{"operation":"document","citation":"CPF 120111010","title":"CENTRAL NEW YORK OIL AND GAS CO LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-05-31","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.455(a)(2), 192.705(b).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120111010.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120111010.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120111010","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120111010","body":"Notice of Probable Violation involving CENTRAL NEW YORK OIL AND GAS CO LLC. PHMSA's enforcement data identifies the cited regulations as 192.455(a)(2),  192.705(b). The case was opened on 2011-05-31 and is reported as closed as of 2012-07-06. Proposed civil penalty: $16,200. Assessed civil penalty: $16,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120111010_Final Order_06152012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120111010/120111010_Final%20Order_06152012.pdf\n\n120111010_Final Order_06152012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120111010/120111010_Final%20Order_06152012_text.pdf\n\n120111010_NOPV_PCP_05312011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120111010/120111010_NOPV_PCP_05312011.pdf\n\n120111010_NOPV_PCP_05312011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120111010/120111010_NOPV_PCP_05312011_text.pdf\n\n120111010_Operator_Response_and_Request_for_Hearing_06302011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120111010/120111010_Operator_Response_and_Request_for_Hearing_06302011.pdf\n\n120111010_Final Order_06152012_text.pdf\n\nJUNE 15, 2012\nMr. Barry Cigich\nVice President Operations and Engineering\nCentral New York Oil and Gas Company, L.L.C.\nInergy Midstream, L.P.\nTwo Brush Creek Blvd., Suite 200\nKansas City, MO 64112\nRe: CPF No. 1-2011-1010\nDear Mr. Cigich:\nPlease find the enclosed Final Order issued in the above-referenced case. It makes a finding of\nviolation and assesses a civil penalty of $16,200. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is complete upon mailing as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Byron Coy, Director, Eastern Region, OPS\nCERTIFIED MAIL – RETURN 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________________________________________________\nIn the Matter of )\nCentral New York Oil and Gas Company, L.L.C., ) CPF No. 1-2011-1010\na subsidiary of Inergy Midstream, L.P., )\n)\n)\n)\nRespondent. )\n________________________________________________)\nFINAL ORDER\nOn August 3–4, 2010, pursuant to 49 U.S.C. §§ 60106 and 60117, a representative of the New\nYork State Department of Public Service (NYS-DPS), as agent for the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an on-\nsite pipeline safety inspection of the facilities and records of Central New York Oil and Gas\nCompany, L.L.C. (CNYOG or Respondent) in Owego, New York. CNYOG operates\napproximately 55 miles of gas transmission pipeline in New York and Pennsylvania.\n1\nAs a result of the inspection, NYS-DPS notified the Director, Eastern Region, OPS (Director), of\ncertain probable violations of the gas pipeline safety regulations in 49 C.F.R. Part 192. After\nreviewing the notification, the Director issued to Respondent, by letter dated May 31, 2011, a\nNotice of Probable Violation and Proposed Civil Penalty. In accordance with\n49 C.F.R. § 190.207, the Notice alleged that CNYOG committed a violation of § 192.705 and\nproposed a civil penalty of $16,200 for the alleged violation. In accordance with § 190.205, the\nNotice also included a warning item, which advised Respondent to correct another probable\nviolation.\nCNYOG responded to the Notice by letter dated June 30, 2011 (Response), contesting the\nallegations and requesting a hearing. A hearing was held on February 2, 2012, in West Trenton,\nNew Jersey, before the Presiding Official from the Office of Chief Counsel, PHMSA.\n1 CNYOG has reported this information pursuant to 49 C.F.R. § 191.17.\n\n\n\n2\nFINDING OF VIOLATION\nItem 1 in the Notice alleged that Respondent violated 49 C.F.R. § 192.705(b), which states:\n§ 192.705 Transmission lines: Patrolling.\n(a) Each operator shall have a patrol program to observe surface\nconditions on and adjacent to the transmission line right-of-way for\nindications of leaks, construction activity, and other factors affecting\nsafety and operation.\n(b) The frequency of patrols is determined by the size of the line, the\noperating pressures, the class location, terrain, weather, and other relevant\nfactors, but intervals between patrols may not be longer than prescribed in\nthe following table:\nMaximum interval between patrols\nClass loca-\ntion of line\nAt highway and railroad\ncrossings At all other places\n1, 2 ........... 7½ months; but at least\ntwice each calendar year.\n15 months; but at least once\neach calendar year.\n3 ............... 4½ months; but at least four\ntimes each calendar year.\n7½ months; but at least\ntwice each calendar year.\n4 ............... 4½ months; but at least four\ntimes each calendar year.\n4½ months; but at least four\ntimes each calendar year.\n(c) Methods of patrolling include walking, driving, flying or other\nappropriate means of traversing the right-of-way.\nThe Notice alleged that Respondent violated § 192.705(b) by failing to conduct patrols to\nobserve surface conditions on and adjacent to the transmission line right-of-way at the proper\nintervals. Specifically, the Notice alleged that in 2009 and 2010 CNYOG did not perform\npatrols at highway and railroad crossings in Class 1 and 2 areas at least twice each calendar year\nwith a maximum interval of 7½ months.\nThe evidence in the record includes documentation by the NYS-DPS inspector who requested\nCNYOG’s patrol records from 2009 and 2010. Based on the records that were provided, NYS-\nDPS concluded that patrols had been performed only once per calendar year in June 2009 and\nJuly 2010. Respondent’s Operations Manager also allegedly stated during the inspection that the\ncompany patrolled highway and railroad crossings once per year during annual leakage surveys,\nand that he was not aware of the requirement to perform patrols twice per year.