{"operation":"document","citation":"CPF 420179002","title":"ENERGY XXI PIPELINE, LLC — 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":null,"summary":"CLOSED notice of probable violation citing 192.605(a), 192.605(b)(8), 192.616, 195.402(a), 195.402(c)(13), 195.413(c), 195.440(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420179002.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420179002.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420179002","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420179002","body":"Notice of Probable Violation involving ENERGY XXI PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 192.605(a),  192.605(b)(8),  192.616,  195.402(a),  195.402(c)(13),  195.413(c),  195.440(c). The case was opened on 2017-05-16 and is reported as closed as of 2018-05-14. Proposed civil penalty: $30,200. Assessed civil penalty: $30,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420179002_Final Order_05142018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420179002/420179002_Final%20Order_05142018.pdf\n\n420179002_Final Order_05142018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420179002/420179002_Final%20Order_05142018_text.pdf\n\n420179002_NOPV PCP_05162017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420179002/420179002_NOPV%20PCP_05162017.pdf\n\n420179002_NOPV PCP_05162017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420179002/420179002_NOPV%20PCP_05162017_text.pdf\n\n420179002_Operator Reponse to Notice_06092017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420179002/420179002_Operator%20Reponse%20to%20Notice_06092017.pdf\n\n420179002_Operator Reponse to Notice_06092017.pdf\n\n(energyxx\n1021 Main (One City Centre\nEnergy XXI\nHouston, TX 77002\nSuite 2626\nPage 1 of 3\nJune 9, 2017\nRECEIVED\nU.S. Department of Transportation\nTerri J. Binns\nJUN 1 4 201/\nActing Director, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nBY:\n8701 South Gessner, Suite 630\nHouston, Texas 77074\nSubject: RE: Notice Of Probable Violation and Proposed Civil Penalty - CPF 4-2017-9002\nDear Ms. Binns,\nA representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nconducted an onsite pipeline safety inspection of Energy XXI Pipeline, LLC (Energy XXI)\nprocedures from February 23, 2016 through April 14, 2016 for its crude oil and gas pipeline\noperations in the Gulf of Mexico and Grand Isle, Louisiana areas.\nPursuant to the PHMSA referenced Notice of Probable Violation (NOPV) and Proposed Civil\nPenalty listed above, dated May 16, 2017, this letter serves as Energy XXI's formal response.\nEnergy XXI does not contest the allegation of violation and the Civil Penalty assessed ($30,200),\nbut would like to provide you information on how Energy XXI plans to address and mitigate any\nfuture concerns associated with Items 3 and 4 identified within said letter.\n3. §195.413 Underwater inspection and reburial of pipelines in the Gulf of Mexico and\nits inlets.\nc. If an operator discovers that its pipeline is an exposed underwater pipeline or poses a\nhazard to navigation, the operator shall-\n(1) Promptly, but not later than 24 hours after discovery, notify the National\nResponse Center, telephone: 1-800-424-8802, of the location and, if available,\nthe geographic coordinates of that pipeline.\n(2) Promptly, but not later than 7 days after discovery, mark the location of the\npipeline in accordance with 33 CFR Part 64 at the ends of the pipeline segment\nand at intervals of not over 500 yards (457 meters) long, except that a pipeline\nsegment less than 200 yards (183 meters) long need only be marked at the\ncenter; and\n(3) Within 6 months after discovery, or not later than November 1 of the following\nyear if the 6 month period is later than November I of the year of discovery,\nbury the pipeline so that the top of the pipe is 36 inches (914 millimeters) below\nthe underwater natural bottom (as determined by recognized and generally\naccepted practices) for normal excavation or 18 inches (457 millimeters) for\nrock excavation.\n\n\n\n(energyxx\nEnergy XXI\nSuite 2626\n1021 Main (One City Centre)\nHouston, TX 77002\nPage 2 of 3\ni.\nAn operator may employ engineered alternatives to burial that meet or\nexceed the level of protection provided by burial.\nii. If an operator cannot obtain required state or Federal permits in time to\ncomply with this section, it must notify OPS; specify whether the required\npermit is State or Federal; and, justify the delay.