{"operation":"document","citation":"CPF 42022021NOA","title":"DENBURY ONSHORE, LLC — Notice of Amendment","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-04-19","effective_on":null,"summary":"CLOSED notice of amendment citing 195.452(f)(1), 195.452(f)(6), 195.452(i)(2), 195.452(j)(5)(i), 195.591.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022021noa.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022021noa.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022021noa","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022021NOA","body":"Notice of Amendment involving DENBURY ONSHORE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.452(f)(1),  195.452(f)(6),  195.452(i)(2),  195.452(j)(5)(i),  195.591. The case was opened on 2022-04-19 and is reported as closed as of 2022-08-26. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022021NOA_Closure Letter_08262022_(21-199996).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022021NOA/42022021NOA_Closure%20Letter_08262022_(21-199996).pdf\n\n42022021NOA_Closure Letter_08262022_(21-199996)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022021NOA/42022021NOA_Closure%20Letter_08262022_(21-199996)_text.pdf\n\n42022021NOA_Notice of Amendment_04192022_(21-199996).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022021NOA/42022021NOA_Notice%20of%20Amendment_04192022_(21-199996).pdf\n\n42022021NOA_Notice of Amendment_04192022_(21-199996)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022021NOA/42022021NOA_Notice%20of%20Amendment_04192022_(21-199996)_text.pdf\n\n42022021NOA_Operator Response to Notice_05172022_(21-199996).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022021NOA/42022021NOA_Operator%20Response%20to%20Notice_05172022_(21-199996).pdf\n\n42022021NOA_Closure Letter_08262022_(21-199996)_text.pdf\n\nAugust 26, 2022\nDavid Sheppard\nExecutive Vice President, Chief Operating Officer\nDenbury Onshore, LLC\n5320 Legacy Drive\nPlano, Texas 75024\nCPF 4-2022-021-NOA\nDear Mr. Sheppard:\nOn April 19, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto Denbury Onshore, LLC Notice of Amendment in the above-referenced case. Based on our\nreview of the documentation provided on May 19, 2022, it has been determined that you have\ncomplied 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,\nBryan J. Lethcoe, Director, Southwest Region\nPipeline and Hazardous Materials Safety Administration\n\n42022021NOA_Notice of Amendment_04192022_(21-199996)_text.pdf\n\nNOTICE OF AMENDMENT\nELECTRONIC MAIL - RETURN RECEIPT REQUESTED\nApril 19, 2022\nJohn Filiatrault\nSenior Vice President, CO2 Pipeline and Supply\nDenbury Onshore, LLC\n5320 Legacy Drive\nPlano, Texas 75024\nCPF 4-2022-021-NOA\nDear Mr. Filiatrault:\nFrom March 22, 2021 to March 26, 2021, representatives of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code (U.S.C.),\nvirtually inspected Denbury Onshore, LLC’s (Denbury) Integrity Management (IM) Plans and\nProcedures, of which some are incorporated within Denbury’s Operations and Maintenance\n(O&M) Manual.\nBased on the inspection, PHMSA has identified the apparent inadequacies found within Denbury’s\nplans or procedures, as described below:\n1. § 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(f) What are the elements of an integrity management program? An integrity\nmanagement program begins with the initial framework. An operator must\ncontinually change the program to reflect operating experience, conclusions drawn\nfrom results of the integrity assessments, and other maintenance and surveillance\ndata, and evaluation of consequences of a failure on the high consequence area. An\noperator must include, at minimum, each of the following elements in its written\nintegrity management program:\n(1) A process for identifying which pipeline segments could affect a high\nconsequence area;\n\n\n\n2. Denbury's Integrity Management Program, IMP0100, Integrity Management Plan\n(Revised: 2/15/2021) did not consider topography for overland spread and water transport\nof CO2 for its pipelines and facilities to determine the extent of commodity spread and its\neffects on HCAs.\nDenbury's Integrity Management Program, IMP0100, Integrity Management Plan, 3.5.5.3\nPotential Transportation Zones states, “Denbury pipelines transport CO2, which vaporizes\nupon release to air or water, and dissipates or dissociates upon release to water. As such,\noverland and waterway transport mechanisms do not have the potential to affect an HCA”\nand 3.5.6 Identification of “Could Affect” Facilities states, “Due to the nature of CO2\nreleases, a facility is determined to be a “Could Affect” facility if the pipeline into or out\nof the facility is a “Could Affect” segment, or a “Could Affect” facility boundary intersects\nan HCA or HCA buffer.” Additionally, Denbury personnel stated that its pipelines\ntransport CO2, which vaporizes upon release to air or water, and dissipates or dissociates\nupon release to water. As such, overland and waterway transport mechanisms do not have\nthe potential to affect an HCA. Denbury’s process does not adequately consider the nature\nand characteristics of the product transported or document an adequate air dispersion\nanalysis in the event a release results in a CO2 gas plume.