ALYESKA PIPELINE SERVICE CO — Notice of Probable Violation

party submissionOfficial PDF520080002_operator response_02282008.pdf#

520080002_nopv pco letter_01282008_text.pdf, page 1Official PDFSENI TO COMI'I. IA¹E REGIS Hardcopy Electroruca ly 4 nf Coptes+I Date l- U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration t2300 W Dakota Ave, Suite t10 Lakewood, CO 80228 NOTICE OF PROBABLE VIOLATION and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT RE UESTED January 28, 2008 Mr. Kevin Hostler President & CEO Alyeska Pipeline Service Company 900 East Benson Boulevard Anchorage, AK 99508 CPF 5-2008-0002 Dear Mr. Hostler. On September 10 to 11, 2007, a representative of the Pipehne and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected Alyeska Pipeline Service Company's (APSC) Fuel Gas Line (FGL) integrity management procedures in Fairbanks, Alaska. As a result of the inspection, it appears that you have committed probable violations of the Pipehne Safety Regulations, Title 49, Code of Federal Regulations The items inspected and the probable violations are: 1. $192. 911 What are the elements of an integrity management program? An operator's initial integrity management program begins with a framework (see $192. 907) and evolves into a more detailed and comprehensive integrity#

520080002_nopv pco letter_01282008_text.pdf, page 2management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31. 8S (incorporated by reference, see $192. 7) for more detailed information on the listed element. ) (p) A process for identification and assessment of newly-identiTied high consequence areas. (See $192. 905 and $192. 921. ) ~ Item 1. A: $192. 905(a) and $192. 905(b) APSC does not have an integrity management process for identifying high consequence areas (HCAs) associated with their Fuel Gas Lme (FGL). A process for identifying HCAs is needed to ensure consistency during periodic checks by an operator for newly identified HCAs. This process must ensure that responsible personnel are informed of changes to the pipehne or the area surrounding the pipehne. The process will also ensure that a timely HCA determination due to those changes. ~ Item 1. B: $192. 903 APSC's procedures for their FGL does not contain a process detaihng how the Potential Impact Radius (PIR) is to be apphed to the FGL to determine if the FGL has an HCA. A written process for determinmg the PIR of a pipehne is required to ensure consistency in the apphcation of the PIR to an operator's pipehne throughout the life of the pipeline. ~ Item 1. C: $192. 905(c) APSC does not have a process or procedure for their FGL that contains a description and time hne for actions to be taken as soon as an HCA is identified A process or procedure describmg actions to be taken when an HCA is identified and the timehne for completmg those actions is required to ensure an operator takes consistent, appropriate and timely actions once an HCA is identified. $192. 911 What are the elements of an integrity management program? (i) A performance plan as outlined in ASMK/ANSI B31. 8S, section 9 that includes performance measures meeting the requirements of g 192. 945 APSC has no integrity management procedure for submitting semi-annual reviews to reflect that no new HCAs have been created along their FGL. Additionally, APSC has no process for submitting the four overall performance measures for HCAs specified in ASME/ANSI B31. 8S, section 9. 4, and the specific measures for each identified threat specified in ASME/ANSI B31. 8S, Appendix A, should an HCA be created along any FGL segment An operator is required to submit semi-annual reviews of their pipelines' integrity management activities, which includes reporting that there are no newly-created HCAs A procedure that requires semi-annual reporting is required to ensure that an operator makes these reports consistently and on time. Additionally this process must#

