05-4994. Outer Continental Shelf (OCS) Civil Penalties

AGENCY:

Minerals Management Service (MMS).

ACTION:

Notice summarizing OCS civil penalties paid, January 1, 2004, through December 31, 2004.

SUMMARY:

This notice provides a listing of civil penalties paid January 1, 2004, through December 31, 2004, for violations of the OCS Lands Act (OCSLA). The goal of the MMS OCS Civil Penalties Program is to assure safe and clean operations on 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 (Acting Program Coordinator), 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.

On August 8, 1997, MMS published new regulations (62 FR 42668) implementing the civil penalty provisions of the OCSLA. Written in “plain English,” the new question-and-answer format provides a better understanding of the OCS civil penalty process. In addition, the provisions of OPA 90 require the Secretary to adjust the maximum civil penalty to reflect any increases in the Consumer Price Index. The new rule increased the maximum civil penalty to $25,000 per violation, per day. Please note, subsequent to publishing the new regulations, MMS made several corrections and amendments, including the appeals procedures. These were published at 63 FR 42711, 8/11/98; 64 FR 9066, 2/24/99; 62 FR 9065, 2/24/99, and 64 FR 26257, 5/13/99.

On November 28, 2003, MMS published a new regulation (68 FR 61622) adjusting the maximum civil penalty assessment to comply with the Department of Labor's Consumer Price Index. The maximum amount is now $30,000 per violation per day.

Between August 18, 1990, and January 2005, MMS initiated 504 civil penalty reviews. Operators have paid 397 civil penalties for a total of $13,234,792 in fines. Seventy cases were dismissed; 5 cases were merged; and 32 cases are under review.

On September 1, 1997, the Associate Director of Offshore Minerals Management issued a notice informing lessees and operators of Federal oil, gas, and sulphur leases on 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 penalties paid between January 1, 2004, and December 31, 2004.

2004 Civil/Criminal Penalties—Summary All Penalties Paid in Calendar 2004 (1/1/2004-12/31/2004)

[The following acronyms are used in this table: SCSSV (surface controlled subsurface safety valve); SSV (surface safety valve); PSHL (pressure safety high/low); LSH (level safety high); INC (incident of non-compliance); ESD (emergency shutdown device); H₂ S (Hydrogen Sulfide)]

