# KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 120115001
- **title:** KINDER MORGAN LIQUID TERMINALS, LLC — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2011-05-11
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.402(c)(3), 195.402(c)(7), 195.402(c)(8), 195.402(c)(9), 195.408(b)(1), 195.428(a).
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- **markdown:** https://regulus.evalyn.ai/document/phmsa-enforcement-120115001.md
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/120115001
**body:**

Notice of Probable Violation involving KINDER MORGAN LIQUID TERMINALS, LLC. PHMSA's enforcement data identifies the cited regulations as 195.402(c)(3),  195.402(c)(7),  195.402(c)(8),  195.402(c)(9),  195.408(b)(1),  195.428(a). The case was opened on 2011-05-11 and is reported as closed as of 2013-05-23. Proposed civil penalty: $425,000. Assessed civil penalty: $425,000. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

120115001_Closure Letter_05232013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_Closure%20Letter_05232013.pdf

120115001_Closure Letter_05232013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_Closure%20Letter_05232013_text.pdf

120115001_Final Order_10172012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_Final%20Order_10172012.pdf

120115001_Final Order_10172012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_Final%20Order_10172012_text.pdf

120115001_NOPV_PCP_PCO_05112011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_NOPV_PCP_PCO_05112011.pdf

120115001_NOPV_PCP_PCO_05112011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_NOPV_PCP_PCO_05112011_text.pdf

120115001_Operator_Written_Response_to_NOPV_and_Proposed_Compliance_Order__08092011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120115001/120115001_Operator_Written_Response_to_NOPV_and_Proposed_Compliance_Order__08092011.pdf

120115001_Final Order_10172012_text.pdf

OCTOBER 17, 2012
Mr. Carlos Munguia
Regional Vice President
Kinder Morgan Liquids Terminals LLC
8500 West 68th Street, #1
Summit Argo, IL 60501
Re: CPF No. 1-2011-5001
Dear Mr. Munguia:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a civil penalty of $425,000, and specifies actions that must be taken by Kinder
Morgan Liquids Terminals LLC to comply with the pipeline safety regulations. The penalty
payment terms are set forth in the Final Order. When the civil penalty has been paid and the
terms of the compliance order completed, as determined by the Director, Eastern Region, this
enforcement action will be closed. Service of the Final Order by certified mail is deemed
effective upon the date of mailing, or as otherwise provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
Mr. Byron Coy, Director, Eastern Region, OPS
Robert Hogfoss, Esq., Hunton & Williams, Bank of America Plaza, Suite 4100
600 Peachtree Street, N.E., Atlanta, GA 30308
CERTIFIED MAIL – RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
___________________________________
In the Matter of )
Kinder Morgan Liquids Terminals LLC, ) )
)
)
Respondent. )
___________________________________ )
CPF No. 1-2011-5001
FINAL ORDER
On May 4, 2010, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and Hazardous
Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an
investigation of an accident involving the release of approximately 8,600 gallons (200 barrels) of
fuel oil at a pipeline terminal facility operated by Kinder Morgan Liquids Terminals LLC
(KMLT or Respondent) in Perth Amboy, New Jersey. The accident was reported to the National
Response Center on October 28, 2009 (NRC Report 921903). The Perth Amboy facility consists
of 23 breakout tanks and a refined petroleum products pipeline that is 2.28 miles in length.
KMLT, a subsidiary of Kinder Morgan Energy Partners, L.P., operates approximately 250
breakout tanks and 55 miles of pipeline transporting refined petroleum products primarily in
Texas and New Jersey.
1
As a result of the investigation, the Director, Eastern Region, OPS (Director), issued to
Respondent, by letter dated May 11, 2011, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the
Notice alleged that KMLT committed seven violations of the hazardous liquid pipeline safety
regulations in 49 C.F.R. Part 195. The Notice proposed a civil penalty of $425,000 for the
alleged violations and proposed corrective measures to remediate the alleged violations.
By letter dated June 10, 2011, KMLT requested a hearing and an extension of time to respond to
the allegations in the Notice. After receiving an extension of time, Respondent submitted a
written response dated August 9, 2011 (Response). In its Response, KMLT did not contest the
alleged violations, but requested that the proposed penalty be reduced. Both Respondent and
counsel for OPS submitted pre-hearing briefs regarding the proposed penalty on
November 11, 2011. The hearing was held on November 22, 2011, in West Trenton,
New Jersey, before the Presiding Official from the Office of Chief Counsel, PHMSA. After the
hearing, Respondent filed a Post-Hearing Submittal by letter dated January 6, 2012.
1 System information for calendar year 2011 is reported pursuant to 49 C.F.R. § 195.49.



