{"operation":"document","citation":"CPF 52022023NOPV","title":"ISLAND ENERGY SERVICES — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2022-04-27","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.205(a), 195.205(b)(1), 195.575(c), 195.579(d), 195.581(b), 195.583(a), 195.589(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-52022023nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-52022023nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-52022023nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/52022023NOPV","body":"Notice of Probable Violation involving ISLAND ENERGY SERVICES. PHMSA's enforcement data identifies the cited regulations as 195.205(a),  195.205(b)(1),  195.575(c),  195.579(d),  195.581(b),  195.583(a),  195.589(c). The case was opened on 2022-04-27 and is reported as closed as of 2023-02-14. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n52022023NOPV_Final Order_02142023_(21-218958).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52022023NOPV/52022023NOPV_Final%20Order_02142023_(21-218958).pdf\n\n52022023NOPV_Final Order_02142023_(21-218958)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52022023NOPV/52022023NOPV_Final%20Order_02142023_(21-218958)_text.pdf\n\n52022023NOPV_Operator Response to Notice and Request for Hearing_05262022_(21-218958).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52022023NOPV/52022023NOPV_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing_05262022_(21-218958).pdf\n\n52022023NOPV_PCO_04272022_(21-218958).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52022023NOPV/52022023NOPV_PCO_04272022_(21-218958).pdf\n\n52022023NOPV_PCO_04272022_(21-218958)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52022023NOPV/52022023NOPV_PCO_04272022_(21-218958)_text.pdf\n\n52022023NOPV_Final Order_02142023_(21-218958)_text.pdf\n\nFebruary 14, 2023\nVIA ELECTRONIC MAIL TO: jonmauer@islandenergyservices.com\nMr. Jon Mauer\nPresident and Chief Executive Officer\nIsland Energy Services, LLC\n91-480 Malakole Street\nKapolei, Hawaii 96707\nRe: CPF No. 5-2022-023-NOPV\nDear Mr. Mauer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes a finding of\nviolation and finds that the proposed actions to comply with the pipeline safety regulations have\nbeen completed. This case is now closed. Service of the Final Order by e-mail is effective upon\nthe date of transmission and acknowledgement of receipt as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA\nMr. Mark Dangler, Vice President, Logistics, Island Energy Services, LLC,\nmdangler@islandenergyservices.com\nMr. Teja Arika, Pipeline Integrity Engineer, Island Energy Services, LLC,\ntarika@islandenergyservices.com\nCONFIRMATION OF 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____________________________________\nIn the Matter of )\nIsland Energy Services, LLC, ) CPF No. 5-2022-023-NOPV\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom November 1 through November 5, 2021, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an on-site pipeline safety inspection of the facilities and records of\nIsland Energy Services, LLC’s (Island Energy or Respondent) Oahu Pipelines in Kapolei and\nHonolulu, Hawaii and its breakout facility in Hilo, Hawaii.\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated April 24, 2022, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Island Energy had violated 49 C.F.R. § 195.205 and proposed ordering Respondent\nto take certain measures to correct the alleged violation. The Notice also included an additional\nfive warning items pursuant to 49 C.F.R. § 190.205, which warned the operator to correct the\nprobable violations or face possible future enforcement action.\nIES Downstream, LLC, a wholly owned affiliate of Island Energy, responded to the Notice on\nbehalf of Island Energy by letter, dated May 26, 2022 (Response). Respondent contested the\nallegation and requested a meeting with OPS to discuss the Proposed Compliance Order.\nRespondent and OPS met on June 27, 2022. Respondent did not request a hearing and therefore\nhas waived its right to one.\nRespondent and OPS held a meeting to discuss the Proposed Compliance Order on June 27,\n2022. OPS subsequently submitted a recommendation that included revised compliance terms\non August 4, 2022 (Region Recommendation). Respondent then submitted a letter, dated\nOctober 25, 2022, which summarized the steps Respondent “plans to take to continue to inspect,\nmaintain and repair Hilo Tank 12 including the roof plates” (Supplemental Response). On\nDecember 12, 2022, OPS submitted a supplemental recommendation finding the information\nprovided by Respondent on October 25, 2022, satisfied the terms of the amended proposed\ncompliance items (Supplemental Region Recommendation).\n\n\n\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.205(b)(1), which states:\n§ 195.205 Repair, alteration and reconstruction of aboveground\nbreakout tanks that have been in service.\n(a) Aboveground breakout tanks that have been repaired, altered, or\nreconstructed and returned to service must be capable of withstanding the\ninternal pressure produced by hazardous liquid to be stored therein and any\nanticipated external loads.