{"operation":"document","citation":"CPF 42022048NOPV","title":"DENBURY ONSHORE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-09-14","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.64(c)(1)(ii).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022048nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022048nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42022048nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42022048NOPV","body":"Notice of Probable Violation involving DENBURY ONSHORE, LLC. PHMSA's enforcement data identifies the cited regulation as 195.64(c)(1)(ii). The case was opened on 2022-09-14 and is reported as closed as of 2023-01-12. Proposed civil penalty: $19,000. Assessed civil penalty: $19,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42022048NOPV_Final Order_12302022_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022048NOPV/42022048NOPV_Final%20Order_12302022_(21-214479).pdf\n\n42022048NOPV_Final Order_12302022_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022048NOPV/42022048NOPV_Final%20Order_12302022_(21-214479)_text.pdf\n\n42022048NOPV_Operator Response to Notice_10282022_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022048NOPV/42022048NOPV_Operator%20Response%20to%20Notice_10282022_(21-214479).pdf\n\n42022048NOPV_PCP_09142022_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022048NOPV/42022048NOPV_PCP_09142022_(21-214479).pdf\n\n42022048NOPV_PCP_09142022_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42022048NOPV/42022048NOPV_PCP_09142022_(21-214479)_text.pdf\n\n42022048NOPV_Final Order_12302022_(21-214479)_text.pdf\n\nDecember 30, 2022\nVIA ELECTRONIC MAIL TO: david.sheppard@denbury.com\nMr. David Sheppard\nExecutive Vice President and Chief Operating Officer\nDenbury Inc.\n5851 Legacy Circle, Suite 1200\nPlano, Texas 75024\nRe: CPF No. 4-2022-048-NOPV\nDear Mr. Sheppard:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $19,000 to Denbury Onshore, LLC, a subsidiary of\nDenbury Inc. The penalty payment terms are set forth in the Final Order. This enforcement\naction closes automatically upon receipt of payment. Service of the Final Order by e-mail is\neffective upon the date of transmission and acknowledgement of receipt as provided under\n49 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. Steven Bevers, Manager, CO2 Pipeline Services, Denbury Onshore, LLC,\nsteven.bevers@denbury.com\nMr. George C. Hopkins, outside counsel for Denbury Onshore, LLC, Vinson & Elkins,\nghopkins@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____________________________________\n)\nIn the Matter of )\n)\nDenbury Onshore, LLC, ) CPF No. 4-2022-048-NOPV\na subsidiary of Denbury Inc., )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn several dates between June 14, 2021, through May 26, 2022, pursuant to 49 U.S.C. § 60117,\na representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities\nand records of Denbury Onshore, LLC’s (Denbury or Respondent) Cedar Creek Anticline (CCA)\ncarbon dioxide (CO2) pipeline construction project at various field locations in Montana and\nNorth Dakota.\nAs a result of the inspection, the Director, Southwest Region, OPS (Director), issued to\nRespondent, by letter dated September 14, 2022, a Notice of Probable Violation and Proposed\nCivil Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding\nthat Denbury had violated 49 C.F.R. § 195.64(c)(1)(ii) and proposed assessing a civil penalty of\n$19,000 for the alleged violation.\nDenbury responded to the Notice by letter dated, October 28, 2022 (Response). Respondent\ncontested the allegation in part and requested that the civil penalty be withdrawn, subject to the\nfinal finding. 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. § 195.64(c)(1)(ii), which states:\n§ 195.564 National Registry of Pipeline and LNG Operators.\n(a) ….\n(c) Changes. Each operator must notify PHMSA electronically\nthrough the National Registry of Operators at https://portal.phmsa.dot.gov,\n\n\n\nof certain events.\n(1) An operator must notify PHMSA of any of the following\nevents not later than 60 days before the event occurs:\n(ii) Construction of 10 or more miles of a new or replacement\nhazardous liquid or carbon dioxide pipeline;\nThe Notice alleged Respondent violated 49 C.F.R. § 195.64(c)(1)(ii) by failing to notify PHMSA\nof construction of the CCA project 60 days prior to the event. Specifically, the Notice alleged\nthat Denbury notified PHMSA of the project on May 14, 2021, with an anticipated construction\nstart date of July 13, 2021. The Notice stated PHMSA observed pipes being transported by truck\nto the CCA project right-of-way on July 7, 2021. The Notice alleged Denbury violated\n§ 195.64(c)(1)(ii) by notifying PHMSA of the construction only 54 days before the pipe was\nmoved to the right-of-way.\nIn its Response, Denbury stated it “is willing to accept that it failed to provide the 60 day notice\nbefore moving construction materials to the construction site on July 7 as referenced in the\nNOPV.