\nIn its Response, CNYOG contested the alleged violation and explained that the company\nperforms patrols at highway and railroad crossings in Class 1 and 2 areas twice per year—during\nannual leakage surveys and at one other time during the year. The company submitted crossing\ninspection records that had not been examined during the NYS-DPS inspection. Regarding the\nalleged statements by its Operations Manager, Respondent explained that it may have been the\nresult of a misunderstanding between the employee and the inspector.\n\n\n\n3\nAt the hearing, OPS presented several charts that it had created to summarize the inspection\nrecords submitted by Respondent in response to the Notice. The charts included the dates when\neach pipeline crossing was patrolled in 2009 and 2010. They demonstrated that even if patrol\ninspections were performed on the dates indicated by Respondent’s records, the operator\nexceeded the maximum interval permitted by the regulation on many occasions.\nDuring the two calendar years of 2009 and 2010, approximately 92 highway or railroad crossing\npatrols would have been required using the maximum interval in the regulation. Company\nrecords indicated approximately 20 instances in which Respondent performed patrols at an\ninterval exceeding 7½ months. Most of those instances exceeded the maximum interval by\nseveral weeks, although some exceeded the interval by several months. In addition, there were\napproximately five instances in which CYNOG could not produce any records to show that at\nleast two patrols were performed in each of the two calendar years.\nCNYOG did not dispute the accuracy of the information presented by OPS during the hearing. I\nfind the evidence in the record establishes that Respondent patrolled most of its highway\ncrossings at the correct intervals during 2009 and 2010, but on at least 25 occasions during that\ntime period, the maximum interval was exceeded.\nAccordingly, after considering all of the evidence, I find Respondent violated\n49 C.F.R. § 192.705(b) by failing to conduct patrols to observe surface conditions at highway\ncrossings in Class 1 and 2 areas at the requisite interval.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations.2\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on Respondent’s ability to\ncontinue doing business; and the good faith of Respondent in attempting to comply with the\npipeline safety regulations. In addition, I may consider the economic benefit gained from the\nviolation without any reduction because of subsequent damages, and such other matters as justice\nmay require.\n2 Subsequent to the actions that gave rise to this case, the Pipeline Safety, Regulatory Certainty, and Job Creation\nAct of 2011 increased the civil penalty liability for violations to $200,000 per violation for each day of the violation\nup to a maximum of $2,000,000 for any related series of violations. See Pub. L. No. 112-90, § 2(a), 125 Stat. 1905.\n\n\n\n4\nItem 1: The Notice proposed a civil penalty of $16,200 for the violation of § 192.705(b). In its\nResponse and at the hearing, CNYOG did not argue for a reduction of the civil penalty under the\nassessment criteria listed above.\nHaving considered those criteria, including the adverse risk to pipeline safety posed by failing to\npatrol transmission lines at highway crossings for indications of leaks, construction activity, and\nother factors affecting safety and operation, CNYOG is assessed the civil penalty of $16,200 for\nthe violation.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $16,200 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 192 and specifically\nconsidered this to be a warning item. The warning was for:\n49 C.F.R. § 192.455(a)(2) – Respondent’s alleged failure to protect a buried pipeline\nagainst external corrosion by installing a cathodic protection system within one year of its\nconstruction in 2008. Specifically, the Notice alleged that CNYOG installed a cathodic\nprotection system for a new pipeline, but never performed a close interval survey (CIS) to\ndetermine whether the cathodic protection system was adequate to protect the entire\nlength of the pipeline. The company only checked cathodic protection levels at\napproximately ten locations along the nine-mile pipeline.\nIn its Response and at the hearing, CNYOG maintained that the cathodic protection system met\nthe -850 mV standard when it was placed in service. CNYOG also contested the assertion in the\nNotice that a CIS was required to verify the adequacy of cathodic protection.\nAt the hearing, OPS and CNYOG discussed the possibility of using an alternative method rather\nthan CIS to demonstrate the adequacy of cathodic protection along the entire pipeline. One\n\n\n\n5\nalternative discussed by the parties was the installation of additional test stations to be\nstrategically located based on the unique physical and environmental characteristics of the\npipeline.\nSince Item 2 is a warning item, there is no finding as to whether or not a violation of\n§ 192.455(a)(2) occurred. Pursuant to 49 C.F.R. § 190.205, however, Respondent is advised that\nif OPS finds the same issue in a subsequent inspection, Respondent may be subject to future\nenforcement action.\nUnder 49 C.F.R. § 190.215, Respondent may submit a petition for reconsideration of this Final\nOrder to the Associate Administrator for Pipeline Safety, PHMSA, 1200 New Jersey Avenue SE,\nEast Building, 2nd Floor, Washington, DC 20590, no later than 20 days after receipt of the Final\nOrder by the Respondent. Any petition submitted must contain a statement of the issue(s) and\nmeet all other requirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays\nthe payment of any civil penalty assessed. If Respondent submits payment of the civil penalty,\nthe Final Order becomes the final administrative decision and the right to petition for\nreconsideration is waived. The terms and conditions of this Final Order are effective upon\nservice in accordance with 49 C.F.R. § 190.5.\n__________________________________ _____________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":14020}