{"operation":"document","citation":"CPF 42022041NOPV","title":"DENBURY ONSHORE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-08-05","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.452(i)(1), 195.452(i)(4), 195.452(k).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022041nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022041nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022041nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022041NOPV","body":"Notice of Probable Violation involving DENBURY ONSHORE, LLC. PHMSA's enforcement data identifies the cited regulations as 195.452(i)(1),  195.452(i)(4),  195.452(k). The case was opened on 2022-08-05 and is reported as closed as of 2023-09-28. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022041NOPV_Closure Letter_09282023_(21-199244).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_Closure%20Letter_09282023_(21-199244).pdf\n\n42022041NOPV_Closure Letter_09282023_(21-199244)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_Closure%20Letter_09282023_(21-199244)_text.pdf\n\n42022041NOPV_Final Order_04282023_(21-199244).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_Final%20Order_04282023_(21-199244).pdf\n\n42022041NOPV_Final Order_04282023_(21-199244)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_Final%20Order_04282023_(21-199244)_text.pdf\n\n42022041NOPV_Operator RtN and Request Time Extension_09092022_(21-199244).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_Operator%20RtN%20and%20Request%20Time%20Extension_09092022_(21-199244).pdf\n\n42022041NOPV_PCO_08052022_(21-199244).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_PCO_08052022_(21-199244).pdf\n\n42022041NOPV_PCO_08052022_(21-199244)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022041NOPV/42022041NOPV_PCO_08052022_(21-199244)_text.pdf\n\n42022041NOPV_Closure Letter_09282023_(21-199244)_text.pdf\n\nVIA ELECTRONIC MAIL TO: david.sheppard@denbury.com\nSeptember 28, 2023\nDavid Sheppard\nExecutive Vice President and Chief Operating Officer\nDenbury Onshore, LLC\n5320 Legacy Drive\nPlano, Texas 75024\nCPF 4-2022-041-NOPV\nDear Mr. Sheppard:\nFrom February 23 to August 19, 2021, representatives of the Pipeline and Hazardous Materials\nSafety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code (U.S.C),\ninspected Denbury Onshore, LLC’s (Denbury) carbon dioxide (CO2) transmission pipeline system\nin Louisiana and Mississippi. As a result of the inspection, Denbury was issued a Final Order\n(Order) in the above-referenced case on April 28, 2023. This Order included a Compliance Order.\nBased on PHMSA’s review of the documentation provided on June 27, 2023, it has been\ndetermined that Denbury has 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: Chad Docekal, Regulatory Manager - Pipeline, chad.docekal@denbury.com\nKevin Dahncke, Vice President, Pipeline Operations & Projects,\nkevin.dahncke@denbury.com\n\n42022041NOPV_Final Order_04282023_(21-199244)_text.pdf\n\nApril 28, 2023\nVIA ELECTRONIC MAIL TO: david.sheppard@denbury.com\nDavid Sheppard\nExecutive Vice President and Chief Operating Officer\nDenbury Onshore, LLC\n5320 Legacy Drive\nPlano, Texas 75024\nRe: CPF No. 4-2022-041-NOPV\nDear Mr. Sheppard:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, specifies actions that need to be taken by Denbury Onshore, LLC, to comply with the\npipeline safety regulations, and withdraws one alleged violation and its associated compliance\norder. When the terms of the compliance order have been completed, as determined by the\nDirector, Southwest Region, this enforcement action will be closed. Service of the Final Order\nby e-mail is effective upon the date of transmission and acknowledgement of receipt as provided\nunder 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. Randy Robichaux, Vice President, Environmental, Health, and Safety, Debury\nOnshore, LLC, randy.robichaux@denbury.com\n\n\n\nMr. George C. Hopkins, Outside Counsel for Denbury Onshore, LLC, Vinson &\nElkins, LLP, ghopkins@velaw.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 )\nDenbury Onshore, LLC, ) CPF No. 4-2022-041-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom February 23 to August 19, 2021, pursuant to 49 U.S.C. § 60117, representatives of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), inspected Denbury Onshore, LLC’s (Denbury or Respondent) carbon dioxide\ntransmission pipeline system in Louisiana and Mississippi. Since 2001, Denbury has acquired or\nconstructed approximately 750 miles of carbon dioxide pipelines in the Gulf Coast.\n1 As of\nDecember 31, 2021, Respondent owns approximately 925 miles of carbon dioxide pipelines in\nLouisiana, Mississippi, and Texas.2\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated August 5, 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 Denbury had violated 49 C.F.R. § 195.452 and proposed ordering Respondent to\ntake certain measures to correct the alleged violations.