520080002_nopv pco letter_01282008_text.pdf, page 3include enough detail to permit operator personnel to adequately report performance measures semi-annually if or when an HCA is determined. $192. 945 What methods must an operator use to measure program effectiveness? (a) General. An operator must include in its integrity management program methods to measure, on a semi-annual basis, whether the program is effective in assessing and evaluating the integrity of each covered pipeline segment and in protecting the high consequence areas. These measures must include the four overall performance measures specified in ASME/ANSI B31. 8S (incorporated by reference, see $192. 7), section 9. 4, and the specific measures for each identified threat specified in ASME/ANSI B31. 8S, Appendix A. An operator must submit the four overall performance measures, by electronic or other means, on a semi-annual frequency to OPS in accordance with $192. 951. An operator must submit its first report on overall performance measures by August 31, 2004. Thereafter, the performance measures must be complete through June 30 and December 31 of each year and must be submitted within 2 months after those dates. APSC failed to submit their initial semi-annual performance measures report to PHMSA beginnmg on August 31, 2004. Additionally APSC filed their next five semi-annual performance measures reports in late March 2007. The result was that APSC's March 1, 2005 report was 25 months late; the August 30, 2005 report was 19 months late; the March 2006 report was 13 months late; the August 2006 report was 7 months late; and the March 1, 2007 report was late by /2 month. Though an operator may have not HCA's, they are still required to report on a semi-annual basis that they do not have HCA's to which performance measures can be apphed. Warnin Items With respect to Item 3 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 promptly correct this item. Be advised that failure to do so may result in APSC being subject to additional enforcement action. Pro osed Com hance Order With respect to Items 1. A, 1. B, 1. C and 2, pursuant to 49 United States Code ) 60118, the Pipehne and Hazardous Materials Safety Administration proposes to issue a Compliance Order to APSC. Please refer to the Proposed Comphance Order, which is enclosed and made a part of this Notice. Res onse to this Notice Enclosed as part of this Notice is a document entitled Response Options for Pipehne Operators in Comphance Proceedings Please refer to this document and note the response options. Be advised that all material you submit in response to this enforcement action is subject to being made publicly available. If you beheve that any portion of your responsive material qualifies for#

520080002_nopv pco letter_01282008_text.pdf, page 4confidential 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 of why you believe the redacted information qualifies for confidential treatment under 5 U. S. C. 552(b). If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations in this Notice and authorizes the Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further notice to you and to issue a Final Order. In your correspondence on this matter, please refer to CPF 5-2008-0002 and for each document you submit, please provide a copy in electronic format whenever possible. Smcerely, Chris oidal Director, Western Pipeline and Hazardous Materials Safety Administration cc: PHP-60 Comphance Registry PHP-500 G Davis (¹119571) Enclosures. Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings#

520080002_nopv pco letter_01282008_text.pdf, page 5PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code ) 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Alyeska Pipeline Service Company a Comphance Order incorporating the followmg remedial requirements to ensure the compliance of APSC with the pipeline safety regulations: 1. In regard to Item Number 1. A of the Notice pertaining to a process for identifying HCAs: APSC must develop and adopt a procedure for identifying HCAs during periodic checks by operator personnel This process must ensure that responsible personnel are informed of changes to the pipehne or the area surroundmg the pipehne. The process will also ensure that a timely HCA determination due to those changes. Provide the new procedure to the Director, Western Region. 2. In regard to Item Number 1. B of the Notice pertaining to procedure that details how the Potential Impact Radius (PIR) is to be apphed to the FGL' APSC must develop and adopt a procedure that details how the Potential Impact Radius (PIR) is to be apphed to the FGL to determine if the FGL has an HCA. Provide the new procedure to the Director, Western Region. 3. In regard to Item Number 1. C of the Notice pertaining to a process or procedure describmg actions to be taken when an HCA is identified; APSC must develop and adopt a procedure that describes actions to be taken when and HCA is identified which includes the timeline for completing those actions once an HCA is identified Provide the new procedure to the Director, Western Region. 4 In regard to Item Number 2 of the Notice pertainmg to a procedure for review of integrity management performance measures and the semi-annual reportmg of performance measures APSC must develop a procedure with provisions for reportmg that no HCAs have been identified. The procedure must include provisions that direct personnel to review of the FGL integrity management performance measures effectiveness, once HCAs have been determmed This procedure must require that these reports be submitted on a semi- annual basis for time periods January 1 through June 30, and July 1 through December 31 of each year. These semi-annual reports must be submitted within two (2) months after those dates#

520080002_nopv pco letter_01282008_text.pdf, page 6Provide the new procedure to the Director, Western Region. 5. APSC must complete the above items 30 days after receipt of the Final Order. 6. APSC shall mamtain docinnentation of the safety improvement costs associated with fulfillmg this Comphance Order and submit the total to Chris Hoidal, Director, Western Region, Pipehne and Hazardous Materials Safety Administration. Costs shall be reported m two categories 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipehne mfrastructure.#

