{"operation":"document","citation":"CPF 520145003S","title":"ALYESKA PIPELINE SERVICE CO — Safety Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2014-03-13","effective_on":null,"summary":"CLOSED safety order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520145003s.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520145003s.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520145003s","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520145003S","body":"Safety Order involving ALYESKA PIPELINE SERVICE CO. The dataset does not identify a cited regulation for this case. The case was opened on 2014-03-13 and is reported as closed as of 2015-06-09. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520145003S_Closure Letter_06092015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Closure%20Letter_06092015.pdf\n\n520145003S_Closure Letter_06092015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Closure%20Letter_06092015_text.pdf\n\n520145003S_Consent Agreement_06272014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Consent%20Agreement_06272014.pdf\n\n520145003S_Consent Agreement_06272014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Consent%20Agreement_06272014_text.pdf\n\n520145003S_Consent Order_06272014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Consent%20Order_06272014.pdf\n\n520145003S_Consent Order_06272014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Consent%20Order_06272014_text.pdf\n\n520145003S_Notice of Proposed Safety Order_03132014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Notice%20of%20Proposed%20Safety%20Order_03132014.pdf\n\n520145003S_Notice of Proposed Safety Order_03132014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520145003S/520145003S_Notice%20of%20Proposed%20Safety%20Order_03132014_text.pdf\n\n520145003S_Notice of Proposed Safety Order_03132014_text.pdf\n\nTRANSMITTED VIA EMAIL &\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMarch 13, 2014\nMr. Tom Barrett\nPresident\nAlyeska Pipeline Service Company\n3700 Center Point Drive\nAnchorage, AK 99503\nCPF 5-2014-5003S\nDear Mr. Barrett:\nEnclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced\ncase. The Notice proposes that you take certain measures with respect to the Trans-Alaska\nPipeline System (TAPS) operated by Alyeska Pipeline Service Company (Alyeska) to\nensure pipeline safety. Options for responding are set forth in this Notice. Your receipt of\nthe Notice constitutes service of this document under 49 C.F.R. §190.5.\nWe look forward to a successful resolution of this matter to ensure pipeline safety. Please\ndirect any questions on this matter to me at 720-963-3160.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nEnclosure: Notice of Proposed Safety Order\nCopy of 49 CFR § 190.239\ncc: Mr. Mike Joynor, Vice President, Operations, Alyeska Pipeline Service Company\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWESTERN REGION\nLAKEWOOD, COLORADO\n____________________________________\nIn the Matter of )\nAlyeska Pipeline Service Company, ) CPF 5-2014-5003S\n)\n)\n)\nRespondent )\n___________________________________ )\nNOTICE OF PROPOSED SAFETY ORDER\nBackground and Purpose\nPursuant to Chapter 601 of title 49, United States Code, the Pipeline and Hazardous Materials\nSafety Administration (PHMSA) has initiated an investigation into the safety of the Trans-\nAlaska Pipeline System (TAPS) operated by Alyeska Pipeline Service Company (Alyeska) as\na result of a situation that was discovered on September 8, 2013. On that day, during\nscheduled valve maintenance, Alyeska discovered a large piece of metal in one of the\nmainline backpressure control valves at the Valdez Marine Terminal (VMT). The piece of\nmetal was identified as a 10” diameter section of the mainline pipe wall (coupon). The\ncoupon had a 2” vent pipe and Thread-O-Ring (TOR) attached to it. The coupon was traced\nback to its point of origin at Mile Post (MP) 385.77 using physical identifiers and recent in-\nline inspection (ILI) results. A high point vent encapsulation had been installed at this\nlocation on August 13, 2012.\nPHMSA and other members of the Joint Pipeline Office (JPO) observed and/or evaluated the\nactions taken by Alyeska to restore the integrity at MP 385.77, investigate the cause of the\npipe wall failure, simulate the failure, and assess the condition of the other encapsulations that\nutilized epoxy filler (approximately 90) on TAPS. The encapsulations were installed between\n2010 and 2013. Despite significant field testing to date, PHMSA believes Alyeska still has\nnot fully addressed the integrity conditions at all of the other encapsulation sites. Alyeska\nproposed a plan to address many of our remaining integrity concerns through additional field\ntesting on January 31, 2014, but that testing cannot be accomplished until weather and site\nconditions improve. As a result of the investigations to date, it appears that a condition or\nconditions exist on your pipeline facilities that pose a pipeline integrity risk to public safety,\nproperty or the environment. Pursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of\n\n\n\n2\nProposed Safety Order, notifying you of the preliminary findings of the investigation, and\nproposing that you take measures to ensure that the public, property, and the environment are\nprotected from the potential risk.