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[Federal Register Volume 72, Number 52 (Monday, March 19, 2007)]
[Notices]
[Pages 12823-12827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4876]

[[Page 12823]]

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DEPARTMENT OF THE INTERIOR

Minerals Management Service

Outer Continental Shelf Civil Penalties

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice summarizing Outer Continental Shelf Civil Penalties paid 
from January 1, 2006, through December 31, 2006.

-----------------------------------------------------------------------

SUMMARY: This notice provides a listing of civil penalties paid from 
January 1, 2006, through December 31, 2006, for violations of the Outer 
Continental Shelf Lands Act (OCSLA). The goal of the MMS Outer 
Continental Shelf (OCS) Civil Penalties Program is to assure safe and 
clean operations in the OCS. Through the pursuit, assessment, and 
collection of civil penalties and referrals for the consideration of 
criminal penalties, the program is designed to encourage compliance 
with OCS statutes and regulations. The purpose of publishing the 
penalties summary is to provide information to the public on violations 
of special concern in OCS operations and to provide an additional 
incentive for safe and environmentally sound operations.

FOR FURTHER INFORMATION CONTACT: Joanne McCammon, Program Coordinator, 
at 703-787-1292.

SUPPLEMENTARY INFORMATION: The Oil Pollution Act of 1990 (OPA 90) 
strengthened section 24 of the OCSLA Amendments of 1978. Subtitle B of 
OPA 90, titled ``Penalties,'' increased the amount of the civil penalty 
from a maximum of $10,000 to a maximum of $20,000 per violation for 
each day of noncompliance. More importantly, in cases where a failure 
to comply with applicable regulations constitutes or constituted a 
threat of serious, irreparable, or immediate harm or damage to life 
(including fish and other aquatic life); property; any mineral deposit; 
or the marine, coastal, or human environment; OPA 90 provided the 
Secretary of the Interior (Secretary) with the authority to assess a 
civil penalty without regard to the requirement of expiration of a 
period of time allowed for corrective action.
    The provisions of OPA 90 also require the Secretary to adjust the 
maximum civil penalty to reflect any increases in the Consumer Price 
Index. Every 3 years, MMS analyzes the civil penalty maximum amount in 
conjunction with the CPI prepared by the U.S. Department of Labor. If 
an adjustment is necessary, MMS informs the public through the Federal 
Register of the new maximum amount. The MMS has published regulations 
adjusting the civil penalty assessment to $25,000 on August 8, 1997 (62 
FR 42668), and to $30,000 on November 28, 2003 (68 FR 61622).
    Between August 18, 1990, and January 2007, MMS initiated 583 civil 
penalty reviews. Operators have paid 459 civil penalties for a total of 
$15,370,792 in fines.
    On September 1, 1997, the Associate Director for Offshore Minerals 
Management issued a notice informing lessees and operators of Federal 
oil, gas, and sulphur leases in the OCS that MMS will annually publish 
a summary of OCS civil penalties paid. The annual summary will 
highlight the identity of the party, the regulation violated, and the 
amount paid. The following table provides a listing of the 41 penalties 
paid between January 1, 2006, and December 31, 2006. The total amount 
collected was $1,480,000. A quarterly update of the list is posted on 
MMS's home page, http://www.mms.gov/civilpenalties/CP_2006.HTM.