\n(b) After October 2, 2000, compliance with paragraph (a) requires the\nfollowing:\n(1) For tanks designed for approximate atmospheric pressure,\nconstructed of carbon and low alloy steel, welded or riveted, and non-\nrefrigerated; and for tanks built to API Std 650 (incorporated by reference,\nsee § 195.3) or its predecessor Standard 12C; repair, alteration; and\nreconstruction must be in accordance with API Std 653 (except section\n6.4.3) (incorporated by reference, see § 195.3)\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.205(b)(1) by failing to repair the\nroof of Tank 12, an atmospheric pressure breakout tank built to API Standard (Std) 12C, in\naccordance with API Std 653. Specifically, the Notice alleged that on November 4, 2021, a\nPHMSA inspector observed holes in the roof of Tank 12 due to corrosion. An email from the\noperator dated November 11, 2021, explained that the holes in the tank observed by the inspector\nhad been sealed with epoxy. The Notice alleged the epoxy repair does not meet the requirements\nof § 195.205(b)(1) or Chapter 9 of API Std 653.\nIn its Response, Respondent argued it was in compliance with pipeline safety regulations\nbecause API RP 575, Section 9.3 allows for repairs of tank roofs with soft patches. Respondent\nstated its records showed that, as of last testing in May 2022, the repaired areas on Tank 12’s\nroof were within safe operating standards around the holes filled with the metal-epoxy.\nRespondent reported that metal thickness readings in the areas surrounding the holes following\nrepairs were above 0.09 inches at the lowest points, but Respondent did not provide the precise\nreadings. Respondent stated other areas where external coating had failed in a similar fashion to\nthe holes returned readings at 0.144 inches at the lowest points. Respondent stated Island Energy\ninspectors concluded that the integrity of the tank roof was not compromised for the purposes of\npersonnel accessing and walking on the roof.\nSection 195.205(a) requires aboveground breakout tanks that have been repaired and returned to\nservice be capable of withstanding any anticipated external loads. Section 195.205(b)(1)\nrequires certain tanks to be repaired in accordance with API Std 653. API Std 653, Section\n4.2.1.2 requires “[r]oof plates corroded to an average thickness of less than 0.09 in. in any 100-\ninch area or roof plates with any holes through the roof plate shall be repaired or replaced.”\nChapter 9 of API Std 653 describes allowable methods for tank repair. API Std 653, Section\n\n\n\n9.1.1 states, “the basis for repairs and alterations shall be an API Std 650 equivalence.” Section\n5.10.2.2 of API Std 650 requires roof plates to measure at a minimum thickness of 3/16th of an\ninch (0.1875 in.). Chapter 4 of API Std 650 contains detailed requirements regarding allowable\nmaterials and Appendix N describes conditions that must be followed when using an alternative\nmaterial. Neither API Std 653 nor API Std 650 specifically authorize the use of epoxy to repair\nholes or corroded areas of roof plates.\nHere, there is no dispute that API Std 653 required the roof plate of Tank 12 to be replaced or\nrepaired as the roof had several holes through the metal plate. Respondent did not replace the\nroof plate, but rather it filled the holes with epoxy on November 11, 2021. Respondent does not\ndescribe any action taken to repair the other corroded areas on the roof plate. Respondent\nconducted testing on May 10, 2022, following the November repairs, which showed that the\nplate thickness around the holes filled with metal-epoxy was above 0.09 inches (without\nreporting the precise readings), and other areas as thin as 0.144 inches due to corrosion.\n1 This\ntesting shows that the repairs made on November 11, 2021, failed to restore the tank roof plate\nconsistent with the requirements of API Std 650, Section 5.10.2.2, which requires a minimum\nroof plate thickness of 0.1875 inches. Further, the use of the epoxy is not consistent with the\nmaterials requirements in Chapter 4 or Appendix N of API Std 650. The repairs of the roof\nplate, therefore, were not in compliance with the API Std 653 or API Std 650.\nRespondent argues the use of epoxy to make the repairs is consistent with § 195.205(b)(1)\nbecause portions of API Std 653 reference API Std 2610, which references API RP 575, and the\nrepair with metal epoxy is in accordance with the recommendations in API RP 575.\n2 However,\nhere, the applicable section of API Std 653 does not refer to API Std 2610, but rather it refers to\nAPI Std 650. While API RP 575 may allow for repairs to be made with soft patches, the code\nspecifically requires repairs be made in accordance with API Std 653, which requires API 650\nequivalence, and those requirements were not met in making the repairs on November 11, 2021,\nas described above. Because Respondent’s repair is not consistent with API Std 653, I find the\nRespondent’s repair was not compliant with § 195.205(b)(1).\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.205(b)(1) by failing to repair the roof of an aboveground breakout tank in accordance with\nAPI Std 653.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\n1 Response, at 1-2.\n2 AP RP 575 Section 10.3.1 states, in relevant part “[f]illing with air-hardening adhesive-to-steel epoxies may be\nsuitable if it will not be affected by the tank’s contents. Any other material of a putty-like nature that hardens upon\ndrying can be used for temporary repairs; such materials must be able to tolerate the tank’s contents in addition to\nmaking a tight bond with the steel plate.”\n\n\n\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Item 1 in the Notice for violation of 49\nC.F.R. Part 195. Under 49 U.S.C. § 60118(a), each person who engages in the transportation of\nhazardous liquids or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under chapter 601.