Operator name and Case No.	Violation and date(s)	Penalty paid and date paid	Regulation(s) violated (30 CFR)
Dominion Exploration & Production, Inc., G-2002-049	A fire resulted during a welding operation when operator failed to properly protect equipment containing hydrocarbons. Equipment was located on a lower deck immediately beneath welding site	$28,000 2/11/04
	8/14/02-8/14/02		250.107
	8/15/02-8/15/02		250.113
TDC Energy LLC (Island Operators Co., Inc.), G-2003-005	The operating company was conducting operations without an H2 S Contingency Plan and with a confirmed presence of H2 S in concentrations and volumes that could potentially result in atmospheric concentrations of 20 ppm or more of H2 S	$25,000 5/7/04
	10/29/02-10/29/02		250.417(f)
Pogo Producing Company, G-2003-007	The sump pump ABH-1460 was isolated from the sump tank by a closed valve, rendering the pump inoperable	$10,000 3/12/04
	1/29/03-1/29/03		250.300(b)
Murphy Exploration & Production Company, G-2003-009	Relay for the departing gas pipeline (KAH-0056) PSHL pilots was found pinned out of service	$10,000 6/29/04
	3/17/03-3/17/03		250.1004
BP America Production Company (Diamond Offshore Drilling, Inc.), G-2003-010	The Rig's Gas Detection System was bypassed with ongoing drilling operations being conducted	$25,000 2/3/04
	3/1/03-3/18/03		250.410(e)(3)
Chevron U.S.A. Inc., G-2003-011	Gas detector protecting the generator building was found in the bypass position	$20,000 1/15/04
	3/7/03-3/10/03		250.803(c)
Devon Louisiana Corporation, G-2003-012	The production process group by-pass selector valve was found in the by-pass mode	$30,000 4/1/04
	9/13/02-9/13/02		250.803(c)
Helis Oil & Gas Company, LLC, G-2003-014	Surface-controlled subsurface safety valve for Well B-1 was blocked out of service	$10,000 2/4/04
	5/29/03-5/30/03		250.803(c)
El Paso Production GOM Inc., G-2003-015	The LSH on the 3rd stage suction scrubber was bypassed and was not flagged or monitored	$12,000 1/9/04
	6/12/03-6/13/03		250.803(c)
GOM Shelf LLC (Production Systems, Inc.), G-2003-017	Pollution resulted due to an inoperable drain sump system	$35,000 3/4/04
	6/19/03-6/24/03		250.300(b)
	6/24/03-6/24/03		250.300(a)
BP Exploration & Production Inc., G-2003-018	A fire occurred involving the as-built diverter system leading to damage to property and the environment. The diverter system was not installed as in the approved plan, had inadequate supports, added right angle turns at the ends, and did not provide for downwind diversion	$190,000 7/6/04
	8/6/02-8/9/02		250.409(d)(1)
	8/6/02-8/9/02		250.415
Chevron U.S.A. Inc. (Production Management Industries, LLC), G-2004-001	While cleaning a low pressure separator, the Confined Space Entry policy was not completely followed which resulted in an explosion and flash fire that injured four employees	$50,000 8/2/04
	6/14/02-6/15/02		250.107(a)
Union Oil Company of California (Coastal Production Services, Inc.), G-2004-002	Rusted out hole in grating and missing toe (kick) plates in two locations	$35,000 7/26/04
	5/9/03-5/9/03		250.107
Comstock Offshore, LLC, G-2004-004	Tubing plugs for Well 01 and Well 01D were found leaking on March 31, 2002. Not repaired until September 18, 2002	$172,000 7/9/04
	3/31/02-9/18/02		250.804(a)(1)
Anadarko E&P Company LP (Island Operators Co. Inc.), G-2004-006	Subsurface safety valve in Well C-21 was found leaking and left in service without being repaired or replaced for 129 days	$96,750 8/20/04
	7/29/02-12/4/02		250.804(a)(1)
Walter Oil & Gas Corporation, G-2004-007	The Operator failed to implement the H2 S Contingency Plan while performing operations on a well with a confirmed presence of H2 S in concentrations and volumes that could potentially result in atmospheric concentrations of 20 ppm or more of H2 S	$40,000 9/1/04
	12/3/03-12/4/03		250.490(f)(1-13)
Murphy Exploration & Production Company—USA, G-2004-008	The SCSSV, which was being used as a tubing plug, was found in the open position with the hydraulic control line pressured up	$15,000 10/22/04
	3/30/04-3/31/04		250.801(f)
Newfield Exploration Company, G-2004-009	The LSH on the 2nd stage scrubber was found in the bypassed mode rendering it inoperable. It was not flagged or being monitored	$12,000 11/8/04
	3/29/04-4/1/04		250.803(c)
Murphy Exploration & Production Company—USA, G-2004-010	The required surface safety valve (SSV-2) for Well CA-7 was found capped in the open position and inadvertently left bypassed for 8 days	$40,000 10/21/04
	3/25/04-4/1/04		250.803(c)
Apache Corporation (Island Operators Co. Inc.), G-2004-015	The main safety panel for the Water Bath Heater, the Fired Component, and the Water Bath Pump was found in the bypassed position and it was not flagged or being monitored by personnel	$5,000 12/22/04
	6/21/04-6/21/04		250.803(c)
Aera Energy LLC., P-2004-001	Aera was issued INC G-110 on 7/12/02 after a pipeline riser leak and oil spill. Aera appealed to IBLA. Through the DOI Solicitor, Aera proposed to settle the appeal with a payment of $25,000. MMS accepted Aera's offer on 1/22/04. The INC was not withdrawn and Aera paid $25,000 as a civil penalty	$25,000 2/4/04
			250.107(a)
Total Penalties Paid: 1/1/04-12/31/04
21 Cases: $885,750
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.

Dated: February 15, 2005.

Thomas A. Readinger,

Associate Director for Offshore Minerals Management.