{"operation":"document","citation":"CPF 42021009NOPV","title":"OCELOT ENERGY MANAGEMENT LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2021-03-18","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.410(a)(2)(ii), 195.420(a).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021009nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021009nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42021009nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42021009NOPV","body":"Notice of Probable Violation involving OCELOT ENERGY MANAGEMENT LLC. PHMSA's enforcement data identifies the cited regulations as 195.410(a)(2)(ii),  195.420(a). The case was opened on 2021-03-18 and is reported as closed as of 2022-03-15. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42021009NOPV_ Operator Response to Notice_04272021_(20-187765).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_%20Operator%20Response%20to%20Notice_04272021_(20-187765).pdf\n\n42021009NOPV_Closure Letter_03152022_(20-187765).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_Closure%20Letter_03152022_(20-187765).pdf\n\n42021009NOPV_Closure Letter_03152022_(20-187765)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_Closure%20Letter_03152022_(20-187765)_text.pdf\n\n42021009NOPV_Final Order_11192021_(20-187765).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_Final%20Order_11192021_(20-187765).pdf\n\n42021009NOPV_Final Order_11192021_(20-187765)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_Final%20Order_11192021_(20-187765)_text.pdf\n\n42021009NOPV_PCO_03182021_(20-187765).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_PCO_03182021_(20-187765).pdf\n\n42021009NOPV_PCO_03182021_(20-187765)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42021009NOPV/42021009NOPV_PCO_03182021_(20-187765)_text.pdf\n\n42021009NOPV_Final Order_11192021_(20-187765)_text.pdf\n\nNovember 19, 2021\nVIA ELECTRONIC MAIL TO: bramsey@eastonenergy.com\nMr. Brad Ramsey\nPresident and Chief Executive Officer\nEaston Energy Pipelines, LLC\n15375 Memorial Drive, Suite 850\nHouston, Texas 77079\nRe: CPF No. 4-2021-009-NOPV\nDear Mr. Ramsey:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and specifies actions that need to be taken by Easton Energy Pipelines, LLC to comply\nwith the pipeline safety regulations. When the terms of the compliance order have been\ncompleted, as determined by the Director, Southwest Region, this enforcement action will be\nclosed. Service of the Final Order by e-mail is effective upon transmission as provided under 49\nC.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, PE, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Matthew Cesarz, PE, Director, HSE & Regulatory, Easton Energy Pipelines, LLC,\nmcesarz@eastonenergy.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____________________________________\nIn the Matter of )\nEaston Energy Pipelines, LLC, ) CPF No. 4-2021-009-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom August 10 through October 7, 2020, pursuant to 49 U.S.C. § 60117, a representative 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 Easton\nEnergy Pipelines, LLC (Easton or Respondent) in Louisiana and Texas. Easton owns and\noperates over 400 miles of pipeline located throughout the Texas and Louisiana Gulf Coast.1\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated March 18, 2021, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Easton had violated 49 C.F.R. § 195.420(a) and proposed ordering Respondent to\ntake certain measures to correct the alleged violation. The Notice also included an additional\nwarning item pursuant to 49 C.F.R. § 190.205, which required no further action, but warned the\noperator to correct the probable violation or face possible future enforcement action.\nAfter requesting and receiving an extension of time to respond, Easton responded to the Notice\nby letter dated April 27, 2021 (Response). Easton contested the allegation, offered additional\ninformation in response to the Notice, and requested that the Proposed Compliance Order be\nwithdrawn. Respondent did not request a hearing and therefore has waived its right to one.\nFINDING 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. § 195.420(a), which states:\n§ 195.420 Valve maintenance.\n1 See Pipeline Safety Violation Report (Violation Report) at 1 (March 17, 2021) (on file with PHMSA).\n\n\n\nCPF No. 4-2021-009-NOPV\nPage 2\n(a) Each operator shall maintain each valve that is necessary for the safe\noperation of its pipeline systems in good working order at all times.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.420(a) by failing to maintain each\nvalve that is necessary for safe operation of its pipeline system in good working order at all\ntimes. Specifically, the Notice alleged that during valve inspections in 2019 and 2020, four\nvalves were noted as inoperable, and were not subsequently repaired.2\nIn its Response, Easton contested the allegation of violation. The company alleged that the\ninoperable valves were not necessary for the safe operation of its pipeline system because the\nvalves are located on a line that is idle, purged of product, and not in active service.3 Pursuant to\nEaston’s Inspection of Mainline Valves procedure, P-195.420, which differentiates between\nvalves on “active in-service” lines and those on “active idle” lines, the company deferred\nmaintenance on the inoperable valves until such time the company chose to return the line to\nactive service.4 In support of its position, Easton cited PHMSA Advisory Bulletin (ADB) 2016-\n05, which states that the agency will accept “deferral of certain activities for purged but active\npipelines.”