                   2006 Civil/Criminal Penalties Summary; All Penalties Paid in Calendar 2006
                                             [01/01/2006-12/31/2006]
----------------------------------------------------------------------------------------------------------------
  Operator name (contractor) and                                  Penalty paid     Regulation(s)  violated  (30
             case No.                  Violation and date(s)     and date paid                 CFR)
----------------------------------------------------------------------------------------------------------------
The Houston Exploration Company...  Failed to conduct one               $10,000  Sec.   250.108.
(Grasso Production Management)....   annual crane inspection.           8/25/06
G-2003-004........................  7/1/02-9/30/02              ...............
PetroQuest Energy, LLC............  Missing grating &                   $60,000  Sec.   250.802(b),
(Wood Group Production Services)..   handrails, corroded                 1/3/06  Sec.   250.107.
                                     unsafe steps, and severe
                                     corrosion around the fuel
                                     scrubber created an
                                     unsafe situation for
                                     personnel. Also, the
                                     flowline and departing
                                     pipeline did not have
                                     secondary over-pressure
                                     protection.
G-2004-026........................  6/29/04-6/29/04             ...............
El Paso Production Oil and Gas      Explosion and fire                  $25,000  Sec.   250.107
 Company.                            occurred on platform from           2/7/06
                                     welding and cutting
                                     operations near
                                     hydrocarbons.
G-2005-007........................  12/23/04-12/23/04           ...............
Exxon Mobil Corporation...........  The Pressure Safety Low             $25,000  Sec.   250.803(b)(2)(i).
                                     (PSL) for Well G-24 had             6/8/06
                                     the incorrect spring and
                                     piston installed; the
                                     spring tension was backed
                                     off to a point where it
                                     would not function. This
                                     violation occurred for 11
                                     days.
G-2005-012........................  12/19/04-12/29/04           ...............
Apache Corporation................  During an annual                    $28,000  Sec.   250.803.
(Wood Group Production Services)..   inspection, the inspector          3/10/06
                                     discovered that the
                                     Emergency Shut Down (ESD)
                                     stations for both the
                                     North and South boat
                                     landings were out-of-
                                     service.
G-2005-014........................  10/15/04-10/18/04           ...............
Noble Energy, Inc.................  The gas detector panel             $160,000  Sec.   250.459(b).
(Hercules Offshore Drilling)......   that monitors the mud pit          2/15/06
                                     room and shale shaker
                                     area was found to be in
                                     bypass during a monthly
                                     rig inspection. The
                                     operator forgot to put it
                                     back in service after
                                     calibrating the sensors.
                                     When the panel was taken
                                     out of bypass and tested,
                                     the audible alarm failed
                                     to activate.
G-2005-015........................  2/23/05-3/2/05              ...............
Energy Partners Ltd...............  The level safety high                $8,000  Sec.   250.803(c).
                                     (LSH) shut-in sensor for           1/10/06
                                     the deck drain sump tank
                                     was bypassed at the main
                                     panel. Neither the LSH
                                     nor the operating
                                     condition of the sump
                                     tank were being monitored
                                     by platform personnel.
G-2005-016........................  3/2/05-3/2/05               ...............

[[Page 12824]]

