{"operation":"document","citation":"CPF 420195016","title":"ENERGY TRANSFER COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-08-12","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.402(a), 195.452(b)(1), 195.452(b)(5), 195.452(j)(1), 195.452(l)(1)(ii), 195.583(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-420195016.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-420195016.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-420195016","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/420195016","body":"Notice of Probable Violation involving ENERGY TRANSFER COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.402(a),  195.452(b)(1),  195.452(b)(5),  195.452(j)(1),  195.452(l)(1)(ii),  195.583(a). The case was opened on 2019-08-12 and is reported as closed as of 2020-09-09. Proposed civil penalty: $73,600. Assessed civil penalty: $73,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n420195016_Closure Letter_09092020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_Closure%20Letter_09092020.pdf\n\n420195016_Closure Letter_09092020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_Closure%20Letter_09092020_text.pdf\n\n420195016_Final Order_01142020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_Final%20Order_01142020.pdf\n\n420195016_Final Order_01142020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_Final%20Order_01142020_text.pdf\n\n420195016_NOPV PCP PCO_08122019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_NOPV%20PCP%20PCO_08122019.pdf\n\n420195016_NOPV PCP PCO_08122019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_NOPV%20PCP%20PCO_08122019_text.pdf\n\n420195016_Operator Response to Notice_ 09132019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/420195016/420195016_Operator%20Response%20to%20Notice_%2009132019.pdf\n\n420195016_Final Order_01142020_text.pdf\n\nJanuary 14, 2020\nMr. Kelcy L. Warren\nChief Executive Officer\nEnergy Transfer, LP\n8111 Westchester Drive\nDallas, Texas 75225\nRe: CPF No. 4-2019-5016\nDear Mr. Warren:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, finds that the civil penalty amount of $73,600 has been paid in full, and specifies\nactions that need to be taken by Lone Star NGL, LLC, a subsidiary of Energy Transfer, LP, to\ncomply with the pipeline safety regulations. When the terms of the compliance order are\ncompleted, as determined by the Director, Southwest Region, this enforcement action will be\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\nEnclosures (Final Order and NOPV)\ncc: Ms. Mary McDaniel, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Eric Amundsen, Senior Vice President – Operations, Energy Transfer, LP\nMr. Mark Milliken, Vice President – Technical Services, Energy Transfer, LP\nMr. Danny Nichols, Senior Director – Regulatory Compliance, Energy Transfer, LP\nMr. Chris Lason, Vice President – Asset Integrity, Energy Transfer, LP\nMr. Delyn Houder, Senior Manager – Corrosion Services, Energy Transfer, LP\nMr. Todd Nardozzi, Senior Manager – Regulatory Compliance, Energy Transfer, LP\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 )\nLone Star NGL, LLC, ) CPF No. 4-2019-5016\na subsidiary of Energy Transfer, LP, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn August 12, 2019, pursuant to 49 C.F.R. § 190.207, the Director, Southwest Region, Office of\nPipeline Safety (OPS), issued a Notice of Probable Violation (Notice) to Lone Star NGL, LLC\n(Respondent). The Notice proposed finding that Respondent had violated the pipeline safety\nregulations in 49 C.F.R. Part 195 and proposed a civil penalty of $73,600. The Notice also\nproposed certain measures to correct the violations. Respondent did not contest the allegations\nof violation or corrective measures, and paid the proposed civil penalty on September 30, 2019.\nIn accordance with § 190.208(a)(1), such payment authorizes the entry of this final order.\nBased upon a review of all of the evidence, pursuant to § 190.213, I find Respondent violated the\npipeline safety regulations listed below, as more fully described in the enclosed Notice, which is\nincorporated by reference:\n49 C.F.R. § 195.402(a) (Item 1) ─ Respondent failed to follow for each pipeline\nsystem a manual of written procedures for conducting normal operations and\nmaintenance activities by failing to properly document atmospheric corrosion\ninspections;\n49 C.F.R. § 195.452(b)(5) (Item 2) ─ Respondent failed to implement and follow\nits Integrity Management Plan (IMP) by failing to conduct periodic evaluations to\nassure pipeline integrity pursuant to its IMP and § 195.452(j); and\n49 C.F.R. § 195.452(l) (Item 5) ─ Respondent failed to maintain, for the useful\nlife of the pipeline, documents to support the decisions and analyses regarding\nEmergency Flow Restricting Device installation(s) on the segments that could\naffect a high consequence area and records regarding risk analyses.