520080002_FinalOrder_03152010.pdf, page 1Official PDFU.S. Department of Transportation 1200 New Jersey Ave, S.E. Pipeline and Hazardous Materials Washington, D.C. 20590 Safety Administration MAR 1 5 2010 Mr. Kevin Hostler President & Chief Executive Officer Alyeska Pipeline Service Company 900 East Benson Boulevard Anchorage, AK 99508 Re: CPF No. 5-2008-0002 Dear Mr. Hostler: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and finds that Alyeska Pipeline Service Company has completed the actions specified n the Notice to comply with the pipeline safety regulations. It also issues your company : varning for another probable violation and advises you to correct that condition. This case i now closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, AbouT Migh for- Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure CC: Mr. Chris Hoidal, Director, Western Region, PHMSA CERTIFIED MAIL - RETURN RECEIPT REQUESTED [7009 1410 0000 2472 52171#

520080002_FinalOrder_03152010.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 In the Matter of Alyeska Pipeline Service CPF No. 5-2008-0002 Company, Respondent. FINAL ORDER On September 10 to 11, 2007, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Alyeska Pipeline Service Company (Alyeska or Respondent) in Fairbanks, Alaska. Alyeska is the operator of the Trans Alaska Pipeline System (TAPS), an 800-mile-long hazardous liquid pipeline system that transports crude oil from production facilities in Prudhoe Bay to a marine terminal in Valdez, Alaska.' Respondent also operates a 148-mile-long natural gas pipeline system, the facility subject to the September 2007 OPS inspection. As a result of the inspection, the Director, Western Region, OPS (Director), issued to Alyeska, by letter dated January 28, 2008, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had committed various violations of 49 C.F.R. Part 192 and proposed ordering the company to take certain measures to correct the alleged violations. The Notice also proposed finding that Respondent had committed another probable violation of 49 C.F.R. Part 192 and warning it to take appropriate corrective action to address this item or be subject to future enforcement action. Alyeska responded to the Notice by letter dated February 28, 2008 (Response). Respondent did not contest the allegations of violation covered by the proposed compliance order but provided information concerning the corrective actions it had taken. Alyeska did, however, dispute the allegation of violation that led to the proposed warning. Respondent did not request a hearing and therefore has waived its right to one. 'http://www.alyeska-pipe.com (accessed on Feb. 14, 2010).#

520080002_FinalOrder_03152010.pdf, page 32 FINDINGS OF VIOLATION In its Response, Alyeska did not contest the allegations in the Notice that it violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.911(p), which states, in relevant part: § 192.911 What are the elements of an integrity management program? An operator's initial integrity management program begins with a framework (see § 192.907) and evolves into a more detailed and comprehensive integrity management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at a minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31.8S (incorporated by reference, see § 192.7) for more detailed information on the listed element.) (a).... (p) A process for identification and assessment of newly-identified high consequence areas. (See § 192.905 and 192.921). Specifically, Item 1A of the Notice alleged that Alyeska violated 49 C.F.R. § 192.911 (p) by failing to have a process for identifying high consequence areas (HCAs) along its fuel gas line, as further required under § 192.905(a) and (b). Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911(p), which incorporates by reference 49 C.F.R. § 192.905(a) and (b). Likewise, Item 1B of the Notice alleged that Alyeska also violated 49 C.F.R. § 192.911(p) by failing to have a written procedure for applying the potential impact radius method to determine if an HCA would be affected by a failure on the company's fuel gas line. This requirement is listed in § 192.903 and incorporated by reference into § 192.911(p). Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911(p), which incorporates by reference 49 C.F.R. § 192.903, by failing to have a written procedure for applying the potential impact radius method to determine if an HCA would be affected by a failure of its fuel gas line. Finally, Item 1C of the Notice alleged that Alyeska violated 49 C.F.R. § 192.911(p) by failing to have a written procedure for the actions that must be taken if a new HCA is identified. This procedure is required by § 192.905 (c), which is incorporated by reference into § 192.911(p), and must be followed to ensure that personnel take timely action in addressing new HCAs.#