\nEXXI did not promptly, but not later than 7 days after discovery mark the location of ST21H-\nEast Timbalier Island Facility 10-inch pipeline in accordance with 33 CFR Part 64. Also EXXI\ndid not bury the pipeline so that the top of the pipe is 36 inches below the underwater natural\nbottom within 6 months after discovery.\nDuring the records inspection, PHMSA inspectors reviewed EXXI's 2015 Underwater Inspection\nProcedure (UIP). EXXI performed the survey and found that ST21H-East Timbalier Island\nFacility 10-inch pipeline was exposed/hazard to navigation on March 19, 2013. The location\nmarking for the exposure/hazard to navigation of this pipeline was not performed until May 15,\n2013 according to the UIP. Also, the UIP showed that ST21H Oil-East Timbalier Island Facility\n10-inch pipeline was not reburied until September 2014 which is 18 months past the date of\ndiscovery\nEnergy XXI's Response:\nEnergy XXI has enhanced its process flowchart within the Underwater Inspection Manual to\nincorporate what needs to be done if and when a pipeline is exposed/hazard to navigation is\ndiscovered. (See attachment (A)).\n4. §195.440 and §192.616 Public Awareness.\nc. The operator must follow the general program recommendations, including\nbaseline and supplemental requirements of API RP 1162, unless the operator\nprovides justification in its program or procedural manual as to why compliance\nwith all or certain provisions of the recommended practice is not practicable and\nnot necessary for safety.\nAPI RP 1162 - MEASURING PROGRAM EFFECTIVENESS\nOperators should assess progress on the following measures to assess whether the\nactions undertaken in implementation of this RP are achieving the intended goals\nand objectives:\n• Whether the information is reaching the intended stakeholder audiences\n• If the recipient audiences are understanding the messages delivered\n• Whether the recipients are motivated to respond appropriately in alignment\nwith the information provided\n• If the implementation of the Public Awareness Program is impacting bottom-\nline results (such as reduction in the number of incidents caused by third-\nparty damage).\nEXXI did not perform a review of their Public Awareness Plan to measure effectiveness of the\n\n\n\n(energy*\n1021 Main (One City Centre)\nEnergy XXI\nSuite 2626\nHouston, TX 77002\nPage 3 of 3\nprogram every 4 years as required by API RP 1162 Sections 8.4, 8.5 and their written Public\nAwareness Plan.\nDuring records and procedures review, PHMSA inspectors inspected EXXI's Public Awareness\nPlan (Plan). EXXI' s Plan Section 13 - Perform Program Evaluation states that the effectiveness\nreview must be completed every four years. While inspecting the Plan, the Review and Revision\nLog noted that Version 1 of the Plan was revised and updated on November 24, 2011. Also, the\nPlan's Review and Revision Log Version 3 stated in August 2014 that the due date for the\nEffectiveness Evaluation required in Section 13.3 was changed from April 1, 2015 to\nNovember 1, 2017. EXXI could not provide an explanation or justification to the PHMSA\nInspectors as to why the Plan's Effectiveness Evaluation date was changed to well past 4\nyears to complete the review.\nEXXI did complete their Plan's Effectiveness Evaluation on March 3, 2016 and it was\nreviewed by PHMSA inspectors.\nEnergy XIl's Response:\nEnergy XXI has added this Effectiveness Evaluation review to TaskOp (EXXI's\nComputerized Compliance Maintenance System) to help alleviate human error associated\nwith task assignments and dates.\nPlease be assured that Energy XXI Pipeline, LLC shares with PHMSA a commitment to safely\noperate our pipeline assets. Energy XXI believes that the existing manuals, procedures and\nprocesses complied with the applicable regulations, but it is our desire that both parties work\ncooperatively to assure this common objective; we have made these revisions to clarify the above\nmatters in our manuals.\nSincerely,\nWesley Stout\nWishy Star\nVice President Production\n713-396-3066 (office)\n713-594-7859 (cell)\nwstout@energyxxi.com\n\n420179002_Final Order_05142018_text.pdf\n\nMay 14, 2018\nMr. Douglas E. Brooks\nPresident and CEO\nEnergy XXI Pipeline, LLC\n1021 Main Street, Suite 2626\nHouston, TX 77002\nRe: CPF No. 4-2017-9002\nDear Mr. Brooks:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $30,200. This is to acknowledge receipt of payment of\nthe full penalty amount, by wire transfer, dated June 13, 2017. This enforcement action is now\nclosed. Service of the Final Order by certified mail is effective upon the date of mailing as\nprovided 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. Wesley Stout, Vice President Production, Energy XXI Pipeline, LLC, 1021 Main\nStreet, Suite 2626, 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 )\nEnergy XXI Pipeline, LLC, ) CPF No. 4-2017-9002\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom February 23 through April 14, 2016, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline 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 Energy\nXXI Pipeline, LLC (EXXI or Respondent) in the South Timbalier, Grand Isle, West Delta, West\nDelta-South Addition, and South Pass areas in the Gulf of Mexico and Grand Isle, Louisiana.