\nPreliminary Findings\n• Alyeska owns and operates the TAPS, which consists of approximately 800 miles\nof pipeline. The pipeline transports crude oil from the North Slope of Alaska to\nthe VMT. The pipeline is constructed with approximately 400 miles of above-\nground (supported/insulated) pipe and 400 miles of buried pipe. The failure\nlocation is approximately 70 pipeline miles north of Fairbanks, Alaska, and was in\nan above-ground segment of the pipeline.\n• The coupon was discovered on September 8, 2013. There was no discharge of oil\nas a result of the failure. Alyeska continued to operate TAPS and maintained\nsteady operating pressure at the failure site throughout the entire incident.\n• An in-line inspection (ILI) of TAPS between Pump Station 4 (PS4) and the VMT\nwas conducted in the spring of 2013.\n• Using physical identifiers and ILI data from the Spring 2013 pig run, Alyeska\ntraced the origin of the 10” coupon to a construction-era high point vent at MP\n385.77, approximately 70 miles north of Fairbanks. The vent had been\nencapsulated on August 13, 2012, to mitigate a potential integrity risk. The\nencapsulation was a 10” cap filled with epoxy.\n• Alyeska performed visual monitoring and ultrasonic testing (UT) at MP 385.77.\nNo abnormal conditions were observed at the site. A UT survey of the area of the\n10” encapsulation was conducted to determine the remaining mainline material\nunder the encapsulation and to examine the welds that bond the encapsulation to\nthe mainline pipe.\n• The circumference of the hole in the mainline pipe wall extended under the wall of\nthe encapsulation, and potentially under the fillet weld that held the encapsulation\nto the carrier pipe. In one area the circumference of the hole was approximately\n0.140 inches from the toe of the fillet weld. After evaluating the available\ninformation, Alyeska stated that there was no imminent threat of leakage or\nrupture while continuing to run in a steady state condition. Nevertheless, PHMSA\nconsidered the long term integrity of the existing encapsulation to be at risk.\n• Alyeska completed installation of a full-encirclement, pressure-containing sleeve\n(a 48” split tee and 24” cap and flange) at MP 385.77 on September 14, 2013. The\nsleeve was installed according to Alyeska’s sleeve installation procedures.\nPHMSA and the Joint Pipeline Office (JPO) required Alyeska to take extensive\n\n\n\n3\nprecautions during installation in order to avoid imposing lateral loads to the\ndamaged encapsulation.\n• In 2009, Alyeska identified a number of high-point vents and low-point drains on\nTAPS for risk remediation by encapsulation. In 2010, Alyeska completed the first\nfive encapsulations. From 2011 to 2013, Alyeska continued to encapsulate the\nremaining vents and drains, and used a procedure that included filling the\nencapsulation with epoxy to mitigate the potential for deadleg piping. The five\nencapsulations that were completed in 2010 did not include the use of epoxy. The\nencapsulation diameter sizes are 6 inches (at approximately 85 locations), 10\ninches (at 4 locations, including the failure site at MP 385), and 12 inches (at 1\nlocation).\n• After the discovery of the coupon at VMT, Alyeska conducted onsite radiographic\nand magnetic particle examinations on three (3) 10”, one (1) 12”, and eleven (11)\n6” diameter encapsulations. Of the eleven (11) 6” encapsulations examined, six\n(6) encapsulations were installed after the Spring 2013 ILI run, one encapsulation\nwas installed prior to the Spring 2013 ILI run, and four (4) encapsulations were\ninstalled on a pipeline sleeve, near the Steele Creek area. Initially, no UT (straight\nbeam, shear wave, or phased array) of these sites was done to assess the weld or\ncarrier pipe where the encapsulations were mounted.\n• PHMSA staff verbally expressed concern to Alyeska’s compliance staff regarding\nthe need to evaluate the condition of other encapsulations on September 10, 2013.\nFollowing receipt of Alyeska’s DRAFT: Prioritization and Possible Non-\nDestructive Testing Techniques of Epoxy-Filled Encapsulations (prepared by\nKiefner & Associates) on October 11, 2013, PHMSA requested that Alyeska\nperform UT on the four remaining exposed (at the time) 10” and 12”\nencapsulations, and a sampling of the other encapsulations, to determine whether\nor not cracks existed within the encapsulations. Alyeska agreed to conduct phased\narray and shear wave UT of one (1) 10” encapsulation at MP 361.45 on October\n17, 2013 and completed that testing on October 19, 2013. The other 10” and 12”\nencapsulations were not tested and the below ground encapsulations were reburied.