\nHaving considered Respondent’s position, I find PHMSA regulations do not recognize an “idle”\nstatus for hazardous liquid pipelines. As noted by PHMSA in the Advisory Bulletin cited by\nRespondent, “The regulations consider pipelines to be either active and fully subject to all\nrelevant parts of the safety regulations or abandoned.” ADB 2016-05. Accordingly, only\npipelines permanently removed from service are exempt from Part 195 regulations. In re NuStar\nTerminals Operations Partnership, LP, CPF No. 1-2011-5011, 2012 WL 6946967, at *4 (Dec.\n18, 2012). In NuStar, the operator alleged that mainline valve inspections were not required\nbecause its pipeline was idled and not transporting hazardous liquids. Id. PHMSA concluded,\nhowever, that the valve inspections were still required because the line had not been formally\nabandoned pursuant to § 195.402(c)(10). Id. “If a pipeline has not been abandoned according to\n§ 195.402(c)(10), then it is considered active and the operator must comply with all requirements\nof Part 195.” Id.\nSince Easton did not abandon its pipeline pursuant to the requirements set forth in §\n195.402(c)(10), it is an active hazardous liquid pipeline subject to all the relevant safety\nrequirements set forth in Part 195, including § 195.420(a). PHMSA’s Advisory Bulletin\nacknowledges that operators may defer “certain activities” for purged but active pipelines, but\nclarified those would be actions that are “impractical on most purged pipelines such as in-line\ninspections.” ADB 2016-05. The Advisory Bulletin also states that if an operator plans to defer\nan activity, they should coordinate the deferral in advance with PHMSA. Id.\nValve maintenance is not impractical on an inactive, purged pipeline. The pipeline does not\nneed to be operating with product inside for Easton to operate the valves to ensure they are in\n2 These valves were located at Sites #3, #9, #10 and #11. Notice, at 1.\n3 It was purged of product and filled with nitrogen gas. Response, at 1.\n4 Id., at 1-2.\n\n\n\nCPF No. 4-2021-009-NOPV\nPage 3\ngood working order and repair them if they are found to be inoperable. In contrast, in-line\ninspection tools—cited in the Advisory Bulletin as an example of an activity that is impractical\non most purged pipelines—generally require product in the pipeline to push the tool through the\nline. It would be impractical, if not impossible, to run in-line inspection tools in most purged\npipelines. Further, Easton did not coordinate the deferral of the valve repairs in advance with\nPHMSA. Instead, PHMSA discovered during a routine safety inspection that Respondent had\nfailed to repair valves that were not in working order.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.420(a) by failing to maintain each valve that is necessary for safe operation of its pipeline\nsystem in good working order at all times.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49\nC.F.R. § 195.420(a). Under 49 U.S.C. § 60118(a), each person who engages in the\ntransportation of hazardous liquids or who owns or operates a pipeline facility is required to\ncomply with the applicable safety standards established under chapter 601. Pursuant to the\nauthority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the\nfollowing actions to ensure compliance with the pipeline safety regulations applicable to its\noperations:\n1. With respect to the violation of § 195.420(a) (Item 1), Respondent must submit a\nplan to remediate the inoperable valves located at Valves Sites #3, #9, #10, and #11\nwithin 30 days of receipt of the Final Order. Respondent must complete the approved\nremedial work plan, and submit records demonstrating that the plan was completed,\nto the Director within 180 days of receipt of the Final Order.\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.\n\n\n\nCPF No. 4-2021-009-NOPV\nPage 4\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. § 195.410(a)(2)(ii) (Item 2) ─ Respondent’s alleged failure to place\nand maintain line markers over each buried pipeline that stated the name of the\ncurrent operator and a telephone number where the operator can be reached at all\ntimes on a background of sharply contrasting color.\nIf OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject\nto 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 terms of the order, including corrective\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\n42021009NOPV_Closure Letter_03152022_(20-187765)_text.pdf\n\nELECTRONIC MAIL\nMarch 15, 2022\nBrad Ramsey\nPresident and Chief Executive Officer\nEaston Energy Pipelines, LLC\n15375 Memorial Drive, Suite 850\nHouston, Texas 77079\nCPF 4-2021-009-NOPV\nDear Mr. Ramsey:\nOn November 19, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Easton Energy Pipelines, LLC a Final Order in the above-referenced case. This Order\nincluded a Compliance Order requiring the submittal of a plan to remediate the inoperable valves\nlocated at Valves Sites #3, #9, #10, and #11, and to complete the remediation upon approval of the\nwork plan. Based on our review of the documentation provided, it has been determined that you\nhave 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.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration","truncated":false,"body_characters":13686}