{"operation":"document","citation":"CPF 520176006S","title":"HILCORP ALASKA, LLC — Safety Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-03-17","effective_on":null,"summary":"CLOSED safety order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-520176006s","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/520176006S","body":"Safety Order involving HILCORP ALASKA, LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2017-03-17 and is reported as closed as of 2019-02-01. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n520176006S_Notice of Proposed Safety Order_03172017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Notice%20of%20Proposed%20Safety%20Order_03172017.pdf\n\n520176006S_Notice of Proposed Safety Order_03172017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Notice%20of%20Proposed%20Safety%20Order_03172017_text.pdf\n\n520176006S_Region Withdrawal of Notice Letter_02012019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Region%20Withdrawal%20of%20Notice%20Letter_02012019.pdf\n\n520176006S_Region Withdrawal of Notice Letter_02012019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/520176006S/520176006S_Region%20Withdrawal%20of%20Notice%20Letter_02012019_text.pdf\n\n520176006S_Notice of Proposed Safety Order_03172017_text.pdf\n\nVIA FACSIMILE TO (907) 777-8301 AND CERTIFIED MAIL\nMarch 17, 2017\nMr. Greg Lalicker\nPresident\nHilcorp Alaska, LLC\n1201 Louisiana Street, Suite 1400\nHouston, Texas 77002\nCPF 5-2017-6006S\nDear Mr. Lalicker:\nEnclosed is a Notice of Proposed Safety Order (Notice) issued in the above-referenced case.\nThe Notice proposes that you take certain measures with respect to Hilcorp Alaska, LLC’s1\nMiddle Ground Shoal (MGS) Hazardous Liquid System located in Cook Inlet, Alaska, to ensure\npipeline safety. Your options for responding are set forth in the Notice. Your receipt of the\nNotice constitutes service of that document under 49 C.F.R. § 190.5.\nWe look forward to a successful resolution of this integrity issue to ensure pipeline safety.\nPlease direct any questions on this matter to me at 720-963-3160.\nSincerely,\nChris Hoidal\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\nEnclosures: Notice of Proposed Safety Order & Attachment A (General Overview Map)\ncc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nMs. Erin McKay, Regulatory Compliance Manager, Alaska Integrity Group, Hilcorp Alaska,\nLLC, emckay@hilcorp.com\n1 Hilcorp Alaska, LLC, operates as a subsidiary of Hilcorp Energy Company.\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWESTERN REGION\nLAKEWOOD, COLORADO 80228\n________________________________________________\nIn the Matter of )\n)\n)\nHilcorp Alaska, LLC, )\na subsidiary of Hilcorp Energy Company, )\nRespondent. )\n_______________________________________________ )\n) CPF No. 5-2017-6006S\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), U.S. Department of Transportation, has initiated an\ninvestigation and information review of the safety of your Middle Ground Shoal (MGS)\nHazardous Liquid System, consisting of approximately 14 miles of in-service crude oil pipeline\nmileage located in the Cook Inlet of Alaska. This investigation stems from a gas leak on\nHilcorp’s parallel natural gas pipeline that was first reported by Hilcorp Alaska, LLC (Hilcorp)\non February 7, 2017. That leak continues to discharge natural gas (methane) into the waters of\nCook Inlet.\nThe MGS Hazardous Liquid System transports produced liquids (oil and water) from Hilcorp’s\noffshore “A Platform,” “Baker Platform,” “C Platform,” and “Dillon Platform,” to the MGS\nonshore facility located in Nikiski, Alaska.2 From the MGS onshore facility, crude oil is\ntransported by pipeline to the Tesoro Kenai Refinery. The MGS Hazardous Liquid System’s\npipeline is identified as the “B Pipeline” and consists of the following four sections: 1) the “A\nPlatform” to the MGS onshore facility; 2) the “C Platform” to the “A Platform;” 3) the “Baker\nPlatform” to the “A Platform;” and 4) the “Dillon Platform” to the “C Platform.”3 The “B Crude\nPipeline” is located adjacent and parallel to the leaking natural gas “A Pipeline.”\n2 See Attachment A, General overview map of the pipeline system. All of the referenced Hilcorp platforms utilize\ngas from the MGS Fuel Gas System, which is the subject of a separate but related Notice of Proposed Safety Order,\nissued by PHMSA on March 3, 2017. See Notice, CPF No. 5-2017-0004S, available at\nhttp://www.phmsa.dot.gov/pipeline/hilcorp-gas-leak-cook-inlet-alaska.