{"operation":"document","citation":"CPF 52023035NOPV","title":"CONTANGO RESOURCES — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2023-10-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.446(c)(3), 195.446(c)(4), 195.446(e)(5).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023035nopv.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023035nopv.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-52023035nopv","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/52023035NOPV","body":"Notice of Probable Violation involving CONTANGO RESOURCES. PHMSA's enforcement data identifies the cited regulations as 195.446(c)(3),  195.446(c)(4),  195.446(e)(5). The case was opened on 2023-10-25 and is reported as closed as of 2025-03-31. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n52023035NOPV_Closure Letter_03312025_(22-239214).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_Closure%20Letter_03312025_(22-239214).pdf\n\n52023035NOPV_Closure Letter_03312025_(22-239214)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_Closure%20Letter_03312025_(22-239214)_text.pdf\n\n52023035NOPV_Final Order_09242024_(22-239214).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_Final%20Order_09242024_(22-239214).pdf\n\n52023035NOPV_Final Order_09242024_(22-239214)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_Final%20Order_09242024_(22-239214)_text.pdf\n\n52023035NOPV_Operator Response to Notice_11212023_(22-239214).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_Operator%20Response%20to%20Notice_11212023_(22-239214).pdf\n\n52023035NOPV_PCO_10252023_(22-239214).pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_PCO_10252023_(22-239214).pdf\n\n52023035NOPV_PCO_10252023_(22-239214)_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/52023035NOPV/52023035NOPV_PCO_10252023_(22-239214)_text.pdf\n\n52023035NOPV_Final Order_09242024_(22-239214)_text.pdf\n\nVIA ELECTRONIC MAIL TO: wcolyer@contango.com\nWilkie S. Colyer, Jr.\nChief Executive Officer\nContango Resources, LLC\n2628 Highway 36 S, PMB 283\nBrenham, Texas 77833\nRe: CPF No. 5-2023-035-NOPV\nDear Mr. Colyer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and specifies actions that need to be taken by Contango Resources, LLC, to comply\nwith the pipeline safety regulations. When the terms of the compliance order have been\ncompleted, as determined by the Director, Western Region, this enforcement action will be\nclosed. Service of the Final Order by e-mail is effective upon the date of transmission and\nacknowledgement 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 (Final Order)\ncc: Mr. Dustin Hubbard, Director, Western Region, Office of Pipeline Safety, PHMSA\nMs. Ellen McElrath, Vice President – Rockies, Contango Resources, LLC,\nellen.mcelrath@contango.com\nMr. Greg Westfall, Director, Gas Plants & Midstream, Contango Resources, LLC,\ngreg.westfall@contango.com\n\n\n\nMr. Caleb Dill, Supervisor, Operations, Contango Resources, LLC,\ncaleb.dill@contango.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____________________________________\n)\nIn the Matter of )\n)\nContango Resources, LLC, ) CPF No. 5-2023-035-NOPV\na subsidiary of Crescent Energy Co., )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom July 25 through July 29, 2022, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), inspected Contango Resources, LLC’s1 (Contango or Respondent) control room\nprocedures and records in Midwest, Wyoming.\nAs a result of the inspection, the Director, Western Region, OPS (Director), issued to\nRespondent, by letter dated October 25, 2023, a Notice of Probable Violation and Proposed\nCompliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed\nfinding that Contango had committed three violations of 49 C.F.R. Part 195 and proposed\nordering Respondent to take certain measures to correct the alleged violations.\nContango responded to the Notice by letter dated November 21, 2023 (Response). Contango\noffered additional information in response to the Notice and requested that Item 2 be withdrawn.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS 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. § 195.446(c)(3), which states:\n§ 195.446 Control room management.\n(a) ….\n(c) Provide adequate information. Each operator must provide its\n1 Contango is an operating subsidiary of Crescent Energy Company. Contango Resources, LLC, website, available\nat https://contango.com/about-us (last accessed August 30, 2024).\n\n\n\ncontrollers with the information, tools, processes and procedures necessary\nfor the controllers to carry out the roles and responsibilities the operator has\ndefined by performing each of the following:\n(1) ….