\nEXXI is an oil and natural gas development and production company with assets located in the\nU.S. Gulf of Mexico waters and the Gulf Coast onshore.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated May 16, 2017, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice), which also included warnings pursuant to 49 C.F.R. § 190.205. In accordance\nwith 49 C.F.R. § 190.207, the Notice proposed finding that EXXI had committed four violations\nof 49 C.F.R. Parts 192 and 195 and proposed assessing a civil penalty of $30,200 for the alleged\nviolations. The warning items required no further action, but warned the operator to correct the\nprobable violations or face possible future enforcement action.\nEXXI responded to the Notice by letter dated June 9, 2017 (Response). The company did not\ncontest the allegations of violation and paid the proposed civil penalty of $30,200. In accordance\nwith 49 C.F.R. § 190.208(a)(1), such payment authorizes the Associate Administrator to make\nfindings of violation and to issue this final order without further proceedings.\nFINDINGS OF VIOLATION\nIn its Response, EXXI did not contest the allegations in the Notice that it violated 49 C.F.R.\nParts 192 and 195, as follows:\n1 Energy XXI Pipeline, LLC’s website, available at http://www.energyxxi.com/ (last accessed February 26, 2018).\n\n\n\nCPF No. 4-2017-9002\nPage 2\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.413(c)(2) and (3), which\nstate:\n§ 195.413. Underwater inspection and reburial of pipelines in the Gulf\nof Mexico and its inlets.\n(a) . . . .\n(c) If an operator discovers that its pipeline is an exposed underwater\npipeline or poses a hazard to navigation, the operator shall –\n(1) . . . .\n(2) Promptly, but not later than 7 days after discovery, mark the\nlocation of the pipeline in accordance with 33 CFR Part 64 at the ends\nof the pipeline segment and at intervals of not over 500 yards (457\nmeters) long, except that a pipeline segment less than 200 yards (183\nmeters) long need only be marked at the center; and\n(3) Within 6 months of discovery, or not later than November 1 of the\nfollowing year if the 6 month period is later than November 1 of the year of\ndiscovery, bury the pipeline so that the top of the pipe is 36 inches (914\nmillimeters) below the underwater natural bottom (as determined by\nrecognized and generally accepted practices) for normal excavation or 18\ninches (457 millimeters) for rock excavation.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.413(c)(2) and (3) by failing to\npromptly, but not later than seven days after discovery, that its pipeline was exposed underwater\nor posed a hazard to navigation, mark the location of its pipeline in accordance with 33 C.F.R.\nPart 64 and to bury its pipeline so that the top of the pipe was 36 inches below the underwater\nnatural bottom, within six months of discovery. Specifically, the Notice alleged that EXXI did\nnot mark the location of its ST21H-E Timbalier Island Facility 10-inch diameter pipeline in\naccordance with 33 C.F.R. Part 64, and failed to bury it so that the top of the pipe was 36 inches\nbelow the underwater natural bottom, within the regulatory timeframes.2\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. § 195.413(c)(2) and (3) by failing to\npromptly, but not later than seven days after discovery, that its pipeline was exposed underwater\nor posed a hazard to navigation, mark the location of its pipeline in accordance with 33 C.F.R.\nPart 64 and to bury it so that the top of the pipe was 36 inches below the underwater natural\nbottom, within six months of discovery.\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 192.616(c) and 49 C.F.R.\n§ 195.440(c), which state:\n2 PHMSA’s review of EXXI’s records revealed that EXXI discovered on March 19, 2013, that its ST21H-E Timbalier\nIsland Facility 10-inch diameter pipeline was exposed underwater or posed a hazard to navigation. The location was\nnot marked pursuant to 33 C.F.R. Part 64 until May 15, 2013 (past the seven-day requirement), and the pipe was not\nreburied until September 2014 (past the six-month requirement). Pipeline Safety Violation Report (May 15, 2017)\n(on file with PHMSA) at 18-19.