\n3 See id.\n\n\n\nAs a result of PHMSA’s investigation and information review, it appears that conditions exist on\nthe MSG Hazardous Liquid System that pose a pipeline integrity risk to public safety, property\nor the environment. Pursuant to 49 U.S.C. § 60117(l), PHMSA issues this Notice of Proposed\nSafety Order (Notice), notifying you of the preliminary findings of the investigation and\nproposing that you take certain measures to ensure that the public, property, and the environment\nare protected from this integrity risk.\nFor purposes of this Notice, the term Affected Pipeline Facility means the 8-inch-diameter “B\nPipeline” and consists of the following four sections: 1) the MGS onshore facility to the “A\nPlatform;” 2) the “A Platform” to the “Baker Platform;” 3) the “A Platform” to the “C Platform;”\nand 4) the “C Platform” to the “Dillon Platform.”\nPreliminary Findings:\n On March 3, 2017, PHMSA issued to Hilcorp a Notice of Proposed Safety Order, CPF\nNo. 2017-0004S, related to a natural gas leak on Hilcorp’s MGS Fuel Gas System. As of\nthe date of this Notice, the gas leak is occurring on Hilcorp’s “A Pipeline” segment of the\noffshore (subsea) portion of the MGS Fuel Gas System. The gas leak is located\napproximately 2.6 miles from the “A Platform” and approximately 4.6 miles from the\nMGS onshore facility (as measured along the pipeline alignment).\n4 The MGS onshore\nfacility services both the “A Pipeline” and the “B” Pipeline.\n The gas leak was reported on February 7, 2017, and is still ongoing, with a current\nestimated leak rate of between 193,000 and 215,000 cubic feet per day.\n The accident was initially reported by Hilcorp to the National Response Center at 7:49\npm EST on February 7, 2017 (NRC Report No. 1170504), indicating an unknown\nquantity release of natural gas. In addition, Hilcorp’s Regulatory Compliance Manager\nleft a phone message for a PHMSA Anchorage Office employee on February 7, 2017, at\n8:25 pm EST.\n Hilcorp reports that in late January 2017, it noticed an increased trend in pipeline flow\ndata on the “A Pipeline.” In response to this data, Hilcorp indicates that it conducted\naerial pipeline surveillances by helicopter, looking specifically for leaks, and discovered\nthe leak on February 7, 2017. Subsequently, Hilcorp’s flow analysis revealed that the\npipeline began leaking in late December 2016.\n The “A Pipeline” begins at the onshore facility and is routed to the “A Platform.” At the\n“A Platform,” the pipeline bifurcates, with one leg extending to the “Baker Platform” and\nthe other to the “C Platform” and the “Dillon Platform.” The “A Pipeline” is an 8-inch\n4 Hilcorp’s MGS Fuel Gas System provides non-odorized gas (including oil production lift gas) to Hilcorp’s\noffshore “A Platform,” “Baker Platform,” “C Platform,” and “Dillon Platform,” all utilizing gas from the East Cook\nInlet Gas Gathering System (ECIGGS). The MGS pipeline system begins at the three-inch tie-in to the ECIGGS\npipeline on Wik Road in Nikiski, Alaska. The pipeline passes through Station O (201 Meter) and the MGS onshore\nfacility before transitioning to the subsea portion that extends to the platforms in Cook Inlet. The offshore (subsea)\nportion of the MGS Fuel Gas System is identified as the “A Pipeline.”\n\n\n\nnominal diameter gas transmission pipeline and was converted from liquid to gas service\nin 2005.\n The “B Pipeline,” is a crude-oil pipeline that is in close proximity to the “A Pipeline.”\nThe “B Pipeline” has similar pipeline characteristics as those of the “A Pipeline” and\ntransports hazardous liquids produced and initially processed by the offshore platforms to\nthe MGS onshore facilities. The “B Pipeline” is operating in an environment\nsubstantially similar to the “A Pipeline.”\n The “A Platform” and “C Platform” produce crude oil, conduct initial processing, and are\nmanned 24 hours a day, seven days a week. The “Baker Platform” and “Dillon Platform”\nare in “light house” mode and are unmanned.5\n The “B Pipeline” is an 8-inch nominal diameter, steel pipeline with a 0.593” wall\nthickness. The pipeline is comprised of Grade B seamless pipe with X-Tru Coat and one-\ninch concrete weight coating. The portion of the “B Pipeline” running from the “A\nPlatform” to the MGS onshore facility was installed in 1965.\n Hilcorp Alaska, LLC (OPID: 32645), purchased oil and gas facilities located in Nikiski,\nAlaska, from XTO Energy, Inc. (OPID: 31178), on September 1, 2015. This purchase\nincluded the “B Pipeline.”