# FAIRBANKS NATURAL GAS — Notice of Amendment

- **operation:** document
- **citation:** CPF 520130001M
- **title:** FAIRBANKS NATURAL GAS — Notice of Amendment
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2013-02-26
- **effective on:** Not available
- **summary:** CLOSED notice of amendment citing 192.1007(a)(1), 192.1007(a)(3), 192.1007(b), 192.1007(c), 192.1007(e)(1), 192.1007(f), 192.1011.
- **machine formats:** - **json:** https://regulus.evalyn.ai/document/phmsa-enforcement-520130001m.json
- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-520130001m.md
- **app url:** https://regulus.evalyn.ai/document/phmsa-enforcement-520130001m
- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/520130001M
**body:**

Notice of Amendment involving FAIRBANKS NATURAL GAS. PHMSA's enforcement data identifies the cited regulations as 192.1007(a)(1),  192.1007(a)(3),  192.1007(b),  192.1007(c),  192.1007(e)(1),  192.1007(f),  192.1011. The case was opened on 2013-02-26 and is reported as closed as of 2013-05-20. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

520130001M_closure letter_05202013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520130001M/520130001M_closure%20letter_05202013.pdf

520130001M_closure letter_05202013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520130001M/520130001M_closure%20letter_05202013_text.pdf

520130001M_notice of amendment_02262013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520130001M/520130001M_notice%20of%20amendment_02262013.pdf

520130001M_notice of amendment_02262013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520130001M/520130001M_notice%20of%20amendment_02262013_text.pdf

520130001M_closure letter_05202013_text.pdf

VIA UPS GROUND: 1Z WR2 588 03 9828 1717
May 20, 2013
Mr. Dan Britton
President and CEO
Fairbanks Natural Gas, LLC
3408 International Way
Fairbanks, AK 99701
CPF 5-2013-0001M
Dear Mr. Britton:
On September 9-12, 2012, representatives from the Pipeline and Hazardous Materials Safety
Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, conducted an
on-site pipeline safety inspection of Fairbanks Natural Gas’ (FNG) procedures in Fairbanks,
Alaska. As a result of the inspection, FNG was issued a Notice of Amendment on February,
19, 2013, which proposed amendment of your procedures.
FNG submitted its amended procedures on April 29, 2013. My staff reviewed the amended
procedures, and it appears that the inadequacies outlined in this Notice of Amendment have
been corrected.
This letter is to inform you no further action is necessary and this case is now closed. Thank
you for your cooperation.
Sincerely,
Dennis Hinnah
Deputy Director, Western Region
Pipeline and Hazardous Materials Safety Administration
cc: PHP-60 Compliance Registry
PHP-500 Jon Strawn (#139392)

520130001M_notice of amendment_02262013_text.pdf

NOTICE OF AMENDMENT
UPS 2-DAY AIR - 1Z WR2 588 03 9156 1687
February 26, 2013
Mr. Dan Britton
President and Chief Executive Officer
Fairbanks Natural Gas
3408 International Way
Fairbanks, AK 99701
CPF 5-2013-0001M
Dear Mr. Britton:
On September 9-11, 2012, representatives of the Pipeline and Hazardous Materials Safety
Administration (PHMSA), pursuant to Chapter 601 of 49 United States Code, inspected
Fairbanks Natural Gas’ (FNG) procedures and records for their Distribution Integrity
Management Program (DIMP) in Fairbanks, Alaska.
As a result of the inspection, PHMSA has identified inadequacies found within FNG’s DIMP
plan as described below:
1. §192.1007 What are the required elements of an integrity management plan?
A written integrity management plan must contain procedures for developing
and implementing the following elements:
(a) Knowledge. An operator must demonstrate an understanding of its gas
distribution system developed from reasonably available information.
(1) Identify the characteristics of the pipeline's design and operations and the
environmental factors that are necessary to assess the applicable threats and
risks to its gas distribution pipeline.
FNG’s DIMP procedures do not adequately describe the data sources used to gather
information and knowledge of the system, e.g., subject matter experts consulted, information
gathered from specific Operation and Maintenance and Inspection (OM&I) forms, records,
system maps, etc.) Furthermore, the data sources that are used do not go beyond those
recommended by the Simple, Handy, Risk-based Integrity Management Plan (SHRIMP) that