\n• On September 19, 2013, Alyeska conducted a mock-up demonstration of the\nmethods used to install epoxy filled encapsulations covering high-point vents. The\npurpose of the mock-up was two-fold: (1) to screen for field investigation\nprioritization of which encapsulations to examine, and (2) to validate the\nnondestructive testing procedure. The mock-up consisted of an open-ended\nsegment of 48” pipe with two 2” piping attachments welded to the pipe segment.\nThe 2” attachments simulated the existing vents on TAPS. Two sizes of\nencapsulations were welded over the top of the 2” attachments: a 6” cap and a 10”\ncap. The mock-up was constructed using piping components designed, fabricated,\nand tested similarly to those used to install the encapsulations on the mainline from\n2011 through 2013. The procedure used on the mock-ups was not identical to the\nprocedure used in the original mainline pipeline encapsulations. Approximately\n\n\n\n4\n3½ hours after the initial epoxy pour into the 10” encapsulation, the 48” pipe wall\ncontained within the internal circumference of the 10”encapsulation bulged and\nthen failed during the curing process. The failure resulted in the pipe wall material\n(approximately 10” in diameter) and epoxy being injected into the 48” pipe. The\nexplosion of the mainline failure within the mock-up’s 10” encapsulation resulted\nin a safety incident at the lab where the test was performed, which Alyeska\ninvestigated. Alyeska provided a report of the safety incident to PHMSA.\n• The 10” coupon found at the VMT was sent to Kiefner and Associates for analysis.\nOn November 22, 2013, Kiefner and Associates submitted their report to Alyeska\ntitled “Examination of a Failed Pipe Coupon from an Epoxy-filled Encapsulation\nat MP-385 on the Trans-Alaska Pipeline.” Kiefner’s report concluded that, “The\ncoupon of carrier pipe was separated within the base of the encapsulation due to\nhigh pressure condition inside the encapsulation….” and “… High pressure within\nthe encapsulation is plausible given that the ventilation fitting in the top of the\nencapsulation was plugged with cured epoxy.”\n• Alyeska sent its Pipeline MP 385.77 Incident Investigation Report to PHMSA on\nNovember 22, 2013. Alyeska’s Investigation Report (Page 3 of 29) concluded that\nthe epoxy created a mechanism which caused the “punch-out” of the pipe coupon.\nThe report also stated that a small amount of oil leaked from the encapsulation\nduring the installation.1\n• Alyeska conducted an analysis of the Spring 2013 ILI data at each of the high\npoint vent and low point drain locations. This analysis is described in a report\ntitled “ILI Encapsulation Analysis Report Regarding PLMP 385.77 Incident”\ndated November 6, 2013. The report concluded that the ILI data “confirmed that\nno locations other than PLMP 385.77 showed indications of a loss of pipe wall\nmaterial.”\n• Six (6) encapsulations (one (1) each at MP 548.59, 586.68, 585.84, and 585.87,\nand two (2) at MP 548.80) were installed after the Spring 2013 ILI was conducted.\nTherefore, no current ILI information is available for these six vent/drain locations\nafter installation.\n• Alyeska concluded that the 10” coupon dislodgement at MP 385.77 was due to a\nhigh pressure condition inside of the encapsulation and that the epoxy injected into\nthe encapsulation created a mechanism for generating the high pressure. There are\n1 Alyeska’s crew welded the encapsulation over the TOR high-point vent, injected epoxy, and then: “The crew\ninserted clear vinyl tubing into the pipe with a plastic bag attached at the lower end to catch any epoxy that might\nescape the spool due to expansion as the epoxy cured. When the crews returned to MP-385.77 on the morning of\n08/14/12, they found crude oil had leaked from the ½” Thread-O-Let (TOL) fitting at the top of the\nencapsulation, entered the vinyl tubing with about ½ cup in the plastic bag, and some oil had escaped to run\ndown the pipe with a few drops to the ground below. They immediately notified the Alyeska construction\nmanager, HCC management, and filed a spill report (Ll#21563). The threaded pipe used to catch expanding\nepoxy was removed and the ½” plug was installed.”\n\n\n\n5\na number of other vent/drain locations (approximately 90) that were installed in\nthe 2011-2013 timeframe using epoxy to fill the encapsulation. The conditions of\nthe other encapsulations are unknown in the following areas: 1) cracking of the\ncarrier pipe below the encapsulation, 2) internal pressure in the encapsulation\neither as a result of the epoxy curing process or crude oil leakage, and 3) integrity\nof encapsulation body and weld integrity. Occurrence of any or all of these items\nmay pose a risk of a leak or carrier pipe failure.