 
El Paso Production Oil and Gas      Shut down valve connected           $10,000  Sec.   250.802(b).
 Company.                            in such a way that it               8/7/06
(Baker Energy, Inc.)..............   would not operate as
                                     designed; pressure would
                                     not bleed off if an upset
                                     had occurred.
G-2005-020........................  3/10/05-3/10/05             ...............
Apache Corporation................  Grating missing on the              $66,000  Sec.   250.107.
(Wood Group Production Services)..   plus 10 deck level in two           2/9/06
                                     areas and area not
                                     barricaded to prevent
                                     personnel from entering.
G-2005-021........................  4/10/05-4/10/05             ...............
Apache Corporation................  During a production follow-         $24,000  Sec.   250.803(c).
(Wood Group Production Services)..   up inspection on February          3/13/06
                                     20, 2005, wells A002 and
                                     A003 Surface Safety
                                     Valves (SSVs) were pinned
                                     out of service in the
                                     open position, and the
                                     wells were not flagged or
                                     monitored.
G-2005-022........................  2/20/05-2/20/05             ...............
ATP Oil & Gas Corporation.........  The vertical run Surface            $21,000  Sec.   250.803(c).
(Wood Group Production Services)..   Safety Valve (SSV) for             6/22/06
                                     Well C-2 was bypassed and
                                     locked out of service
                                     with a locking cap.
G-2005-023........................  5/17/05-5/19/05             ...............
Millennium Offshore Group, Inc....  Unsafe and un-workmanlike           $10,000  Sec.   250.107.
(TODCO)...........................   operations were conducted          7/27/06
                                     in that the policies and
                                     procedures for Confined
                                     Space Entry were not
                                     being adhered to as per
                                     Operator's Health, Safety
                                     and Environment manual.
G-2005-024........................  3/30/05-3/30/05             ...............
Noble Energy......................  During an inspection on              $8,000  Sec.   250.803(c).
                                     May 2, 2005, the top and           3/24/06
                                     bottom isolation valves
                                     on the Level Safety Low
                                     (LSL) for the Bad Oil
                                     Tank (ABJ-5020) were
                                     found blocked out of
                                     service and not flagged
                                     or being monitored.
G-2005-025........................  5/1/05-5/2/05               ...............
Apache Corporation................  Apache failed to comply             $28,000  Sec.   250.107,
                                     with the safe and                  5/11/06  Sec.   250.615(c).
                                     workmanlike manner and
                                     well control requirements
                                     addressed in the
                                     regulations. A remote
                                     blowout preventer (BOP)
                                     station on the rig floor
                                     would not operate nor
                                     function the bottom pipe
                                     ram and the hydraulic
                                     (HCR) choke valve. An
                                     accumulation of hydraulic
                                     oil on derrick beams and
                                     board rack, oily and
                                     slippery hand rail, and
                                     no grating over mud pits
                                     demonstrated Apache's
                                     failure to maintain all
                                     equipment in a safe
                                     condition.
G-2005-026........................  7/25/05-7/25/05             ...............
Pioneer Natural Resources USA, Inc  Operations were not                 $45,000  Sec.   250.300(b),
                                     performed in a safe                5/10/06  Sec.   250.300(a),
                                     manner as Personnel                         Sec.   250.107(a).
                                     attempted to replace a
                                     2'' ball valve on the
                                     water dump bypass line on
                                     the Chem-Electric Treater
                                     without draining the
                                     vessel. This created an
                                     uncontrolled oil release
                                     from the vessel over the
                                     structure's open grating,
                                     and into the containment
                                     skid which was damaged
                                     and unable to contain the
                                     oil. As a result,
                                     approximately 1 barrel of
                                     oil polluted the Gulf.
G-2005-027........................  6/10/05-6/10/05             ...............
SPN Resources, LLC................  The sump system could not           $10,000  Sec.   250.300(b).
                                     automatically maintain             6/13/06
                                     the oil at a level
                                     sufficient to prevent
                                     discharge of oil into
                                     offshore waters.
G-2005-028........................  5/6/05-5/6/05               ...............
ATP Oil & Gas Corporation.........  The Level Safety Low (LSL)           $5,000  Sec.   250.803(c).
                                     on the water section of            6/27/06
                                     the Heater Treater was
                                     bypassed and blocked out
                                     of service. Startup,
                                     maintenance, or testing
                                     procedures were not being
                                     performed; personnel were
                                     not monitoring the
                                     bypassed and blocked out
                                     functions; and the LSL
                                     was not flagged.
G-2006-001........................  10/31/05-10/31/05           ...............
Petroquest Energy, LLC............  The Gas Detector Head               $20,000  Sec.   250.803(c).
(Grasso Production Management)....   (ASH) in the operator's             6/8/06
                                     tool room was found
                                     covered with plastic
                                     wrap, which rendered it
                                     inoperable. Paint fumes
                                     were activating the ASH
                                     and plastic bags were
                                     placed over it to prevent
                                     nuisance shut-ins and to
                                     keep the fumes from
                                     contaminating the sensor.
G-2006-002........................  6/19/05-6/20/05             ...............

[[Page 12825]]