was developed by the American Public Gas Association to assist distribution companies in
creating and implementing a DIMP. A SHRIMP plan is starting point for creating a
comprehensive DIMP, and must be expanded to include the unique risk threats that a
distribution company may be exposed to. The FNG SHRIMP reviewed do not reflect unique
threats to the system imposed by Arctic conditions. There are other data sources that must be
considered, e.g. the condition of connections at a dwelling to see if there are problems due to
frost heaving that may have shifted the ground and joint and fitting connections. In addition,
the PHMSA inspectors found that the risks posed by gas corrosivity and components that
limited Maximum Allowable Operating Pressure were not well defined.
Chapter 3, “Knowledge of System” includes no provisions for periodic updates (i.e.
reviewing, collecting and consolidating of data sources beyond the two year plan review
period. Data sources exist that are not captured in the procedures other than those listed in
Section 11.2. This section is only the minimum of data sources recommended by the
SHRIMP software and does not reflect data sources that are needed to perform a threat
assessment that takes into account the unique Arctic environment. Additionally, procedures
to consolidate information on a periodic basis are not provided in Chapter 3, Knowledge of
the Distribution System.
FNG did not adequately describe the process (who, what, when, where) to improve the
operator’s knowledge of its gas distribution system, especially the environmental risk factors
that may pose a risk to its pipelines and appurtenances. FNG’s DIMP plan must provide
procedures for identifying, listing, and collecting, as appropriate, additional data and
information that is needed to fill gaps in knowledge and information due to missing,
inaccurate, or incomplete records, and to consolidate information on a periodic basis.
2. §192.1007 What are the required elements of an integrity management plan?
A written integrity management plan must contain procedures for developing
and implementing the following elements:
(a) Knowledge. An operator must demonstrate an understanding of its gas
distribution system developed from reasonably available information.
(3) Identify additional information needed and provide a plan for gaining that
information over time through normal activities conducted on the pipeline (for
example, design, construction, operations or maintenance activities).
FNG’s DIMP process does not adequately identify additional information needed to fill
information gaps that could be used to increase the knowledge of their system.
A procedure must be developed so that if an incident occurs, there is a way to collect
information to see if the problem exists on other parts of the system. FNG’s DIMP plan,
Chapter 11.1, Section C, states, "The following gaps identified by FAIRBANKS NATURAL
GAS: FAIRBANKS NATURAL GAS will implement as follows; No additional information
needed."
FNG’s DIMP must include a process to gain additional information over time.
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3. §192.1007 What are the required elements of an integrity management plan? A
written integrity management plan must contain procedures for developing and
implementing the following elements:
(b) Identify threats. The operator must consider the following categories of
threats to each gas distribution pipeline: corrosion, natural forces, excavation
damage, other outside force damage, material or welds, equipment failure,
incorrect operations, and other concerns that could threaten the integrity of its
pipeline. An operator must consider reasonably available information to identify
existing and potential threats. Sources of data may include, but are not limited
to, incident and leak history, corrosion control records, continuing surveillance
records, patrolling records, maintenance history, and excavation damage
experience.
FNG’s DIMP plan does not detail the specific processes used to identify all existing and
potential threats that describe how subject matter experts gather and input information into
DIMP for the threat assessment. FNG’s DIMP has no procedures to gather data beyond
those risk categories explicitly listed in SHRIMP, either on FNG’s unique system or trends
found across the industry as they are identified. FNG’s DIMP plan procedures do not
address one of the most common threats unique to your system, frost heave. The FNG DIMP
is also incomplete because it does not describe procedures for how it will receive updates
from outside sources and consider them for incorporation into your DIMP. Outside sources
must include, but are not limited to, the following:
• American Gas Association;
• Informal meetings with Enstar Natural Gas; and
• PHMSA Advisory Bulletins.
FNG must consider all available information including how to solicit and gather information
for the threat assessment analysis, data identifying all potential and existing threats and all
information required for creating a comprehensive threat analysis.
4. §192.1007 What are the required elements of an integrity management plan?
A written integrity management plan must contain procedures for developing
and implementing the following elements:
(c) Evaluate and rank risk. An operator must evaluate the risks associated with
its distribution pipeline. In this evaluation, the operator must determine the
relative importance of each threat and estimate and rank the risks posed to its
pipeline. This evaluation must consider each applicable current and potential
threat, the likelihood of failure associated with each threat, and the potential
consequences of such a failure. An operator may subdivide its pipeline into
regions with similar characteristics (e.g., contiguous areas within a distribution
pipeline consisting of mains, services and other appurtenances; areas with
common materials or environmental factors), and for which similar actions
likely would be effective in reducing risk….
(f) Periodic Evaluation and Improvement. An operator must re-evaluate threats
and risks on its entire pipeline and consider the relevance of threats in one
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location to other areas. Each operator must determine the appropriate period
for conducting complete program evaluations based on the complexity of its
system and changes in factors affecting the risk of failure. An operator must
conduct a complete program re-evaluation at least every five years. The operator
must consider the results of the performance monitoring in these evaluations.
FNG’s DIMP procedures do not provide an adequate process to identify existing and
potential threats AND to re-evaluate the rankings and justify those rankings on an ongoing
basis. FNG must re-evaluate the risk ranking process by determining the relative risk of each