\nDenbury responded to the Notice by letter dated September 9, 2022 (Response). Respondent\ncontested two of the three allegations, offered additional information in response to the Notice,\nand requested an extension of time to complete the proposed compliance order (PCO) for Item 2.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195.452, as follows:\n1 Pipeline Network, DENBURY, available at https://www.denbury.com/operations/pipeline-network/ (last accessed\nApril 26, 2023).\n2 Id.\n\n\n\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a)….\n(i) What preventative and mitigative measures must an operator take to\nprotect the high consequence area?\n(1) General requirements. An operator must take measures to prevent\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.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(1) by failing to conduct a\nrisk analysis in 2019 for its Brandon Pump Station, Lockhart Meter Station, Jordan Meter\nStation, Industrial Park Lateral Meter Station, and South Gluckstadt Extension Temporary Pig\nReceiver to identify preventive and mitigative measures (P&MM) that may enhance public\nsafety or environmental protection. In addition, the Notice alleged that when Respondent\neventually performed a P&MM evaluation on November 2, 2021, the evaluation was inadequate\nbecause it failed to identify additional P&MM.\nIn its Response, Denbury did not dispute that it failed to complete the risk analysis as required in\n2019. Denbury contested, however, the allegation that it failed to identify additional P&MM\nduring the November 2, 2021 risk assessment. Respondent explained that it considered an\nadditional P&MM, namely, “installation of remote mounted cameras” to address the risk of\n“outside force related failure,” but ultimately determined that the P&MM already in place were\nsufficient.\nUnder § 195.452(f)(6), identification of P&MM to protect the high consequence area (HCA) is\nan element of an integrity management program (IMP). An operator must continually change\nthis program to reflect operating experience, conclusions drawn from results of the integrity\nassessments, other maintenance and surveillance data, and evaluation of consequences of a\nfailure on the HCA.3 Pursuant to § 195.452(j)(3), an operator must continually evaluate and\nassess pipeline integrity at intervals of five years, not to exceed 68 months. Denbury’s own\nprocedures establish a five-year interval for P&MM risk analysis.4 Denbury complied with\n3 49 C.F.R. § 195.452(f).\n4 See Violation Report Exhibit-B1, Integrity Management Program, IMP0100, 3.10 Integrity Management for\nFacilities Other than Line Pipe, 3.10.1 Process (Revised: 2021-02-15).\n\n\n\nneither. An operator must follow their manual of written procedures.5 Prior to the November 2,\n2021 facility risk assessment, Denbury last performed a risk analysis in 2014. In its Response,\nDenbury did not dispute that it did not complete a risk analysis in 2019, within the requisite\nintervals.\nAfter considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.452(a)(i)(1) by failing to conduct a risk analysis in 2019 for its Brandon Pump Station,\nLockhart Meter Station, Jordan Meter Station, Industrial Park Lateral Meter Station, and South\nGluckstadt Extension Temporary Pig Receiver to identify P&MM that may enhance public\nsafety or environmental protection.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(4), 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)….\n(4) Emergency Flow Restricting Devices (EFRD). If an operator\ndetermines that an EFRD is needed on a pipeline segment to protect a high\nconsequence area in the event of a hazardous liquid pipeline release, an\noperator must install the EFRD. In making this determination, an operator\nmust, at least, consider the following factors – the swiftness of leak\ndetection and pipeline shutdown capabilities, the type of commodity\ncarried, the rate of potential leakage, the volume that can be released,\ntopography or pipeline profile, the potential for ignition, proximity to power\nsources, location of nearest response personnel, specific terrain between the\npipeline segment and the high consequence area, and benefits expected by\nreducing the spill size.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(i)(4) by failing to perform a\nrisk assessment to determine whether emergency flow restricting devices (EFRDs) are needed on\nits pipeline segments to protect HCAs in the event of a release. Specifically, the Notice alleged\nthat Respondent failed to perform an EFRD risk assessment using all of the factors in §\n195.452(i)(4) in accordance with its written IMP. During the inspection, Denbury failed to\nprovide an EFRD risk assessment for its system to evaluate the potential impact on HCAs.