{"operation":"document","citation":"CPF 520116001","title":"MERIT ENERGY COMPANY — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-01-06","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.310(b)(9), 195.403(b)(1), 195.403(c), 195.404(a)(4), 195.406(a)(3), 195.440(c), 195.555, 195.589(a), 195.589(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520116001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520116001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520116001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520116001","body":"Notice of Probable Violation involving MERIT ENERGY COMPANY. PHMSA's enforcement data identifies the cited regulations as 195.310(b)(9),  195.403(b)(1),  195.403(c),  195.404(a)(4),  195.406(a)(3),  195.440(c),  195.555,  195.589(a),  195.589(b). The case was opened on 2011-01-06 and is reported as closed as of 2012-03-23. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520116001_ Final Order_03232012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520116001/520116001_%20Final%20Order_03232012.pdf\n\n520116001_ Final Order_03232012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520116001/520116001_%20Final%20Order_03232012_text.pdf\n\n520116001_NOPV PCO_01062011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520116001/520116001_NOPV%20PCO_01062011.pdf\n\n520116001_NOPV PCO_01062011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520116001/520116001_NOPV%20PCO_01062011_text.pdf\n\n520116001_Operator_Response_02162011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520116001/520116001_Operator_Response_02162011.pdf\n\n520116001_ Final Order_03232012_text.pdf\n\nMAR 23 2012\nMr. Terry Gottberg\nPresident\nMerit Energy Company, LLC\n1327 Noel Road, Suite 500\nDallas, TX 75240\nRe: CPF No. 5-2011-6001\nDear Mr. Gottberg:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and finds that Merit Energy Company, LLC, has completed the actions specified in\nthe Notice to comply with the pipeline safety regulations. Therefore, this case is now closed.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Jay Prudhomme, Vice President Northern Rockies, Merit Energy Company, LLC\nMr. Bill Ellsworth, PSM/DOT Coordinator, Merit Energy Company, LLC\nMr. Chris Hoidal, Director, Western Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164203363333]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nMerit Energy Company, LLC, ) CPF No. 5-2011-6001\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn May 4-5, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Merit Energy\nCompany, LLC’s (Merit Energy or Respondent) Bairoil CO2 pipeline between Bairoil,\nWyoming, and Jeffrey City Wyoming. Merit Energy operates the 19.8-mile Bairoil CO2\nPipeline (Bairoil Pipeline) in the high plains of Central Wyoming.\n1\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated January 6, 2011, a Notice of Probable Violation and Proposed\nCompliance Order (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that Merit Energy had\ncommitted various violations of 49 C.F.R. Part 195 and proposed ordering the company to take\ncertain measures to correct the alleged violations. The warning items required no further action,\nbut warned the operator to correct the probable violation or face possible enforcement action.\nMerit Energy responded to the Notice by letter dated February 16, 2011 (Response). The\ncompany did not contest the allegations of violation but provided information concerning the\ncorrective actions it had taken. Respondent did not request a hearing and therefore has waived\nits right to one.\nFINDINGS OF VIOLATION\nIn its Response, Merit Energy did not contest the allegations in the Notice that it violated\n49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.310(b)(9), which states:\n1 www.meritenergy.com (last accessed 9/30/2011)\n\n\n\n2\n§ 195.310 Records.\n(a) A record must be made of each pressure test required by this\nsubpart, and the record of the latest test must be retained as long as the\nfacility is in use.\n(b) The record required by paragraph (a) of this section must include:\n(1) …\n(9) Where elevation differences in the section under test exceed 100\nfeet (30 meters), a profile of the pipeline that shows the elevation and test\nsites over the entire length of the test section;….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.310(b)(9) by failing to retain\ncomplete records of each pressure test required under Subpart E of 49 C.F.R. Part 195 for the\nBairoil Pipeline. Specifically, the Notice alleged that Merit Energy’s September 9, 1986\npressure test records did not include a profile of the pipeline showing the elevation and test sites\nover the entire length of the test section, where elevation differences in the section under test\nexceeded 100 feet.\nAlthough the elevation differences along the pipeline range between 6985 feet above mean sea\nlevel (MSL) to 7575 feet MSL, the company’s hydrostatic test records did not include a profile\nof the pipeline showing such elevation differences. Respondent did not contest this allegation of\nviolation. Accordingly, based upon a review of all of the evidence, I find that Merit Energy\nviolated 49 C.F.R. § 195.310(b)(9) by failing to include on its latest pressure test record a profile\nof the Bairoil Pipeline showing the elevation and test sites over the entire length of the test\nsection, where elevation differences in the section under test exceeded 100 feet.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(4), which states:\n§ 195.404 Maps and records.