2
FINDINGS OF VIOLATION
The Notice alleged that Respondent committed seven violations of 49 C.F.R. Part 195 as
follows:
Item 1: The Notice alleged that Respondent violated § 195.402(c)(7), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) General. Each operator shall prepare and follow for each pipeline
system a manual of written procedures for conducting normal operations
and maintenance activities and handling abnormal operations and
emergencies . . . .
(c) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following to
provide safety during maintenance and normal operations:
(7) Starting up and shutting down any part of the pipeline system in a
manner designed to assure operation within the limits prescribed by
§ 195.406, consider the hazardous liquid or carbon dioxide in
transportation, variations in altitude along the pipeline, and pressure
monitoring and control devices.
The Notice alleged that Respondent violated § 195.402(c)(7) by failing to have and follow
written procedures for starting up and shutting down the pipeline at the Perth Amboy terminal
facility. Specifically, the Notice alleged that on October 28, 2009, while a third-party pipeline
company was delivering fuel oil into Tank #57, the valve on the tank closed prematurely,
causing a pressure surge in the piping. Surge pressures normally would relieve into Surge Tank
#42, but the Notice alleged that the isolation valve on Tank #42 had been left closed, preventing
surge pressure relief. This resulted in an overpressure and failure of the piping and release of
approximately 8,600 gallons of fuel oil into the breakout tank’s dike containment area.
During an investigation of the accident, the OPS inspector observed that Respondent did not
have startup and shutdown procedures that included “line-up procedures” designed to ensure
valves were in the correct position for unimpeded tank loading and unloading operations and
appropriate pressure relief. Additional evidence in the record supporting the allegation included
KMLT’s accident investigation report, which lists under “immediate/direct causes” of the
accident that “there was no written SOP or SSP that was used or followed to perform and check
the lineup associated with this pipeline move.”2 The report also listed under “basic/root causes”
that “there is no written SOP or SSP that is followed for the lineup and operations activity
associated with pipeline inbound movements to tank 57 and the new tank field. This would
include verification of high pressure/surge tank valves being open as appropriate.”3
2 OPS Pipeline Safety Violation Report, Exhibit A-3 at 5 (May 10, 2011).
3 Violation Report, Exhibit A-3 at 6.



3
In its Response and at the hearing, KMLT did not contest the alleged violation and
acknowledged that the isolation valve to Tank 42 was inadvertently left in a closed position after
maintenance activities. Respondent stated that it has revised its manual of written procedures to
include more specific startup and shutdown procedures in regard to valve lineup, as well as
conducting additional activities intended to prevent recurrence of such an incident.
Accordingly, after considering the evidence, I find that Respondent violated § 195.402(c)(7) by
failing to have and follow written procedures for starting up and shutting down its pipeline at the
Perth Amboy terminal facility.
Item 2: The Notice alleged that Respondent violated § 195.402(c)(8), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) . . . .
(c) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following to
provide safety during maintenance and normal operations:
(8) In the case of a pipeline that is not equipped to fail safe, monitoring
from an attended location pipeline pressure during startup until steady
state pressure and flow conditions are reached and during shut-in to assure
operation within limits prescribed by § 195.406.
The Notice alleged that Respondent violated § 195.402(c)(8) by failing to have and follow
written procedures for monitoring pressure on the pipeline from an attended location to assure
operation within limits prescribed by § 195.406 during startup and shut-in.
During the investigation, the OPS inspector observed that Respondent did not have procedures
for monitoring pressure on the terminal facility pipeline from an attended location. Additional
evidence in the record supporting the allegation included KMLT’s accident investigation report,
which lists under “basic/root causes” of the accident that “there is no requirement or policy for
an operator [to] oversee the entire [pipeline] inbound operation in the control room.”4
In its Response and at the hearing, KMLT did not contest the alleged violation and stated that it
has revised its manual of written procedures to address this concern.
Accordingly, after considering the evidence, I find that Respondent violated § 195.402(c)(8) by
failing to have and follow written procedures for monitoring pressure on the pipeline from an
attended location.
Item 3: The Notice alleged that Respondent violated § 195.402(c)(9), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
4 Violation Report, Exhibit A-3 at 6.



