BETA OFFSHORE — Notice of Amendment

party submissionOfficial PDF520087002M_operator_response_03052009.pdf#

520087002m_notice of amendment_11142008_text.pdf, page 1Official PDFU. S Department of Transportation Ptpelltne and Hazardous Maferlells Safety Admmjrjitsfrafmon 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 NOTICE OP AMKXDMKNT November 14, 2008 Mr Robert Pyle Manager, Pipehne and Marine Logistics Pacific Energy Resources, Ltd 111 West Ocean Blvd, Suite 1240 Long Beach, CA 90802 iCPF 5-2008-7002M Dear Mr Pyle On May 19-22, 2008, representatives of the Pipehne and Hazardous Materials Safety Administration (PHMSA) and the Cahfornia State Fire Marshal (CSFM), pursuant to Chapter 601 of 49 United States Code, mspected Pacific Energy Resources, Ltd. 's (PERL) procedures and supporting implementation records for their Integrity Management Program (IMP) in Long Beach, Cahfornia On the basis of the inspection, PHMSA has identified the apparent inadequacies found within PERL's plans or procedures, as described below (f) An operator must include, at mimmum, each of the following elements in its written integrjlty management program: (8) A process for review of integrity assessment results and information ana]lysis by a person quahfied to evaluate the results and information (see paragraph (h)(2) of this section).#

520087002m_notice of amendment_11142008_text.pdf, page 2The PERL procedures are inadequate for ensuring the quahfication of the IMP reviewers and evaluators. Currently, the procedures require documentation of the IMP team members, however, the procedures do not specify the level of quahfications the IMP reviewers must have to adequately review and analyze the assessment results The PERL procedures do not specify what the in-hne inspection (ILI) vendors' quahfications must be. The PERL procedures do not ensure through contractual means or otherwise, that their ILI tool vendor performs integrity assessments and information analysis in accordance with Part 195. 452(f) (4) (h) What actions must an operator take to address integrity issues' (I) General requirements. An operator must take prompt action to address all anomalous conditions the operator discovers through the integrity assessment or information analysis. Ln addressing all conditions, an operator must evaluate all anomalous conditions and remediate those that could reduce a pipehne's integrity. An operator must be able to demonstrate that the remediation of the condition will ensure the condition is unhkely to pose a threat to the long-term integrity of the pipeline. An operator must. comply with g 195. 422 when making a repair. (i) Temporary pressure reduction. An operator must notify PHMSA, in accordance with paragraph (m) of this section, if the operato~ cannot meet the schedule for evaluation and remediation required under paragraph (h)(3) of this section and cannot provide safety through a temporary ~eduction in operating pressure. (ii) ILong-term pressure reduction. When a pressure reduction exceeds 365 days, the operator must notify PHMSA in accordance with paragraph (m) of this section and explain the reasons for the delay. An operator must also take further remedial action to ensure the safety of the pipeline. (3) Schedule for evaluation and remediation. An operator must complete remediation of a condition according to a schedule that pnoritizes the conditions for evaluation and remediation. Yf an operator cannot meet the schedule For any condition, the operator must justify the reasons why it cannot meet the schedule#

520087002m_notice of amendment_11142008_text.pdf, page 3and that the changed scheduie wild not jeopardize pubiic safety or environmental protection. An operator must notify OPS if the operator cannot meet the schedule and can not provide safety through a temporai y reduction in operating pressure. An operator must send the notice to the address specified in paragraph (m) of this section. (m) Where does an opeII ator send a notification T An operator must send any notification required by this section to the Information Resources Manager, Office of Pipeline Safety, Research and Speciall Programs Administration, U. S. Department of Yransportation, Room 7I28, 400 Seventh Street SW, Washington BC 20590, or to the facsimIle number (202) 366-7I28. The PERL IMP procedures do not ensure the operator cannot exceed 365 days without making a formal notification to the PHMSA The procedures also do not specify what additional safety measures will be used to ensure long term safety The PERL procedures do not consider the risks associated with alternate modes of operation of their pipeluies, e. g. startup, shutdown, shut-in, slack hne, pressure cychng, etc In addition, the PERL procedures do not consider hkely risk factors and threats on their pipehne, e g the risk for corrosion needs to be more threat specific for each type of condition or environment (f) An oper ator must include, at minimum, each of the foWowing elements in its written integrity management program: (7) Methods to measure the program's effectiveness (see paragraph (k) of this section)#

520087002m_notice of amendment_11142008_text.pdf, page 4PERL's root cause analysis was not adequately integrated mto their IM program. The analysis currently used by the PERL is not referenced in its IMP to ensure a process for an effective root cause analysis and lessons learned The PERL IMP procedures do not include a document retention pohcy that ensures key documents, as described in Part (195 452 (1), are retained for the hfe of the pipehne Res onse to this Notice This Notice is provided pursuant to 49 U S. C ) 60108(a) and 49 C. F R ( 190 237 Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators in Compliance 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 pubhcly available. If you beheve that any portion of your responsive material quahfies 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) If you do not respond within 30 days of receipt of this Notice, this constitutes a waiver of your right to contest the allegations m 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#

520087002m_notice of amendment_11142008_text.pdf, page 5If, after opportunity for a hearing, your plans or procedures are found inadequate as alleged m this Notice, you may be ordered to amend your plans or procedures to correct the inadequacies (49 C F R, $ 190 237). If you are not contestmg this Notice, we propose that you submit your amended procedures to my office withm 60 days of receipt of this Notice This period may be extended by written request for good cause Once the inadequacies identified herem have been addressed in your amended procedures, this enforcement action will be closed In correspondence concerning this matter, please refer to CPF 5-2008-7002M and, for each document you submit, please provide a copy m electronic format whenever possible Sincerel, is a Director, Western Region Pipehne and Hazardous Materials Safety Administration cc PHP-60 Comphance Registry PHP-500 H. Monfared (0120746) Enclosure' Response Options for Pipeline Operators in Compliance Proceedings#