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent. In accordance with 49 C.F.R. § 190.223, Respondent is\n\n\n\nCPF No. 4-2019-5016\nPage 2\nassessed the proposed civil penalty amount of $73,600, which Respondent has already paid in\nfull.\nPursuant to 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the\nactions proposed in the enclosed Notice to correct the violations. The Director may grant an\nextension of time to comply with any of the required items upon a written request timely\nsubmitted by the Respondent and demonstrating good cause for an extension. Upon completion\nof ordered actions, Respondent may request that the Director close the case. Failure to comply\nwith this Order may result in the assessment of civil penalties under 49 C.F.R. § 190.223 or in\nreferral to the Attorney General for appropriate relief in a district court of the United States.\nWith respect to Items 3, 4, and 6, the Notice alleged a probable violation of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.452(b)(5) (Item 3) ─ Respondent’s alleged failure to implement\nand follow its written IMP regarding reassessment intervals;\n49 C.F.R. § 195.452(b)(5) (Item 4) ─ Respondent’s alleged failure to implement\nand follow its written IMP regarding annual evaluations of its program; and\n49 C.F.R. § 195.583(a) (Item 6) ─ Respondent’s alleged failure to inspect each\nonshore pipeline or portion of onshore pipeline that is exposed to the atmosphere\nfor evidence of atmospheric corrosion at least once every three calendar years, but\nwith intervals not exceeding 39 months.\nIf OPS finds a violation of these provisions in a subsequent inspection, Respondent may be\nsubject to future enforcement action.\nThe terms and conditions of this order are effective upon service in accordance with 49 C.F.R.\n§ 190.5.\nJanuary 14, 2020\n___________________________________ _________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n420195016_Closure Letter_09092020_text.pdf\n\nELECTRONIC MAIL - RETURN RECEIPT REQUESTED\nSeptember 9, 2020\nKelcy L. Warren\nChief Executive Officer\nEnergy Transfer, LP\n8111 Westchester Drive\nDallas, Texas 75225\nCPF 4-2019-5016\nDear Mr. Warren:\nOn January 14, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Energy Transfer L.P. a Final Order in the above-referenced case. This Order included a\nCivil Penalty assessment and a Compliance Order with requirements to review your HLD 44\nprocedures, retrain the technicians on changes and its requirements, and to conduct an EFRD\nstudy. Based on our review of the documentation provided and confirmation of payment of the\nCivil Penalty, it has been determined that you have complied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nCc: Todd Nardozzi, Director – Regulatory Compliance, Energy Transfer Partners\n\n420195016_NOPV PCP PCO_08122019_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nAugust 12, 2019\nEric Amundsen\nSenior Vice President Operations\nEnergy Transfer Company\n1300 Main Street\nHouston, Texas 77002\nCPF 4-2019-5016\nDear Mr. Amundsen:\nOn April 2, 2018 through October 29, 2018, 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 inspected Energy Transfer Company’s (Energy Transfer) Lone Star\nNGL – East and West pipeline system (Gateway Justice Pipeline) in Houston, Abilene, Victoria,\nand Midland, Texas.\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\n1. §195.402 Procedural manual for operations, maintenance, and emergencies.\n(a) General. Each operator shall prepare and follow for each pipeline system a\nmanual of written procedures for conducting normal operations and maintenance\nactivities and handling abnormal operations and emergencies. This manual shall\nbe reviewed at intervals not exceeding 15 months, but at least once each calendar\nyear, and appropriate changes made as necessary to insure that the manual is\neffective. This manual shall be prepared before initial operations of a pipeline\nsystem commence, and appropriate parts shall be kept at locations where\noperations and maintenance activities are conducted.