\n(a) Each operator shall maintain current maps and records of its\npipeline systems that include at least the following information,\n(1) …\n(4) The diameter, grade, type and nominal wall thickness of all pipe.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.404(a)(4) by failing to maintain\ncurrent maps of the Bairoil Pipeline showing the various wall thicknesses along the pipeline.\nAccording to the Notice, Respondent’s Operations and Maintenance Manual showed that the\nwall thickness varied from 0.420 to 0.64 inches, but that the company’s maps did not show the\nlocation of each variance in wall thickness along the pipeline.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.404(a)(4) by failing to maintain\ncurrent maps of its pipeline showing the nominal wall thickness of all pipe along the pipeline.\nItem 5: The Notice alleged that Respondent violated 49 C.F.R. § 195.406(a)(3), which states:\n\n\n\n3\n§ 195.406 Maximum operating pressure.\n(a) Except for surge pressures and other variations from normal\noperations, no operator may operate a pipeline at a pressure that exceeds\nany of the following:\n(1) …\n(3) Eighty percent of the test pressure for any part of the pipeline\nwhich has been pressure tested under subpart E of this part.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(a)(3) by operating the Bairoil\nPipeline at a pressure exceeding 80% of the lowest test pressure for any part of the pipeline that\nhad been pressure tested under Subpart E. Specifically, the Notice alleged that the company’s\ntest pressure devices were located at an elevation of 6985 feet MSL and that Merit Energy had\ndetermined that the maximum operating pressure (MOP) was 3550 psig for the entire length of\nthe pipeline without factoring in elevation differences along the pipeline.\nPHMSA’s review of Respondent’s test pressure documentation revealed that the highest\nelevation point along the pipeline was 7575 feet MSL, with a pressure of 3294 psig. 2 After\nconsidering the elevation differences between 6985 feet MSL and 7575 feet MSL, the minimum\ntest pressure on the line should have been 3294 psig,\n3294 psig).\n3 with a correct MOP of 2635 psig (80% of\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.406(a)(3) by operating the\nBairoil Pipeline at a pressure exceeding 80% of the lowest test pressure for any part of the\npipeline that had been pressure tested under Subpart E.\nItem 7: The Notice alleged that Respondent violated 49 C.F.R. § 195.555, which states:\n§ 195.555 What are the qualifications for supervisors?\nYou must require and verify that supervisors maintain a thorough\nknowledge of that portion of the corrosion control procedures established\nunder § 195.402(c)(3) for which they are responsible for insuring\ncompliance.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.555 by failing to require and verify\nthat supervisors maintained a thorough knowledge of that portion of the corrosion control\nprocedures for which they were responsible for insuring compliance. Specifically, the Notice\nalleged that a review of Merit Energy’s personnel records and interviews revealed that the\ncompany’s supervisory personnel had relied solely on a contractor for all of its cathodic\nprotection (CP) monitoring tasks and the reading of rectifiers and bonds. During the OPS\ninspection, Respondent’s personnel acknowledged a lack of CP but argued that a working\n2 Pipeline Safety Violation Report (January 5, 2011) (Violation Report): Attachment A - Hydrostatic pressure tests\nrecords; Attachment B - alignment sheets with high and low points along the line, and Attachment D - Merit Energy\nCompany’s O&M Manual.\n3 Test pressure of 3350 psig at the Bairoil plant station – [(7575 feet – 6985 feet) x .433 psig/foot] = minimum test\npressure of 3294 psig.\n\n\n\n4\nknowledge of external corrosion control was not required because CP services were the\nresponsibility of its contractor.\n4 Respondent did not contest this allegation of violation.\nAlthough Respondent’s contractor may have been responsible for all CP monitoring services,\nMerit Energy, as operator of the pipeline, is still responsible for the company’s compliance with\nthe pipeline safety regulations. Respondent’s reliance on a contractor does not negate this\nviolated 49 C.F.R. § 195.555 by failing to require and verify that supervisors maintained a\nresponsibility.5 Accordingly, based upon a review of all of the evidence, I find that Respondent\nthorough knowledge of cathodic protection procedures for which they were responsible for\ninsuring compliance.\nItem 8: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(a), which states:\n§ 195.589 What corrosion control information do I have to maintain?\n(a) You must maintain current records or maps to show the location\nof—\n(1) Cathodically protected pipelines;\n(2) Cathodic protection facilities, including galvanic anodes, installed\nafter January 28, 2002; and\n(3) Neighboring structures bonded to cathodic protection systems.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.589(a) by failing to maintain\ncurrent records or maps showing the location and details of its cathodic protection facilities that\nhad been installed on the Bairoil Pipeline after 2002. Specifically, the Notice alleged that Merit\nEnergy had failed to provide documentation showing the location of such cathodic protection\nfacilities, including test stations, bonds, rectifiers, ground beds, and galvanic anodes.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.589(a) by failing to maintain\ncurrent records or maps to show the location of its cathodic protection facilities, installed on the\nBairoil Pipeline.