4
(a) . . . .
(c) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following to
provide safety during maintenance and normal operations:
(9) In the case of facilities not equipped to fail safe that are identified
under paragraph 195.402(c)(4) or that control receipt and delivery of the
hazardous liquid or carbon dioxide, detecting abnormal operating
conditions by monitoring pressure, temperature, flow or other appropriate
operational data and transmitting this data to an attended location.
The Notice alleged that Respondent violated § 195.402(c)(9) by failing to have and follow
written procedures for detecting abnormal operating conditions by monitoring pressure,
temperature, flow or other appropriate operational data on the pipeline and transmitting this data
to an attended location.
During the investigation, the OPS inspector observed that Respondent did not have procedures
for monitoring pressure, temperature, flow and other appropriate operational data and
transmitting the data to an attended location.
In its Response and at the hearing, KMLT did not contest the alleged violation and stated that it
has revised its manual of written procedures to address this concern.
Accordingly, after considering the evidence, I find that Respondent violated § 195.402(c)(9) by
failing to have and follow written procedures for detecting abnormal operating conditions by
monitoring pressure, temperature, flow or other appropriate operational data and transmitting the
data to an attended location.
Item 4: The Notice alleged that Respondent violated § 195.402(c)(3), which states:
§ 195.402 Procedural manual for operations, maintenance, and
emergencies.
(a) . . . .
(c) Maintenance and normal operations. The manual required by
paragraph (a) of this section must include procedures for the following to
provide safety during maintenance and normal operations:
(3) Operating, maintaining, and repairing the pipeline system in
accordance with each of the requirements of this subpart [F] and subpart H
of this part.
The Notice alleged that Respondent violated § 195.402(c)(3) by failing to have procedures for
operating, maintaining, and repairing the pipeline system’s overpressure safety devices and
overfill protection systems in accordance with the requirements of § 195.428 of subpart F.
Section 195.428 establishes requirements for regularly inspecting and testing overpressure safety
devices and overfill protection systems to verify they are functioning properly, in good
mechanical condition, and adequate from the standpoint of capacity and reliability of operation
for the service in which they are used.



5
The evidence in the record supporting the allegation included documentation by the OPS
inspector of his observation during the investigation that KMLT did not have procedures for
operating, maintaining, and repairing the pipeline system’s overpressure safety devices and
overfill protection systems.
In its Response and at the hearing, Respondent did not contest the alleged violation and stated
that it has revised its manual of written procedures to address this concern.
Accordingly, after considering the evidence, I find that Respondent violated § 195.402(c)(3) by
failing to have procedures for operating, maintaining, and repairing the pipeline system’s
overpressure safety devices and overfill protection systems in accordance with the requirements
of § 195.428 of subpart F.
Item 5: The Notice alleged that Respondent violated § 195.402(c)(3), quoted above, by failing to
have procedures for maintaining pipeline system valves in accordance with the requirements of
§ 195.420 of subpart F. Section 195.420 establishes requirements for maintaining mainline
valves in good working order at all times and for regularly inspecting mainline valves to verify
they are functioning properly. Specifically, the Notice alleged that KMLT did not have written
procedures for maintaining the automated shell gate valve located on Tank #57 or the gate valve
on the 8-inch tank line to Surge Tank #42. As previously alleged, the valve on Tank #57 closed
prematurely during the fuel oil transfer, causing a surge in pressure, and the isolation valve at
Surge Tank #42 was closed preventing surge relief. This resulted in the overpressure and failure
of the piping.
The evidence in the record supporting the allegation included documentation by the OPS
inspector of his observation during the investigation that KMLT did not have procedures for
maintaining the valves. The OPS inspector also noted that company records documented the
valve on Surge Tank #42 had been closed for maintenance, but never reopened. Also included in
evidence was KMLT’s accident investigation report, which documented there had been
“previous examples of tank valves closing during marine and related tank activity operations”
and that the company planned to look into the cause of those occurrences to determine if they
were related to the premature closure of the valve on October 28, 2009. KMLT’s accident report
listed under causes, “Inadequate Maintenance,” and noted that the valve at Tank #42 had been
closed for maintenance after a nitrogen leak was discovered during the summer of 2009, but the
valve had never been repaired or reopened and that “many individuals/operators in the terminal
were unaware that this valve was closed.”5
In its Response and at the hearing, KMLT did not contest the alleged violation and stated that it
has revised its manual of written procedures to address this concern.
Accordingly, after considering the evidence, I find that Respondent violated § 195.402(c)(3) by
failing to have procedures for maintaining the pipeline system’s valves in accordance with the
requirements of § 195.420.
5 Violation Report, Exhibit A-3 at 6.