pipeline threat and validate the results through FNG’s DIMP. FNG should also add, “natural
forces” and “workmanship defects” in addition to “outside force damage” caused by
excavation. Based on information reviewed by the inspectors, above ground vehicle strikes
and “poor workmanship” downstream of the meters are higher risks not currently considered
in their risk rankings. FNG must also document justification of its ranking on an ongoing
basis in the DIMP procedures in Section 5, page 14).
5. §192.1007(e) What are the required elements of an integrity management plan?
A written integrity management plan must contain procedures for developing
and implementing the following elements:
(e) Measure performance, monitor results, and evaluate effectiveness.
(1) Develop and monitor performance measures from an established baseline to
evaluate the effectiveness of its IM program. An operator must consider the
results of its performance monitoring in periodically re-evaluating the threats
and risks. These performance measures must include the following:
(i) Number of hazardous leaks either eliminated or repaired as required by §
192.703(c) of this subchapter (or total number of leaks if all leaks are repaired
when found), categorized by cause;
(ii) Number of excavation damages;
(iii) Number of excavation tickets (receipt of information by the underground
facility operator from the notification center);
(iv) Total number of leaks either eliminated or repaired, categorized by cause;
(v) Number of hazardous leaks either eliminated or repaired as required by §
192.703(c) (or total number of leaks if all leaks are repaired when found),
categorized by material; and
(vi) Any additional measures the operator determines are needed to evaluate the
effectiveness of the operator's IM program in controlling each identified threat.
FNG’s DIMP procedures do not contain an adequate process for establishing baselines for
performance measures from which to monitor effectiveness of its DIMP program. FNG does
not have an adequate process for taking additional safety measures after the operator
integrates and evaluates all known risks. FNG must have a process to monitor the
performance measures in compliance with §192.1007(e) and to implement additional risk-
reducing measures where applicable. Further, FNG’s procedures are inadequate to measure
effectiveness of additional risk-reducing measures as required by §192.1007(e)(1)(vi) since
no preventative steps are being taken beyond those required by Federal pipeline safety
regulations. Regardless of the fact that currently no additional risk reduction measures are
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being proposed or implemented, procedures must exist to establish a performance baseline
which future improvements can be measured against.
6. §192.1007(f) What are the required elements of an integrity management plan?
A written integrity management plan must contain procedures for developing
and implementing the following elements:
(f) Periodic Evaluation and Improvement. An operator must re- evaluate
threats and risks on its entire pipeline and consider the relevance of threats in
one location to other areas. Each operator must determine the appropriate
period for conducting complete program evaluations based on the complexity of
its system and changes in factors affecting the risk of failure. An operator must
conduct a complete program re-evaluation at least every five years. The operator
must consider the results of the performance monitoring in these evaluations.
FNG’s DIMP procedures do not contain an adequate process that describes the details of how
it will conduct periodic evaluations. The DIMP periodic evaluations process does not contain
an evaluation of program effectiveness to determine if modifications to the program need to
be made including risk prioritization results, risk control practices, failure analysis results and
performance measures. The written procedures for periodic review do not include the
frequency of review (not to exceed 5 years, based on the complexity of the system and
changes in factors affecting the risk of failure), the verification of general information (e.g.
contact information, form names, action schedules, etc.), or incorporating new system
information (re-evaluating threats and risks, reviewing the frequency and the effectiveness of
the measures to reduce risk, and modifying measures to reduce risk).
7. §192.1011 What records must an operator keep? An operator must maintain
records demonstrating compliance with the requirements of this subpart for at
least 10 years. The records must include copies of superseded integrity
management plans developed under this subpart.
FNG’s procedures are inadequate and general in nature in that FNG’s DIMP plan does not
contain an adequate process to record the various forms and documents used in the threat
identification section, and it does not require that the documents be retained for 10 years.
FNG’s DIMP must include the requirement that the OM&I forms and documentation used to
demonstrate compliance with §192 Subpart P be retained for 10 years.
Response 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 publicly available. If you believe that any portion of your responsive material qualifies
for confidential 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
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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.
If, after opportunity for a hearing, your plans or procedures are found inadequate as alleged
in 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 contesting this Notice, we propose that
you submit your amended procedures to my office within thirty (30) days of receipt of this
Notice. This period may be extended by written request for good cause. Once the
inadequacies identified herein have been addressed in your amended procedures, this
enforcement action will be closed.
It is requested (not mandated) that Fairbanks Natural Gas maintain documentation of the
safety improvement costs associated with fulfilling this Notice of Amendment
(preparation/revision of plans, procedures) and submit the total to Chris Hoidal, Director,
Western Region, Pipeline and Hazardous Materials Safety Administration.
In correspondence concerning this matter, please refer to CPF 5-2013-0001M and send all
documents to our office at 188 W. Northern Lights Blvd., Suite 520, Anchorage AK, 99503,
and for each document you submit please provide a copy in electronic format whenever
possible.
Sincerely,
Dennis Hinnah
Deputy Director, Western Region
Pipeline and Hazardous Materials Safety Administration
Enclosure: Response Options for Pipeline Operators in Compliance Proceedings
cc: PHP-60 Compliance Registry
PHP-500 J. Strawn (#139392)
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