\nDenbury must amend its procedures to include a quantitative analysis of the overland\nspread and a water transport analysis, including differences in spill volume, between line\npipe and other pipeline facilities, which usually have a greater potential release volume.\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(f) What are the elements of an integrity management program? An integrity\nmanagement program begins with the initial framework. An operator must\ncontinually change the program to reflect operating experience, conclusions drawn\nfrom results of the integrity assessments, and other maintenance and surveillance\ndata, and evaluation of consequences of a failure on the high consequence area. An\noperator must include, at minimum, each of the following elements in its written\nintegrity management program:\n(1) . . .\n(6) Identification of preventive and mitigative measures to protect the high\nconsequence area (see paragraph (i) of this section);\n(i) What preventive and mitigative measures must an operator take to protect the high\nconsequence area? -\n(1) . . .\n(2) Risk analysis criteria. In identifying the need for additional preventive and\nmitigative measures, an operator must evaluate the likelihood of a pipeline release\noccurring and how a release could affect the high consequence area. This\ndetermination must consider all relevant risk factors, including, but not limited\nto:\n(i) Terrain surrounding the pipeline segment, including drainage systems such\nas small streams and other smaller waterways that could act as a conduit to\nthe high consequence area;\n\n\n\n3. (ii) Elevation profile;\n(iii) Characteristics of the product transported;\n(iv) Amount of product that could be released;\n(v) Possibility of a spillage in a farm field following the drain tile into a\nwaterway;\n(vi) Ditches alongside a roadway the pipeline crosses;\n(vii) Physical support of the pipeline segment such as by a cable suspension\nbridge;\n(viii) Exposure of the pipeline to operating pressure exceeding established\nmaximum operating pressure.\n(ix) Seismicity of the area.\nDenbury's Integrity Management Program, IMP0100 (Revised: 2/15/2021), Section 3.9\nProcess for Identification of Preventive and Mitigative Measures is inadequate because it\ndoes not consider all relevant risk factors in the risk analysis process. At the time of the\ninspection, Denbury's procedure did not include the basis for an exclusion or any of the\nrelevant risk factors listed in 195.452(i)(2)(i) through (ix).\nDenbury must amend its written procedure to consider all relevant risk factors listed in\n195.452(i)(2) or document a basis for an exclusion.\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) . . .\n(j) What is a continual process of evaluation and assessment to maintain a pipeline's\nintegrity? -\n(1) . . .\n(5) Assessment methods. An operator must assess the integrity of the line pipe by\nany of the following methods. The methods an operator selects to assess low\nfrequency electric resistance welded pipe or lap welded pipe susceptible to\nlongitudinal seam failure must be capable of assessing seam integrity and of\ndetecting corrosion and deformation anomalies.\n(i) In-Line Inspection tool or tools capable of detecting corrosion and\ndeformation anomalies, including dents, gouges, and grooves. For pipeline\nsegments that are susceptible to cracks (pipe body and weld seams), an operator\nmust use an in-line inspection tool or tools capable of detecting crack anomalies.\nWhen performing an assessment using an In-Line Inspection tool, an operator\nmust comply with § 195.591;\n§ 195.591 In-Line inspection of pipelines.\nWhen conducting in-line inspection of pipelines required by this part, each operator\nmust comply with the requirements and recommendations of API Std 1163, Inline\nInspection Systems Qualification Standard; ANSI/ASNT ILI-PQ, Inline Inspection\nPersonnel Qualification and Certification; and NACE SP0102-2010, Inline Inspection\nof Pipelines (incorporated by reference, see § 195.3). An in-line inspection may also\nbe conducted using tethered or remote control tools provided they generally comply\nwith those sections of NACE SP0102-2010 that are applicable.