520080002_FinalOrder_03152010.pdf, page 43 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911 (p), which incorporates by reference the requirement in 49 C.F.R. § 192.905(c) to have a written procedure for the actions that must be taken if a new HCA is identified. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.911(i), which states in relevant part: § 192.911 What are the elements of an integrity management program? An operator's initial integrity management program begins with a framework (see § 192.907) and evolves into a more detailed and comprehensive integrity management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at a minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31.8S (incorporated by reference, see § 192.7) for more detailed information on the listed element.) (a).... (i) A performance plan as outlined in ASME/ANSI B31.8S, section 9 that includes performance measures meeting the requirements of § 192.945. In particular, the Notice alleged that Alyeska violated 49 C.F.R. 192.911(i) by failing to have a This requirement is outlined in detail in § 192.945 and incorporated by reference into written procedure for submitting semi-annual reviews of its integrity management activities. semi-annual basis to determine if it is effective. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.911(i) by failing to have a written procedure for submitting semi-annual These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for violations of 49 C.F.R. § 192.911. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the#

520080002_FinalOrder_03152010.pdf, page 5applicable safety standards established under chapter 601. The Director has indicated that Respondent has taken the following actions specified in the proposed compliance order: In response to Item 1, Alyeska submitted written procedures for identifying an HCA on its fuel gas line, applying the potential impact radius method, and describing the actions that must be taken once an HCA is identified. In response to Item 2, Alyeska supplied written procedures for submitting semi-annual reviews of its integrity management activities. The Director has reviewed these written procedures and supporting documentation and determined that they are sufficient to comply with the Gas Transmission Pipeline Integrity Management requirements of Subpart O. Accordingly, I find that compliance has been achieved with respect to these violations. Therefore, the compliance terms proposed in the Notice are not included in this Order. WARNING ITEM With respect to Item 3, the Notice alleged a probable violation of Part 192 but did not propose a civil penalty or compliance order for this item. Therefore, it is considered to be a warning item. The warning was for: 49 C.F.R. § 192.945(a) (Item 3) — Respondent's alleged failure to file the company's first semi-annual integrity management report for its fuel gas line on or before August 31, 2004, the applicable regulatory deadline, and its alleged failure to file its next five semi-annual reports for that line on or before the applicable regulatory deadlines. In its Response, Alyeska disputed these allegations and stated that the company had in fact filed these reports. Respondent also stated that it had contacted Roger Little, PHMSA's Director of Information and Analysis, after receiving notification that these reports were missing. According to Alyeska, Mr. Little told the company that PHMSA lost its reports during a database failure. Alyeska also submitted several supporting documents, including a written receipt showing that Respondent had submitted its semi-annual report for the January 1 to June 30, 2005 reporting period on September 27, 2005. Alyeska also submitted email records showing that the company had allegedly re-submitted its reports for the periods ending December 31, 2004, June 30, 2005, December 31, 2005, and June 30, 2006, respectively, on March 28, 2007. Respondent's own evidence shows that its semi-annual report for the January 1 to June 30, 2005 period was not timely filed——i.e., the written receipt confirms that this report was not submitted until September 27, 2005, several weeks after the applicable 2-month deadline. Alyeska also had no written procedure for filing these reports, which are required even if an operator has no HCAs, and PHMSA has no record of timely receiving the reports or experiencing a subsequent#

520080002_FinalOrder_03152010.pdf, page 65 database failure. Accordingly, having considered such information, I find, pursuant to 49 C.F.R. § 190.205, that a probable violation of 49 C.F.R. § 192.945(a) (Notice Item 3) occurred and Respondent is hereby advised to correct such conditions. In the event that OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject to future enforcement action. The terms and conditions of this Final Order are effective upon receipt of service. Maut Water MAR 1 5 2010 for: Jefirey D. Wiese Date Issued Associate Administrator for Pipeline Safety#