\nItem 9: The Notice alleged that Respondent violated 49 C.F.R. § 195.589(a)-(b), which states:\n§ 195.589 What corrosion control information do I have to maintain?\n(a) You must maintain current records or maps to show the location\nof-\n(1) Cathodically protect pipelines;\n(2) Cathodic protection facilities, including galvanic anodes, installed\nafter January 28, 2002; and\n(3) Neighboring structures bonded to cathodic protection systems.\n(b) Records or maps showing a stated number of anodes, installed in a\nstated manner or spacing, need not show specific distances to each buried\nanode.\n4 Violation Report, at 14-17.\n5 See, e.g., In the Matter of Williams Gas Pipeline–Transco, Final Order at 4, CPF No. 1-2005-1007 (July 30,\n2007), 2007 WL 2475903; In the Matter of Koch Pipelines, Inc., Final Order at 7, CPF No. 32506 (April 28, 1998),\n1998 WL 35166464.\n\n\n\n5\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.589(a)-(b) by failing to maintain\nrecords or maps showing the company’s cathodic protection facilities, including the number of\ngalvanic anodes installed in a stated manner or spacing, on the Bairoil Pipeline. During the\ninspection, Merit Energy did not have maps or records to demonstrate compliance with the\nregulation. Respondent did not contest this allegation of violation. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.589(a)-(b) by\nfailing to maintain records or maps showing the number of galvanic anodes installed in a stated\nmanner or spacing on its pipeline.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, 5, 7, 8, and 9 in the Notice\nfor violations of 49 C.F.R. §§ 195.310(b)(9), 195.404 (a)(4), 195.406 (a)(3), 195.555,\n195.589(a), and 195.589(a)-(b), respectively. Under 49 U.S.C. § 60118(a), each person who\nengages in the transportation of hazardous liquids or who owns or operates a pipeline facility is\nrequired to comply with the applicable safety standards established under chapter 601. The\nDirector indicates that Respondent has taken the following actions specified in the proposed\ncompliance order:\n1. With respect to the violation of § 195. 310(b)(9) (Item 1), Respondent has\ndeveloped a profile of the Bairoil Pipeline that shows the elevation over the entire\nlength of the test section and the location of the test apparatus site. Merit Energy has\nsubmitted a copy of this profile to PHMSA.\n2. With respect to the violation of § 195. 404 (a)(4) (Item 2), Respondent has\ndeveloped maps showing the locations of the diameter, grade, type and nominal wall\nthickness of all pipe sections on the Bairoil Pipeline. Merit Energy has submitted to\nPHMSA a copy of its Bairoil CO2 Pipeline Construction Plan and alignment sheets\nthat reflect wall thickness changes along the pipeline.\n3. With respect to the violation of § 195. 406 (a)(3) (Item 5), Respondent has\nestablished the correct MOP for the Bairoil Pipeline by using the test pressure at the\nhighest elevation point at which the pipeline was tested during the 1986 pressure test.\nMerit Energy has submitted a copy of its MOP re-calculations to PHMSA.\n4. With respect to the violation of § 195. 555 (Item 7), Respondent has conducted\ncorrosion control training for its supervisory employees who are responsible for\npipeline operations on the Bairoil Pipeline. The training included § 195. 402(c)(3)\nqualifications for supervisors, evaluation and mitigation of external and internal\ncorrosion, use of inhibitors & coupons, sulfate reducing bacteria, atmospheric\ncorrosion, external coatings, cathodic protection systems and inspection and repair\ntechniques. Merit Energy has submitted copies of its supervisors’ certificates of\ncompletion.\n5. With respect to the violation of § 195.589(a) (Item 8), Respondent has developed\nmaps and records that accurately reflect the location of the Bairoil Pipeline cathodic\nprotection facilities, including test stations, bonds, rectifiers, ground beds, and\ngalvanic anodes installed after 2002.\n\n\n\n6\n6. With respect to the violation of § 195.589(a)-(b) (Item 9), Respondent has\nupdated its Bairoil Operations and Maintenance Manual, Section 1.3.1, detailing the\ninstallation technique of the new deep-well ground bed installed on the Bairoil\nPipeline in March 2010. Merit Energy has also updated its alignment sheets to depict\nthe location of the ground bed.\nAccordingly, I find that compliance has been achieved with respect to these violations.\nTherefore, the compliance terms proposed in the Notice are not included in this Order.\nWARNING ITEMS\nWith respect to Items 3, 4, and 6, the Notice alleged probable violations of Part 195 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 195.403(b)(1) (Item 3) ─ Respondent’s alleged failure to review\nwith its personnel their performance in meeting the objectives of the company’s\nemergency response training program;\n49 C.F.R. § 195.403(c) (Item 4) ─ Respondent’s alleged failure to verify that its\nsupervisors maintained a thorough knowledge of that portion of the company’s\nemergency response procedures for which they were responsible to ensure\ncompliance under 49 C.F.R. § 195.402; and\n49 C.F.R. § 195.440(c) (Item 6) ─ Respondent’s alleged failure to follow the\nbaseline and supplemental emergency official communications recommendations\nlisted in Table 2.3 of the American Petroleum Institute’s Recommended Practice\n1162.\nMerit Energy presented information in its Response showing that it had taken certain actions to\naddress the cited items. If OPS finds a violation of these provisions in a subsequent inspection,\nRespondent may be subject to future enforcement action.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":17998}