{"operation":"document","citation":"CPF 42021005NOPV","title":"CENTURION PIPELINE L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-02-11","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.440(a), 195.440(c), 195.452(f)(3), 195.573(e), 195.64(c)(1)(ii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021005nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021005nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021005nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42021005NOPV","body":"Notice of Probable Violation involving CENTURION PIPELINE L.P.. PHMSA's enforcement data identifies the cited regulations as 195.440(a),  195.440(c),  195.452(f)(3),  195.573(e),  195.64(c)(1)(ii). The case was opened on 2021-02-11 and is reported as closed as of 2022-07-29. Proposed civil penalty: $96,200. Assessed civil penalty: $72,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42021005NOPV_Closure Letter_07292022_(20-171911).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_Closure%20Letter_07292022_(20-171911).pdf\n\n42021005NOPV_Closure Letter_07292022_(20-171911)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_Closure%20Letter_07292022_(20-171911)_text.pdf\n\n42021005NOPV_Final Order_11192021_(20-171911).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_Final%20Order_11192021_(20-171911).pdf\n\n42021005NOPV_Final Order_11192021_(20-171911)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_Final%20Order_11192021_(20-171911)_text.pdf\n\n42021005NOPV_Operator Response to Notice_ 04012021_(20-171911).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_Operator%20Response%20to%20Notice_%2004012021_(20-171911).pdf\n\n42021005NOPV_PCP PCO_02112021_(20-171911).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_PCP%20PCO_02112021_(20-171911).pdf\n\n42021005NOPV_PCP PCO_02112021_(20-171911)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021005NOPV/42021005NOPV_PCP%20PCO_02112021_(20-171911)_text.pdf\n\n42021005NOPV_Final Order_11192021_(20-171911)_text.pdf\n\nNovember 19, 2021\nVIA ELECTRONIC MAIL TO: m.prince@lotusmidstream.com\nMr. Michael Prince\nPresident and Chief Executive Officer\nLotus Midstream, LLC\n2150 Town Square Place, Suite 395\nSugar Land, Texas 77479\nRe: CPF No. 4-2021-005-NOPV\nDear Mr. Prince:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $72,000, and specifies actions that need to be taken\nby Centurion Pipeline, LP, to comply with the pipeline safety regulations. The penalty payment\nterms are set forth in the Final Order. When the civil penalty has been paid and the terms of the\ncompliance order completed, as determined by the Director, Southwest Region, this enforcement\naction will be closed. Service of the Final Order by e-mail is effective upon the date of\ntransmission 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. Michael Morgan, Vice President of Operations & Engineering, Centurion Pipeline, LP,\nmichael_morgan@centurionpl.com\nMr. Cutty Cunningham, Director of Integrity Management, Centurion Pipeline, LP,\ncutty_cunningham@centurionpl.com\nCONFIRMATION OF 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____________________________________\n)\nIn the Matter of )\n)\nCenturion Pipeline, LP, ) CPF No. 4-2021-005-NOPV\na subsidiary of Lotus Midstream, LLC, )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom April 6, 2020 through September 11, 2020, pursuant to 49 U.S.C. § 60117, representatives\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted a virtual pipeline safety inspection of the facilities and records of\nCenturion Pipeline, LP, (Centurion or Respondent), a wholly-owned subsidiary of Lotus\nMidstream, LLC. The Centurion Pipeline System is an integrated network of approximately\n3,000 miles of crude oil gathering and transportation pipelines that extends from southeast New\nMexico across the Permian Basin of West Texas to Cushing, Oklahoma.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated February 11, 2021, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the\nNotice proposed finding that Centurion committed three violations of 49 C.F.R. Part 195,\nproposed assessing a civil penalty of $96,200 for the alleged violations, and proposed ordering\nRespondent to take certain measures to correct the alleged violations. The Notice also included\nan additional warning item pursuant to 49 C.F.R. § 190.205, which required no further action,\nbut warned the operator to correct the probable violation or face possible future enforcement\naction.\nCenturion responded to the Notice by letter dated April 1, 2021 (Response).2 Centurion\ncontested all of the allegations, offered additional information in response to the Notice, and\nrequested that the proposed civil penalty be reduced or eliminated. Respondent did not request a\nhearing and therefore has waived its right to one.\n1 https://www.lotusmidstream.com/about-us (last accessed July 23, 2021).\n2 Centurion requested an extension of time to respond to the Notice on March 5, 2021. The Southwest Region\nDirector granted the extension through April 4, 2021.