A recent enforcement action announced by the Pipeline and Hazardous Materials Safety Administration (PHMSA) should serve to remind owners and operators of onshore oil and gas pipelines of two key compliance obligations–identifying all high consequence areas (HCAs) associated with a pipeline and informing PHMSA about which method will be used to assess the integrity of each covered segment of the pipeline.  The enforcement action involved an independent energy company with both offshore drilling and onshore properties in Southern California.

70-foot impact radius

According to PHMSA, in the alleged HCA violation, the operator failed to identify a mushroom farm within the calculated potential impact radius (PIR) of 70 feet of a gas pipeline in Oxnard.  Under 49 CFR 192.903, there are several ways to identify an HCA.  In this case, the farm would be classified as an “identified site” within the HCA definition.  PHMSA’s regulations define the term as either “an outside area or open structure that is occupied by twenty (20) or more persons on at least 50 days in any twelve (12)-month period, or a building that is occupied by twenty (20) or more persons on at least five (5) days a week for ten (10) weeks in any twelve (12)-month period. (The days and weeks need not be consecutive.)”

Assessment method

PHMSA regulations at 49 CFR 192.921 specify that an operator must assess the integrity of the pipeline in each covered segment by applying one or more listed methods, depending on the threats to which the segment is susceptible.  The listed methods include an internal inspection tool or tools, a pressure test, direct assessment, or any other technology an operator demonstrates can provide an equivalent understanding of the condition of the line pipe.  In the current case, PHMSA charged that the operator failed to specify an internal inspection tool that was capable of detecting corrosion and other threats to which the pipeline is susceptible, such as stress corrosion cracking or electric resistance welded seam failure. 

Corrections

In neither case did the operator contest the alleged violations.  PHMSA also reported that the operator revised its integrity management plan to include the specified segment as an HCA segment and revised its assessment method matrix to ensure appropriate internal inspection tools are selected.

PHMSA’s final order noted that the company reported the cost to achieve compliance, as requested by PHMSA.  The order did not indicate what those costs were.  Neither did PHMSA indicate that the operator was subject to a civil penalty.

The final order also included two warning items.  First, PHMSA stated that the operator allegedly failed to reassess one of its pipelines in accordance with its assessment schedule.  The second warning involved an alleged failure to measure program effectiveness on a semi-annual basis and failure to report the 2010 performance measures to PHMSA.

PHMSA stated that the operator had taken “certain actions” to address these warnings.  However, should violations of these items be found, PHMSA added that the operator may be subject to future enforcement action.