{"operation":"document","citation":"CPF 42023015NOPV","title":"DENBURY GREEN PIPELINE-MONTANA, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-01-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.202.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023015nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023015nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-42023015nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/42023015NOPV","body":"Notice of Probable Violation involving DENBURY GREEN PIPELINE-MONTANA, LLC. PHMSA's enforcement data identifies the cited regulation as 195.202. The case was opened on 2023-01-25 and is reported as closed as of 2024-04-02. Proposed civil penalty: $151,900. Assessed civil penalty: $151,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n42023015NOPV_Final Order_02082024_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_Final%20Order_02082024_(21-214479).pdf\n\n42023015NOPV_Final Order_02082024_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_Final%20Order_02082024_(21-214479)_text.pdf\n\n42023015NOPV_Operator Response to Notice_02232023_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_Operator%20Response%20to%20Notice_02232023_(21-214479).pdf\n\n42023015NOPV_PCP_01252023_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_PCP_01252023_(21-214479).pdf\n\n42023015NOPV_PCP_01252023_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_PCP_01252023_(21-214479)_text.pdf\n\n42023015NOPV_Final Order_02082024_(21-214479)_text.pdf\n\nFebruary 8, 2024\nVIA ELETRONIC MAIL TO: david.sheppard@denbury.com\nDavid Sheppard\nExecutive Vice President & Chief Operating Officer\nDenbury Green Pipeline – Montana, LLC\n5851 Legacy Circle, Suite 1200\nPlano, Texas 75024\nRe: CPF No. 4-2023-015-NOPV\nDear Mr. Sheppard:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $151,900. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is effective upon the date of mailing 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: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA\nMr. Randy Robichaux, Vice President – Health, Safety and Environmental, Denbury\nGreen Pipeline – Montana, LLC, randy.robichaux@denbury.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 )\n)\n)\nDenbury Green Pipeline – Montana, LLC, )\nRespondent. )\n__________________________________________)\n) CPF No. 4-2023-015-NOPV\nFINAL ORDER\nFrom June 14 through May 26, 2022, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), inspected Denbury Green Pipeline – Montana, LLC’s (“Denbury” or “Respondent”)\nCedar Creek Anticline (“CCA”) carbon dioxide (“CO2”) construction project at various filed\nlocations in Powder River County and Fallon County, Montana, and Bowman County, North\nDakota. Denbury owns or operates over 1,300 miles of CO2 pipelines located in the Gulf Coast\nand Rocky Mountain regions.1\nAs a result of the inspection, the Director, Southwest Region, OPS (“Director”), issued to\nRespondent, by letter dated January 25, 2023, a Notice of Probable Violation and Proposed Civil\nPenalty (“Notice”). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nDenbury had committed three violations of 49 C.F.R. Part 195 and proposed assessing a civil\npenalty of $151,900 for the alleged violations. The Notice also included an additional warning\nitem pursuant to 49 C.F.R. § 190.205, which warned the operator to correct the probable\nviolations or face possible future enforcement action\nDenbury responded to the Notice by letter dated February 23, 2023 (“Response”). Respondent\ncontested all the allegations and offered additional information in response to the Notice.\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, as follows:\n1 Operations - Pipeline Network, DENBURY, https://www.denbury.com/operations/pipeline-network/ (last accessed\nAugust 29, 2023).\n\n\n\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:\n§ 195.202 Compliance with specifications or standards.\nEach pipeline system must be constructed in accordance with\ncomprehensive written specifications or standards that are consistent with\nthe requirements of this part.\nThe Notice alleged that Denbury violated 49 C.F.R. § 195.202 by failing to construct its CCA\npipeline project in accordance with comprehensive written specifications or standards that are\nconsistent with the requirements of Part 195. Specifically, the Notice and the associated\nViolation Report alleged that Respondent did not follow its written procedure, Construction\nStandards, C1080, Below Grade Pipe Coatings (Rev. 2013-08-01), when it did not install SP-6\nouterwrap on Spread-1 of its 16-inch pipeline construction project at mileposts 7.5 and 12.\nSection 4.1 of Denbury’s Construction Standards, C1080, Below Grade Pipe Coatings (Rev.\n2013-08-01), stated: “Contractor shall coat all field welds, valves, and fittings for un-coated\nfabrications with specific coating in conformance with Manufacturer’s recommendations”\n(emphasis added).2 The word “shall” denotes a required action.3\nThe manufacturer’s RD-6 Coating System Application Specification, section 5.1, stated: “SP-6\nOUTERWRAP is recommended over the RD-6 for pipe diameters 4 inches or greater” (emphasis\nadded).4 Because the manufacturer recommended use of SP-6 outerwrap for pipe with diameters\n4 inches of greater, and because the pipeline construction project at issue had a diameter greater\nthan 4 inches,5 Denbury’s procedures required installation of SP-6 outerwrap. Respondent failed\nto do so, and consequently it violated its own written procedure.\nIn its Response, Denbury argued that section 5 of the RD-6 Coating System Application\nSpecification was not applicable, because the manufacturer’s RD-6 Coating System Application\nSpecification merely recommended SP-6 outerwrap. Denbury also noted that its construction\ncontractor contacted the manufacturer of the RD-6 coating system, and that the manufacturer\nstated application of the SP-6 outerwrap is a recommendation, not a requirement. However,\nthese arguments ignore the fact that Respondent’s own written procedures explicitly require\nfollowing the manufacturer’s recommendations.