{"operation":"document","citation":"CPF 42022028NOPV","title":"GENESIS OFFSHORE HOLDINGS, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-04-08","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(i)(1), 195.452(i)(2)(i), 195.452(j)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022028nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022028nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022028nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022028NOPV","body":"Notice of Probable Violation involving GENESIS OFFSHORE HOLDINGS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.452(i)(1),  195.452(i)(2)(i),  195.452(j)(1). The case was opened on 2022-04-08 and is reported as closed as of 2023-06-12. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022028NOPV_Closure Letter_06122023_(21-199241).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_Closure%20Letter_06122023_(21-199241).pdf\n\n42022028NOPV_Closure Letter_06122023_(21-199241)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_Closure%20Letter_06122023_(21-199241)_text.pdf\n\n42022028NOPV_Final Order_02142023_(21-199241).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_Final%20Order_02142023_(21-199241).pdf\n\n42022028NOPV_Final Order_02142023_(21-199241)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_Final%20Order_02142023_(21-199241)_text.pdf\n\n42022028NOPV_Operator Response to Notice_05022022_(21-199241).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_Operator%20Response%20to%20Notice_05022022_(21-199241).pdf\n\n42022028NOPV_PCO_04082022_(21-199241).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_PCO_04082022_(21-199241).pdf\n\n42022028NOPV_PCO_04082022_(21-199241)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022028NOPV/42022028NOPV_PCO_04082022_(21-199241)_text.pdf\n\n42022028NOPV_Final Order_02142023_(21-199241)_text.pdf\n\nFebruary 14, 2023\nVIA ELECTRONIC MAIL TO: jeff.gifford@genlp.com\nJeffrey W. Gifford\nVice President, HSSE\nGenesis Energy, L.P.\n919 Milam Street, Suite 2100\nHouston, Texas, 77002\nRe: CPF No. 4-2022-028-NOPV\nDear Mr. Gifford:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken by Genesis Offshore Holdings, LLC, a\nsubsidiary of Genesis Energy, L.P., to comply with the pipeline safety regulations. When the\nterms of the compliance order have been completed, as determined by the Director, Southwest\nRegion, this enforcement action will be closed. Service of the Final Order by certified mail is\neffective upon the date of mailing 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. John Jewett, Senior Manager, Regulatory and Compliance, Genesis Energy, L.P.,\njohn.jewett@genlp.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)\nGenesis Offshore Holdings, LLC, ) CPF No. 4-2022-028-NOPV\na subsidiary of Genesis Energy, L.P., )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 3 through October 28, 2021, 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 Genesis\nOffshore Holdings, LLC’s (Genesis or Respondent) Cameron Highway Oil Pipeline (CHOPS)\nand Poseidon Offshore Liquid Pipeline in the Gulf of Mexico, Louisiana, and Texas.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated April 8, 2022, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Genesis had committed two violations of 49 C.F.R. Part 195 and proposed ordering\nRespondent to take certain measures to correct the alleged violations.\nGenesis responded to the Notice by letter dated May 2, 2022 (Response). Genesis provided\nadditional information in response to the allegations in the Notice. Respondent did not request a\nhearing and therefore has waived its right to one.\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(i)(2), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) ….\n(i) What preventive and mitigative measures must an operator take to\nprotect the high consequence area?\n(1) General requirements. An operator must take measures to prevent\n\n\n\nand mitigate the consequences of a pipeline failure that could affect a high\nconsequence area. These measures include conducting a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or\nenvironmental protection. Such actions may include, but are not limited to,\nimplementing damage prevention best practices, better monitoring of\ncathodic protection where corrosion is a concern, establishing shorter\ninspection intervals, installing EFRDs on the pipeline segment, modifying\nthe systems that monitor pressure and detect leaks, providing additional\ntraining to personnel on response procedures, conducting drills with local\nemergency responders and adopting other management controls.\n(2) Risk analysis criteria. In identifying the need for additional\npreventive and mitigative measures, an operator must evaluate the\nlikelihood of a pipeline release occurring and how a release could affect the\nhigh consequence area. This determination must consider all relevant risk\nfactors, including, but not limited to:\n(i) Terrain surrounding the pipeline segment, including drainage\nsystems such as small streams and other smaller waterways that could act\nas a conduit to the high consequence area;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(2) by failing to include in its\npreventive and mitigative (P&M) risk analysis the likelihood of a pipeline release and how a\nrelease could affect high consequence areas (HCAs). Specifically, the Notice alleged that the\ninformation analyses performed by Genesis for four pipeline segments only presented a total risk\nscore and failed to include the probability or consequence score for each threat associated with\nthe pipeline segment.\nIn its Response, Respondent included its “2020 Integrity Program Risk” spreadsheet for the\nsegments in question, as well as a risk matrix, which Genesis states can be used to explain the\nvarious risk factors and their values. Respondent also provided revised language from its\nIntegrity Management Program Manual, which Respondent states enhances their P&M program.\nAfter reviewing all of the materials provided, I find Respondent failed to complete the analysis\nrequired by § 195.452(i)(2). While the spreadsheet provided by Respondent aggregates an\noverall risk of failure score for each pipeline segment, the documents, including the risk matrix,\ndo not reflect that Genesis carried out an evaluation of the likelihood of a pipeline release\noccurring and how a release could affect the HCA when determining the need for P&M\nmeasures. The documents provided do not show that Respondent’s analysis considered the\nterrain surrounding the pipeline segment, including drainage systems such as small streams and\nother smaller waterways that could act as a conduit to the HCA, as required by § 195.452(i)(2).\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.452(i)(2) by failing to evaluate the likelihood of a pipeline release occurring and how a\nrelease could affect the HCA.