\n\n\n\nNACE SP0102-2010\nSection 5: Logistical Guidelines\n5.1.5 Survey-acceptance criteria\n5.1.5.1 A set of survey-acceptance criteria should be developed and agreed to by\nboth parties prior to the start of the ILI survey. These criteria help to define when\na rerun survey is required and include the following:\n5.1.5.1.1 Physical damage to sensors after run…\n5.1.5.1.6 Velocity underruns or overruns…\nDenbury’s O&M Procedure, O&M 0916, In-Line Inspections (Revised: 2/15/2021)\nprocedure is inadequate because it does not provide the requirements listed in NACE\nSP0102-2010, Section 5: Logistical Guidelines, 5.1.5 Survey-acceptance criteria for\nconducting in-line inspection of its pipelines.\nDuring the inspection, PHMSA reviewed Denbury’s O&M Procedure, O&M 0916, In-Line\nInspections, (Revised: 2/15/2021) Section 3. Core Information and Requirements, which\nstates:\n“3.5.4.2. The Project Manager will review data quality assessments\nprovided by the ILI service provider via e-mail and determine acceptability\nof all ILI surveys including when survey data is incomplete or data quality\nis compromised to any degree. All decisions regarding the acceptability of\nan ILI survey and data quality will be made on an individual basis due to\nthe complexity and number of possible scenarios in evaluating data. After\nreviewing the data quality assessment(s), the Project Manager will respond\nto the ILI service provider via e-mail to accept or reject the ILI survey and\nwill copy the Corrosion Foreman and Integrity Management on the\nresponse. The Project Manager will document the rationale for accepting\nan ILI survey when there is any data degradation. For ILI surveys with\ndegraded data, rationale for accepting the survey will be up to the Project\nManager.”\nOn January 3, 2022, Denbury submitted to PHMSA a revised procedure to address the\nrequirements of §195.452(j)(5)(i) and §195.591 by adding survey-acceptance criteria as\ndescribed in NACE SP0102-2010. Denbury’s updated O&M Procedure, O&M 0916, In-\nLine Inspections (Revised: 10/13/2021) procedure was reviewed by PHMSA and\ndetermined to be adequate.\nResponse to this Notice\nThis Notice is provided pursuant to 49 U.S.C. § 60108(a) and 49 C.F.R. § 190.206. Enclosed as\npart of this Notice is a document entitled Response Options for Pipeline Operators in Compliance\nProceedings. Please refer to this document and note the response options. Be advised that all\nmaterial you submit in response to this enforcement action is subject to being made publicly\navailable. If you believe that any portion of your responsive material qualifies for confidential\ntreatment under 5 U.S.C. 552(b), along with the complete original document, you must provide a\nsecond copy of the document with the portions you believe qualify for confidential treatment\n\n\n\nredacted and an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. 552(b).\nFollowing the receipt of this Notice, you have 30 days to submit written comments, revised\nprocedures, or a request for a hearing under § 190.211. If you do not respond within 30 days of\nreceipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice\nand authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice\nwithout further notice to you and to issue an Order Directing Amendment. If your plans or\nprocedures are found inadequate as alleged in this Notice, you may be ordered to amend your plans\nor procedures to correct the inadequacies (49 C.F.R. § 190.206). If you are not contesting this\nNotice, we propose that you submit your amended procedures to my office within 30 days of\nreceipt of this Notice. This period may be extended by written request for good cause. Once the\ninadequacies identified herein have been addressed in your amended procedures, this enforcement\naction will be closed.\nIt is requested (not mandated) that Denbury Onshore, LLC maintain documentation of the safety\nimprovement costs associated with fulfilling this Notice of Amendment (preparation/revision of\nplans, procedures) and submit the total to Mary L. McDaniel, Director, Southwest, Pipeline and\nHazardous Materials Safety Administration. In correspondence concerning this matter, please refer\nto CPF 4-2022-021-NOA and, for each document you submit, please provide a copy in electronic\nformat whenever possible.\nSincerely,\nMary L. McDaniel, P.E.\nDirector, Southwest Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Response Options for Pipeline Operators in Enforcement Proceedings\ncc: Chad Docekal, Regulatory Compliance Specialist, Denbury Inc., chad.docekal@denbury.com","truncated":false,"body_characters":13938}