\n• PHMSA sent a Request for Specific Information (RFSI) to Alyeska on September\n19, 2013. Alyeska responded on November 7, 2013, and provided most of the\nrequested items. PHMSA reviewed the information and sent an email on\nDecember 16, 2013, documenting items that had been requested in the RFSI that\nAlyeska had not yet provided. Alyeska and PHMSA met on January 23, 2013 to\ndiscuss the outstanding items. The outstanding items have not been provided to\nPHMSA.\n• On December 16, 2013, the JPO provided Alyeska with a list of 37 key issues\nrequiring further explanation or analysis, Letter No. 13-544-AAS. On January 31,\n2014, Alyeska responded to the JPO request by Government Letter No. 29695. On\nFebruary 7, 2014 Alyeska submitted supplemental information by Government\nLetter 29798. The JPO responded to Alyeska on February 14, 2014 by Letter No.\n14-032-AS. Alyeska submitted supplemental information in response to JPO\nLetter No. 13-544-AS by Government Letter 29855 on February 28, 2014.\nProposed Issuance of Safety Order\nSection 60117(l) of Title 49, United States Code, provides for the issuance of a safety order,\nafter reasonable notice and the opportunity for a hearing, requiring corrective measures,\nwhich may include physical inspection, testing, repair, or other action, as appropriate. The\nbasis for making the determination that a pipeline facility has a condition or conditions that\npose a pipeline integrity risk to public safety, property, or the environment is set forth both in\nthe above-referenced statute and 49 C.F.R. § 190.239, a copy of which is enclosed.\nAfter evaluating the foregoing preliminary findings of fact and considering the age of the pipe\ninvolved, the manufacturer, the hazardous nature of the product transported and the pressure\nrequired for transporting such product, the characteristics of the geographical areas where the\npipeline facility is located, the uncertainty regarding the integrity of the other encapsulations,\nand the likelihood that the conditions could worsen or develop on other areas of the pipeline\nand potentially impact its serviceability, it appears that the continued operation of the affected\npipeline without corrective measures would pose a pipeline integrity risk to public safety,\nproperty, or the environment.\nAccordingly, PHMSA issues this Notice of Proposed Safety Order to notify Alyeska of the\nproposed issuance of a safety order and to propose that it take the measures specified herein to\naddress the potential risk.\n\n\n\n6\nResponse to this Notice\nIn accordance with § 190.239, you have 30 days following receipt of this Notice to submit a\nwritten response to the official who issued the Notice. If you do not respond within 30 days,\nthis constitutes a waiver of your right to contest this Notice and authorizes the Associate\nAdministrator for Pipeline Safety to find facts as alleged in this Notice without further notice\nto you and to issue a Safety Order.\nIn your response, you may notify that official that you intend to comply with the terms of the\nNotice as proposed, or you may request that an informal consultation be scheduled (you will\nalso have the opportunity to request an administrative hearing before a safety order is issued).\nInformal consultation provides you with the opportunity to explain the circumstances\nassociated with the risk conditions alleged in the notice and, as appropriate, to present a\nproposal for a work plan or other remedial measures, without prejudice to your position in any\nsubsequent hearing. If you and PHMSA agree within 30 days of informal consultation on a\nplan and schedule for you to address each identified risk condition, we may enter into a\nwritten consent agreement (PHMSA would then issue an administrative consent order\nincorporating the terms of the agreement).\nIf a consent agreement is not reached, or if you have elected not to request informal\nconsultation, you may request an administrative hearing in writing within 30 days following\nreceipt of the Notice or within 10 days following the conclusion of an informal consultation\nthat did not result in a consent agreement, as applicable. Following a hearing, if the Associate\nAdministrator finds the facility to have a condition that poses a pipeline integrity risk to the\npublic, property, or the environment in accordance with §190.239, the Associate\nAdministrator may issue a safety order.\nBe advised that all material you submit in response to this enforcement action is subject to\nbeing made publicly available. If you believe that any portion of your responsive material\nqualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete original\ndocument you must provide a second copy of the document with the portions you believe\nqualify for confidential treatment redacted and an explanation of why you believe the redacted\ninformation qualifies for confidential treatment under 5 U.S.C. 552(b).