# DENBURY GREEN PIPELINE-MONTANA, LLC — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.202.
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- **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.

Official case documents:

42023015NOPV_Final Order_02082024_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_Final%20Order_02082024_(21-214479).pdf

42023015NOPV_Final Order_02082024_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_Final%20Order_02082024_(21-214479)_text.pdf

42023015NOPV_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

42023015NOPV_PCP_01252023_(21-214479).pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_PCP_01252023_(21-214479).pdf

42023015NOPV_PCP_01252023_(21-214479)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/42023015NOPV/42023015NOPV_PCP_01252023_(21-214479)_text.pdf

42023015NOPV_Final Order_02082024_(21-214479)_text.pdf

February 8, 2024
VIA ELETRONIC MAIL TO: david.sheppard@denbury.com
David Sheppard
Executive Vice President & Chief Operating Officer
Denbury Green Pipeline – Montana, LLC
5851 Legacy Circle, Suite 1200
Plano, Texas 75024
Re: CPF No. 4-2023-015-NOPV
Dear Mr. Sheppard:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation and assesses a civil penalty of $151,900. The penalty payment terms are set forth in the
Final Order. This enforcement action closes automatically upon receipt of payment. Service of
the Final Order by certified mail is effective upon the date of mailing as provided under 49
C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Bryan Lethcoe, Director, Southwest Region, Office of Pipeline Safety, PHMSA
Mr. Randy Robichaux, Vice President – Health, Safety and Environmental, Denbury
Green Pipeline – Montana, LLC, randy.robichaux@denbury.com
CONFIRMATION OF RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
__________________________________________
In the Matter of )
)
)
Denbury Green Pipeline – Montana, LLC, )
Respondent. )
__________________________________________)
) CPF No. 4-2023-015-NOPV
FINAL ORDER
From June 14 through May 26, 2022, pursuant to 49 U.S.C. § 60117, a representative of the
Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety
(OPS), inspected Denbury Green Pipeline – Montana, LLC’s (“Denbury” or “Respondent”)
Cedar Creek Anticline (“CCA”) carbon dioxide (“CO2”) construction project at various filed
locations in Powder River County and Fallon County, Montana, and Bowman County, North
Dakota. Denbury owns or operates over 1,300 miles of CO2 pipelines located in the Gulf Coast
and Rocky Mountain regions.1
As a result of the inspection, the Director, Southwest Region, OPS (“Director”), issued to
Respondent, by letter dated January 25, 2023, a Notice of Probable Violation and Proposed Civil
Penalty (“Notice”). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
Denbury had committed three violations of 49 C.F.R. Part 195 and proposed assessing a civil
penalty of $151,900 for the alleged violations. The Notice also included an additional warning
item pursuant to 49 C.F.R. § 190.205, which warned the operator to correct the probable
violations or face possible future enforcement action
Denbury responded to the Notice by letter dated February 23, 2023 (“Response”). Respondent
contested all the allegations and offered additional information in response to the Notice.
Respondent did not request a hearing and therefore has waived its right to one.
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
1 Operations - Pipeline Network, DENBURY, https://www.denbury.com/operations/pipeline-network/ (last accessed
August 29, 2023).



Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:
§ 195.202 Compliance with specifications or standards.
Each pipeline system must be constructed in accordance with
comprehensive written specifications or standards that are consistent with
the requirements of this part.
The Notice alleged that Denbury violated 49 C.F.R. § 195.202 by failing to construct its CCA
pipeline project in accordance with comprehensive written specifications or standards that are
consistent with the requirements of Part 195. Specifically, the Notice and the associated
Violation Report alleged that Respondent did not follow its written procedure, Construction
Standards, C1080, Below Grade Pipe Coatings (Rev. 2013-08-01), when it did not install SP-6
outerwrap on Spread-1 of its 16-inch pipeline construction project at mileposts 7.5 and 12.
Section 4.1 of Denbury’s Construction Standards, C1080, Below Grade Pipe Coatings (Rev.
2013-08-01), stated: “Contractor shall coat all field welds, valves, and fittings for un-coated
fabrications with specific coating in conformance with Manufacturer’s recommendations”
(emphasis added).2 The word “shall” denotes a required action.3
The manufacturer’s RD-6 Coating System Application Specification, section 5.1, stated: “SP-6
OUTERWRAP is recommended over the RD-6 for pipe diameters 4 inches or greater” (emphasis
added).4 Because the manufacturer recommended use of SP-6 outerwrap for pipe with diameters
4 inches of greater, and because the pipeline construction project at issue had a diameter greater
than 4 inches,5 Denbury’s procedures required installation of SP-6 outerwrap. Respondent failed
to do so, and consequently it violated its own written procedure.
In its Response, Denbury argued that section 5 of the RD-6 Coating System Application
Specification was not applicable, because the manufacturer’s RD-6 Coating System Application
Specification merely recommended SP-6 outerwrap. Denbury also noted that its construction
contractor contacted the manufacturer of the RD-6 coating system, and that the manufacturer
stated application of the SP-6 outerwrap is a recommendation, not a requirement. However,
these arguments ignore the fact that Respondent’s own written procedures explicitly require
following the manufacturer’s recommendations.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.202 by failing to follow its written procedure, Construction Standards, C1080, Below
2 Pipeline Safety Violation Report, CPF 4-2023-015-NOPV, January 25, 2023 (hereinafter “Violation Report”),
Exhibit A1 (on file with PHMSA).
3 See Shall, Merriam-Webster, https://www.merriam-webster.com/dictionary/shall (last accessed August 30, 2023)
(“used in laws, regulations, or directives to express what is mandatory”); see also Association of Civilian
Technicians v. FLRA, 22 F.3d 1150, 1154 (D.C. Cir. 1994) (“The word ‘shall’ generally indicates a command that
admits of no discretion on the part of the person instructed to carry out the directive.”).
4 Violation Report, Exhibit A2.
5 Id., at 1.



Grade Pipe Coatings (Rev. 2013-08-01), when it did not install SP-6 outerwrap on Spread-1 of
its 16-inch pipeline construction project at mileposts 7.5 and 12.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:
§ 195.202 Compliance with specifications or standards.
Each pipeline system must be constructed in accordance with
comprehensive written specifications or standards that are consistent with
the requirements of this part.
The Notice alleged that Respondent violated 49 C.F.R. § 195.202 by failing to construct its CCA
pipeline project, Coral Creek site (Spread-2), in accordance with comprehensive written
specification or standards that are consistent with the requirements of Part 195. Specifically, the
Notice alleged that Denbury failed to properly calibrate the welding equipment used at the time
of the inspection (multimeter, serial number S94900584) in accordance with its written
procedure, Construction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01).6
Section 2.3.1 of this procedure stated that Respondent must “[c]alibrate all welding equipment
that will be used on the project to confirm it is capable of operating according to the applicable
welding procedures. Prepare a register of approved welding equipment.”
In its Response, Respondent stated that it “ensured [its] Contractor calibrated all of their welding
equipment used on the CCA pipeline project to confirm that said equipment was capable of
operating according to the applicable welding procedures.” Denbury further argued that the
PHMSA inspector never requested a record or register, and that if the inspector had done so it
“would have provided the daily Welding Inspector Tie-In Report for August 11, 2021.”
Respondent did not provide any record showing it or its contractor calibrated welding equipment
used on Spread-2 of the CCA pipeline project. On August 11, 2021, at a verbal briefing,
PHMSA’s inspector notified Denbury’s on-site welding inspector of the deficiency of not
providing calibration records for the approved welding equipment used at the time of the
inspection.7 This deficiency was again conveyed to Respondent in the written inspection closing
summary, dated August 13, 2021.8 On both of those dates, calibration records were not provided
to PHMSA inspectors, despite Respondent’s procedures requiring the Senior Welding Inspector
to ensure all welding documentation complied with “the project, regulatory, and applicable
code/standards requirements.”9 Further, the post-inspection documentation provided by
Respondent, Welding Inspector Tie-In Report, for August 11, 2021, does not provide evidence of
calibration efforts for the welding equipment at issue (multimeter, serial number S94900584).10
6 Violation Report, Exhibit B1.
7 Id., at 20.
8 Id., Exhibit B4.
9 Id., Exhibit B1.
10 Response, CPF 4-2023-015-NOPV, February 23, 2023, Attachment 3.