\n The product being transported by the “B Pipeline” is produced liquids (oil and water)\nfrom the “A Platform” and the “C” Platform. The pipeline operates continuously and has\na normal operating pressure of approximately 150 psig - 260 psig. The Maximum\nOperating Pressure (MOP) of the “B Pipeline” is 592 psig.\n The majority of the “B Pipeline” is located within the waters of the Cook Inlet, a\ncommercially navigable waterway. The waters of Cook Inlet are a habitat for several\nspecies listed by the Endangered Species Act, and is a designated Critical Habitat for the\nCook Inlet beluga whales (endangered). There are only an estimated 340 remaining\nCook Inlet belugas; therefore, significant impacts to any individual belugas, particularly\nlethal take, could have population-level effects.\n As a result of the multiple state and federal agencies’ response to the “A Pipeline” natural\ngas leak incident, the Alaska Department of Environmental Conservation has compiled a\nlist of “Resources at Risk,” which details the environmental risks associated with the\nongoing leak.\n The National Oceanic and Atmospheric Administration (NOAA), National Marine\nFisheries Service (NMFS), has expressed concerns to PHMSA about the potential\nenvironmental damage that may result from the continued release of gas in Cook Inlet.\n5 “Light house” mode means no active production is taking place at these platforms. The primary operating objectives\nfor light house mode platforms are the continual operation of impressed current cathodic protection systems and\nnavigational-aid lighting.\n\n\n\nBy letter dated February 24, 2017, NMFS provided PHMSA with an outline of the\nspecies and designated critical habitat that occur in Cook Inlet and documented its\nconcerns regarding the potential effects of the leak on marine mammals, including the\ncritically-endangered Cook Inlet beluga whales. NOAA also provided PHMSA with a\nmap showing the March distribution of satellite-tagged beluga whales in 2002 and 2003.\nThe map shows that the Cook Inlet belugas spend a significant amount of time near the\n“A Pipeline” and “B Pipeline.”\n The Alaska Department of Environmental Conservation (ADEC) has also responded to\nthe ongoing leak because it considers the leak to be a discharge of hazardous substance\ninto or upon the waters or lands of the state that is prohibited unless authorized by\nADEC, under Alaska Statute 46.03.745. By letter dated February 27, 2017, ADEC\nordered Hilcorp to conduct environmental sampling and monitoring. To date, ADEC has\nissued four Situation Reports regarding the leak. ADEC also has described the\nenvironmentally sensitive areas and wildlife issues in its Incident Report, which was\nprepared with input from the National Marine Fisheries Service, the Alaska Department\nof Fish and Game, and the U.S. Fish and Wildlife Service (USFWS).\n PHMSA has consulted with USFWS personnel regarding the potential risks to marine life\nassociated with the ongoing leak from the “A Pipeline”. They indicated that the current\nrisk to birds, sea duck, and water fowl from the gas leak are low at present, but that the\nrisk will increase with the beginning of seasonal migration, which typically begins in late\nMarch. In addition, fish migration will begin about mid-April, including hooligan and\nsalmon smelt.\n Hilcorp has taken the following actions since reporting the leak on February 7, 2017: (1)\nthe operating pressure on the “A Pipeline” was lowered to 145 psi; (2) periodic helicopter\noverflights have been conducted for visual surveillance of the leak area; (3) periodic\nsituational reports were compiled; (4) analyses of different operational options was\nperformed; (5) the estimated gas leak rate was calculated; (6) the company shut down\nnon-essential equipment on the offshore platforms to minimize gas demand; (7) modeling\non methane dispersion in Cook Inlet waterway was performed; (8) preliminary\npreparations for divers and dive boat to perform necessary repairs when ice conditions\nand weather permitted were made; (9) the company participated in meetings with federal\nand state agencies to coordinate response efforts; and (10) an initial monitoring and\nsampling plan was submitted to ADEC. As of the date of this Notice, no sampling of the\nrelease site has occurred.