\n(3) Test and verify an internal communication plan to provide adequate\nmeans for manual operation of the pipeline safely, at least once each\ncalendar year, but at intervals not to exceed 15 months;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(c)(3) by failing to test and\nverify its internal communication plan as required. Specifically, the Notice alleged that\nContango’s Environment Health, & Safety DOT CO2 Pipeline Control Room Management Plan\n(Rev. 0; March 1, 2022), section 5.3 Internal Communication Plan, stated that tabletop drills\nwould be the primary method for testing its internal communications plan. The Notice alleged\nthat the tabletop drills did not test the ability of Contango’s employees to communicate with\ncontrol room personnel from the pipeline right-of-way locations in the event that employees are\ndeployed to manually operate the pipeline. The Notice further alleged that Contango’s internal\ncommunication plan failed to provide details as to when employees would deploy to the pipeline\nrights-of-way and how communications between the deployed employees and the control room\npersonnel would occur and failed to provide adequate means for the safe manual operation of the\npipeline.\nRespondent did not contest this allegation of violation and provided additional information in its\nResponse, including its amended internal communication plan. Accordingly, after considering\nall of the evidence, I find that Respondent violated 49 C.F.R. § 195.446(c)(3) by failing to test\nand verify its internal communication plan to provide adequate means for manual operation of\nthe pipeline safely, at least once each calendar year, but at intervals not to exceed 15 months.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(c)(4), which states:\n§ 195.446 Control room management.\n(a) ….\n(c) Provide adequate information. Each operator must provide its\ncontrollers with the information, tools, processes and procedures necessary\nfor the controllers to carry out the roles and responsibilities the operator has\ndefined by performing each of the following:\n(1) ….\n(4) Test any backup SCADA systems at least once each calendar year,\nbut at intervals not to exceed 15 months; . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(c)(4) by failing to test its\nbackup supervisory control and data acquisition (SCADA) systems at least once each calendar\nyear, but at intervals not to exceed 15 months as required. Specifically, the Notice alleged that\nContango did not have a procedure to test backup SCADA systems and could not provide\nrecords that it had tested its backup SCADA systems.\nIn its Response, Respondent did not deny that it had failed to test its backup SCADA systems,\n\n\n\nbut explained that it had determined following PHMSA’s inspection that it did not maintain\nbackup SCADA equipment specific to only the pipeline, and therefore could not perform testing\nas required by § 195.446(c)(4) without significant operational and financial impact. Respondent\nalso stated that it had amended its procedures to remove language regarding backup SCADA\ntesting and added a requirement to manually shut in the pipeline in the event of a SCADA\nsystem failure and provided a copy of the revised procedure in its Response. Respondent stated\nthat the additional information provided in its Response warrants a withdrawal of Item 2.\nAfter considering all of the evidence, I find that Respondent failed to test its backup SCADA\nsystems at least once each calendar year, but at intervals not to exceed 15 months. Respondent’s\nargument that it is not required to test backup SCADA systems because it “does not maintain\nbackup SCADA equipment specific to only the pipeline” and thus testing would cause\nsignificant operational and financial impact, does not excuse compliance with the pipeline safety\nregulations.2 Section 195.446(c)(4) requires testing of any backup SCADA systems that an\noperator maintains. Part 195 defines the term “SCADA system” to mean “a computer-based\nsystem or systems used by a controller in a control room that collects and displays information\nabout a pipeline facility and may have the ability to send commands back to the pipeline\nfacility.”3 PHMSA’s control room management FAQs discuss backup SCADA systems as\n“independent or redundant systems that provide similar functionality to the primary SCADA\nsystem.”4 Here, Respondent maintains an Allen-Bradley distributed control system (DCS) that is\nused to monitor and control the pipeline with Human Machine Interfaces (HMIs) at several sites\nalong the pipeline. Each HMI site is identical and can fully control the pipeline; therefore, each\nHMI site is considered a redundant or backup control room. Respondent, therefore, must have\nprocedures for testing these backup systems. Further, the pipeline safety regulations do not\ndistinguish between SCADA systems that solely operate the pipeline and those that may include\nother functions. Additionally, the regulations do not waive compliance for testing backup\nSCADA systems that operators have in place based on its potential financial or operational\nburden. Accordingly, I find that Respondent violated 49 C.F.R. § 195.446(c)(4) by failing to test\nits backup SCADA systems.