 
Apache Corporation................  An employee was injured             $70,000  Sec.   250.107.
                                     since work had been                5/16/06
                                     performed in an unsafe
                                     and un-workmanlike
                                     manner. On 10-3-05, in
                                     order to access a well
                                     slot, 33'' openings were
                                     cut in the grating on the
                                     well deck and on the
                                     lower production deck.
                                     The two holes cut in the
                                     decking were never
                                     barricaded, covered,
                                     guarded, or made
                                     inaccessible until 10-5-
                                     05, after the employee
                                     fell 8' through the
                                     unguarded hole cut in the
                                     well deck and into the
                                     opening cut on the lower
                                     production deck. He was
                                     able to catch himself
                                     before falling completely
                                     through the second
                                     opening into the cross
                                     members and well slot
                                     guide 40' below..
G-2006-003........................  10/3/05-10/5/05             ...............
Noble Energy, Inc.................  While enroute to another            $50,000  Sec.   250.300(a),
                                     destination, the Minerals          7/13/06  Sec.   250.300(b).
                                     Management Service (MMS)
                                     Inspectors noticed a
                                     multi-colored sheen on
                                     the water coming from the
                                     ST 196 Platform B. They
                                     landed on the platform
                                     and found oil flowing out
                                     of the vent hatch on the
                                     Sump Tank ABH-4760. The
                                     MMS Inspectors also found
                                     the Sump System did not
                                     automatically maintain
                                     the oil level
                                     sufficiently enough to
                                     prevent discharge of oil
                                     into offshore waters.
G-2006-004........................  10/18/05-10/18/05           ...............
Kerr-McGee Oil & Gas Corporation..  Three safety devices were           $15,000  Sec.   250.1004,
                                     found bypassed at the              7/19/06  Sec.   250.803.
                                     panel--the level safety
                                     low for the wet/dry oil
                                     tank, the shut down valve
                                     for the dry oil pump, and
                                     the shut down valve for
                                     the incoming pipeline.
                                     Proposed amount mitigated
                                     from information supplied
                                     in letter.
G-2006-005........................  11/12/04-11/12/04           ...............
ATP Oil & Gas Corporation.........  An injury occurred as a            $110,000  Sec.   250.107.
                                     result of unsafe and un-          12/29/06
                                     workmanlike operations. A
                                     contract worker fell 30'
                                     through an unsecured
                                     access hatch.
                                     Additionally, large
                                     openings in the deck were
                                     found and sections of
                                     heliport skirting were
                                     missing.
G-2006-006........................  10/29/04-11/6/04            ...............
Union Oil Company of California...  A pollution incident                $25,000  Sec.   250.300(a).
                                     occurred as a result of            7/25/06
                                     improperly isolating the
                                     turbine compressor from
                                     the production train.
G-2006-007........................  9/10/04-9/10/04             ...............
Tana Exploration Company, LLC.....  The primary and secondary          $165,000  Sec.   250.803(c),
                                     surface safety valves              8/31/06  Sec.   250.803(c).
                                     (SSV), in addition to the
                                     fuel gas were bypassed on
                                     Caisson Well No. 28. The
                                     relays were placed in
                                     bypass by BP Exploration
                                     and Production employees
                                     (acting as contractors
                                     for Tana) on February 14,
                                     2005. When an upset
                                     occurred on February 19,
                                     2005, on the upstream
                                     processing platform, the
                                     Well No. 28 did not shut
                                     in due to these safety
                                     devices being bypassed.
                                     The pipeline experienced
                                     overpressure and the
                                     flange gasket ruptured
                                     allowing gas/condensate
                                     to escape. The Well was
                                     shut in using the boat
                                     landing emergency shut
                                     down pull loop.
G-2006-008........................  2/14/05-2/19/05             ...............
Energy Partners, Ltd..............  The pressure safety low             $10,000  Sec.   250.1004.
                                     (PSL) on the departing             6/22/06
                                     high-pressure transfer
                                     gas pipeline (KAH-103)
                                     was by-passed at the
                                     master panel, leaving the
                                     pipeline unprotected from
                                     a leak or rupture. The
                                     relay was not flagged and
                                     conditions were not being
                                     monitored.
G-2006-009........................  7/6/05-7/7/05               ...............
Arena Offshore, LLC...............  Pollution occurred in               $27,000  Sec.   250.300(b),
(Island Operators Co., Inc.)......   offshore waters from               8/25/06  Sec.   250.300(a).
                                     overflow of vessel to
                                     deck caused from a
                                     pipeline being tested
                                     which was using FSVs
                                     instead of block valves.
                                     This overflow went to the
                                     deck containment system
                                     and the deck drain sump
                                     system tank was
                                     inoperable.
G-2006-010........................  8/26/05-8/26/05             ...............
Callon Petroleum Operating Company  The fuel gas supply for              $5,000  Sec.   250.300(b).
                                     the sump pump was                  5/11/06
                                     manually closed, placing
                                     the sump pump in an out
                                     of service mode. Neither
                                     the sump pump nor the
                                     sump tank where being
                                     monitored by platform
                                     personnel.
G-2006-011........................  12/12/05-12/12/05           ...............
Forest Oil Corporation............  Operations were not                 $45,000  Sec.   250.107,
(Production Management Industries,   performed in a safe and             9/6/06  Sec.   250.107,
 LLC).                               workmanlike manner, and                     Sec.   250.300(a).
                                     equipment had not been
                                     maintained in a safe
                                     condition. Pollution
                                     occurred since a fuel
                                     tank was filled beyond
                                     capacity and the sump
                                     system had not been
                                     properly maintained.
G-2006-012........................  6/17/05-6/17/05             ...............