\n Since the leak on the “A Pipeline” was discovered, Hilcorp has maintained normal\noperations on the “B Pipeline,” with a current operating pressure of approximately 175\npsi, a flow rate of 3700 barrels per day, and a 63% water cut (63% of flow consists of\nwater).\n PHMSA has reviewed information from Hilcorp and the state and Federal agencies noted\nabove, suggesting that certain risks are presented by the various alternatives for\nresponding to the failure on the “A Pipeline.” These alternatives include: (a) immediate\n\n\n\nrepair of the “A Pipeline;” (b) continued operation of the “A Pipeline” until it can be\nsafely repaired; and (c) shutting in the “A Pipeline” until it can be safely repaired. To\ndate, Hilcorp has indicated it believes the safest alternative is to continue operating the\n“A Pipeline,” at reduced pressure and through-put until it can be safely repaired.\n PHMSA acknowledges from assertions made by Hilcorp that immediate repair of the leak\nwould pose an extreme risk to personnel during the current winter conditions where\ndiving operations are required to access, investigate, and repair the “A Pipeline”.\nBecause of sea ice, weather conditions, and the Cook Inlet’s extreme tides and currents,\ndiving operations cannot be safety conducted at present and, therefore, immediate repair\nof the leaking pipeline is not a viable option. It is estimated the sea ice and weather\ncondition could allow safe diving operations as early as late March but not later than the\nend of April 2017.\n PHMSA recognizes that the majority of the MGS pipeline system is located within the\nwaters of the Upper Cook Inlet, which is known for extreme tides (average tides of 20\nfeet, maximum tides of 35 feet, and currents more than 5 to 7 knots) and the presence of\ndynamic sea-ice conditions.\n Hilcorp has further indicated to PHMSA that the company cannot access the failure\nlocation on the “A Pipeline” until the ice clears, at which time diving operations can\nsafely be conducted to access, investigate, and repair the leak. According to Hilcorp, the\nice could clear as early as late March or as late as the end of April 2017. The\nserviceability of the “A Pipeline” will remain impaired until at least this time.\n The ongoing gas leak is the third leak on the “A Pipeline” since June 2014. The two\nprevious leaks were in June 2014 and August 2014, during ice-free conditions. The\nprevious operator determined that those leaks were caused by rocks contacting the\npipeline in areas where the pipeline was not continuously supported by the seabed. The\nrocks contacting the pipeline deteriorated the steel pipe wall by abrasion, resulting from\nrelative movement between the pipeline and rocks contacting the pipeline. Both leaks\nwere repaired by installation of bolt-on, split-sleeve clamps. The 2014 leaks were 42\nyards apart and the current leak is approximately 2/3 mile from the previous two leaks.\n Vortex shedding induced vibrations on subsea pipelines and/or excessive bending of\nunsupported pipeline spans is a known integrity threat for pipelines within the waters of\nthe Cook Inlet. Both phenomena are generally associated with unsupported pipeline\nspans. Water currents can potentially scour the supporting seabed below pipelines,\ncausing unsupported pipeline spans. If the length of an unsupported pipeline span is\ngreat enough, excessive bending and/or vortex shedding induced vibrations (causing\nabrasion from relative movement or cyclical loading of the pipe) can impact the integrity\nof the pipeline. Subsea pipeline operators in Cook Inlet typically monitor subsea\npipelines (both hazardous liquid and natural gas pipelines) annually to identify pipeline\nspans that are unsupported by the seabed and, if necessary, investigate and provide\nadditional support in these areas.\n\n\n\n The “A Pipeline” and the “B Pipeline” have substantially similar pipeline characteristics\nand operate in substantially similar environmental conditions. Although the cause of the\nongoing leak on the “A Pipeline” is unknown, past leaks on the pipeline have occurred\ndue to outside forces, e.g. vibration, vortex shedding, excessive bending, or rock\nimpingement. Accordingly, it is reasonable to conclude that similar conditions are also\npresent on the “B Pipeline”.\n The extreme and dynamic environmental conditions within the Cook Inlet and the nature\nof the risk conditions on the “A Pipeline” and “B Pipeline” present an elevated likelihood\nthat the risk conditions identified are already present or could develop on multiple areas\nof the Affected Pipeline Facility.