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.446(e)(5), which states:\n§ 195.446 Control room management.\n(a) ….\n(e) Alarm management. Each operator using a SCADA system must\nhave a written alarm management plan to provide for effective controller\nresponse to alarms. An operator’s plan must include provisions to:\n(1) ….\n(5) Monitor the content and volume of general activity being directed\n2 Response, at 1.\n3 49 C.F.R. § 195.2.\n4 PHMSA CRM FAQ C.08. Examples of backup SCADA systems described in FAQ C.08 include redundant\nservers, and entire backup control rooms with duplicate SCADA and communication systems. FAQ C.08 also\nexplains that backup SCADA systems do not have to duplicate the performance and functionality of the primary\nsystem in order to be considered a backup system.\n\n\n\nto and required of each controller at least once each calendar year, but at\nintervals not exceeding 15 months, that will assure controllers have\nsufficient time to analyze and react to incoming alarms; and\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.446(e)(5) by failing to monitor the\ncontent and volume of general activity being directed to and required of each controller at least\nonce each calendar year, but at intervals not exceeding 15 months, that will ensure controllers\nhave sufficient time to analyze and react to incoming alarms. Specifically, the Notice alleged\nthat Respondent could not provide any records demonstrating that it monitored the content and\nvolume of general activity being directed to and required of each controller at least once each\ncalendar year, but at intervals not exceeding 15 months, in order to verify controllers have\nsufficient time to analyze and react to incoming alarms.\nRespondent did not contest this allegation of violation and provided additional information in its\nResponse, including its amended control room management procedure. Accordingly, after\nconsidering all of the evidence, I find that Respondent violated 49 C.F.R. § 195.446(e)(5) by\nfailing to monitor the content and volume of general activity being directed to and required of\neach controller at least once each calendar year, but at intervals not exceeding 15 months.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, and 3 in the Notice for\nviolations of 49 C.F.R. §§ 195.446(c)(3), 195.446(c)(4), and 195.446(e)(5), respectively. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquid or\ncarbon dioxide or who owns or operates a pipeline facility is required to comply with the\napplicable safety standards established under chapter 601. The Director has indicated that\nRespondent has taken the following actions to address some of the cited violations:\nWith respect to the violation of § 195.446(c)(3) (Item 1), Respondent has amended its Standard\nOperating Guideline for: Execution of the Internal Communication Plan (PL-General-005, Rev.\n0), section 4 Testing Protocol, to provide for dispatching employees to pipeline locations to test\nand verify the ability for communications between the control room and field locations. The\nDirector indicated that the amended procedure satisfied the terms of the proposed compliance\norder in part, therefore, compliance actions for Item 1 are modified.\nWith respect to the violation of § 195.446(c)(4) (Item 2), Respondent amended its\nEnvironment Health, & Safety DOT CO2 Pipeline Control Room Management Plan, section 5.4\nBackup SCADA System, to indicate that backup SCADA systems are currently not applicable\nand that in the event of a SCADA system failure, the pipeline would be manually shut down.\nThe Director indicated that the amended procedure did not satisfy the terms of the proposed\ncompliance order. For the reasons discussed above that found Respondent in violation of\n§ 195.446(c)(4), I find that Respondent has not taken the necessary actions to address the cited\n\n\n\nviolation, and therefore the compliance actions for Item 2 are not modified.