\nEnergy Transfer failed to follow for each pipeline system a manual of written procedures\nfor conducting normal operations and maintenance activities and handling abnormal\noperations and emergencies. Specifically, it failed to follow section 7.3 of its written\nprocedure, HLD.44 for Atmospheric Corrosion Inspection which requires the inclusion of\ncertain additional details in the inspection records.\nThe procedure (HLD.44) requires that coating conditions be ranked (as either good, fair,\npoor, or bare) as part of the evaluation carried out during the inspection, with section 7.4\nrequiring that the evaluations be documented. Work order numbers 629055, 1602951,\n399997, and 1535422 do not document evaluation results or rankings of the coating\nconditions. Also, the inspection reports for the segments between Highway 87 and Jackson\nplant, SE Hull to Odell extension and Odell to Mont Belvieu pump stations 1-5 did not\ninclude coating condition rankings or evaluation of the results as required.\n2. §195.452 – Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\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\ndate in the second column:\n(5) Implement and follow the program.\n(j) What is a continual process of evaluation and assessment to maintain a pipeline's\nintegrity?\n(1) General. After completing the baseline integrity assessment, an operator must\ncontinue to assess the line pipe at specified intervals and periodically evaluate the\nintegrity of each pipeline segment that could affect a high consequence area.\n2\n\n\n\n3. Energy Transfer failed to follow its procedures for managing pipeline integrity by not\nperiodically evaluating the integrity of each pipeline segment that could affect a high\nconsequence area. Specifically, Energy Transfer failed to follow section 7 of its written\nIntegrity Management Plan requiring that periodic evaluations be carried out at intervals\nnot exceeding 15 months. Following the 2017 assessments, the periodic evaluation record\nprepared for the PS5 to PS6 16” segment was reviewed. Records showing periodic\nevaluations carried out for 2013, 2014 and 2015 were unavailable for review and not\nsubsequently provided. The other five (5) segments on the Gateway and Justice systems\nassessed in 2017 did not have evaluation records either. Energy Transfer, therefore, failed\nto conduct periodic evaluations on segments of the Gateway and Justice system as required\nunder its procedures and pipeline safety regulation in §195.452 (j)(2).\n§195.452 – Pipeline integrity management in high consequence areas.\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 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.\nEnergy Transfer failed to follow section 7.0 of the Integrity Management Plan requiring\nthe re-assessment of the pipeline segments that affect a high consequence area at intervals\nnot to exceed 5 years. The Monument Junction to WT2 and WT2 to Halley Junction\nsegments were initially assessed on October 5, 2012 and the subsequent reassessments did\nnot happen until April 27, 2018 and May 16, 2018, for the respective segments. The\nreassessments exceeded the 5 year duration by 6 to 8 months.\n3\n\n\n\n4. 5. §195.452 – Pipeline integrity management in high consequence areas.\n(b) What program and practices must operators use to manage pipeline integrity?\nEach operator of a pipeline covered by this section must:\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\ndate in the second column:\n(5) Implement and follow the program.\nEnergy Transfer failed to follow Section 9 of its written Integrity Management Plan that\nrequires the evaluation of the Integrity Management Program annually and its distribution\nto management by December 15th. The record for the annual evaluation of the program\nusing performance measures shows that the evaluation was not carried out between 2013\nand 2016 (5 years). The first year this evaluation was carried out was in 2017.\n§195.452 – Pipeline integrity management in high consequence areas.\n(l) What records must an operator keep to demonstrate compliance?\n(1) An operator must maintain, for the useful life of the pipeline, records that\ndemonstrate compliance with the requirements of this subpart. At a minimum, an\noperator must maintain the following records for review during an inspection:\n(ii) Documents to support the decisions and analyses, including any modifications,\njustifications, deviations and determinations made, variances, and actions taken, to\npage 622 implement and evaluate each element of the integrity management program\nlisted in paragraph (f) of this section.