AIRCRAFT SERVICES INTERNATIONAL GROUP (ASIG) — Warning Letter

520085010w_warning letter_04232008_text.pdf, page 1Official PDFO U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 WARNING LETTER CERTIFIED MAIL - RETURN RECEIPT RE UESTED April 23, 2008 Mr Thomas Mushovic General Manager Aircraft Service International Group 6000 DeHavilland Drive Anchorage, AK 99519 CPF 5-2008-5010W Dear Mr. Mushovic. On November 14-16, 2007, a representative of the Pipeline and Hazardous Materials Safety Admmistration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected Airport Service International Group's (ASIG) Integrity Management Program m Anchorage, Alaska As a result of the mspection, it appears that you have committed probable violations of the Pipehne Safety Regulations, Title 49, Code of Federal Regulations The items mspected and the probable violations are: $195. 452 Pipeline integrity management in high consequence areas. f) What are the elements of an integrity management program? An integrity management program begins with the initial framework. An operator must continually change the program to reflect operating experience, conclusions drawn from results of the integrity assessments, and other maintenance and surveillance data, and evaluation of consequences of a failure on the high consequence area. An operator must include, at minimum, each of the following elements in its written#

520085010w_warning letter_04232008_text.pdf, page 2integrity management program: (8) A process for review of integrity assessment results and information analysis by a person qualified to evaluate the results and information (see paragraph (h)(2) of this section). ASIG does not mclude m their IMP plan gob description, task analysis, or other means to identify the qualification requirements for performing reviews of assessment results and mformation analysis, that address education, experience, skills, and trainmg requirements, as appropriate. (Evidence i ASIG IM Program document, Section 2. 0 f195. 452 Pipeline integrity management in high consequence areas. (h) What actions must an operator take to address integrity issues? (1) General requirements. An operator must take prompt action to address all anomalous conditions that the operator discovers through the integrity assessment or information analysis. In addressing all conditions, an operator must evaluate all anomalous conditions and remediate those that could reduce a pipeline's integrity. An operator must be able to demonstrate that the remediation of the condition will ensure that the condition is unlikely to pose a threat to the long-term integrity of the pipeline. A reduction in operating pressure cannot exceed 365 days without an operator taking further remedial action to ensure the safety of the pipeline. An operator must comply with Sec. 195. 422 when making a repair. ASIG does not mclude m their IM program document a requirement that any temporary reduction m operating pressure taken until repair or remediation can be completed cannot exceed 365 days without the operator takmg additional remedial actions to assure the safety of the pipehne (Evidence i ASIG IM Program document, Section 2 5 3. )195. 452 Pipeline integrity management in high consequence areas. (h) What actions must an operator take to address integrity issues? (3) Schedule for evaluation and remediation. An operator must complete remediation of a condition according to a schedule that prioritizes the conditions for evaluation and remediation. If an operator cannot meet the schedule for any condition, the operator must justify the reasons why it cannot meet the schedule and that the changed schedule will not jeopardize public safety or environmental protection. An operator must notify OPS if the operator cannot meet the schedule and cannot provide safety through a temporary reduction in operating pressure. An operator must send the notice to the address specified in paragraph (m) of this sec60n.#