\n\n\n\nCPF No. 4-2017-9002\nPage 3\n§ 192.616 Public awareness.\n(a) . . . .\n(c) The operator must follow the general program recommendations,\nincluding baseline and supplemental requirements of [American Petroleum\nInstitute (API)] RP 1162, unless the operator provides justification in its\nprogram or procedural manual as to why compliance with all or certain\nprovisions of the recommended practice is not practicable and not necessary\nfor safety.\nand\n§ 195.440 Public awareness.\n(a) . . . .\n(c) The operator must follow the general program recommendations,\nincluding baseline and supplemental requirements of API RP 1162, unless\nthe operator provides justification in its program or procedural manual as to\nwhy compliance with all or certain provisions of the recommended practice\nis not practicable and not necessary for safety.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.616(c) and § 195.440(c) by failing\nto follow the general program recommendations, including baseline and supplemental\nrequirements, of API RP 1162, or providing justification in its program or procedural manual as\nto why compliance with all or certain provisions of the recommended practice was not\npracticable and not necessary for safety.3 Specifically, the Notice alleged that EXXI failed to\nreview its Public Awareness Plan to measure program effectiveness, in accordance with API RP\n1162 Sections 8.4 and 8.5, and failed to complete this review within four years, as required by\nSection 13 of EXXI’s own written plan.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. § 192.616(c) and § 195.440(c) by\nfailing to follow the general program recommendations, including baseline and supplemental\nrequirements, of API RP 1162.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n3 API RP 1162 Section 8.4 states that operators should measure program effectiveness to assess whether the actions\nundertaken in implementation of the RP are achieving the intended goals and objectives. Further, Section 8.5 provides\nguidance on how results of this evaluation need to be considered and revisions/updates made accordingly in the\noperator’s public awareness program plan, implementation, materials, frequency and/or messages.\n4 During the PHMSA inspection, EXXI could not provide an explanation or justification as to why the Effectiveness\nEvaluation date was changed to November 1, 2017, well past the four-year frequency listed in the Plan. Notice at 5-\n6.\n\n\n\nCPF No. 4-2017-9002\nPage 4\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.5 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 $30,200 for the violations cited above.\nHaving reviewed the record and considered the assessment criteria for each of the Items cited\nabove, I assess Respondent a total civil penalty of $30,200. Respondent paid the total civil\npenalty amount of $30,200 by wire transfer on June 13, 2017.\nWARNING ITEMS\nWith respect to Items 1 and 2, the Notice alleged probable violations of Parts 192 and 195 but\ndid not propose a civil penalty or compliance order for these items. Therefore, these are\nconsidered to be warning items. The warnings were for:\n49 C.F.R. § 195.402(c) (Item 1) ─ Respondent’s alleged failure to follow its own\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies for hazardous liquid\npipelines. Specifically, it alleged that EXXI failed to periodically review the work\ndone by operator personnel to determine the effectiveness of the procedures used\nin normal operation and maintenance, and to take corrective action where\ndeficiencies were found; and\n49 C.F.R. § 192.605(b)(8) (Item 2) ─ Respondent’s alleged failure to follow its\nown manual of written procedures for conducting operations and maintenance\nactivities and for emergency response for gas pipelines. Specifically, it alleged\nthat EXXI failed to periodically review the work done by operator personnel to\ndetermine the effectiveness and adequacy of the procedures used in normal\noperation and maintenance and to modify the procedures when deficiencies were\nfound.\nIf OPS finds a violation of any of these items in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\n5 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. 4-2017-9002\nPage 5\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nMay 14, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":19952}