\nEnergy Transfer failed to provide any record that shows that an evaluation for the need or\nlack of need for Emergency Flow Restricting Device (EFRD) on the segments that could\naffect an HCA, of the Lone Star NGL pipeline system had been carried out. Energy\nTransfer stated that it determined that EFRDs were not necessary on its system after an\nevaluation was carried out; however, Energy Transfer could not provide any records\nsubstantiating this finding or decision.\nLikewise, Energy Transfer failed to maintain records showing the risk analysis results from\nprevious years compared against the current risk analysis results. Energy Transfer stated\nthese records were not maintained in its database.\n4\n\n\n\n6. §195.583 – What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is exposed to the\natmosphere for evidence of atmospheric corrosion, as follows:\nThen the frequency of inspection is:\nAt least once every 3 calendar years, but with intervals not\nexceeding 39 months\nIf the pipeline is\nlocated:\nOnshore Energy Transfer failed to inspect exposed portions of its 24” Permian Connector at Hailey\nJunction for evidence of atmospheric corrosion within the 3 calendar years to 39 months\nfrequency required under 49 CFR §195.583. The inspection records show the last\ninspection was on July 14, 2014 and subsequently on April 4, 2018. The interval between\nthe inspections was therefore 45 months which exceeded the required deadline by 6\nmonths. The required follow up inspection should have occurred no later than October 14,\n2017.\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$213,268 per violation per day the violation persists, up to a maximum of $2,132,679 for a related\nseries of violations. For violation occurring on or after November 2, 2015 and before November\n27, 2018, the maximum penalty may not exceed $209,002 per violation per day, with a maximum\npenalty not to exceed $2,090,022. For violations occurring prior to November 2, 2015, the\nmaximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to\nexceed $2,000,000 for a related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violation(s) and has\nrecommended that you be preliminarily assessed a civil penalty of $73,600 as follows:\nItem number PENALTY\n2 $73,600\nWarning Items\nWith respect to item numbers 3,4, and 6 we have reviewed the circumstances and supporting\ndocuments involved in this case and have decided not to conduct additional enforcement action or\npenalty assessment proceedings at this time. We advise you to promptly correct these items.\nFailure to do so may result in additional enforcement action.\nProposed Compliance Order\n5\n\n\n\nWith respect to items 1, and 5 pursuant to 49 U.S.C. § 60118, the Pipeline and Hazardous Materials\nSafety Administration proposes to issue a Compliance Order to Energy Transfer Company. Please\nrefer to the Proposed Compliance Order, which is enclosed and made a part 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\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 4-2019-5016 and, for each document\nyou submit, please provide a copy in electronic format whenever possible.\nSincerely,\nMary L. McDaniel P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n6\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 Energy Transfer a Compliance Order incorporating\nthe following remedial requirements to ensure the compliance of Energy Transfer Company with\nthe pipeline safety regulations:\n1. In regard to Item Number 1 of the Notice pertaining to ranking of atmospheric\ncorrosion inspection and documenting the evaluation results as set forth in HLD 44\nprocedure, Energy Transfer shall review the HLD 44 procedure and retrain it’s\ncorrosion control personnel on the requirements for evaluating coating conditions\nand properly documenting the atmospheric corrosion evaluation / inspection.\n2. In regard to Item Number 5 of the Notice pertaining to Energy Transfer’s inability\nto provide records showing that an evaluation for the need for EFRD on the Lone\nStar NGL pipeline was carried out, Energy Transfer shall conduct an EFRD study\nand provide records of that study to PHMSA.\n3. 4. Records showing all trainings, retraining’s, implementations and plan of correction\nas required in Items 1 and 5 of this compliance order shall be submitted within 90\ndays of the issuance of the Final Order.\nIt is requested (not mandated) that Energy Transfer Company maintain\ndocumentation of the safety improvement costs associated with fulfilling this\nCompliance Order and submit the total to Mary L. McDaniel, 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.\n7","truncated":false,"body_characters":21875}