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.202 by failing to follow its written procedure, Construction Standards, C1080, Below\n2 Pipeline Safety Violation Report, CPF 4-2023-015-NOPV, January 25, 2023 (hereinafter “Violation Report”),\nExhibit A1 (on file with PHMSA).\n3 See Shall, Merriam-Webster, https://www.merriam-webster.com/dictionary/shall (last accessed August 30, 2023)\n(“used in laws, regulations, or directives to express what is mandatory”); see also Association of Civilian\nTechnicians v. FLRA, 22 F.3d 1150, 1154 (D.C. Cir. 1994) (“The word ‘shall’ generally indicates a command that\nadmits of no discretion on the part of the person instructed to carry out the directive.”).\n4 Violation Report, Exhibit A2.\n5 Id., at 1.\n\n\n\nGrade Pipe Coatings (Rev. 2013-08-01), when it did not install SP-6 outerwrap on Spread-1 of\nits 16-inch pipeline construction project at mileposts 7.5 and 12.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:\n§ 195.202 Compliance with specifications or standards.\nEach pipeline system must be constructed in accordance with\ncomprehensive written specifications or standards that are consistent with\nthe requirements of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.202 by failing to construct its CCA\npipeline project, Coral Creek site (Spread-2), in accordance with comprehensive written\nspecification or standards that are consistent with the requirements of Part 195. Specifically, the\nNotice alleged that Denbury failed to properly calibrate the welding equipment used at the time\nof the inspection (multimeter, serial number S94900584) in accordance with its written\nprocedure, Construction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01).6\nSection 2.3.1 of this procedure stated that Respondent must “[c]alibrate all welding equipment\nthat will be used on the project to confirm it is capable of operating according to the applicable\nwelding procedures. Prepare a register of approved welding equipment.”\nIn its Response, Respondent stated that it “ensured [its] Contractor calibrated all of their welding\nequipment used on the CCA pipeline project to confirm that said equipment was capable of\noperating according to the applicable welding procedures.” Denbury further argued that the\nPHMSA inspector never requested a record or register, and that if the inspector had done so it\n“would have provided the daily Welding Inspector Tie-In Report for August 11, 2021.”\nRespondent did not provide any record showing it or its contractor calibrated welding equipment\nused on Spread-2 of the CCA pipeline project. On August 11, 2021, at a verbal briefing,\nPHMSA’s inspector notified Denbury’s on-site welding inspector of the deficiency of not\nproviding calibration records for the approved welding equipment used at the time of the\ninspection.7 This deficiency was again conveyed to Respondent in the written inspection closing\nsummary, dated August 13, 2021.8 On both of those dates, calibration records were not provided\nto PHMSA inspectors, despite Respondent’s procedures requiring the Senior Welding Inspector\nto ensure all welding documentation complied with “the project, regulatory, and applicable\ncode/standards requirements.”9 Further, the post-inspection documentation provided by\nRespondent, Welding Inspector Tie-In Report, for August 11, 2021, does not provide evidence of\ncalibration efforts for the welding equipment at issue (multimeter, serial number S94900584).10\n6 Violation Report, Exhibit B1.\n7 Id., at 20.\n8 Id., Exhibit B4.\n9 Id., Exhibit B1.\n10 Response, CPF 4-2023-015-NOPV, February 23, 2023, Attachment 3.\n\n\n\nThe document included observations from that day, welding parameter checks, and visual weld\ninspection report. It did not include any calibration records. Further, the Welding Inspector Tie\nIn Report was authored by a different welding inspector than the inspector who observed the\nproject. Respondent did not explain how a different inspector could ensure that the welding\nequipment used at the time of the inspection (multimeter, serial number S94900584) was\nproperly calibrated.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.202 by failing to properly calibrate the welding equipment used at the time of the\ninspection (multimeter, serial number S94900584) in accordance with its written procedure,\nConstruction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01).\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:\n§ 195.202 Compliance with specifications or standards.\nEach pipeline system must be constructed in accordance with\ncomprehensive written specifications or standards that are consistent with\nthe requirements of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.202 by failing to construct its CCA\npipeline project in accordance with comprehensive written specifications or standards that are\nconsistent with the requirements of Part 195. Specifically, Denbury failed to perform the\nrequired hydrostatic test prior to installation of the pipe in horizontal directional drilling (HDD)\naccording to its written procedure, Construction Standards, Horizontal Directional Drilling,\nC1160 (Rev 2013-08-01). Sections 4.2 and 8.3 of this procedure required Denbury to\nhydrostatically test the prefabricated pipe section for at least four hours prior to pull-back.