520080002_Final Order_03152010_text.pdf, page 1Official PDFMAR 15 2010 Mr. Kevin Hostler President & Chief Executive Officer Alyeska Pipeline Service Company 900 East Benson Boulevard Anchorage, AK 99508 Re: CPF No. 5-2008-0002 Dear Mr. Hostler: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and finds that Alyeska Pipeline Service Company has completed the actions specified in the Notice to comply with the pipeline safety regulations. It also issues your company a warning for another probable violation and advises you to correct that condition. This case is now closed. Service of the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Jeffrey D. Wiese Associate Administrator for Pipeline Safety Enclosure cc: Mr. Chris Hoidal, Director, Western Region, PHMSA CERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 5217]#

520080002_Final Order_03152010_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 ______________________________ In the Matter of ) Alyeska Pipeline Service ) CPF No. 5-2008-0002 Company, ) ) ) ) Respondent. ) ______________________________) FINAL ORDER On September 10 to 11, 2007, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of Alyeska Pipeline Service Company (Alyeska or Respondent) in Fairbanks, Alaska. Alyeska is the operator of the Trans Alaska Pipeline System (TAPS), an 800-mile-long hazardous liquid pipeline system that transports crude oil from production facilities in Prudhoe Bay to a marine terminal in Valdez, Alaska.1 Respondent also operates a 148-mile-long natural gas pipeline system, the facility subject to the September 2007 OPS inspection. As a result of the inspection, the Director, Western Region, OPS (Director), issued to Alyeska, by letter dated January 28, 2008, a Notice of Probable Violation and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Respondent had committed various violations of 49 C.F.R. Part 192 and proposed ordering the company to take certain measures to correct the alleged violations. The Notice also proposed finding that Respondent had committed another probable violation of 49 C.F.R. Part 192 and warning it to take appropriate corrective action to address this item or be subject to future enforcement action. Alyeska responded to the Notice by letter dated February 28, 2008 (Response). Respondent did not contest the allegations of violation covered by the proposed compliance order but provided information concerning the corrective actions it had taken. Alyeska did, however, dispute the allegation of violation that led to the proposed warning. Respondent did not request a hearing and therefore has waived its right to one. 1 http://www.alyeska-pipe.com (accessed on Feb. 14, 2010).#

520080002_Final Order_03152010_text.pdf, page 32 FINDINGS OF VIOLATION In its Response, Alyeska did not contest the allegations in the Notice that it violated 49 C.F.R. Part 192, as follows: Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.911(p), which states, in relevant part: § 192.911 What are the elements of an integrity management program? An operator’s initial integrity management program begins with a framework (see § 192.907) and evolves into a more detailed and comprehensive integrity management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at a minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31.8S (incorporated by reference, see § 192.7) for more detailed information on the listed element.) (a) . . . . (p) A process for identification and assessment of newly-identified high consequence areas. (See § 192.905 and 192.921). Specifically, Item 1A of the Notice alleged that Alyeska violated 49 C.F.R. § 192.911(p) by failing to have a process for identifying high consequence areas (HCAs) along its fuel gas line, as further required under § 192.905(a) and (b). Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911(p), which incorporates by reference 49 C.F.R. § 192.905(a) and (b). Likewise, Item 1B of the Notice alleged that Alyeska also violated 49 C.F.R. § 192.911(p) by failing to have a written procedure for applying the potential impact radius method to determine if an HCA would be affected by a failure on the company’s fuel gas line. This requirement is listed in § 192.903 and incorporated by reference into § 192.911(p). Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911(p), which incorporates by reference 49 C.F.R. § 192.903, by failing to have a written procedure for applying the potential impact radius method to determine if an HCA would be affected by a failure of its fuel gas line. Finally, Item 1C of the Notice alleged that Alyeska violated 49 C.F.R. § 192.911(p) by failing to have a written procedure for the actions that must be taken if a new HCA is identified. This procedure is required by § 192.905(c), which is incorporated by reference into § 192.911(p), and must be followed to ensure that personnel take timely action in addressing new HCAs.#