6
Item 6: The Notice alleged that Respondent violated § 195.428(a), which states:
§ 195.428 Overpressure safety devices and overfill protection
systems.
(a) Except as provided in paragraph (b) of this section, each operator
shall, at intervals not exceeding 15 months, but at least once each calendar
year, or in the case of pipelines used to carry highly volatile liquids, at
intervals not to exceed 7 1/2 months, but at least twice each calendar year,
inspect and test each pressure limiting device, relief valve, pressure
regulator, or other item of pressure control equipment to determine that it
is functioning properly, is in good mechanical condition, and is adequate
from the standpoint of capacity and reliability of operation for the service
in which it is used.
The Notice alleged that Respondent violated § 195.428(a) by failing to inspect and test the relief
device on Surge Tank #42 at intervals not exceeding 15 months, but at least once each calendar
year, to verify its capacity was adequate.
During the investigation, the OPS inspector observed that Respondent did not have any records
showing the relief device had been inspected and tested to determine that capacity was adequate
to relieve anticipated pressure and flow rates in the event of an overpressure situation.
Additional evidence in the record supporting the allegation included KMLT’s Pipeline
Hydraulics Analysis performed after the accident, which found that for normal operating
conditions, the maximum flow rate of 4,650 gallons per minute (USGPM) could be run in the
current piping system at Perth Amboy Terminal using a relief set point at Surge Tank #42 of 80
psig.6 The set point of the relief device at the time of the accident, however, was 90 psig.
In its Response and at the hearing, Respondent did not contest the allegation of violation, and
stated it has taken action to confirm that its inspection and testing schedule will ensure future
compliance with this regulation.
Accordingly, after considering the evidence, I find that Respondent violated § 195.428(a) by
failing to inspect and test the relief device on Surge Tank #42 at intervals not exceeding 15
months, but at least once each calendar year, to verify that its capacity was adequate.
Item 7: The Notice alleged that Respondent violated § 195.408(b)(1), which states:
§ 195.408 Communications.
(a) Each operator must have a communication system to provide for
the transmission of information needed for the safe operation of its
pipeline system.
(b) The communication system required by paragraph (a) of this
section must, as a minimum, include means for:
(1) Monitoring operational data as required by § 195.402(c)(9);
6 Violation Report, Exhibit A-4.



7
The Notice alleged that Respondent violated § 195.408(b)(1) by failing to have a communication
system that provided for the transmission of information needed for the safe operation of the
pipeline. Specifically, the Notice alleged that the communication system in place at the time of
the accident did not transmit information about the inbound product movement, such as pressure,
temperature, flow and other operational data, specified in § 195.402(c)(9), for detecting
abnormal operating conditions. In addition, the Notice alleged the communication system failed
to transmit level alarm information from Tank #57 to the control room of the third-party pipeline
company delivering product to the tank.
During the investigation, the OPS inspector noted that when the valve on Tank #57 closed
prematurely, causing a pressure surge in the piping system, the third-party control system could
not detect any pressure increase. It was not until the failure occurred that the third party’s leak
detection system detected a pressure loss triggering an automatic shutdown of the pumping
operations. Additional evidence in the record supporting the allegation included KMLT’s
accident investigation report, which lists under “basic/root causes” that “there is no
communication link between tank 57 High-high alarm” and the third party’s control room to alert
the third party of a potential overfill situation.7
In its Response and at the hearing, Respondent did not contest the allegation of violation, and
stated that it has taken action to revise its communication plan in response to PHMSA’s
concerns.
Accordingly, after considering the evidence, I find that Respondent violated § 195.408(b)(1) by
failing to have a communication system that provided for the transmission of information needed
for the safe operation of the pipeline.
These findings of violation will be considered prior offenses in any subsequent enforcement
action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any
related series of violations.8 The Notice proposed a total civil penalty of $425,000 for the
violations cited above.
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on Respondent’s ability to
7 Violation Report, Exhibit A-3 at 6.
8 Subsequent to the Notice issued in this case, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of
2011, Pub. L. No. 112-90, § 2(a), 125 Stat. 1905, increased the civil penalty liability for violating a pipeline safety
standard to $200,000 per violation for each day up to a maximum of $2,000,000 for any related series of violations.