[[Page 12826]]

 
Palace Operating Company..........  During an annual                     $5,000  Sec.   250.803(c).
(Island Operators Co.)............   inspection, the MMS               10/27/06
                                     inspector detected that
                                     the Surface Safety Valve
                                     (SSV) on well 2
                                     was locked open using a
                                     fusible SSV stem cap
                                     rendering the valve
                                     inoperable or by-passed.
                                     This valve would not
                                     close had an undesirable
                                     event occurred (under
                                     pressure or overpressure
                                     of the flowline).
G-2006-013........................  11/28/05-11/28/05           ...............
Total E&P USA, Inc................  The Emergency Shut Down            $130,000  Sec.   250.803,
                                     Valves were bypassed on            6/16/06  Sec.   250.803.
                                     both boat landings. The
                                     two PSVs on the
                                     Intermediate Production
                                     Separator were found
                                     closed thus taking them
                                     out of service (bypassed).
G-2006-014........................  8/15/05-8/21/05             ...............
Northstar Gulfsands, LLC..........  The level safety low (LSL)          $15,000  Sec.   250.803.
(Offshore Contract Services LLC)..   on the atmospheric bad              9/6/06
                                     oil tank was manually
                                     closed placing it in
                                     bypass.
G-2006-015........................  1/4/06-1/5/06               ...............
Nippon Oil Exploration U.S.A......  The Platform's two primary          $30,000  Sec.   250.107.
                                     means of escape had not            9/28/06
                                     been adequately
                                     maintained. Personnel on
                                     the platform had no safe
                                     means of egress due to
                                     missing grating and
                                     handrails.
G-2006-017........................  1/3/06-1/3/06               ...............
Chevron U.S.A. Inc................  Platform's emergency                $30,000  Sec.   250.107(a)(2).
                                     equipment had not been            10/30/06
                                     adequately maintained.
                                     The winch and lower
                                     flange kit on the south
                                     capsule was severely
                                     corroded and unsafe for
                                     use.
G-2006-018........................  8/9/05-8/9/05               ...............
ATP Oil & Gas Corporation.........  The level controller which          $12,000  Sec.   250.300(b).
                                     starts the sump pump was           9/22/06
                                     improperly set, therefore
                                     rendering the sump pump
                                     incapable of maintaining
                                     the oil in the sump tank
                                     at a safe level to
                                     prevent discharge into
                                     the gulf waters.
G-2006-019........................  9/19/04-9/19/04             ...............
ATP Oil & Gas Corporation.........  The Emergency Shut Down             $20,000  Sec.   250.803(c).
(Wood Group Production Services)..   (ESD) Stations on the              9/22/06
                                     condensate accumulator
                                     deck, sump deck, well bay
                                     area, and boat landing
                                     were all rendered out of
                                     service since the ESD
                                     supply line was
                                     disconnected.
G-2006-020........................  11/9/04-11/9/04             ...............
Marathon Oil Company..............  The Temperature Sensing             $40,000  Sec.   250.803.
                                     Element for the +10 deck           11/9/06
                                     drain Sump Pump was
                                     bypassed.
G-2006-022........................  9/23/04-9/30/04             ...............
BP America Production Company.....  Operations were not                 $25,000  Sec.   250.107(a)(1).
                                     performed in a safe and           10/25/06
                                     workmanlike manner. While
                                     making an assessment of
                                     the unsafe conditions on
                                     the platform that needed
                                     repairing, the
                                     construction crew did not
                                     barricade a 3'4'' x 3'4''
                                     opening in the stairway
                                     landing. Later, one of
                                     the crew members was
                                     injured when he fell
                                     through the open hole,
                                     approximately 20' and
                                     into the Gulf of Mexico.
G-2006-023........................  2/10/06-2/10/06             ...............
GOM Shelf LLC.....................  While attempting to secure          $30,000  Sec.   250.107(a).
(Crown Oilfield Services, Inc.)...   and barricade hurricane            10/6/06
                                     related damages on the
                                     sub-cellar deck, a
                                     contract employee was
                                     seriously injured since
                                     the work was not
                                     performed in a safe and
                                     workmanlike manner. He
                                     was not wearing fall
                                     protection while he was
                                     in the direct vicinity of
                                     open holes in the deck
                                     grating, and he fell
                                     approximately 25-30 feet
                                     through a 3' x 3' opening
                                     onto the +10 deck.
G-2006-026........................  2/10/06-2/10/06             ...............
Pioneer Natural Resources USA, Inc  The main safety panel was           $20,000  Sec.   250.803(c).
                                     bypassed during testing.          12/13/06
                                     In order to test any
                                     safety device on this
                                     panel, they all had to be
                                     placed in bypass. When
                                     the panel was in total
                                     bypass, the supply to the
                                     indicators was removed
                                     not allowing them to trip
                                     when an abnormal
                                     condition became present,
                                     thus there was no way for
                                     personnel to monitor the
                                     bypassed devices.
G-2006-034........................  7/17/06-7/17/06             ...............
Venoco, Inc.......................  During well recompletion            $30,000  Sec.   250.300(a),
                                     operations, an accident            4/27/06  Sec.   250.107(a).
                                     occurred, which resulted
                                     in a loss of well control
                                     (blowout), and a 3 gallon
                                     oil spill. An
                                     investigation revealed
                                     removal of a lockdown pin
                                     from the well head during
                                     the alignment of the
                                     split tube hanger had
                                     circumvented the blowout
                                     preventer system.
P-2005-001........................  11/19/04-11/19/04           ...............