\nIn your correspondence on this matter, please refer to CPF 5-2014-5003S and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nProposed Corrective Measures\nPursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to\nAlyeska a Safety Order incorporating the following requirements with respect to the affected\npipeline:\n1. Develop a protocol and schedule for increased monitoring of the encapsulations.\nPossible monitoring methods could include installing soil gas probes at all locations\n\n\n\n7\n2. 3. 4. 5. 6. and leaving certain locations exposed. Submit monitoring protocol and\nimplementation schedule to PHMSA for approval within 30 days of receiving this\norder.\nComplete a phased array and shear wave ultrasonic testing of the three (3) remaining\n10” and 12” encapsulations, and all 6” encapsulations that were installed after the\nSpring 2013 ILI run. Complete the field testing by July 15, 2014. If field testing at\nindividual locations cannot be completed by July 15, 2014 due to site safety concerns,\nAlyeska may propose an alternate completion date with supporting justification to\nPHMSA. Submit the testing report (test results, analysis of the results, conclusions\nreached, etc.) for each individual location to PHMSA no later than 30 days after\ntesting is completed at each location.\nComplete a phased array and shear wave ultrasonic testing, magnetic particle\nexamination, and radiographic examination of at least 10% of the remaining 6”\nencapsulations. The specific locations to be evaluated should be chosen based on\nspecific site risk factors such as: atmospheric temperature during encapsulation\ninstallation, pipeline pressure during encapsulation installation, condition of TOR at\ntime of encapsulation, and ILI data. Submit the list of 6” encapsulations to be\nexamined to PHMSA for approval, including the justification of why each location\nwas selected, within 30 days of receiving this order.\nComplete field testing of the encapsulations identified in Item 3 and approved by\nPHMSA by August 15, 2014. If field testing at individual locations cannot be\ncompleted by August 15, 2014, due to safety concerns, propose an alternate\ncompletion date with supporting justification. Submit the testing report (test results,\nanalysis of the results, conclusions reached, etc.) for each individual location to\nPHMSA no later than 30 days after testing is completed at each location.\nRemediate all integrity threats identified by the testing required by items 2 and 4\nabove by September 30, 2014.\nDevelop a protocol and schedule to test the pressure in the encapsulations and a plan\nfor relieving the pressure as necessary. Submit protocol and schedule to PHMSA\nwithin 30 days of receiving this order. Complete the testing and relieve the pressure,\nas necessary, within 1 year of receiving the order.\nThe above actions proposed to be required by this Notice of Proposed Safety Order are in\naddition to and do not waive any requirements that apply to Alyeska’s pipeline system under\n49 C.F.R. Parts 190 through 199, under any other order issued to Alyeska under authority of\n49 U.S.C. Chapter 601, or under any other provision of Federal or State law.\nAfter receiving and analyzing additional data in the course of this proceeding and\nimplementation of the corrective measures, PHMSA may identify other safety measures that\n\n\n\n8\nneed to be taken. In that event, Alyeska will be notified of any proposed additional measures\nand any amendments to the work plan or Safety Order.\n___________________________________ __________________\nChris Hoidal Date issued\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 T. Johnson (#144579)\n\n520145003S_Closure Letter_06092015_text.pdf\n\nCERTIFIED MAIL—RETURN RECEIPT REQUESTED\nJune 9, 2015\nMr. Tom Barrett\nPresident\nAlyeska Pipeline Service Company\n3700 Centerpoint Drive\nAnchorage, AK 99503\nRE: CPF 5-2014-5003S\nConsent Agreement Closure\nDear Mr. Barrett:\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) issued the above\nreferenced Consent Agreement (CA) to Alyeska Pipeline Service Company (Alyeska) by\nConsent Order, dated June 27, 2014. Since issuance of the Consent Agreement, Alyeska has\nworked toward completing the requirements of the Consent Agreement. PHMSA has also\nbeen closely monitoring and conducting field validation of Alyeska’s progress.\nThis letter acknowledges PHMSA’s receipt of two recent Alyeska Government Letters,\nprovides an update regarding the status of the CA, and closes the CA. The two recent letters\n(both Subject: CPF No. 5-2014-5003S, Encapsulation Consent Agreement) are Alyeska\nGovernment Letter Nos. 32503 and 32886, dated April 13, 2015 and June 4, 2015,\nrespectively.\nPHMSA’s review of the information submitted by Alyeska to date indicates that Alyeska has\ncompleted all of the corrective measures required by the CA. PHMSA bases this\ndetermination on the following:\na. Per PHMSA letter dated December 5, 2014, PHMSA considers corrective measure CA\nItems 11-15 completed. The corrective measure remaining open at the time\n(December 2014) was corrective measure CA Item 16.