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452, which states:\n\n\n\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a) ….\n(j) What is a continual process of evaluation and assessment to\nmaintain a pipeline's integrity?\n(1) General. After completing the baseline integrity assessment, an\noperator must continue to assess the line pipe at specified intervals and\nperiodically evaluate the integrity of each pipeline segment that could affect\na high consequence area.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(j)(1) by failing to continue to\nassess the line pipe at specified intervals and periodically evaluate the integrity of each pipeline\nsegment that could affect HCAs. Specifically, the Notice alleged that Respondent did not have\nprocedures in its Integrity Management Plan to conduct periodic integrity evaluations of pipeline\nsegments that could affect HCAs. PHMSA alleged that Respondent’s procedures addressed the\nprogram effectiveness reviews required under § 195.452(k), but not the requirements in\n§ 195.452(j)(1).\nIn its Response, Respondent stated it follows the 49 C.F.R Part 195 Frequently Asked Questions\n(FAQs), specifically #5.10 in the Integrity Assessment Intervals Section, claiming that Genesis’\nrisk analysis meets the definition in the FAQ.\n1 Respondent also provided copies of its “IM\nProcess 200” and “IM Procedure 201L,\n” and stated it created a form to document the annual risk\nanalysis and corresponding P&M measures. Lastly, Respondent stated it revised its procedures\nto conform with FAQ #5.10.\nAfter reviewing all of the materials provided, I find the Respondent was not able to produce any\ndocumentation or records that reflect a process for conducting periodic evaluations of the\nintegrity of each pipeline segment that could affect HCAs. Section 195.452(j)(1) includes two\ndistinct requirements—continual assessments of line pipe at specified intervals and periodic\nevaluations of the integrity of each pipeline segment. When conducting the evaluations of the\nintegrity of each pipeline segment, § 195.452(j)(2) requires operators to consider the results of\nany baseline and periodic integrity assessments, information analyses (required under\n§ 195.452(g)), decisions about remediation (required under § 195.452(h)) and decisions about\nP&M actions (required under §195.452(i)). The documents provided by Respondent include risk\nassessment scores and corresponding P&M measures associated with several pipeline segments,\nand states during the annual risk assessment review, the form was used to discuss changes to\nGenesis’ pipeline risk matrix. Respondent also provided documentation pertaining to its risk\nmodel, including factors that are integrated into the algorithm. None of the documents provided,\nhowever, reflect a process for periodically evaluating segment integrity that considers all of the\ninformation included in § 195.452(j)(2), including Respondent’s information analyses or its\ndecisions about remediation.\nRespondent argues FAQ #5.10 of the Liquid Integrity Management Rule FAQs supports a\nfinding that Genesis is in compliance with § 195.452(j)(1). I disagree. FAQ #5.10 states that\n1 See Liquid Integrity Management Rule Frequently Asked Questions, revised Aug. 31, 2016, available at\nhttps://www.phmsa.dot.gov/pipeline/hazardous-liquid-integrity-management/hl-im-faqs (last accessed Feb. 2, 2023).\n\n\n\n“[p]eriodic evaluations are analytical reviews of a wide range of data and information regarding\nthe pipeline integrity that includes but goes beyond simply ‘assessment’ results.” This FAQ goes\non to state that “the continual evaluation must, at a minimum, consider the results of the baseline\nand periodic integrity assessments, risk analysis, decisions about remediation, and preventive and\nmitigative actions.” As discussed above, the documents provided by Respondent do not reflect\nan evaluation as described in the FAQ was completed.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.452(j)(1) by failing to periodically evaluate the integrity of each pipeline segment that\ncould affect HCAs.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for\nviolations of 49 C.F.R. §§ 195.452(i)(2) and 195.452(j)(1). Under 49 U.S.C. § 60118(a), each\nperson who engages in the transportation of hazardous liquids or who owns or operates a\npipeline facility is required to comply with the applicable safety standards established under\nchapter 601.\nWith regard to the violations of § 195.452(i)(2) and § 195.452(j)(1) (Items 1 and 2, respectively),\nRespondent argued that it was in compliance and did not provide separate argument for\nwithdrawal or modification of the Compliance Order. For the reasons stated above, the\nunderlying allegations of violation have not been withdrawn. Consequently, the Compliance\nOrder for these Items is not withdrawn or modified.\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(i)(2) (Item 1), Respondent must update\nits information analysis records to show that probability risk scores and consequence\nrisk scores for each threat for the associated pipeline segment were considered in the\nidentification and evaluation of P&M actions. Genesis must provide documentation\nof such within 60 days of receipt of the Final Order.\n2. With respect to the violation of § 195.452(j)(1) (Item 2), Respondent must amend\nits integrity management plan to ensure that its procedure covers the periodic\nevaluation required by § 195.452(j)(1) and complete a periodic evaluation of its\npipeline segments that could affect HCAs. Genesis must provide documentation of\nsuch within 120 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\n\n\n\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.\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. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of\nthe order, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nFebruary 14, 2023\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n42022028NOPV_Closure Letter_06122023_(21-199241)_text.pdf\n\nVIA ELECTRONIC MAIL\nJune 12, 2023\nMr. Jeffrey W. Gifford\nVice President\nGenesis Offshore Holdings, LLC\n919 Milam Street, Suite 2100\nHouston, Texas 77002\nCPF 4-2022-028-NOPV\nDear Mr. Gifford:\nOn February 14, 2023, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Genesis Offshore Holdings, LLC (Genesis) a Final Order in the above-referenced case\nto include a Compliance Order. Based on PHMSA’s review of the documentation Genesis\nprovided, 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,\nBryan Lethcoe\nDirector, Southwest Region, Office of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration\ncc: John Jewett, Manager – Regulatory Compliance, John.jewett@genlp.com","truncated":false,"body_characters":16716}