\nThe Notice alleged that during PHMSA’s inspection on August 12, 2021, at the Coral Creek site\n(Spread-2), Denbury performed an HDD operation and performed pull-back without\nhydrostatically pre-testing the prefabricated pipe sections. In support of the allegation that an\nHDD operation occurred, the Notice stated that Respondent’s contractor used HDD-specific\nequipment and HDD procedures.11 The Notice further stated that the HDD site execution plan,\nHDD profile, and equipment specifications from the contractor indicated that an HDD operation\nwas performed.12\nIn its Response, Denbury argued that while its contractor termed this procedure HDD and used\nHDD equipment and techniques, it was actually a road bore; therefore it fell under Respondent's\nconstruction standard Railway, Highway, and Road Crossings, C1140 (Rev 2013-08-01),13\nwhich does not require hydrostatic pre-testing prior to pullback. Respondent explained that the\ntypical HDD is “long and deep” and used to avoid environmentally sensitive areas or difficult\nterrain. Denbury stated that the pipeline at issue was “relatively short (5 joints),” installed at a\n11 Violation Report, at 23.\n12 Id., at 23-24.\n13 Response, CPF 4-2023-015-NOPV, February 23, 2023, Attachment 3.\n\n\n\n“shallow depth (20.2 ft max),” and was not installed in an environmentally sensitive or difficult\nto access area. Therefore, Denbury asserted, it was not HDD, and thus did not require\nhydrostatic testing.\nDespite Respondent’s argument, the procedures employed during the installation indicate that\nHDD was performed. At the Coral Creek site (Spread-2), Respondent used a contractor\n“specializing in the installation of pipelines by [HDD].”14 Section 3.2 of Denbury’s\nConstruction Standards, Horizontal Directional Drilling, C1160, required its contractor to\nsubmit an execution plan with the scope of the work and detailed procedures to Respondent for\napproval prior to commencing the work.15 Respondent’s contractor submitted this plan and these\nprocedures, which clearly stated that HDD would be performed.16 The contractor used HDD\nequipment and employed an HDD technique to install the pipeline.17 While Respondent may\nhave intended a non-HDD installation (i.e., boring), the process used was HDD. Therefore,\nDenbury’s Construction Standards, Horizontal Directional Drilling, C1160, needed to be\nfollowed, which included a hydrostatic pre-test. Such testing is necessary because removal of\nthe pipe from HDD installation can be exceptionally difficult given the profile and method of\ninstallation, particularly after the drilling mud used to stabilize the hole, facilitate the installation,\nand fill the annular space around the pipe has set. Drilling mud was observed at the site during\npull back.18\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.202 by failing to perform the required hydrostatic test prior to installation of the pipe in\nHDD according to its written procedure, Construction Standards, Horizontal Directional\nDrilling, C1160 (Rev 2013-08-01).\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken 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.19\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\n14 Violation Report, Exhibit C2.\n15 Id., at Exhibit C1.\n16 Id., at Exhibit C2.\n17 Id., at 23-24.\n18 Id., at 23.\n19 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.\n\n\n\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 $151,900 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $37,600 for Respondent’s violation of 49 C.F.R.\n§ 195.202, for failing to follow its written procedure, Construction Standards, C1080, Below\nGrade Pipe Coatings (Rev. 2013-08-01), where it did not install SP-6 outerwrap on Spread-1 of\nits 16-inch pipeline construction project at mileposts 7.5 and 12. Denbury argued for withdrawal\nof the underlying allegation. It did not advance separate argument for a reduction or withdrawal\nof the civil penalty. For the reasons stated above, the underlying allegation is not withdrawn.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $37,600 for violation of 49 C.F.R. § 195.202.\nItem 2: The Notice proposed a civil penalty of $ 29,300 for Respondent’s violation of 49 C.F.R.\n§ 195.202, for failing to properly calibrate the welding equipment used at the time of the\ninspection (multimeter, serial number S94900584) in accordance with its written procedure,\nConstruction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01). Denbury\nargued for withdrawal of the underlying allegation. It did not advance separate argument for a\nreduction or withdrawal of the civil penalty. For the reasons stated above, the underlying\nallegation is not withdrawn. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $29,300 for violation of 49 C.F.R.\n§ 195.202.\nItem 3: The Notice proposed a civil penalty of $85,000 for Respondent’s violation of 49 C.F.R.\n§ 195.202, for failing to perform the required hydrostatic test prior to installation of the pipe in\nHDD according to its written procedure, Construction Standards, Horizontal Directional\nDrilling, C1160 (Rev 2013-08-01). Denbury argued for withdrawal of the underlying allegation.\nIt did not advance separate argument for a reduction or withdrawal of the civil penalty. For the\nreasons stated above, the underlying allegation is not withdrawn. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $85,000\nfor violation of 49 C.F.R. § 195.202.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $151,900.\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,\n\n\n\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\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.\nWARNING ITEM\nWith respect to Item 4, the Notice alleged probable violation of Part 195, but identified it as a\nwarning item pursuant to § 190.205. The warning was for:\n49 C.F.R. § 195.202 (Item 4) ─ Respondent’s alleged failure to properly\ndocument the hydrostatic test plan as required by its written procedure,\nConstruction Standard, Pressure Testing, C1130 (Rev 2013-08-01).\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. 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.\nFebruary 8, 2024\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":21892}