NORGASCO INC — Warning Letter

520070011W_warning letter_04092007.pdf, page 1Official PDFu.5. Deoorfmenl of Tronsporlotion Pipeline ond Hdzorclous Moterlols sofeiy Admlnislrollon 12300 W. Dakota Ave., Suite 110 Lakewood, CO 80228 WARNING LETTER CERTIFIED MAIL - RETURN RECEIPT REOIJESTED April 9,2007 Mr. Leroy Frank Norgasco lnc. 4341 B, Suite 306 Anchorage, Alaska 99503 ,.rir.,r , ll -.,r',I,r...\ri\'ir il.tlcis'tty ;iri'{i.,'(iir', -..-*. lit..:1, rx*,:t'.',1't -1 ". , .,,,,.,,..i , :.,,.:,; .:4il211'1 cPF 5-2007-00llw Dear Mr. Frank: On December 12,2006 a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected Norgasco's Natural Gas Distribution Pipeline System in Prudhoe Bay, Alaska. As a result ofthe inspection, ii appears that you have committed a probable violation ofthe Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violation(s) are: 1. S192.455 External corrosion control: Buried or submerged pipelines installed after July 31,1971. (a) Except as provided in paragraphs (b), (c), and (f) of this section, each buried or submerged pipeline installed after July 31, 1971, must be protected against external corrosion, including the following: (1) It must have an external protective coating meeting the requirements of s192.461. (2) It must have a cathodic protection system designed to protect the pipeline in accordance with this subpart, installed and placed in operation within 1 year after completion of construction, (b) An operator need not comply with paragraph (a) of this section, if the operator can demonstrate by tests, investigation, or experience in the area of applicationt including, as a minimum, soil resistivity measurements and tests for corrosion accelerating bacteria, that a corrosive environment does not exist. However,#

520070011W_warning letter_04092007.pdf, page 2within 6 months after an installation made pursuant to the preceding sentence, the operator shall conduct tests, including pipe-to-soil potential measurements with respect to either a continuous reference electrode or an electrode using close spacing, not to exceed 20 feet (6 meters)' and soil resistivity measurements at potential profile peak locations, to adequately evaluate the potential profile along the entire pipeline. Ifthe tests made indicate that a corrosive condition exists, the pipeline must be cathodically protected in accordance with paragraph (a)(2) of this section, Examination of Norgasco's 6-inch diameter line segment between the Conoco-Phillips facility and your Pressure Reduction Station #1 revealed corrosion at the soil-air interface where the pipeline went under the road. The pipe surface was visibly corroded and needs to be evaluated and re-coated where necessary to meet the requirements of $ 192.461. Under 49 United States Code, $ 60122, you are subject to a civil penalty not to exceed $100,000 for each violation for each day the violation persists up to a maximum of$l '000'000 for any related series ofviolations. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the item(s) identified in this letter. Failure to do so will result in Norgasco being subject to additional enforcement action. No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 5-2007-0011W. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you believe that any portion ofyour responsive material qualifies for confidential treatment under 5 U.S'C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you believe qualify for confidential treatment redacted and an explanation ofwhy you believe the redacted information qualifies for confidential treatment under 5 U.S.C. 5s2(b). Sincerely, ?LA/ Chris Hoidal Director, Westem Region Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Compliance RegistrY PHP-500 B. Flanders (#116679)#