\n The three leaks on the “A Pipeline” since 2014 demonstrate the potential that other areas\nof the MGS pipeline, including the Affected Pipeline Facility, could be impacted.\n If a leak or rupture of “B Pipeline” occurred, the environmental damage has the potential\nto be significantly greater than the presently-known environmental damage from the leak\noccurring on the “A Pipeline”. In addition, if a leak or rupture on the “B Pipeline”\noccurred during the winter season, Hilcorp’s oil spill response capabilities could be\nsignificantly hampered by the sea ice, weather conditions, and the Cook Inlet’s extreme\ntides and currents.\n The “B Pipeline” is not In-Line Inspection (ILI) compatible because of piping associated\nwith a manifold sled that is positioned on the sea-floor at the base of the “A Platform.”\n Hilcorp indicates that the “B Pipeline” was successfully pressure tested in 2005, 2010,\nand 2015.\n The annual side-scan sonar or multi-beam echo-sounder survey, or both, that Hilcorp\ncurrently performs do not provide sufficient information to determine whether there are\nexternal loads on the pipe, eroded pipe, rock impingements, metal loss, dents, gouges,\ndielectric coating deterioration, and/or missing one-inch-thick concrete weight coating.\nHowever, it is noted that Hilcorp does conduct diver-based inspections, with inspection\nlocations based on the annual side-scan sonar and/or multi-beam echo-sounder surveys.\nProposed Issuance of Safety Order\nSection 60117(l) of Title 49, United States Code, provides for the issuance of a safety order, after\nreasonable notice and the opportunity for a hearing, requiring corrective measures, which may\ninclude physical inspection, testing, repair, or other action, as appropriate. The basis for making\nthe determination that a pipeline facility has a condition or conditions that pose a pipeline\nintegrity risk to public safety, property, or the environment is set forth both in the above-\nreferenced 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 hazardous nature of the product transported and the pressure required for\n\n\n\ntransporting such product, the characteristics of the geographical areas where the pipeline facility\nis located, the environmentally sensitive area with endangered and threatened species marine life\nin and around the location of the leak, and the likelihood that the conditions could worsen or\ndevelop on other areas of the pipeline and potentially impact its serviceability, PHMSA finds\nthat the Affected Pipeline Facility has conditions that, without corrective measures, pose a\npipeline integrity risk to public safety, property, and the environment.\nAccordingly, PHMSA issues this Notice of Proposed Safety Order to notify Respondent of the\nproposed issuance of a safety order and to propose that Hilcorp take measures specified herein to\naddress the potential risk.\nProposed Corrective Measures\nPursuant to 49 U.S.C. § 60117(l) and 49 C.F.R. § 190.239, PHMSA proposes to issue to Hilcorp\nAlaska, LLC, a safety order incorporating the following remedial requirements with respect to\nthe “Affected Pipeline Facility.”\nDefinitions:\nThe Affected Pipeline Facility means the 8-inch-diameter “B Pipeline” and consists of the\nfollowing four sections: 1) MGS onshore facility to “A Platform;” 2) “A Platform” to “Baker\nPlatform;” 3) “A Platform” to “C Platform,” and 4) “C Platform” to “Dillon Platform.”\nProposed Actions:\n1. The Affected Pipeline Facility must be externally inspected to assess the safety of its\ncontinued operation within 21 calendar days from the issuance of a final Safety Order.\nHilcorp must send to the Director, Western Region (Director), for approval, the results\nfrom its inspection of the Affected Pipeline Facility within three (3) calendar days after\nthe inspection required by this paragraph is complete. The inspection required by this\nparagraph must include the following:\na. Hilcorp must conduct high-resolution side-scan sonar inspection, or equivalent\ntechnology, the use of which is expressly approved in writing by the Director, of\nthe “B Pipeline” to identify pipeline sections that are not adequately supported\nand to prevent excessive bending or current-induced vibrations that may damage\nthe pipeline.