EXXONMOBIL PRODUCTION COMPANY, A DIVISION OF EXXON MOBIL CORPORATION — Notice of Probable Violation

case documentOfficial PDF520176017_Operator Post-Hearing Statement_12082017.pdf#

case documentOfficial PDF520176017_Operator Pre Hearing Submission_10302017.pdf#

party submissionOfficial PDF520176017_Operator Response to Notice and Request for Hearing_06302017.pdf#

520176017_Final Order_09032019_text.pdf, page 1Official PDFSeptember 3, 2019 Mr. Darren W. Woods Chairman and Chief Executive Officer Exxon Mobil Corporation 5959 Las Colinas Boulevard Irving, Texas 75039 Re: CPF No. 5-2017-6017 Dear Mr. Warren: Enclosed please find the Final Order issued in the above-referenced case. It withdraws the allegation of violation in the Notice of Probable Violation issued to Exxon Mobil Production Company, a subsidiary of Exxon Mobil Corporation, on May 24, 2017. Accordingly, this case is now closed. Service of the Final Order by certified mail is effective upon the date of mailing, as provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter. Sincerely, Alan K. Mayberry Associate Administrator for Pipeline Safety Enclosure cc: Mr. Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA Mr. Colin G. Harris, Faegre Baker Daniels, LLP, 1470 Walnut Street, Suite 300, Boulder, Colorado, 80302 CERTIFIED MAIL - RETURN RECEIPT REQUESTED#

520176017_Final Order_09032019_text.pdf, page 2U.S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D.C. 20590 __________________________________________ In the Matter of ) ExxonMobil Production Company, ) CPF No. 5-2017-6017 a subsidiary of Exxon Mobil Corporation, ) ) ) ) Respondent. ) __________________________________________) FINAL ORDER From May 16-19, 2016, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of ExxonMobil Production Company’s (ExxonMobil or Respondent), Shute Creek carbon dioxide (CO2) facility located near La Barge, Wyoming. ExxonMobil’s Shute Creek CO2 facility is one of the largest CO2 capture plants in the world and has the capacity to capture approximately 365 million cubic feet of CO2 per day from gas streams.1 As a result of the inspection, the Director, Western Region, OPS (Director), issued to Respondent, by letter dated May 24, 2017, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that ExxonMobil violated 49 C.F.R. § 195.446(a) and proposed assessing a civil penalty of $43,200 for the alleged violation. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violation. The warning item required no further action but warned the operator to correct the probable violation or be subject to future enforcement action. ExxonMobil responded to the Notice by letter dated June 30, 2017 (Response). Respondent contested the allegation of violation, proposed civil penalty and compliance order, and requested a hearing. A hearing was subsequently held on November 8, 2017, in Lakewood, Colorado, with an attorney from the Office of Chief Counsel, PHMSA, presiding. At the hearing, Respondent was represented by counsel. 1 ExxonMobil News and Updates, ExxonMobil Expands World’s Largest Carbon Capture Plant in Wyoming (Dec. 10, 2010), available at https://news.exxonmobil.com/press-release/exxonmobil-expands-worlds-largest-carbon- capture-plant-wyoming (Last accessed June 5, 2019).#

520176017_Final Order_09032019_text.pdf, page 3CPF 5-2017-6017 Page 2 WITHDRAWAL OF VIOLATION At the hearing, ExxonMobil contested the allegation in the Notice that it violated 49 C.F.R. Part 195, as follows: Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(a), which states in relevant part: § 195.446 Control room management. (a) General. This section applies to each operator of a pipeline facility with a controller working in a control room who monitors and controls all or part of a pipeline facility through a SCADA system. Each operator must have and follow written control room management procedures that implement the requirements of this section. The procedures required by this section must be integrated, as appropriate, with the operator's written procedures required by §195.402. An operator must develop the procedures no later than August 1, 2011, and must implement the procedures according to the following schedule. The procedures required by paragraphs (b), (c)(5), (d)(2) and (d)(3), (f) and (g) of this section must be implemented no later than October 1, 2011. The procedures required by paragraphs (c)(1) through (4), (d)(1), (d)(4), and (e) must be implemented no later than August 1, 2012. The training procedures required by paragraph (h) must be implemented no later than August 1, 2012, except that any training required by another paragraph of this section must be implemented no later than the deadline for that paragraph. The Notice alleged that Respondent violated 49 C.F.R. § 195.446(a) by failing to have and follow written control room management procedures that implement the requirements of § 195.446. Specifically, the Notice alleged that ExxonMobil maintains an active control room at the Shute Creek gas plant and failed to have the required control room management procedures pursuant to § 195.446(a). In its Recommendation, the Region stated that this Item should be withdrawn, along with the associated civil penalty and compliance order. Therefore, I withdraw this Item without reaching any of the jurisdictional or factual arguments raised by either the Respondent or the Region. Accordingly, for the reasons discussed above, I withdraw Item 2. ASSESSMENT OF PENALTY Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed $200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.2 In determining the amount of a civil penalty under 49 U.S.C. 2 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts, 83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).#