8
continue doing business; and the good faith of Respondent in attempting to comply. In addition,
I may consider the economic benefit gained from the violation without any reduction because of
subsequent damages, and such other matters as justice may require.
In its written submissions and at the hearing, Respondent contended that the proposed penalty
should be reduced for four primary reasons: (1) the penalty proposed for Item 1 exceeded the
statutory limit of $100,000; (2) multiple and duplicative penalties were proposed for essentially
the same regulatory violations; (3) the statutory assessment criteria warrant reducing the penalty;
and (4) the proposed penalty is higher than other penalties assessed by PHMSA for similar
violations. Each of these arguments is addressed below.
Item 1: The Notice proposed a civil penalty of $122,500 for Respondent’s violation of 49 C.F.R.
§ 195.402(c)(7). With regard to the nature, circumstances, and gravity of the violation,
Respondent’s failure to have startup and shutdown procedures that included “line-up procedures”
led to valves being in an incorrect position for tank loading and unloading operations and
appropriate pressure relief. The pipeline accident that occurred on October 28, 2009, was
directly attributable to this failure to have and follow line-up procedures. At the hearing, OPS
explained that an elevated penalty had been proposed for this violation because it was a causal
factor in the accident.
Respondent argued that the proposed penalty for Item 1 exceeds the statutory limit of $100,000
for a single-day violation. Respondent argued further that no multiple-day violation had been
alleged in the Notice or in the supporting materials, nor would it be appropriate to allow OPS to
advance an allegation of a multiple-day violation given the facts.9
KMLT is correct that the Notice did not include a statement concerning the duration of the
violation, but the Violation Report, which contained all of the evidence and other supporting
materials, stated that the violation began in January 2007.10 At the hearing, OPS also explained
that the period of alleged noncompliance lasted approximately 720 days from the date operations
first began at the facility until the date of the accident.11 Respondent had an opportunity to
respond to these statements at the hearing and in its Post-Hearing Submittal, but did not rebut the
alleged duration of the violation. Since the evidence demonstrates the violation extended for
multiple days, I find the proposed penalty does not exceed the applicable statutory limit of
$1,000,000.
Respondent also contended that six of the seven violations (Items 1-5 and 7) “should be
consolidated for proposed penalty purposes, and kept within the statutory maximum,” because
they all concern Respondent’s manual of written procedures and invoke a single regulation,
§ 195.402(c).12
9 KMLT Pre-Hearing Brief at 2.
10 Violation Report at 5. In fact, the Violation Report noted that each of the violations began in January 2007.
11 See also OPS Pre-Hearing Brief at 3.
12 Cover letter to Response at 2.