\nFor areas where the pipeline is not continuously supported by the seabed\n(unsupported span) for 10 feet or more and the gap between the seabed and\npipeline is one foot or more, Hilcorp must inspect the pipeline by diver, or\nequivalent, to identify pipeline surfaces that lack a one-inch-thick concrete weight\ncoating. On pipeline surfaces without intact concrete weight coating, Hilcorp\nmust inspect exposed pipeline surfaces to determine the condition of the dielectric\ncoating and to check for the presence of dents, gouges, metal loss, or other\nanomalies.\nb.\n\n\n\n2. 3. 4. 5. c. If Hilcorp is unable to inspect the Affected Pipeline Facility as required by this\nparagraph within 21 calendar days from the issuance of a final Safety Order, or\nthe Director determines, based on a review of the results of the inspection, that the\ncontinued operation of the Affected Pipeline Facility poses a pipeline integrity\nrisk to public safety, property, or the environment, then the Affected Pipeline\nFacility must be shut down and purged within seven (7) calendar days from\nreceipt of written notice by the Director.\nd. If the Affected Pipeline Facility is to be shut down and purged pursuant to this\nparagraph, Hilcorp must submit a purging plan to the Director, Western Region\n(Director), for approval, within three (3) calendar days after the Director’s written\nnotice.\nHilcorp must purge and clean the Affected Pipeline Facility sections that are inactive,\nsuch that if the wall of the inactive pipeline sections on the Affected Pipeline Facility are\nperforated, hazardous material will not release into the environment.\nHilcorp must notify responders from the United States Coast Guard, the Environmental\nProtection Agency, ADEC, the Alaska Department of Natural Resources, and the Cook\nInlet Spill Prevention and Response, Incorporated, at least 48 hours prior to commencing\nany purging operations on the Affected Pipeline Facility.\nHilcorp must develop and implement a “Modification and Inspection Plan” for the\nAffected Pipeline Facility. Hilcorp must submit the plan to the Director for approval no\nlater than 45 days from the issuance of a final Safety Order. At a minimum, the plan\nmust include the following for the “B Pipeline:”\na. Hilcorp must modify the “B Pipeline” to accommodate the use of ILI methods or\nalternative technologies approved by the Director. Hilcorp must conduct an ILI or\nalternative technology referenced above on the “B Pipeline” and make all necessary\nrepairs by September 30, 2018. The ILI results, and documentation of all subsequent\nassociated repairs, must be sent to the Director within 30 days of receipt of the report\nby Hilcorp and 30 days following completion of each repair.\nb. Hilcorp must again conduct the external inspection and evaluation methods required\nby paragraphs 1a and 1b in the summer of 2018 to ensure continued pipeline support\nand integrity.\nHilcorp must conduct a review and modify, as appropriate, its oil spill response plan6\n(OPA Plan) in light of the environmental barriers and restraints, or both (e.g., response\ncapabilities during ice covered conditions), as experienced during its response to the leak\non the “A Pipeline.” Hilcorp must conduct the review and make appropriate\nmodifications to its OPA Plan required by this paragraph prior to November 1, 2017.\nHilcorp must submit its modified OPA Plan for review and approval to David Lehman,\n6 As required under the Oil Pollution Act of 1990 (OPA), 33 U.S.C. § 2701 et seq.\n\n\n\nDirector, Oil Spill Preparedness and Emergency Support Division, Office of Pipeline\nSafety, upon completion of the requirements of this paragraph.\n6. Hilcorp must provide the Director with documentation of compliance and supporting\ndata, to all Items above.\n7. If the Affected Pipeline Facility is shut down for any reason, Hilcorp must develop a\nstart-up plan for the Affected Pipeline Facility. The plan required by this paragraph must\nbe submitted to the Director for approval at least two weeks prior to the requested start-\nup date.\n8. Hilcorp must revise all plans identified in Items 1, 4, and 7 above, as necessary, to\nincorporate new information obtained during the evaluations and associated remedial\nactivities. Hilcorp must submit any such plan revisions to the Director for prior approval.\nThe Director may approve plan elements incrementally. The plans identified in Items 1,\n4, and 7 above, once approved by the Director, will be incorporated by reference into any\nfinal Safety Order issued by PHMSA.