\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(f)(3) which states, in\nrelevant part:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) …\n(f) What are the elements of an integrity management program? An\nintegrity management program begins with the initial framework. An\noperator must continually change the program to reflect operating\nexperience, conclusions drawn from results of the integrity assessments,\nand other maintenance and surveillance data, and evaluation of\nconsequences of a failure on the high consequence area. An operator must\ninclude, at minimum, each of the following elements in its written integrity\nmanagement program:\n(1) …\n(3) An analysis that integrates all available information about the\nintegrity of the entire pipeline and the consequences of a failure (see\nparagraph (g) of this section);\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(f)(3) by failing to include in its\nintegrity management program (IMP) an analysis that integrates all available information about\nthe integrity of the entire pipeline and the consequences of a failure. Specifically, the Notice\nalleged that Centurion’s risk analysis process, outlined in its IMP, considers the consequences of\na failure on the line pipe in Centurion’s system, but fails to consider the consequences of a\nfailure of any facility components in the system. The Notice also alleged Centurion’s Pipeline\nand Facility Integrity Manager (PFIM), which Centurion uses to determine the risk rankings of\npipeline segments and assess the benefits of preventative and mitigative measures on the risk of\nthe pipeline segments, does not consider facility components like breakout tanks and pumps in\nthe algorithm used to calculate risk.\nIn its Response, Centurion argues it does consider the risks of releases from facilities in its\nsystem in its Spill Prevention, Control and Countermeasure (SPCC) plans for its facilities.\nCenturion argues the SPCC plans contain risk mitigation counter measures and control measures\nto minimize the possibility of a release of oil from facility boundaries. Centurion also states that\nits risk analysis program uses information from different sources and integrates all available\ninformation in the risk algorithm.\nSection 195.452(f) includes the required elements of every integrity management plan. Of those\nelements is a complete analysis of all information available to each operator about all\ncomponents of its system that could affect an HCA and the consequences of failures on its\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 3\nsystem.3 Centurion does not contest that Section 4 of its Integrity Management Program Manual\ntitled, Risk Analysis, fails to incorporate information regarding consequences of facility failures\non Centurion’s system in its analysis process. Rather, Centurion states that facility failures are\nconsidered in its SPCC plans. Section 4 of the Manual makes no reference to the incorporation\nof information from the SPCC in conducting analyses of consequences of failures on Centurion’s\nsystem. Further, Centurion did not provide any evidence showing one complete analysis of both\nline pipe and facilities was performed in accordance with the regulation, which requires one\nanalysis that integrates all available information about the integrity of the entire pipeline and the\nconsequences of a failure. Accordingly, after considering all of the evidence, I find that\nRespondent violated 49 C.F.R. § 195.452(f)(3) by failing to include in its IMP an analysis that\nintegrates all available information about the integrity of the entire pipeline and the\nconsequences of a failure.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) …\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under §195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe regulation references § 195.401(b), which states:\n§ 195.401 What must I do to monitor external corrosion control?\n(a) …\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non Integrity management repairs. Whenever an operator discovers\nany condition that could adversely affect the safe operation of its pipeline\nsystem, it must correct the condition within a reasonable time. However, if\nthe condition is of such a nature that it presents an immediate hazard to\npersons or property, the operator may not operate the affected part of the\nsystem until it has corrected the unsafe condition.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to correct any\nidentified deficiency in corrosion control as required by § 195.401(b). Specifically, the Notice\nalleged that Centurion identified 22 test points that did not meet cathodic protection (CP) criteria\n3 Part 195 defines “pipeline” as all parts of a pipeline facility through which a hazardous liquid or carbon dioxide\nmoves in transportation, including, but not limited to, line pipe, valves, and other appurtenances connected to line\npipe, pumping units, fabricated assemblies associated with pumping units, metering and delivery stations and\nfabricated assemblies therein, and breakout tanks. Section 195.452(f)(1) requires an identification of all pipeline\nsegments that could affect a high consequence area. Section 195.452(f)(3), therefore, requires an operator to\nintegrate all available information concerning the entire pipeline, including non linear facilities, such as pump\nstations and breakout tanks. See In the Matter of Rocky Mountain Pipeline System, CPF No. 5-2004-2006, 2006 WL\n4488857, at *2 (Dec. 11, 2006).\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 4\non its 12-inch Cedar Canyon to JAL pipeline segment, a non-HCA segment, in 2018, 2019, and\n2020. The Notice alleged that Centurion failed to correct the deficiencies in accordance with\n§ 195.401(b), which requires that any condition that could adversely affect the safe operation of\na pipeline system be corrected within a reasonable time. Finally, the Notice alleged Centurion\nalso failed to follow its own Corrosion Control Manual by not applying the 100 millivolt shift\ncriteria after the negative 0.85-volt criteria was not achieved, until corrective actions were\nplanned to remediate the corrosion control deficiency.