\nWith regard to the violation of § 195.205(b)(1) (Item 1), Respondent argued that it was in\ncompliance with the regulation and requested a meeting with OPS to discuss the Proposed\nCompliance Order. Island Energy did not provide a separate argument for withdrawal or\nmodification of the Compliance Order for this Item. For the reasons stated above, the underlying\nallegation of violation has not been withdrawn, and consequently, the Compliance Order for this\nItem is not withdrawn.\nOPS and Respondent met on June 27, 2022, where the parties discussed the Proposed\nCompliance Order.3 At that time, Respondent expressed its concern of conducting a roof plate\nrepair consistent with the proposed compliance terms within the time frame set forth in the\nProposed Compliance Order.4 Pursuant to that conversation, OPS submitted a recommendation\nto amend the proposed compliance terms.5\nFor the above reasons, the Compliance Order is modified as set forth below.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. With respect to the violation of § 195.205(b)(1) (Item 1), Respondent must, within 90\ndays of receiving the Final Order, provide to the Director, Western Region,\nprocedures for maintaining and repairing Tank 12’s roof plates in such a manner to\nensure that personnel are safely supported by the tank’s roof. The procedures must\ninclude, at a minimum:\na. Procedures for conducting Tank 12’s routine, monthly in-service inspection,\nthat include provisions for close inspection of the coating condition of all\nsurfaces where personnel have access to the tank roof. The procedures must\nhave clear and specific provisions to promptly repair and re-coat any location\nthat has coating damage or visible evidence of corrosion;\nb. Procedures for conducting Tank 12’s external and ultrasonic inspections by an\nauthorized inspector. The procedures must clearly describe the inspection\nprocess and inspection interval, and that interval must be based on a\n3 See Region Recommendation, at 1.\n4 Id.\n5 Id., at 2.\n\n\n\nconservative estimate of corrosion growth rate from known thickness\nmeasurements. The ultrasonic inspection procedures must include a close\nexamination and thickness measurements along the tank’s walkway at all\nlocations where coating has failed, where local dishing allows ponding of\nrainwater, or anywhere else where there is visible evidence of corrosion or\nthinning of the roof plate; and\nc. Procedures for repairing the failed locations of Tank 12’s roof with\nreplacement plates or patch plates upon the tanks next out-of-service\ninspection. These procedures must include dates, to the nearest month and\nyear, that the tank will be taken out of service for inspection and repair.\nOn October 25, 2022, Respondent submitted documentation to OPS in accordance with the\namended proposed compliance terms described in the Region Recommendation. On December\n12, 2022, OPS submitted a Supplemental Region Recommendation stating it reviewed\nRespondent’s October Supplemental Response, and the Director found Respondent’s actions\nsufficient to satisfy the amended proposed compliance terms.\n6\nWARNING ITEMS\nWith respect to Items 2 through 6, the Notice alleged probable violations of Part 195, but\nidentified them as warning items pursuant to § 190.205. The warnings were for:\n49 C.F.R. § 195.575(c) (Item 2) ─ Respondent’s alleged failure to inspect and\nelectrically test each electrical isolation to assure isolation is adequate;\n49 C.F.R. § 195.579(d) (Item 3) ─ Respondent’s alleged failure to install a tank\nbottom lining in an aboveground breakout tank built to Standard 12C in\naccordance with API RP 652;\n49 C.F.R. § 195.581(b) (Item 4) ─ Respondent’s alleged failure to use coating\nmaterial suitable for the prevention of atmospheric corrosion;\n49 C.F.R. § 195.583(a) (Item 5) ─ Respondent’s alleged failure to inspect each\npipeline or portion of pipeline that is exposed to the atmosphere for evidence of\natmospheric corrosion at least once every three calendar years, but with intervals\nnot exceeding 39 months; and\n49 C.F.R. § 195.589(c) (Item 6) ─ Respondent’s alleged failure to maintain a\nrecord of each analysis, check, demonstration, examination, inspection,\ninvestigation, review, survey, and test required to demonstrate the adequacy of\ncorrosion control measures or that corrosion requiring control measures does not\nexist.\n6 Supplemental Region Recommendation, at 1.\n\n\n\nRespondent presented information in its Response showing that it had taken certain actions to\naddress the cited warning items. Under § 190.205, PHMSA does not adjudicate warning items to\ndetermine whether a probable violation occurred. If OPS finds a violation of any of these items\nin a subsequent inspection, Respondent may be subject to future enforcement action.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address. The written petition must be received no later than\n20 days after receipt of the Final Order by Respondent. Any petition submitted must contain a\nstatement of the issue(s) and meet all other requirements of 49 C.F.R. § 190.243. The terms of\nthe order, including corrective action, remain in effect unless the Associate Administrator, upon\nrequest, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nFebruary 14, 2023\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":17383}