\n9. Hilcorp may only implement the plans identified in Items 1, 4, and 7 above, only after\nthey have been approved, in writing, by the Director, including any revisions to the\nplan(s).\n10. Hilcorp must submit quarterly reports to the Director that: (1) include analysis of all\navailable data and results of the testing and evaluations required by the safety order; and\n(2) describe the progress of the repairs and other remedial actions being undertaken. The\nfirst report will be due 45 days from issuance of a final Safety Order.\n11. The Director may grant an extension of time for compliance with any of the terms of the\nfinal Safety Order upon a written request timely submitted demonstrating good cause for\nan extension.\n12. Respondent may appeal any decision of the Director to the Associate Administrator for\nPipeline Safety. Decisions of the Associate Administrator will be final.\nThe actions proposed by this Notice of Proposed Safety Order are in addition to and do not\nwaive any requirements that apply to Respondent’s pipeline system under 49 C.F.R. Parts 190\nthrough 199, under any other order issued to Respondent under authority of 49 U.S.C. § 60101 et\nseq., 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 work plan, PHMSA may identify other safety measures that need to be\ntaken. In that event, Respondent will be notified of any proposed additional measures and, if\nnecessary, amendments to the work plan or safety order.\nResponse to this Notice\n\n\n\nIn accordance with § 190.239, you have 30 days following receipt of this Notice to submit a\nwritten response to the Director. If you do not respond within 30 days, this constitutes a waiver\nof your right to contest this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a final\nSafety Order. In your response, you may indicate 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 also\nhave the opportunity to request an administrative hearing before a final Safety Order is issued).\nInformal consultation provides you with an opportunity to explain the circumstances associated\nwith the risk conditions alleged in the Notice and, as appropriate, to present a proposal for a\nwork plan or other remedial measures, without prejudice to your position in any subsequent\nhearing.\nIf you and PHMSA agree within 30 days of informal consultation on a plan and schedule for you\nto address each identified risk condition, the parties may enter into a written consent agreement,\nin which case PHMSA would then issue an administrative Consent Order incorporating the terms\nof the agreement. If a consent agreement is not reached, or if you have elected not to request\ninformal consultation, you may request an administrative hearing in writing within 30 days\nfollowing receipt of the Notice or within 10 days following the conclusion of an informal\nconsultation that did not result in a consent agreement, as applicable. Following a hearing, if the\nAssociate Administrator finds the facility to have a condition that poses a pipeline integrity risk\nto the public, property, or the environment in accordance with § 190.239, the Associate\nAdministrator may issue a final Safety Order.\nBe advised that all material you submit in response to this enforcement action is subject to being\nmade publicly available. If you believe that any portion of your responsive material qualifies for\nconfidential treatment under 5 U.S.C. 552(b), along with the complete original document you\nmust provide a second copy of the document with the portions you believe qualify for\nconfidential treatment redacted and an explanation of why you believe the redacted information\nqualifies for confidential treatment under 5 U.S.C. 552(b).\nIn your correspondence on this matter, please refer to CPF No. 5-2017-6006S for each document\nyou submit, please provide a copy in electronic format whenever possible.