\nb. Regarding corrective measure CA Item 16, the consulting firm Alyeska engaged to\nevaluate pipeline structural integrity and long term integrity risks associated with the\nencapsulations has completed their evaluation. The evaluation findings and\n\n\n\nconclusions are documented in five previously transmitted reports as acknowledged by\nPHMSA letter date February 12, 2015. Alyeska’s position is that the remaining\npressure within the installed encapsulations is either zero or a small vacuum and, as\nsuch, testing and relieving the pressure within the installed encapsulations is not\nnecessary. Alyeska bases this position on all available information, including the\nconsulting firm’s findings and conclusions. This completes corrective measure CA\nItem 16.\nPHMSA considers that all corrective measures of the Consent Agreement have been\ncompleted. Therefore, I am closing the above referenced Consent Agreement. I thank\nAlyeska for their assistance in bringing this effort to an acceptable conclusion.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 T. Johnson (#144663)\n\n520145003S_Consent Order_06272014_text.pdf\n\nMr. Thomas J. Barrett\nPresident\nAlyeska Pipeline Service Company\n3700 Center Point Drive\nAnchorage, AK 99503\nRe: CPF No. 5-2014-5003S\nDear Mr. Barrett:\nEnclosed please find a Consent Order incorporating the terms of the Consent Agreement that you\nsigned on June 17, 2014. Service of the Consent Order and Consent Agreement by certified mail\nis deemed effective upon the date of mailing, or as otherwise 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. Chris Hoidal, Director, Western Region, PHMSA\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\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)\nAlyeska Pipeline Service Company ) CPF No. 5-2014-5003S\n)\nRespondent. )\n____________________________________)\nCONSENT ORDER\nBy letter dated March 13, 2014, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) Office of Pipeline Safety issued a Notice of Proposed Safety Order (Notice) to\nAlyeska Pipeline Service Company (Respondent) in this case.\nIn accordance with 49 C.F.R. § 190.239, the Notice alleged that Respondent’s Trans-Alaska\nPipeline System (TAPS) has an apparent condition that, without corrective measures, would pose\na pipeline integrity risk to public safety, property, or the environment and proposed that\nRespondent take certain actions to address the condition. Specifically, the Notice alleged that\nthere are a number of vent and drain encapsulations on TAPS which may pose a risk of a leak or\ncarrier pipe failure.\nIn response to the Notice, Respondent requested an informal consultation and Respondent and\nPHMSA engaged in good faith settlement discussions resulting in the Consent Agreement\nattached to this Order that settles all of the allegations in the Notice. Accordingly, the Consent\nAgreement is hereby approved and incorporated by reference into this Order. The Respondent is\nhereby ordered to comply with the terms of the Consent Agreement, effective immediately.\nPursuant to 49 U.S.C. 60101, et seq., failure to comply with this Consent Order may result in the\nassessment of civil penalties of up to $200,000 per violation per day, or in the referral of the case\nfor judicial enforcement. The terms and conditions of this Consent Order are effective upon\nservice in accordance with 49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n520145003S_Consent Agreement_06272014_text.pdf\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\n____________________________________\nIn the Matter of )\n)\n)\nAlyeska Pipeline Service Company, )\nRespondent. )\n____________________________________)\n) CPF 5-2014-5003S\nCONSENT AGREEMENT\nOn March 13, 2013, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nU.S. Department of Transportation, issued to Alyeska Pipeline Service Company (Alyeska or\nRespondent) a Notice of Proposed Safety Order (NOPSO). The Notice alleged that conditions\nexist on Alyeska's pipeline facilities that pose a pipeline integrity risk to public safety, property,\nor the environment. The Notice also proposed that Respondent take certain corrective measures\nto correct the alleged conditions and ensure that the public, property, and the environment are\nprotected from the potential risk.\nAlyeska responded to the Notice by letter dated April 11, 2014 (Response). Alyeska\nacknowledged receipt of the proposed safety order and requested an informal consultation, which\nwas held April 23 and May 8, 2014.