Binns, Acting Director, Southwest
Region, Pipeline and Hazardous Materials Safety Administration. It is requested
that these costs be reported in two categories: 1) total cost associated with
preparation/revision of plans, procedures, studies and analyses, and 2) total cost
associated with replacements, additions and other changes to pipeline
infrastructure.
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