\nIn its Response, Centurion does not contest that numerous test points did not meet corrosion\ncontrol criteria from 2018 to 2020, but argues Centurion did not fail “to meet any discrete\nregulatory requirement.” Centurion provided a detailed timeline of activities related to the\ncorrosion control deficiencies on the Cedar Canyon to JAL segment beginning in August 2017\nand ending in March 2021. Centurion argues the actions outlined in its timeline show it took\nactions to install CP systems that were “progressive and reasonable.”\nIn Centurion’s timeline of events in the Response, Centurion explains the actions it took to\naddress the test points that did not meet the required criteria beginning on the segment’s in-\nservice date of August 20, 2017. Centurion states it first discovered that 42 out of 48 test points\nwere below the required criteria in January 2018. Centurion states that “system rectifiers were\nadjusted at this time to provide more output,” but does not report the results of that action.4 In\nSeptember 2018, Centurion states it installed a new ground bed on the JAL station end of the\nsegment to improve CP coverage, but reported the next survey conducted in January 2019\nshowed that 48 of 48 test points were deficient. The next action Centurion took was in\nNovember 2019 when it conducted a close interval survey (CIS) and the results were used to\nselect locations for two new rectifiers and ground beds along the segment. Centurion states that\npermits were required from the New Mexico Bureau of Land Management (BLM) and that Excel\nEnergy, the electric contractor, reported to Centurion an initial denial of the permit applications.\nNext, in January 2020, Centurion’s third survey showed 22 of 48 test points were deficient.\nCenturion reports it ran an in-line inspection (ILI) tool in October 2020 that showed no\nsignificant external corrosion anomalies along the 22 deficient test points. In November 2020,\nCenturion installed the new ground beds and rectifiers and states they could not be energized due\nto electric power and COVID-19 restrictions. Centurion reports that “negotiations between the\nelectric company and BLM broke down in late 2020,” but the permits were ultimately granted in\n“early 2021.” The new rectifiers and ground beds were fully energized in March 2021 and the\ntest points all showed criteria was met on March 18, 2021.\nWhile Respondent contends the phrase “reasonable period of time” in § 195.401(b) is not a\ndiscrete regulatory requirement, previous PHMSA final orders have interpreted the phrase to\nmean that a deficiency must be remediated before the next required survey, which is generally no\nlonger than 15 months from the time of discovery, the maximum time allowed between annual\n4 Centurion Pipeline, LP’s Response to the Notice (April 1, 2021), at 3. Respondent contended the low readings\nwere “only 5 months after the in-service date of the pipeline, so the low readings at this time were acceptable under\nthe regulations.” To the contrary, § 195.563(a) requires each pipeline to have cathodic protection in operation not\nlater than one year after the pipeline is “constructed, relocated, replaced, or otherwise changed, as applicable.” It is\nnot based on the much later in-service date as Respondent contended.\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 5\ncathodic protection surveys under § 195.573(a)(1).5 Centurion first discovered corrosion control\ndeficiencies on the Cedar Canyon to JAL segment in January of 2018 and did not remediate the\ndeficiency until March 18, 2021, over three years later. Centurion installed a new ground bed on\none end of the pipeline after discovering the issue, but failed to ensure that such actions actually\nremediated the CP deficiencies. By the time of the following annual survey, all 48 test points\nalong the pipeline were deficient, so this action did not resolve the CP deficiencies that were\noccurring at all of the test points along the entire segment. At that point, Respondent had failed\nto comply with § 195.573(e). Moreover, in November 2019, approximately 22 months after\ninitially discovering the CP deficiencies, Centurion conducted a CIS to determine a workable\nsolution to the known problems. The delays in the permitting process after coming up with the\nplan to install and energize ground beds and rectifiers that were capable to resolving the deficient\nCP further lengthened the delay in remediation. Centurion’s actions to correct identified\ncorrosion control deficiencies were not reasonable because it failed to correct the deficiencies by\nthe next annual survey and, thereafter, did not take steps to develop a plan for correcting the\ndeficiencies until approximately 22 months after discovery. I note, however, that Centurion’s\nefforts to remediate the deficiencies, even though untimely, are considered below with regard to\nthe penalty.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.573(e) by failing to correct any identified deficiency a corrosion control as required by\n§ 195.401(b).\nItem 4: The Notice alleged that Respondent violated 49 C.F.R. § 195.440(c), which states:\n§ 195.440 Public awareness.\n(a) Each pipeline operator must develop and implement a written\ncontinuing public education program that follows the guidance provided in\nthe American Petroleum Institute's (API) Recommended Practice (RP)\n1162 (incorporated by reference, see §195.3).