[[Page 12827]]

 
Nuevo Energy Company..............  On February 16, 2004, a              $8,000  Sec.   250.107,
                                     transformer on a variable           2/8/06  Sec.   250.803(c)(1).
                                     speed drive (VSD) unit
                                     over-heated and caught
                                     fire. A Minerals
                                     Management Service (MMS)
                                     investigation of the
                                     incident determined the
                                     fire, which was confined
                                     to the motor control
                                     center room, was due to
                                     the following causes: The
                                     electrical overload
                                     protection on the VSD had
                                     been placed in a non-
                                     functional mode. High
                                     amperage from a downhole
                                     electric submersible pump
                                     caused transformer to
                                     overload on the VSD,
                                     which subsequently
                                     overheated. Melting metal
                                     from the transformer
                                     dripped into a pan of
                                     threading oil below the
                                     transformer. A cotton
                                     glove that was laying in
                                     the pan of threading oil
                                     ignited. The resultant
                                     fire was extinguished by
                                     platform personnel
                                     investigating the source
                                     of smoke from the motor
                                     control center.
P-2004-002........................  2/16/04-2/16/04             ...............
                                    3/31/04-3/31/04...........
----------------------------------------------------------------------------------------------------------------
                        Total Penalties Paid: 1/1/2006-12/31/2006, 41 Cases: ($1,480,000)
----------------------------------------------------------------------------------------------------------------

    The purpose of publishing the penalties summary is to provide 
information to the public on violations of special concern in OCS 
operations and to provide an additional incentive for safe and 
environmentally sound operations.

    Authority: 43 U.S.C. 1331 et seq., 31 U.S.C. 9701.

    Dated: January 30, 2007.
Gregory J. Gould,
Acting Associate Director for Offshore Minerals Management.
[FR Doc. E7-4876 Filed 3-16-07; 8:45 am]
BILLING CODE 4310-MR-P
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