\nIn its Response, Respondent argued that that §195.452(i) is not applicable to operators of carbon\ndioxide pipelines. Denbury further disputed that it failed to follow the requirements of its IMP to\nconsider the need for an EFRD analysis. Respondent asserted that it followed its IMP because\nits subject matter expert (SME) reviewed information from work done on the Denbury Green\nPipeline, which is a sister company’s pipeline, and determined that no further evaluation of\nEFRDs was needed.\nPer § 195.452(a), pipeline integrity management applies to each carbon dioxide pipeline that\n5 49 C.F.R. § 195.452(b)(5).\n\n\n\ncould affect an HCA. Under § 195.452(i)(1), operators must conduct a risk analysis of the\npipeline segment to identify additional actions to enhance public safety or environmental\nprotection and mitigate the consequences of a pipeline failure that could affect a HCA.\nHowever, § 195.452(i)(4) specifically applies only to hazardous liquid pipelines, stating: “[i]f an\noperator determines that an EFRD is needed on a pipeline segment to protect a high consequence\narea in the event of a hazardous liquid pipeline release, an operator must install the EFRD”\n(emphasis added). Carbon dioxide is not a hazardous liquid, as that term is defined under §\n195.2. Therefore, because the pipeline at issue transports carbon dioxide, § 195.452(i)(4) is not\napplicable. Accordingly, after considering all of the evidence, I hereby withdraw Notice Item 2.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(k), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(a)….\n(k) What methods to measure program effectiveness must be used? An\noperator’s program must include methods to measure whether the program\nis effective in assessing and evaluating the integrity of each pipeline\nsegment and in protecting the high consequence areas. See Appendix C of\nthis part for guidance on methods that can be used to evaluate a program’s\neffectiveness.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(k) by failing to measure the\neffectiveness of its IMP in assessing and evaluating the integrity of each pipeline segment and in\nprotecting HCAs. Specifically, during the inspection, Denbury stated that its last IMP\nperformance measure was conducted in 2014 and that it failed to conduct the annual IMP\nperformance measure from 2015 to 2020.\nIn its Response, Respondent did not dispute this allegation.\nAccordingly, after considering all of the evidence, I find that Denbury violated 49 C.F.R.\n§ 195.452(k) by failing to measure the effectiveness of its IMP in assessing and evaluating the\nintegrity of each pipeline segment and in protecting 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, 2, and 3 in the Notice for\nviolations of 49 C.F.R. §§ 195.452(i)(1), 195.452(i)(4), and 195.452(k), 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.\nWith regard to the violation of 49 C.F.R. § 195.452(i)(1) (Item 1), Respondent did not dispute\n\n\n\nthat it failed to complete a risk analysis in 2019. Rather, it argued that the risk analysis it\nperformed on November 2, 2021, identified an additional P&MM for the next five years.\nFollowing a review of the documentation from this risk analysis, the Southwest Region, in a\nRegion Recommendation dated December 15, 2022, recommended finding that the terms of the\nPCO for Item 1 have been satisfied. Accordingly, I hereby find that the terms of the PCO have\nbeen completed.\nWith regard to the violation of 49 C.F.R. § 195.452(i)(4) (Item 2), Respondent, without\nadmitting any violation of its IMP, agreed to complete the terms of the PCO for Item 2. Denbury\nrequested an extension of time to complete the work set out in the PCO to 180 days. As\ndiscussed above, I have withdrawn Notice Item 2. Consequently, I hereby withdraw the\ncompliance order associated with this Item. I acknowledge Denbury’s commitment to\ncompleting the terms of the PCO for Item 2 within the time period Denbury has proposed.\nWith regard to the violation of § 195.452(k) (Item 3), Denbury did not contest the allegation of\nviolation or the PCO terms.\nFor the above reasons, the Compliance Order is modified as set forth below.\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:\nWith respect to the violation of § 195.452(k) (Item 3), Respondent must\nmeasure whether its IMP is effective in assessing and evaluating the integrity\nof each pipeline segment and in protecting HCAs. Denbury must submit the\nIMP effectiveness review to the Director, Southwest Region, PHMSA, within\n60 days of the issuance 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\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.\nApril 28, 2023\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":18504}