VENOCO, INC — Notice of Probable Violation

case documentOfficial PDF520120014_NOPV PCO_05222012.pdf#

case documentOfficial PDF520120014_NOPV PCO_05222012_text.pdf#

party submissionOfficial PDF520120014_Operator Response_07262012.pdf#

520120014_Final Order_11162012_text.pdf, page 1Official PDFNOVEMBER 16, 2012 Mr. Edward O’Donnell Chief Executive Officer Venoco, Inc. 370 17th Street, Suite 3900 Denver, CO 80202-1370 Re: CPF No. 5-2012-0014 Dear Mr. O’Donnell: Enclosed please find the Final Order issued in the above-referenced case. It makes findings of violation and finds that Venoco, Inc. has completed the actions specified in the Notice to comply with the pipeline safety regulations. Therefore, 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, OPS Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS Mr. Keith Wenal, Manager – Health, Environment, and Safety, Venoco, Inc. 6267 Carpinteria Ave., Suite 100, Carpinteria, CA 93013 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

520120014_Final Order_11162012_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 ) Venoco, Inc., ) CPF No. 5-2012-0014 ) ) ) Respondent. ) ____________________________________) FINAL ORDER Between July 12 and 14, 2011, 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 Venoco, Inc. (Venoco or Respondent) in Carpinteria, California. Venoco operates approximately 38 miles of oil and gas pipelines in and around the Santa Barbara Channel in Southern California and the Sacramento Basin in Central California.1 As a result of the inspection, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated May 22, 2012, a Notice of Probable Violation and Proposed Compliance Order (Notice), which also included two warning items in accordance with 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Venoco had committed various violations of 49 C.F.R. Part 192 and proposed ordering Respondent to take certain measures to correct two of the alleged violations. The warning items required no further action, but warned the operator to correct the probable violation or face possible enforcement action. Venoco responded to the Notice by letter dated July 26, 2012 (Response). The company did not contest the allegations of violation but provided information concerning the corrective actions it had taken. Respondent did not request a hearing and therefore has waived its right to one. FINDINGS OF VIOLATION In its Response, Venoco did not contest the allegations in the Notice that it violated 49 C.F.R. Part 192 as follows: 1 See http://www.venocoinc.com/index.html (last accessed 10/23/2012).#

520120014_Final Order_11162012_text.pdf, page 32 Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.905(a), which states: § 192.905 -- How does an operator identify a high consequence area? (a) General. To determine which segments of an operator’s transmission pipeline system are covered by this subpart, an operator must identify the high consequence areas. An operator must use method (1) or (2) from the definition in §192.903 to identify a high consequence area. An operator may apply one method to its entire pipeline system, or an operator may apply one method to individual portions of the pipeline system. An operator must describe in its integrity management program which method it is applying to each portion of the operator’s pipeline system. The description must include the potential impact radius when utilized to establish a high consequence area. (See appendix E.I. for guidance on identifying high consequence areas.) The Notice alleged that Respondent violated 49 C.F.R. § 192.905(a) by failing to identify a segment of the Montalvo Sales Gas pipeline as a segment that could affect a High Consequence Area (HCA). Specifically, the Notice alleged that the segment traversed an area within the calculated Potential Impact Radius (PIR) of 70 feet from the California Mushroom Farm in Oxnard, California, which met the definition of an Identified Site. 2 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. § 192.905(a) by failing to identify a segment of the Montalvo Sales Gas pipeline as a segment that could affect a HCA. Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.921(a)(1), which states: § 192.921 -- How is the baseline assessment to be conducted? (a) Assessment methods. An operator must assess the integrity of the line pipe in each covered segment by applying one or more of the following methods depending on the threats to which the covered segment is susceptible. An operator must select the method or methods best suited to address the threats identified to the covered segment (See §192.917). (1) Internal inspection tool or tools capable of detecting corrosion, and any other threats to which the covered segment is susceptible. An operator must follow ASME/ANSI B31.8S (incorporated by reference, see §192.7), section 6.2 in selecting the appropriate internal inspection tools for the covered segment. The Notice alleged that Respondent violated 49 C.F.R. § 192.921(a)(1) by failing to specify an internal inspection tool capable of detecting corrosion and other threats to which the pipeline is susceptible, such as stress corrosion cracking or electric resistance welded seam failure. 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. § 192.921(a)(1) by failing to specify an internal inspection tool for assessing its pipeline capable of detecting corrosion and other 2 The term “Identified Site” is defined in 49 C.F.R. § 192.903 and includes buildings such as office buildings occupied by twenty or more persons on at least five days a week for ten weeks in any twelve month period.#

520120014_Final Order_11162012_text.pdf, page 43 threats to which the pipeline is susceptible. 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. §§ 192.905(a) and 192.921(a)(1), respectively. 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 applicable safety standards established under chapter 601. The Director indicates that Respondent has taken the following actions specified in the proposed compliance order: 1. With respect to the violation of § 192.905(a) (Item 1), Respondent has revised its integrity management plan to include the specified segment as a HCA segment; and 2. With respect to the violation of § 192.921(a)(1) (Item 2), Respondent has revised its assessment method matrix to ensure appropriate internal inspection tools are selected in accordance with ASME/ANSI B31.8S. 3. Respondent reported the costs to achieve compliance as requested. 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 ITEMS With respect to Items 3 and 4, the Notice alleged probable violations of Part 192 but did not propose a civil penalty or compliance order for these items. Therefore, these are considered to be warning items. The warnings were for: 49 C.F.R. § 192.937(a) (Item 3) ─ Respondent’s alleged failure to reassess the Union Island pipeline in accordance with its assessment schedule; and 49 C.F.R. § 192.945(a) (Item 4) ─ Respondent’s alleged failure to measure program effectiveness on a semi-annual basis and failure to report the 2010 performance measures to OPS. Venoco presented information in its Response showing that it had taken certain actions to address the cited items. If OPS finds a violation of any of these items, Respondent may be subject to future enforcement action.#

520120014_Final Order_11162012_text.pdf, page 54 The terms and conditions of this Final Order [CPF No.:5-2012-0014] are effective upon service in accordance with 49 C.F.R. § 190.5. ___________________________________ __________________________ Jeffrey D. Wiese Date Issued Associate Administrator for Pipeline Safety#