\nDuring the informal consultation, PHMSA and Alyeska agreed that settlement of this proceeding\nwill avoid further administrative proceedings or litigation and that entry into this Consent\nAgreement is the most appropriate means of resolving the Notice; therefore, pursuant to\n49 C.F.R. Part 190, without adjudication of any issue of fact or law, and upon consent and\nagreement of Respondent and PHMSA (the Parties), the Parties agree as follows:\nI. General Provisions\n1. Respondent acknowledges that as operator of the pipeline, Respondent and its pipeline\nsystem are subject to the jurisdiction of the Federal pipeline safety laws, 49 U.S.C. § 60101\net seq., and the regulations and administrative orders issued thereunder. For purposes of this\nConsent Agreement, Respondent acknowledges that it received proper notice of PHMSA's action\nin this proceeding and that the Notice states claims upon which relief may be granted pursuant to\n49 U.S.C. 60101 et seq., and the regulations and orders issued thereunder.\n2. Respondent does not admit or deny any allegation or conclusion in the Notice but agrees,\nfor purposes of this Consent Agreement, that the condition identified in the Notice exists and\nagrees to address it by completing the actions specified in Section II of this agreement\n(Corrective Measures). These actions, including any work plans and schedules, shall\n\n\n\n2\nautomatically be incorporated into this agreement. This Consent Agreement does not constitute\na finding of violation of any Federal law or regulation and therefore may not be used in any civil\nproceeding of any kind as evidence or proof of any fact, fault or liability, or as evidence of the\nviolation of any law, rule, regulation or requirement, except in a proceeding to enforce the\nprovisions of this agreement or in future PHMSA enforcement actions.\n3. After Respondent returns this signed agreement, PHMSA's representative will present it to\nthe Associate Administrator for Pipeline Safety recommending that the Associate Administrator\nadopt the terms of this agreement by issuing an administrative order (Consent Order)\nincorporating the terms of this Consent Agreement. The terms of this agreement constitute an\noffer of settlement until accepted by the Associate Administrator.\n4. Respondent consents to the issuance of the Consent Order, and hereby waives any further\nprocedural requirements with respect to its issuance. Respondent waives all rights to contest the\nadequacy of notice, or the validity of the Consent Order or this Consent Agreement, including all\nrights to administrative or judicial hearings or appeals.\n5. This Consent Agreement shall apply to and be binding upon PHMSA, and upon\nRespondent, its officers, directors, and employees, and its successors, assigns, or other entities or\npersons otherwise bound by law. Respondent agrees to provide a copy of this agreement and any\nincorporated work plans and schedules to all of Respondent's officers, employees, and agents\nwhose duties might reasonably include compliance with this agreement.\n6. For all transfers of ownership or operating responsibility of Respondent’s pipeline,\nRespondent must provide a copy of this Consent Agreement to the prospective transferee at least\n30 days prior to such transfer and simultaneously provide written notice of the prospective\ntransfer to the PHMSA Region Director who issued the Notice.\n7. This Consent Agreement constitutes the final, complete and exclusive agreement and\nunderstanding between the Parties with respect to the settlement embodied in this agreement, and\nthe Parties acknowledge that there are no representations, agreements or understandings relating\nto the settlement other than those expressly contained in this agreement, except that the terms of\nthis agreement may be construed by reference to the Notice.\n8. Nothing in this Consent Agreement affects or relieves Respondent of its responsibility to\ncomply with all applicable requirements of the Federal pipeline safety laws, 49 U.S.C. § 60101\net seq., and the regulations and orders issued thereunder. Nothing in this agreement alters\nPHMSA's right of access, entry, inspection, and information gathering or PHMSA's authority to\nbring enforcement actions against Respondent pursuant to the Federal pipeline safety laws, the\nregulations and orders issued thereunder, or any other provision of Federal or State law.\n9. This Consent Agreement does not waive or modify any Federal, State, or local laws or\nregulations that are applicable to Respondent's pipeline systems. This agreement is not a permit,\nor a modification of any permit, under any Federal, State, or local laws or regulations.\nRespondent remains responsible for achieving and maintaining compliance with all applicable\nFederal, State, and local laws, regulations and permits.\n10. This Consent Agreement does not create rights in, or grant any cause of action to, any\nthird party not party to this agreement. The U.S. Department of Transportation is not liable for\n\n\n\n3\nany injuries or damages to persons or property arising from acts or omissions of Respondent or\nits officers, employees, or agents carrying out the work required by this agreement. The U.S.\nDepartment of Transportation, its officers, employees, agents, and representatives are not liable\nfor any cause of action arising from any acts or omissions of Respondent or its contractors in\ncarrying out any work required by this agreement.