9
Respondent claimed the Pipeline Safety Act (PSA) “expressly prohibits the assessment of
multiple penalties for the violation of a single regulation under the Act if the violations are based
on the same act,” 13 but Respondent has misinterpreted 49 U.S.C. § 60122(f), which applies only
in situations where a single act by an operator constitutes both a violation of a regulation and a
violation of an order.14 The current proceeding does not involve the violation of an order,
therefore § 60122(f) is not applicable.
Respondent also claimed the APA “more generally prohibits federal agencies from seeking
duplicate penalties for alleged violations based on the same underlying facts, or for claims that
seek same substantially similar relief.” Respondent cited 5 U.S.C. § 706, but I fail to find any
language in that section that suggests such a specific prohibition. The APA does authorize a
reviewing court to set aside agency action found to be “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law,” but for the reasons set forth in this Final
Order, a reviewing court should not find reason to set aside the penalty assessments.
Respondent further stated that it has been PHMSA’s “ordinary practice” to assess a single
penalty not exceeding $100,000 for related violations that concern an operator’s manual of
written procedures under § 195.402. To support this assertion, Respondent cited a prior PHMSA
enforcement decision.15
Section 195.402 is a regulation containing multiple requirements separated into paragraphs and
subparagraphs. A review of 49 C.F.R. Part 195 will show this is a common method of
organizing the pipeline safety regulations. For example, the integrity management rule in
§ 195.452 is divided into more than 50 paragraphs containing distinct requirements. Even a
single paragraph may actually constitute multiple requirements for which the operator is
responsible for compliance, such as § 195.402(c)(3), a paragraph that requires procedures for
“operating, maintaining, and repairing the pipeline system in accordance with each of the
requirements of this subpart and subpart H of this part.” It would be contrary to the intent of the
regulations for PHMSA to limit enforcement to only one requirement of § 195.402(c). As
explained in another prior enforcement decision, the pipeline safety regulations are performance-
based and allow an operator to develop written procedures tailored to its system, “but each
section of those procedures is enforceable by PHMSA in the same manner as a code section. If
PHMSA were unable to hold operators accountable for following all of their procedures in a
given subject area of the manual because they were in some sense related, public safety would
suffer and the intent of Congress in enacting the pipeline safety laws would be frustrated.”16
The prior enforcement decision cited by Respondent is factually different than the current
proceeding.17 In that case, PHMSA alleged a single violation of § 195.402(a) and (d) for failing
to follow written procedures for abnormal operations. (The operator ultimately proved it did not
13 KMLT Pre-Hearing Brief at 1.
14 See Florida Gas Transmission Co., CPF No. 45102, at 7-9, 2006 WL 3825342 (Jan. 3, 2006).
15 KMLT Pre-Hearing Brief at 3.
16 Colorado Interstate Gas Co., CPF No. 5-2008-1005, at 11, 2009 WL 5538649 (Nov. 23, 2009).
17 See Alyeska Pipeline Service Co., CPF No. 5-2010-5001, 2011 WL 4351595 (Jul. 29, 2011).



10
violate the regulation, and PHMSA withdrew the allegation.) In the current proceeding, OPS has
alleged multiple violations for failing to have and follow various procedures required by
different paragraphs of the code. It is not unusual for PHMSA to allege multiple violations of
procedural requirements and propose separate penalties for each violation. For example, in one
case, PHMSA assessed civil penalties totaling $1,200,000 for multiple violations of requirements
to have and follow written procedures (combined with other violations, the total penalty was
$2,405,000).18 In another case, PHMSA assessed civil penalties of $2,335,000 for multiple
violations of requirements to have and follow written procedures.19
For the above reasons, I reject Respondent’s assertion that Items 1-5 and 7 must be consolidated
into a single violation. Moreover, I note the combined penalties in this case do not exceed the
statutory limit of $1,000,000 for a related series of violations.
Respondent also argued the civil penalty should be reduced under the statutory assessment
criteria. In particular, KMLT contended that the penalty should be reduced because the accident
was an isolated error and did not have severe consequences. Respondent noted that the release
was contained in a diked area and confined to terminal property. There were no injuries or
releases to the environment and Respondent timely reported the accident and conducted all
appropriate response, cleanup, and corrective action.
Despite Respondent’s contention that the accident did not result in severe consequences,
PHMSA still considers it a matter of significant concern when the violation of a regulatory
requirement causes a pipeline failure and the release of hazardous liquid, especially when the
quantity of the product released exceeds the threshold for immediate reporting to the National
Response Center. As noted in the Violation Report, approximately 8,600 gallons of number 2
fuel oil (i.e., home heating oil) was released into a containment dike as a result of this violation.
Fuel oil is toxic and flammable and the safety of persons and property was at risk. The fumes are
hazardous to individuals, there is a risk of ignition, and the product is harmful to the
environment. Approximately 20 gallons splashed over the containment dike onto a road within
the terminal property, which required soil remediation. For these reasons, I find the nature,
circumstances and gravity of the violation justify the proposed civil penalty.
With regard to culpability, Respondent contested the allegation in the Violation Report that “KM
failed to take any action to comply” with the regulatory requirement. This statement was
included in the Violation Report for each of the seven violations.20 Respondent argued that it
was inaccurate to allege that the company failed to take any action to comply with § 195.402
because the company did in fact maintain a written operations and maintenance manual.
In each instance this statement appears in the Violation Report, there is an explanation
immediately following it to qualify the statement. For example in Item 1, the explanation notes
that KMLT did not have line-up procedures for the terminal facility. Taken together, these
statements appear to be merely a comment on KMLT’s conduct that resulted in the cited
18 Enbridge Energy Partners, CPF No. 3-2008-5011, 2010 WL 6531629 (Aug. 17, 2010).
19 Colorado Interstate Gas Co., CPF No. 5-2008-1005, 2009 WL 5538649 (Nov. 23, 2009).
20 See Violation Report at 7, 12, 18, 23, 28, 34 and 40.