\n(b) …\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. § 195.440(c) by failing to follow the\ngeneral program recommendations, including the baseline and supplemental requirements, of\nAPI RP 1162 in measuring the effectiveness of Centurion’s Public Awareness Program.\nSpecifically, the Notice alleged that Centurion failed to measure the bottom-line results of the\nprogram by tracking third-party incidents and consequences, including near misses, excavation\ndamage resulting in pipeline failures, and excavation damages that do not result in pipeline\n5 E.g., In the Matter of Sunoco Pipeline, LP, CPF 1-2014-5005, 2016 WL 770393, at *3 (Jan. 13, 2016); See also,\nIn the Matter of Colonial Pipeline Company, CPF 2-2008-5005, 2010 WL 6518285, at *4 (July 12, 2010) (“PHMSA\nhas generally considered a “reasonable time' to be the maximum time allowed between required annual cathodic\nprotection surveys (15 months maximum from the discovery of a deficient survey reading).”).\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 6\nfeatures.\nIn its Response, Centurion argues that it had conducted a four-year effectiveness review of its\nPublic Awareness Program that included bottom-line results. Centurion states its Public\nAwareness Manual, Section 11, “Four-Year Effectiveness Evaluation,” Measure 4, “Bottom Line\nResults,” requires an annual survey to be conducted. Centurion states these annual reviews\ninclude tracking of One-Call tickets requiring action and third-party line strikes. Centurion\nargues this procedure requires consideration of bottom-line results, and therefore, complies with\nAPI RP 1162.\nSection 8 of API RP 1162 provides the recommendations that must be followed by operators for\nperiodically evaluating the effectiveness of their public awareness programs. The RP states that\nan evaluation of the effectiveness of public awareness program implementation should occur no\nmore than four years apart and lays out four measures that should be used to determine\neffectiveness. Measure 4, “Achieving Bottom-Line Results,” states:\nAs a baseline, the operator should track the number of incidents and\nconsequences caused by third-party excavators. This should include\nreported near misses; reported pipeline damage occurrences that did not\nresult in a release; and third-party excavation damage events that resulted\nin pipeline failures\nCenturion’s public awareness program includes a process for evaluating the effectiveness of its\nprogram, including a four-year review. The process requires that the four-year review include an\nanalysis of whether the program provides bottom-line results. The process, however, states that\nto evaluate bottom-line results, Centurion will conduct a survey consisting of questions related to\nstakeholder perception of the company’s public awareness program. A survey of stakeholders’\nperceptions of the company does not inform Centurion regarding the change in the number or the\nconsequences of third-party incidents. While the process also states that the four-year review\nmay also include “damage to ticket ratio,” it does not require Centurion to track the number of\nincidents and consequences caused by third-party excavators, including reported near misses;\nreported pipeline damage occurrences that did not result in a release; and third-party excavation\ndamage events that resulted in pipeline failures. Further, while Centurion hired a contractor to\nconduct a four-year effectiveness review, the resulting report does not include any analysis of\ndata related to incidents and consequences caused by third-party excavators or provide any\nevidence that the contractor considered the “bottom-line results,” as defined in API RP 1162, in\nevaluating the effectiveness of Centurion’s public awareness program.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.440(c) by failing to follow the general program recommendations, including the baseline\nand supplemental requirements, of API RP 1162 in measuring the effectiveness of Centurion’s\nPublic Awareness Program.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 7\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.6\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on its ability to continue\ndoing business; the good faith of Respondent in attempting to comply with the pipeline safety\nregulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.\nIn addition, I may consider the economic benefit gained from the violation without any reduction\nbecause of subsequent damages, and such other matters as justice may require. The Notice\nproposed a total civil penalty of $96,200 for the violations cited above.\nItem 3: The Notice proposed a civil penalty of $96,200 for Respondent’s violation of 49 C.F.R.\n§ 195.573(e), for failing to correct any identified deficiency in corrosion control as required by\n§ 195.401(b). Centurion argues the gravity criterion should consider that pipeline safety was\nminimally affected and the culpability criterion should recognize the additional actions\nCenturion took, such as conducting a CIS and an ILI, to monitor for corrosion. Centurion also\nargues the overall penalty should consider the difficulty that Centurion’s electric contractor had\nin receiving the state permits necessary to complete Centurion’s plan for rectifying the CP\ndeficiencies.