520085010w_warning letter_04232008_text.pdf, page 3ASIG does not include in their IM program document a requirement to notify PHMSA if the operator cannot meet the remediation schedule and cannot provide safety through a temporary reduction in operating pressure. (Evidence) ASIG IM Program document, Section 2 5 $195. 452 Pipeline integrity management in high consequence areas. (h) What actions must an operator take to address integrity issues? (4) Special requirements for scheduling remediation. (i) Immediate repair conditions. An operator's evaluation and remediation schedule must provide for immediate repair conditions. To maintain safety, an operator must temporarily reduce operating pressure or shut down the pipeline until the operator completes the repair of these conditions. An operator must calculate the temporary reduction in operating pressure using the formula in section 451. 7 of ASME/AIVSI B31. 4 (incorportaed by reference, see Sec. 195. 3). An operator must treat the following conditions as immediate repair conditions: ASIG does not mclude m their IM program document a requirement statmg that if an immediate repair condition is identified, the operating pressure of the affected pipehne be temporarily reduced m accordance with the formula m Section 451. 7 of ASME/ANSI B31. 4 or the pipehne be shutdown until the condition is repaired. Where pressure reduction cannot be calculated using the method of Section 451 7, the process should identify alternative methods of calculating a safe operatmg pressure iiEvidence) ASIG IM Program document, Section 2 5 $195. 452 Pipeline integrity management in high consequence areas. (i) What preventive and mitigative measures must an operator take to protect the high consequence area? (2) Risk analysis criteria. In identifying the need for additional preventive and mitigative measures, an operator must evaluate the likelihood of a pipeline release (i) Terrain surrounding the pipeline segment, including drainage systems such as small streams and other smaller waterways that could act as a conduit to the high consequence area; (ii) Elevation profile; (iii) Characteristics of the product transported; (iv) Amount of product that could be released; (v) Possibility of a spillage in a farm field following the drain tile into a waterway; (vi) Ditches along side a roadway the pipeline crosses; (vii) Physical support of the pipeline segment such as by a cable suspension bridge;#

520085010w_warning letter_04232008_text.pdf, page 4(viii) Exposure of the pipeline to operating pressure exceeding established maximum operating pressure. ASIG did not develop and document adequate risk assessment conclusions and implementation actions ASIG appears to be domg the work but did not document what work has been completed ASIG did not identify dominant risk factors nor mtegrate any data with other information to develop a complete and mtegrated understanding of risk. iiEvidence) ASIG IM Program document, Section 2. 4 $195. 452 Pipeline integrity management in high consequence areas. (i) What preventive and mitigative measures must an operator take to protect the high consequence area? (1) General requirements. An operator must take measures to prevent and mitigate the consequences of a pipeline failure that could affect a high consequence area. These measures include conducting a risk analysis of the pipeline segment to identify additional actions to enhance public safety or environmental protection. Such actions may include, but are not limited to, implementing damage prevention best practices, better monitoring of cathodic protection where corrosion is a concern, establishing shorter inspection intervals, installing EFRDs on the pipeline segment, modifying the systems that monitor pressure and detect leaks, providing additional training to personnel on response procedures, conducting drills with local emergency responders and adopting other management controls. ASIG does not mclude in their IM program document a requirement to consider the identification of potential preventive and mitigative actions that address the most significant segment- specific risks, mcluding consideration of preventive and mitigative actions hsted m (195 452(i)(1) Further, ASIG did not conduct reviews of the effectiveness of current preventive and mitigative actions and the potential for enhancements and upgrades evidence) ASIG IM Program document, Section 2. 6 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 $1, 000, 000 for any related series of violations We have reviewed the circumstances and supportmg documents mvolved m this case, and have decided not to conduct additional enforcement action or penalty assessment proceedmgs at this time We advise you to correct the items identified m this letter Failure to do so will result in ASIG bemg subject to additional enforcement action No reply to this letter is required. If you choose to reply, m your correspondence please refer to CPF 5-2008-5010W Be advised that all material you submit in response to this enforcement action is subject to bemg made pubhcly available If you beheve that any portion of your#

520085010w_warning letter_04232008_text.pdf, page 5responsive material qualifies for confidential treatment under 5 U S C. 552(b), along with the complete origmal document you must provide a second copy of the document with the portions you beheve quahfy for confidential treatment redacted and an explanation of why you beheve the redacted information quahfies for confidential treatment under 5 U. S. C. 552(b). Smcerely, Chris Hoidal Director, Western Region Pipelme and Hazardous Materials Safety Administration cc: PHP-60 Comphance Registry PHP-500 J Strawn (¹119912)#