520176017_Final Order_09032019_text.pdf, page 4CPF 5-2017-6017 Page 3 § 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature, circumstances, and gravity of the violation, including adverse impact on the environment; the degree of Respondent’s culpability; the history of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue doing business; and the good faith of Respondent in attempting to comply with the pipeline safety regulations. In addition, I may consider the economic benefit gained from the violation without any reduction because of subsequent damages, and such other matters as justice may require. The Notice proposed a total civil penalty of $43,200 for the violation cited above. Item 2: The Notice proposed a civil penalty of $43,200 for Respondent’s violation of 49 C.F.R. § 195.446(a), for failing to have and follow written control room management procedures required by § 195.446. For the reasons discussed above, this item was withdrawn. Accordingly, I withdraw the civil penalty of $43,200. COMPLIANCE ORDER The Notice proposed a compliance order with respect to Item 2 for violation of 49 C.F.R. § 195.446(a). As stated above, I am withdrawing the proposed Compliance Order. WARNING ITEM With respect to Item 1, the Notice alleged probable violations of Part 195 but did not propose a civil penalty or compliance order for this item. Therefore, this is a warning item. The warning was for: 49 C.F.R. § 195.588(b)(1) (Item 1) ─ Respondent’s alleged failure to follow the requirements for performing External Corrosion Direct Assessment. Specifically, ExxonMobil failed to follow the requirements of NACE Standard SP-0502-2010, which is incorporated by reference in 49 CFR § 195.3(f)(2). If OPS finds a violation of this provision in a subsequent inspection, Respondent may be subject to future enforcement action. The terms and conditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5. September 3, 2019 ___________________________________ _________________________ Alan K. Mayberry Date Issued Associate Administrator for Pipeline Safety#

520176017_NOPV PCP PCO_05242017_text.pdf, page 1Official PDFNOTICE OF PROBABLE VIOLATION PROPOSED CIVIL PENALTY and PROPOSED COMPLIANCE ORDER CERTIFIED MAIL - RETURN RECEIPT REQUESTED May 24, 2017 Mr. Thomas R. Walters President ExxonMobil Production Company A Division of ExxonMobil Corporation P.O Box 4358 Houston, Texas 77210 CPF 5-2017-6017 Dear Mr. Walters: On May 16 through 19, 2016, a representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety, pursuant to Chapter 601 of 49 United States Code, inspected ExxonMobil Production Company’s (ExxonMobil) CO2 pipeline facility in the vicinity of La Barge, Wyoming. As a result of the inspection, it is alleged that ExxonMobil has committed probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations, Part 195. The items inspected and the probable violations are: 1. §195.588 What standards apply to direct assessment? (b) The requirements for performing external corrosion direct assessment are as follows: (1) General. You must follow the requirements of NACE SP0502 (incorporated by reference, see § 195.3). Also, you must develop and implement an - External#