The document included observations from that day, welding parameter checks, and visual weld
inspection report. It did not include any calibration records. Further, the Welding Inspector Tie
In Report was authored by a different welding inspector than the inspector who observed the
project. Respondent did not explain how a different inspector could ensure that the welding
equipment used at the time of the inspection (multimeter, serial number S94900584) was
properly calibrated.
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.202 by failing to properly calibrate the welding equipment used at the time of the
inspection (multimeter, serial number S94900584) in accordance with its written procedure,
Construction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01).
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.202, which states:
§ 195.202 Compliance with specifications or standards.
Each pipeline system must be constructed in accordance with
comprehensive written specifications or standards that are consistent with
the requirements of this part.
The Notice alleged that Respondent violated 49 C.F.R. § 195.202 by failing to construct its CCA
pipeline project in accordance with comprehensive written specifications or standards that are
consistent with the requirements of Part 195. Specifically, Denbury failed to perform the
required hydrostatic test prior to installation of the pipe in horizontal directional drilling (HDD)
according to its written procedure, Construction Standards, Horizontal Directional Drilling,
C1160 (Rev 2013-08-01). Sections 4.2 and 8.3 of this procedure required Denbury to
hydrostatically test the prefabricated pipe section for at least four hours prior to pull-back.
The Notice alleged that during PHMSA’s inspection on August 12, 2021, at the Coral Creek site
(Spread-2), Denbury performed an HDD operation and performed pull-back without
hydrostatically pre-testing the prefabricated pipe sections. In support of the allegation that an
HDD operation occurred, the Notice stated that Respondent’s contractor used HDD-specific
equipment and HDD procedures.11 The Notice further stated that the HDD site execution plan,
HDD profile, and equipment specifications from the contractor indicated that an HDD operation
was performed.12
In its Response, Denbury argued that while its contractor termed this procedure HDD and used
HDD equipment and techniques, it was actually a road bore; therefore it fell under Respondent's
construction standard Railway, Highway, and Road Crossings, C1140 (Rev 2013-08-01),13
which does not require hydrostatic pre-testing prior to pullback. Respondent explained that the
typical HDD is “long and deep” and used to avoid environmentally sensitive areas or difficult
terrain. Denbury stated that the pipeline at issue was “relatively short (5 joints),” installed at a
11 Violation Report, at 23.
12 Id., at 23-24.
13 Response, CPF 4-2023-015-NOPV, February 23, 2023, Attachment 3.



“shallow depth (20.2 ft max),” and was not installed in an environmentally sensitive or difficult
to access area. Therefore, Denbury asserted, it was not HDD, and thus did not require
hydrostatic testing.
Despite Respondent’s argument, the procedures employed during the installation indicate that
HDD was performed. At the Coral Creek site (Spread-2), Respondent used a contractor
“specializing in the installation of pipelines by [HDD].”14 Section 3.2 of Denbury’s
Construction Standards, Horizontal Directional Drilling, C1160, required its contractor to
submit an execution plan with the scope of the work and detailed procedures to Respondent for
approval prior to commencing the work.15 Respondent’s contractor submitted this plan and these
procedures, which clearly stated that HDD would be performed.16 The contractor used HDD
equipment and employed an HDD technique to install the pipeline.17 While Respondent may
have intended a non-HDD installation (i.e., boring), the process used was HDD. Therefore,
Denbury’s Construction Standards, Horizontal Directional Drilling, C1160, needed to be
followed, which included a hydrostatic pre-test. Such testing is necessary because removal of
the pipe from HDD installation can be exceptionally difficult given the profile and method of
installation, particularly after the drilling mud used to stabilize the hole, facilitate the installation,
and fill the annular space around the pipe has set. Drilling mud was observed at the site during
pull back.18
Accordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.
§ 195.202 by failing to perform the required hydrostatic test prior to installation of the pipe in
HDD according to its written procedure, Construction Standards, Horizontal Directional
Drilling, C1160 (Rev 2013-08-01).
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.19
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
14 Violation Report, Exhibit C2.
15 Id., at Exhibit C1.
16 Id., at Exhibit C2.
17 Id., at 23-24.
18 Id., at 23.
19 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223 for adjusted amounts.