520080002_Final Order_03152010_text.pdf, page 43 Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Alyeska violated 49 C.F.R. § 192.911(p), which incorporates by reference the requirement in 49 C.F.R. § 192.905(c) to have a written procedure for the actions that must be taken if a new HCA is identified. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.911(i), which states in relevant part: § 192.911 What are the elements of an integrity management program? An operator’s initial integrity management program begins with a framework (see § 192.907) and evolves into a more detailed and comprehensive integrity management program, as information is gained and incorporated into the program. An operator must make continual improvements to its program. The initial program framework and subsequent program must, at a minimum, contain the following elements. (When indicated, refer to ASME/ANSI B31.8S (incorporated by reference, see § 192.7) for more detailed information on the listed element.) (a) . . . . (i) A performance plan as outlined in ASME/ANSI B31.8S, section 9 that includes performance measures meeting the requirements of § 192.945. In particular, the Notice alleged that Alyeska violated 49 C.F.R. 192.911(i) by failing to have a written procedure for submitting semi-annual reviews of its integrity management activities. This requirement is outlined in detail in § 192.945 and incorporated by reference into § 192.911(i). It is important that an operator review its integrity management program on a semi-annual basis to determine if it is effective. Respondent did not contest this allegation of violation. Accordingly, based upon a review of all of the evidence, I find that Respondent violated 49 C.F.R. § 192.911(i) by failing to have a written procedure for submitting semi-annual reviews of its integrity management activities. These findings of violation will be considered prior offenses in any subsequent enforcement action taken against Respondent. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Items 1 and 2 in the Notice for violations of 49 C.F.R. § 192.911. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of gas or who owns or operates a pipeline facility is required to comply with the#

520080002_Final Order_03152010_text.pdf, page 54 applicable safety standards established under chapter 601. The Director has indicated that Respondent has taken the following actions specified in the proposed compliance order: In response to Item 1, Alyeska submitted written procedures for identifying an HCA on its fuel gas line, applying the potential impact radius method, and describing the actions that must be taken once an HCA is identified. In response to Item 2, Alyeska supplied written procedures for submitting semi-annual reviews of its integrity management activities. The Director has reviewed these written procedures and supporting documentation and determined that they are sufficient to comply with the Gas Transmission Pipeline Integrity Management requirements of Subpart O. Accordingly, I find that compliance has been achieved with respect to these violations. Therefore, the compliance terms proposed in the Notice are not included in this Order. WARNING ITEM With respect to Item 3, the Notice alleged a probable violation of Part 192 but did not propose a civil penalty or compliance order for this item. Therefore, it is considered to be a warning item. The warning was for: 49 C.F.R. § 192.945(a) (Item 3) ─ Respondent’s alleged failure to file the company’s first semi-annual integrity management report for its fuel gas line on or before August 31, 2004, the applicable regulatory deadline, and its alleged failure to file its next five semi-annual reports for that line on or before the applicable regulatory deadlines. In its Response, Alyeska disputed these allegations and stated that the company had in fact filed these reports. Respondent also stated that it had contacted Roger Little, PHMSA’s Director of Information and Analysis, after receiving notification that these reports were missing. According to Alyeska, Mr. Little told the company that PHMSA lost its reports during a database failure. Alyeska also submitted several supporting documents, including a written receipt showing that Respondent had submitted its semi-annual report for the January 1 to June 30, 2005 reporting period on September 27, 2005. Alyeska also submitted email records showing that the company had allegedly re-submitted its reports for the periods ending December 31, 2004, June 30, 2005, December 31, 2005, and June 30, 2006, respectively, on March 28, 2007. Respondent’s own evidence shows that its semi-annual report for the January 1 to June 30, 2005 period was not timely filed—i.e., the written receipt confirms that this report was not submitted until September 27, 2005, several weeks after the applicable 2-month deadline. Alyeska also had no written procedure for filing these reports, which are required even if an operator has no HCAs, and PHMSA has no record of timely receiving the reports or experiencing a subsequent#

520080002_Final Order_03152010_text.pdf, page 65 database failure. Accordingly, having considered such information, I find, pursuant to 49 C.F.R. § 190.205, that a probable violation of 49 C.F.R. § 192.945(a) (Notice Item 3) occurred and Respondent is hereby advised to correct such conditions. In the event that OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject to future enforcement action. The terms and conditions of this Final Order are effective upon receipt of service. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#