520176017_NOPV PCP PCO_05242017_text.pdf, page 2Corrosion Direct Assessment (ECDA) plan that includes procedures addressing pre-assessment, indirect examination, direct examination, and post-assessment. NACE SP0502 5.1.3 A minimum of one dig is required regardless of the results of the indirect inspection and preassessment steps. Guidelines for determining location and minimum of excavations and direct examinations are given in Paragraph 5.3. 6.7 Assessment of ECDA Effectiveness 6.7.2 At least one additional direct examination at a randomly selected location shall be performed to provide additional confirmation that the ECDA process has been successful. 6.7.2.1 For initial ECDA applications, at least two additional direct examinations are required for process validation. The direct examinations shall be performed at randomly selected locations, one of which contains scheduled indication (or monitored indication if no scheduled indications exist) and one in an area where no indication was detected. ExxonMobil failed to follow the requirements for performing External Corrosion Direct Assessment (ECDA). Specifically, ExxonMobil failed to follow the requirements of NACE Standard SP-0502-2010 (NACE Standard), which is incorporated by reference in 49 CFR 195.3(f)(2). NACE Standard Section 6.7.2.1 provides that for initial ECDA application, at least two additional direct examinations are required for process validation. During the inspection, ExxonMobil presented only two direct examination locations for its initial assessment. ExxonMobil is required to perform at least four direct examinations for its initial assessment. Accordingly, ExxonMobil violated §195.588(b)(1) by failing to follow the requirements of NACE SP0502 when performing ECDA. 2. § 195.446 Control room management. (a) General. This section applies to each operator of a pipeline facility with a controller working in a control room who monitors and controls all or part of a pipeline facility through a SCADA system. Each operator must have and follow written control room management procedures that implement the requirements of this section. The procedures required by this section must be integrated, as appropriate, with the operator's written procedures required by §195.402. An operator must develop the procedures no later than August 1, 2011, and must implement the procedures according to the following schedule. The procedures required by paragraphs (b), (c)(5), (d)(2) and (d)(3), (f) and (g) of this section must be implemented no later than October 1, 2011. The procedures required by paragraphs (c)(1) through (4), (d)(1), (d)(4), and (e) must be implemented no 2#

520176017_NOPV PCP PCO_05242017_text.pdf, page 3later than August 1, 2012. The training procedures required by paragraph (h) must be implemented no later than August 1, 2012, except that any training required by another paragraph of this section must be implemented no later than the deadline for that paragraph. ExxonMobil failed to comply with §195.466(a) by not having and following written control room management procedures that implement the requirements of §195.446. ExxonMobil has an active control room at the Shute Creek gas plant that controls and monitors its 160 miles CO2 pipeline, which starts at the Shute Creek compressor station about 2 miles east of the Shute Creek gas plant. As such, ExxonMobil is required to have control room management procedures pursuant to §195.446(a) in place for its Shute Creek gas plant. Proposed Civil Penalty Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $205,638 per violation per day the violation persists up to a maximum of $2,056,380 for a related series of violations. For violations occurring between January 4, 2012 to August 1, 2016, the maximum penalty may not exceed $200,000 per violation per day, with a maximum penalty not to exceed $2,000,000 for a related series of violations. For violations occurring prior to January 4, 2012, the maximum penalty may not exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for related series of violations. Item number PENALTY Item 2 $43,200 Warning Items With respect to Item 1, we have reviewed the circumstances and supporting documents involved in this case and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to promptly correct this item. Failure to do so may result in additional enforcement action. Proposed Compliance Order With respect to Item 2, pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration proposes to issue a Compliance Order to ExxonMobil. Please refer to the Proposed Compliance Order, which is enclosed and made a part of this Notice. Response to this Notice 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. All material you submit in response to this enforcement action may be made publicly available. If you believe that any portion of your responsive material qualifies for3#

520176017_NOPV PCP PCO_05242017_text.pdf, page 4confidential 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 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. In your correspondence on this matter, please refer to CPF 5-2017-6017 and for each document you submit, please provide a copy in electronic format whenever possible. Sincerely, Chris Hoidal Director, Western Region Pipeline and Hazardous Materials Safety Administration Enclosures: Proposed Compliance Order Response Options for Pipeline Operators in Compliance Proceedings cc: PHP-60 Compliance Registry PHP-500 G. Ogirima (#153157) 4#

520176017_NOPV PCP PCO_05242017_text.pdf, page 5PROPOSED COMPLIANCE ORDER Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to issue to Exxon Mobil a Compliance Order incorporating the following remedial requirements to ensure the compliance of ExxonMobil with the pipeline safety regulations: 1. 2. 3. In regard to Item 2 of the Notice, Exxon Mobil must comply with 49 C.F.R. §195.446(a)(1) by having and following written control room management procedures that implement the requirement of 195.446. ExxonMobil must respond within 30-days of receipt of this Notice It is requested (not mandated) that ExxonMobil maintain documentation of the safety improvement costs associated with fulfilling this Compliance Order and submit the total to Chris Hoidal, Director, Western Region, Pipeline and Hazardous Materials Safety Administration. It is requested that these costs be reported in two categories: 1) total cost associated with preparation/revision of plans, procedures, studies and analyses, and 2) total cost associated with replacements, additions and other changes to pipeline infrastructure. 5#