Articles

This PHMSA warning letter could equal big bucks

September 1, 2024

A June 2024 warning letter from the Pipeline and Hazardous Materials Safety Administration (PHMSA) to Dakota Gasification Company (DGC) highlights critical areas of pipeline safety compliance. As industry professionals, it's crucial we learn from these findings to enhance our own operations.

Key issues identified

Public Awareness Program Evaluation (49 CFR § 195.440)

DGC failed to fully evaluate their public awareness program effectiveness by not comparing survey responses over time to identify trends or behavior changes, violating § 195.440(c).

Preventive and Mitigative Measures (PMMs) (49 CFR § 195.452(i)(1))

The company didn't implement identified PMMs, specifically alternating current mitigation in a high consequence area.

Documentation of Decision-Making (49 CFR § 195.452(l)(1)(ii))

Insufficient documentation was provided to justify decisions regarding PMMs for multiple high consequence areas.

Tips from Nathan to prevent future issues

Although these tips are not mentioned or recommended in PHMSA's warning letter, Nathan is a firm believer in giving value to others.

Implement robust tracking systems for survey responses, allowing for trend analysis over multiple years. This would make a great use case for you to start implementing machine learning and AI solutions.
Establish clear timelines and accountability for implementing identified PMMs.
Develop comprehensive documentation processes that capture the rationale behind all integrity management decisions. Like the old saying goes, if you didn't document it, it didn't happen!'
Conduct regular internal audits to ensure compliance with regulations and identify gaps before official inspections.
Invest in training programs to keep staff up-to-date on evolving regulatory requirements and best practices.

Potential fines

While no penalties were assessed in this case, it's important to note the significant financial risks of non-compliance, especially if the items listed in the warning letter are not addressed accordingly. Currently, PHMSA can impose civil penalties up to $266,015 per violation per day, with a maximum of $2,660,135 for a related series of violations. For LNG facilities (not associated with this article), an additional penalty of up to $97,179 per violation may apply.

These potential fines underscore the critical importance of maintaining rigorous compliance programs. If we proactively address these areas, we can enhance pipeline safety and minimize regulatory risks. It's pretty simple when you step back and look at the big picture.

What steps is your organization taking to stay ahead of compliance challenges? I'd love to hear your thoughts.

Citations:
[1] https://primis.phmsa.dot.gov/enforcement-data/cases/WL
[2] https://primis.phmsa.dot.gov/enforcement-documents/32024037WL/32024037WL_Warning%20Letter_06282024_%2823-264742%29_text.pdf
[3] https://primis.phmsa.dot.gov/enforcement-documents/320185004W/320185004W_Warning%20Letter_05292018_text.pdf
[4] https://primis-stage.phmsa.dot.gov/enforcement-data/operator/515
[5] https://www.linkedin.com/pulse/phmsa-warning-letter-could-equal-big-bucks-addressed-properly-hammer-kvvec
[6] https://primis.phmsa.dot.gov/enforcement-data/operator/515
[7] https://primis.phmsa.dot.gov/enforcement-data/case/32024037WL
[8] https://primis.phmsa.dot.gov/enforcement-documents/320125024W/320125024W_Warning%20Letter_11272012_text.pdf

Disclaimer: This is not legal advice and shall not be construed as such.