\nII. Corrective Measures\n11. In addition to its regular pipeline system ground and aerial surveillance, Alyeska will\nperform weekly ground surveillance of all encapsulation sites along the pipeline with hand-held\ngas detectors until completion of the below Items 12, 13, 14, and 15. In the event a specific site\ncannot be accessed by ground due to personnel safety concerns for two consecutive weeks, the\nsite will be accessed by air. Ground surveillances will be documented and when locations cannot\nbe accessed it will be documented by recording the date and reason for non-access. The\nEncapsulation Surveillance Plan is attached to this document as Attachment A.\n12. Alyeska will complete a phased array and shear wave ultrasonic testing of the three (3)\nremaining 10-inch and 12-inch encapsulations by July 31, 2014. If field testing at all three of\nthese locations cannot be completed by July 31, 2014 due to site safety concerns, Alyeska will\nimmediately provide specific reasoning and a new planned completion date in writing for\nPHMSA’s review and approval. Alyeska will submit the testing report (test results, analysis of\nthe results, conclusions reached, etc.) for each individual location to PHMSA no later than 30\ndays after testing is completed at each location.\n13. Alyeska will complete a phased array and shear wave ultrasonic testing, magnetic particle\nexamination, and radiographic examination of all 6-inch encapsulations listed on Attachment B\nto this order. Attachment B contains all encapsulation locations that both Alyeska and PHMSA\nagreed would provide a broad representation of 6-inch encapsulations throughout the system.\nThe specific locations to be evaluated were chosen based on specific site risk factors such as:\natmospheric temperature during encapsulation installation, pipeline pressure during\nencapsulation installation, condition of the thread-o-ring (TOR) at time of encapsulation, and in-\nline-inspection (ILI) data.\n14. Alyeska will complete field testing of the listed 6” encapsulations identified in\nAttachment B by September 1, 2014. If field testing at individual locations cannot be completed\nby September 1, 2014, due to safety concerns, Alyeska will provide specific reasoning and a new\nplanned completion date in writing by for PHMSA’s review and approval. Alyeska will submit\nthe testing report (test results, analysis of the results, conclusions reached, etc.) for each\nindividual location to PHMSA no later than 30 days after testing is completed at each location.\n15. Alyeska will remediate all integrity threats identified by the testing required by Items 12,\n13, and 14 in accordance with 49 CFR § 195.452(h), regardless of whether the location of the\nthreat is within a high consequence area (HCA).\n16. Alyeska has engaged a consulting firm to evaluate pipeline structural integrity associated\nwith the encapsulations and long term integrity risks related to epoxy within the encapsulations.\nThe consulting firm will provide computational analysis, physical large scale model testing, and\nepoxy laboratory testing. Alyeska shall utilize all available information, including the findings\n\n\n\n4\nand recommendations from the consulting firm’s engineering analysis and laboratory work, to\ndevelop an informed position regarding the remaining pressure within the installed\nencapsulations and plan for testing and relieving the pressure as necessary. Alyeska’s position\nand plan for testing and relieving pressure, if necessary, shall be documented in a written report,\nincluding supporting information, and provided to PHMSA. Alyeska will provide a schedule for\ncompleting the components of this item within 30 days of receiving this order.\n17. The Region Director may grant an extension of time for Respondent to complete any of\nthe work to be performed if Respondent submits a timely written request demonstrating good\ncause for an extension.\nIII. Review and Approval Process\n18. With respect to any submission under Section II of this Consent Agreement that requires\nthe approval of the Region Director, the Director may: (a) approve, in whole or in part, the\nsubmission, (b) approve the submission on specified conditions, (c) disapprove, in whole or in\npart, the submission, or (d) any combination of the foregoing. If the Region Director approves,\napproves in part, or approves with conditions, Respondent will take all action as approved by the\nDirector, subject to Respondent's right to invoke the dispute resolution procedures in Section IV\nwith respect to any conditions the Director identifies. If the Director disapproves all or any\nportion of the submission, the Director will provide Respondent with a written notice of the\ndeficiencies. Respondent will correct all deficiencies within the time specified by the Director\nand resubmit it for approval.\nIV. Dispute Resolution\n19. The Region Director and Respondent ","truncated":true,"body_characters":43944}