\nInadequate cathodic protection may lead to external corrosion, which can result in pipeline leaks\nor failures. The proposed penalty took this risk into account, as well as the fact that no pipeline\nfailures or spills were associated with the violation. Accordingly, no adjustment in the gravity\ncriterion is appropriate.\nCenturion’s Response shows the company took action to address the cause of non-compliance\nwith § 195.573(e) and was in the process of correcting the non-compliance before PHMSA\nlearned of the violation, including conducting a CIS and planning for the installation of\nadditional ground beds and rectifiers to correct the corrosion control deficiencies. Such actions\nwere not taken into account in the proposed civil penalty and therefore warrant assessing a credit\nunder the culpability penalty assessment criterion.\nFinally, as discussed in detail above, the permitting issues Centurion may have experienced has\nbeen considered in the determination regarding whether there was a violation of the regulations.\nThose permitting issues occurred after Centurion had already failed to act in a reasonable amount\nof time and committed the violation. The permitting issues, therefore, do not justify the\ncompany’s non-compliance. Accordingly, no good faith credit is warranted.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\n6 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 8\nItems cited above, I assess Respondent a reduced total civil penalty of $72,000 for violation of\n49 C.F.R. § 195.573(e).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $72,000 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 3, and 4 in the Notice for\nviolations of 49 C.F.R. §§ 195.452(f)(3), 195.573(e), and 195.440(c), respectively. Under 49\nU.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601.\nRespondent argues the proposed violations in Items 1, 3, and 4 should be withdrawn because\nthey were not violations, but did not present other arguments supporting modification or\nwithdrawal of any of the proposed compliance actions. For the reasons described above, these\nItems are issued as findings of violation, and therefore, the corresponding Compliance Order\nactions are not withdrawn.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.452(f)(3) (Item 1), Respondent must\ndevelop and perform a risk analysis to identify and evaluate the risks of facilities that\ncould affect HCAs and submit documentation to the Director within 30 days of\nreceipt of the Final Order.\n2. With respect to the violation of § 195.573(e) (Item 3), Respondent must take\ncorrective action to address identified deficiencies in corrosion control and submit\ndocumentation to the Director within 90 days of receipt of the Final Order.\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 9\n3. With respect to the violation of § 195.440(c) (Item 4), Respondent must conduct\nan effectiveness review of its Public Awareness Plan program and follow the general\nrecommendations, including baseline and supplemental requirements, of API RP\n1162 and submit documentation to the Director within 30 days of receipt of the Final\nOrder.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000, as adjusted for inflation (see 49 C.F.R. § 190.223), for each violation for\neach day the violation continues or in referral to the Attorney General for appropriate relief in a\ndistrict court of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 195, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n49 C.F.R. § 195.64(c)(1)(ii) (Item 2) ─ Respondent’s alleged failure to notify\nPHMSA electronically through the National Registry of Operators of construction\nof 10 or more miles of a new or replacement hazardous liquid or carbon dioxide\npipeline, not later than 60 days before the event occurs.\nCenturion requested withdrawal of Item 2 because the pipeline project referenced in the Notice\nactually consisted of a 9.8-mile pipeline and the addition of piping, pumps, and meters at three\nexisting facilities and, therefore, did not require notice in accordance with § 195.64(c). Under\n§ 190.205, PHMSA does not adjudicate warning items to determine whether a probable violation\noccurred. If OPS finds a violation of this provision in a subsequent inspection, Respondent may\nbe subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of this\nFinal Order by Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. The other terms of the order, including corrective\n\n\n\nCPF No. 4-2021-005-NOPV\nPage 10\naction, remain in effect unless the Associate Administrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nNovember 19, 2021\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n42021005NOPV_Closure Letter_07292022_(20-171911)_text.pdf\n\nVIA ELECTRONIC MAIL\nJuly 29, 2022\nMichael Prince\nPresident and Chief Executive Officer\nLotus Midstream, LLC\n2150 Town Square Place, Suite 395\nSugar Land, Texas 77479\nCPF 4-2021-005-NOPV\nDear Mr. Prince:\nOn November 19, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued a Final Order to Centurion Pipeline Company, LLC (Centurion) in the above-referenced\ncase. This Final Order included a Compliance Order and a Civil Penalty assessment. Based on\nour review of the documentation provided by Centurion and confirmation of its payment of\nassessed Civil Penalty, it has been determined that Centurion has complied with the terms of this\nOrder.\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: Michael Morgan, Executive VP Operations & Engineering -\nMichael_morgan@centurionpl.com","truncated":false,"body_characters":32521}