\n__________________________________ __________________\nChris Hoidal Date Issued\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\n\n520176006S_Region Withdrawal of Notice Letter_02012019_text.pdf\n\nVIA FACSIMILE TO (907) 777-8301 AND CERTIFIED MAIL\nFebruary 1, 2019\nMr. Greg Lalicker\nChief Executive Officer\nHilcorp Alaska, LLC\n1111 Travis Street\nHouston, Texas 77002\nRE: Withdrawal of Notice of Proposed Safety Order\nCPF No. 5-2017-6006S\nDear Mr. Lalicker:\nOn March 17, 2017, Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued a Notice of Proposed Safety Order (Notice) with respect to Hilcorp Alaska, LLC\n(Hilcorp) Middle Ground Shoal (MGS) Hazardous Liquid System located in Cook Inlet,\nAlaska. Hilcorp submitted a letter to PHMSA on April 13, 2017 requesting an informal\nconsultation, per 49 CFR § 190.239(b)(2), regarding the Notice. On May 9, 2017, PHMSA\nand Hilcorp personnel and attorneys met at PHMSA’s Anchorage, Alaska office to discuss the\nNotice. During the meeting, PHMSA requested certain information and documents regarding\nthe operations of the MGS platforms and the B pipeline at issue in the Notice. Subsequent to\nthe May 9, 2017 meeting, PHMSA and Hilcorp agreed to an extended informal consultation\nperiod during which PHMSA reviewed pertinent information regarding the regulatory\nclassification of the MGS Hazardous Liquid System (as well as other facilities located within\nthe water of the Cook Inlet).\nThe MGS Hazardous Liquid System’s pipeline is identified in the Notice as the “B Pipeline”\nand consists of the following four sections: 1) the MGS onshore facility to the “A Platform”;\n2) the “A Platform” to the “Baker Platform”; 3) the “A Platform” to the “C Platform”; and 4)\nthe “C Platform” to the “Dillon Platform”. All four of these segments collectively make up\nthe MGS “B Pipeline” and are identified in the Notice issued on March 17, 2017 as the\n“Affected Pipeline Facility”. PHMSA has now determined that two of the pipelines identified\nin the Notice meet a regulatory exemption, 49 CFR § 195.1(b)(5), and are therefore exempt\nfrom PHMSA’s regulations under 49 CFR Part 195. These two hazardous liquids pipeline\nsegments, the MGS onshore facility to the “A Platform”, and the “A Platform” to the “C\nPlatform” (collectively referred to herein as the Exempt Pipelines), are subject to the Alaska\n1\n\n\n\nDepartment of Environmental Conservation’s (ADEC) regulatory oversight.1 The remaining\ntwo pipelines identified in the Notice remain PHMSA-regulated pipelines.\nRegarding the two PHMSA-regulated pipelines identified in the Notice, information obtained\nby PHMSA since the Notice was issued revealed that the “A Platform” to the “Baker\nPlatform” pipeline segment was converted to natural gas service prior to issuance of the\nNotice. It is PHMSA’s understanding that this pipeline segment is out-of-service and filled\nwith seawater, but has not been abandoned pursuant to 49 CFR § 192.727. Therefore, the “A\nPlatform” to the “Baker Platform” pipeline segment remains a PHMSA-regulated natural gas\npipeline subject to inspection by PHMSA personnel. The final pipeline segment identified in\nthe Notice, the “C Platform” to the “Dillon Platform” was an out-of-service hazardous liquids\npipeline prior to issuance of the Notice. This pipeline segment has been cleaned but it has not\nbeen abandoned pursuant to 49 CFR § 195.59, and it was a PHMSA-regulated hazardous\nliquids pipeline when it was removed from service. Therefore, the “C Platform” to the\n“Dillon Platform” pipeline segment remains a PHMSA-regulated hazardous liquids pipeline\nsubject to inspection by PHMSA personnel.\nWith regard to the proposed corrective measures in the Notice, Hilcorp has conducted high-\nresolution side-scan sonar inspections of all pipelines identified in the Notice. In addition,\nHilcorp has modified the two Exempt Pipelines such that they are now capable of in-line\ninspection (ILI) and has performed ILI of the Exempt Pipelines.\nIt is PHMSA’s expectation that prior to returning either of the two out-of-service pipelines\nback into service, the Return to Service Plan include, among other things, modifying the\npipelines such that they are capable of ILI and that the pipelines be ILI’d prior to being\nreturned to service.\nThis letter is to inform you that PHMSA hereby withdraws the Notice and that the case is now\nclosed.\nIf you have any questions concerning this letter, please contact Mr. David Hassell, Alaska\nOffice Operations Supervisor, at (907) 271-6519.\nSincerely,\nChris Hoidal\nActing Director, Western Region\nPipeline and Hazardous Materials Safety Administration\n1 These two pipelines meet the statutory definition of Transportation-Related Oil Flow Lines, as defined by 49\nUSC § 60102(o).\n2\n\n\n\ncc: Mr. Alan K. Mayberry, Associate Administrator for Pipeline Safety, OPS\nMs. Linda Daugherty, Deputy Associate Administrator for Field Operations, OPS\nDavid S. Wilkins, Senior Vice President, Alaska\nErin McKay, Regulatory Compliance Manager Alaska Integrity Group\n3","truncated":false,"body_characters":36008}