\n”1 Denbury, however, objected to language within the Notice regarding PHMSA’s\nreview of pipe purchase orders and other documents regarding construction activities dated\nbefore the anticipated start date of construction of July 13, 2021.\n2 Specifically, Denbury\nobjected to the language in the Notice that references the September 2014 Advisory Bulletin\ntitled, “Pipeline Safety: Construction Notification” (Advisory Bulletin),\n3 which provides\nguidance on construction-related activities that may trigger the 60-day notice period. Denbury\nargued that the Advisory Bulletin interprets “construction-related activities” too broadly, that the\nAdvisory Bulletin is guidance and is not binding, and, therefore, the dates of Denbury’s\nconstruction documents should not have triggered a violation of § 195.64(c)(1)(ii).\nThe Notice states, “based on the construction activity observed on July 7, 2021, the notification\nshould have been made no later than May 8, 2021,” (emphasis added).4 While the Notice\ndiscussed the above-referenced construction project documentation that was reviewed during the\ninspection, the Notice is clear that the alleged violation is based on the movement of pipe to the\nright-of-way by truck on July 7, 2021, rather than on OPS’ review of the project documentation\ndated before July 13, 2021. Further, Denbury does not question that the movement of pipe to the\nconstruction site triggered the notification requirement. Denbury’s notification was dated May\n14, 2021, less than 60 days before the movement of pipe by truck to the right-of-way occurred. I\nfind, therefore, Denbury failed to notify PHMSA of construction of 10 or more miles of new or\nreplacement hazardous liquid pipelines 60 days before the construction occurred.\nBased on the foregoing, further discussion of the referenced construction project documents and\nwhat constitutes “construction” and “construction-related activities,” as described in the\nAdvisory Bulletin, is outside the scope of this enforcement action.\n1 Response, at 1.\n2 Id., at 1.\n3 Pipeline Safety: Construction Notification, Advisory Bulletin, 79 Fed. Reg. 54,777 (Sept 12, 2014).\n4 Notice, at 2.\n\n\n\nAccordingly, after considering all of the evidence and the legal issues presented, I find\nthat Respondent violated 49 C.F.R. § 195.64(c)(1)(ii) by failing to notify PHMSA 60 days prior\nto construction on the CCA project.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\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.5\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 $19,000 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $19,000 for Respondent’s violation of 49 C.F.R.\n§ 195.64(c)(1)(ii), for failing to inform PHMSA 60 days prior to construction of the CCA\nproject. In its Response, Denbury stated that it “is prepared to pay the proposed civil penalty for\nfailing to provide 60-days’ notice prior to moving construction materials to the construction\nsite,” but is opposed to any relief that is based on the use of “construction related activities” as\nthe trigger for the 60 day notice.\n6 As stated above, the finding of violation is based on the\nmovement of pipe to the right-of-way by truck on July 7, 2021, and the civil penalty is a result of\nthat finding. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $19,000 for violation of 49 C.F.R. § 195.64(c)(1)(ii).\nPayment of the civil penalty must be made within 20 days after receipt of this Final Order.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Detailed instructions are contained in the enclosure. Questions concerning wire\ntransfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,\nOklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the civil penalty will result in accrual of interest at the current annual rate in\n5 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n6 Response, at 3.\n\n\n\naccordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those\nsame authorities, a late penalty charge of six percent (6%) per annum will be charged if payment\nis not made within 110 days of service. Furthermore, failure to pay the civil penalty may result\nin referral of the matter to the Attorney General for appropriate action in a district court of the\nUnited 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\nbrief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing\nof a petition automatically stays the payment of any civil penalty assessed. The other terms of\nthe order, including any corrective action, remain in effect unless the Associate Administrator,\nupon request, grants a stay. If Respondent submits payment of the civil penalty, the Final Order\nbecomes the final administrative decision and the right to petition for reconsideration is waived.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nDecember 30, 2022\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":12322}