\nWith respect to the violation of § 195.446(e)(5) (Item 3), Respondent has amended its\nEnvironment Health, & Safety DOT CO2 Pipeline Control Room Management Plan, Appendix B\nAlarm Management Plan, to add a new section 4.0 Information Content & Volume to provide\ndetailed instructions for reviewing and documenting the analysis of the content and volume of\ngeneral activity being directed to and required of each controller that will ensure controllers have\nsufficient time to analyze and react to incoming alarms. The Director indicated that the amended\nprocedure satisfied the terms of the proposed compliance order in part, and therefore compliance\nactions for Item 3 are modified.\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 § 195.446(c)(3) (Item 1), Respondent must\nconduct a test of the internal communications plan using its amended procedure and\nsubmit documentation of the test to PHMSA within 60 days of receipt of the Final\nOrder.\n2. With respect to the violation of § 195.446(c)(4) (Item 2), Respondent must amend\nits procedures to provide detailed instructions for the testing of each backup SCADA\nsystem, as well as documenting each test. Respondent must test each backup\nSCADA system using its amended procedures and submit its amended procedure and\nrecords documenting each backup SCADA system test to PHMSA within 60 days of\nreceipt of the Final Order.\n3. With respect to the violation of § 195.446(e)(5) (Item 3), Respondent must\nconduct a review and analysis of the content and volume of general activity being\ndirected to and required of each controller using its amended procedure and submit\ndocumentation of the review and analysis to PHMSA within 60 days of receipt of the\nFinal Order.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nPHMSA requests that Respondent maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director. It is\nrequested that these costs be reported in two categories: (1) total cost associated with\npreparation/revision of plans, procedures, studies and analyses; and (2) total cost associated with\nreplacements, additions and other changes to pipeline infrastructure.\nFailure to comply with this Order may result in administrative assessment of civil penalties not\n\n\n\nto exceed $200,000, as adjusted for inflation (see 49 C.F.R. § 190.223 for adjusted amounts), for\neach violation for each day the violation continues or in referral to the Attorney General for\nappropriate relief in a district court of the United States.\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.\nSeptember 24, 2024\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n52023035NOPV_Closure Letter_03312025_(22-239214)_text.pdf\n\nVIA ELECTRONIC MAIL TO: WColyer@contango.com\nMarch 31, 2025\nMr. Wilkie S. Colyer\nChief Executive Officer\nContango Resources, LLC\n3230 Camp Bowie Blvd., Suite 810\nFort Worth, TX 73107\nCPF 5-2023-035-NOPV\nClosure Letter\nDear Mr. Colyer:\nOn September 24, 2024, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to Contango Resources, LLC (Contango) a Final Order in the above-referenced case. This\nOrder included a Compliance Order. On November 21, 2024 Contango requested, by letter, an\nextension to complete the terms of the Compliance Order. This request was granted via letter on\nNovember 27, 2024, giving Contango until February 1, 2025 to complete the required\ncompliance terms. On January 31, 2025, PHMSA received Contango’s response to the Final\nOrder. Based on our review of the documentation you provided, it has been determined that you\nhave complied with the terms of this Order.\nRegarding Item 1, the Compliance Order required you to test your internal communications plan.\nAccording to the records you submitted, this has been completed.\nRegarding Item 2, the Compliance Order required Contango to amend its testing procedures and\nto test each backup SCADA system. According to the records you submitted, Contango\namended its procedures, but no longer has any backup SCADA systems. Accordingly, Item 2\nhas been completed.\nRegarding Item 3, the Compliance Order required you to review the content and volume of\nactivity being directed to and required of each controller. According to the records you\nsubmitted, this has been completed.\nAccordingly, this case is now closed, and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\n\n\n\nSincerely,\nDustin Hubbard\nDirector, Western Region\nPipeline and Hazardous Materials Safety Administration\ncc: PHP-60 Compliance Registry\nPHP-500 J. Dunphy (#22-239214)\nCaleb Dill, Supervisor, Operations – Caleb.Dill@contango.com","truncated":false,"body_characters":20323}