must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue
doing business; the good faith of Respondent in attempting to comply with the pipeline safety
regulations; and self-disclosure or actions to correct a violation prior to discovery by PHMSA.
In addition, I may consider the economic benefit gained from the violation without any reduction
because of subsequent damages, and such other matters as justice may require. The Notice
proposed a total civil penalty of $151,900 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $37,600 for Respondent’s violation of 49 C.F.R.
§ 195.202, for failing to follow its written procedure, Construction Standards, C1080, Below
Grade Pipe Coatings (Rev. 2013-08-01), where it did not install SP-6 outerwrap on Spread-1 of
its 16-inch pipeline construction project at mileposts 7.5 and 12. Denbury argued for withdrawal
of the underlying allegation. It did not advance separate argument for a reduction or withdrawal
of the civil penalty. For the reasons stated above, the underlying allegation is not withdrawn.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $37,600 for violation of 49 C.F.R. § 195.202.
Item 2: The Notice proposed a civil penalty of $ 29,300 for Respondent’s violation of 49 C.F.R.
§ 195.202, for failing to properly calibrate the welding equipment used at the time of the
inspection (multimeter, serial number S94900584) in accordance with its written procedure,
Construction Standards, CIM1060A Senior Welding Inspector (Rev 2015-11-01). Denbury
argued for withdrawal of the underlying allegation. It did not advance separate argument for a
reduction or withdrawal of the civil penalty. For the reasons stated above, the underlying
allegation is not withdrawn. Accordingly, having reviewed the record and considered the
assessment criteria, I assess Respondent a civil penalty of $29,300 for violation of 49 C.F.R.
§ 195.202.
Item 3: The Notice proposed a civil penalty of $85,000 for Respondent’s violation of 49 C.F.R.
§ 195.202, for failing to perform the required hydrostatic test prior to installation of the pipe in
HDD according to its written procedure, Construction Standards, Horizontal Directional
Drilling, C1160 (Rev 2013-08-01). Denbury argued for withdrawal of the underlying allegation.
It did not advance separate argument for a reduction or withdrawal of the civil penalty. For the
reasons stated above, the underlying allegation is not withdrawn. Accordingly, having reviewed
the record and considered the assessment criteria, I assess Respondent a civil penalty of $85,000
for violation of 49 C.F.R. § 195.202.
In summary, having reviewed the record and considered the assessment criteria for each of the
Items cited above, I assess Respondent a total civil penalty of $151,900.
Payment of the civil penalty must be made within 20 days after receipt of this Final Order.
Federal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer
through the Federal Reserve Communications System (Fedwire), to the account of the U.S.
Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire
transfers should be directed to: Financial Operations Division (AMK-325), Federal Aviation
Administration, Mike Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City,



Oklahoma 79169. The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the civil penalty will result in accrual of interest at the current annual rate in
accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to those
same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment
is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result
in referral of the matter to the Attorney General for appropriate action in a district court of the
United States.
WARNING ITEM
With respect to Item 4, the Notice alleged probable violation of Part 195, but identified it as a
warning item pursuant to § 190.205. The warning was for:
49 C.F.R. § 195.202 (Item 4) ─ Respondent’s alleged failure to properly
document the hydrostatic test plan as required by its written procedure,
Construction Standard, Pressure Testing, C1130 (Rev 2013-08-01).
If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject
to future enforcement action.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address. The written petition must be received no later than
20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a
brief statement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The filing
of a petition automatically stays the payment of any civil penalty assessed. The other terms of
the order, including any corrective action, remain in effect unless the Associate Administrator,
upon request, grants a stay. If Respondent submits payment of the civil penalty, the Final Order
becomes the final administrative decision and the right to petition for reconsideration is waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
February 8, 2024
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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