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violation, in this instance, the failure to establish and follow start up and shutdown procedures
that included line-up procedures.21 As the operator of the facility, Respondent is responsible for
compliance with the regulations and is therefore culpable for its failure to have and follow such
procedures. The civil penalty is not based on any broad assertions concerning Respondent’s
compliance with other regulatory requirements not cited in the Notice.
With regard to good faith in attempting to achieve compliance, Respondent argued in its written
submissions and at the hearing that it cooperated fully with PHMSA and has taken efforts to
implement the actions in the proposed compliance order, beginning even before the Notice was
issued. In addition, Respondent noted that it has completed virtually all of the actions in the
proposed compliance order and plans to have all corrective actions completed by the dates set
forth in the order.
At the hearing, OPS stated that Respondent’s actions taken after the OPS inspection should not
be considered evidence of a good faith attempt to comply. This position is generally consistent
with the manner in which PHMSA has applied this statutory assessment factor in previous final
orders.22 PHMSA does not generally find cause to reduce a civil penalty for corrective action
taken after the operator has already been notified of the deficiency through a compliance
inspection by OPS, because operators are expected to bring their facilities into compliance with
the regulations, particularly when an issue has been brought to the operator’s attention by the
agency. Rather, PHMSA generally considers evidence of good faith to be those actions taken by
an operator as a deliberate attempt to comply with the regulation prior to when the violation
occurred. For the above reasons, I find the statutory assessment criteria do not warrant reducing
the proposed penalty.
Accordingly, having reviewed the record and considered the assessment criteria, I assess
Respondent a civil penalty of $122,500 for violation of 49 C.F.R. § 195.402(c)(7).
Item 2: The Notice proposed a civil penalty of $85,000 for Respondent’s violation of 49 C.F.R.
§ 195.402(c)(8). Respondent failed to have and follow written procedures for monitoring
pressure on the pipeline from an attended location to assure operation within prescribed pressure
limits during startup and shut-in.
With regard to the nature, circumstances, and gravity of the violation, Respondent’s failure to
monitor pressure on the pipeline from an attended location contributed to the cause of the
accident. Had pressure been appropriately monitored, the operator would have been able to
make an informed decision to timely shut down the transfer operations before the system became
over-pressurized. Accordingly, the nature, circumstances and gravity of the violation justify the
proposed civil penalty. For the same reasons discussed above, I find culpability and good faith
considerations do not result in reducing the penalty.
21 Even OPS referred only to “Respondent’s failure to have written startup and shutdown procedures” in responding
to KMLT’s argument on this issue. OPS Pre-Hearing Brief at 3.
22 See, e.g., Air Products and Chemicals, Inc., CPF No. 4-2009-1008, at 3, 2009 WL 5538650 (Dec. 1, 2009);
Chevron Pipe Line Co., CPF No. 4-2005-8008, at 4, 2008 WL 902913 (Mar. 19, 2008).



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In addition to arguing that Items 1-5 and 7 should be consolidated, which I rejected, Respondent
argued that several pairs of violations should have been brought as single violations because they
involve similar duties. Respondent maintained that “[u]nder established administrative law
precepts, such duplication is impermissible.”23
KMLT argued one of the pairs, Items 2 and 3, involve substantially similar duties because both
pertain to procedures for monitoring pressure and other parameters from an attended location.
KMLT stated that resolution of either one would necessarily result in resolution of the other.
Therefore, Respondent argued these two violations are improperly duplicative and should have
been brought as a single count with only one penalty.
Item 2 concerns the requirement under § 195.402(c)(8) that operators have and follow
procedures for monitoring pipeline pressure during startup and shut-in to ensure compliance with
maximum operating pressure limits. Item 3 concerns the requirement under § 195.402(c)(9) that
operators have and follow procedures for detecting abnormal operating conditions through
monitoring of operational data including pipeline pressure, temperature, flow or other
appropriate data. Even though both regulations concern the monitoring of certain operational
data, one is concerned only with monitoring pressure during startup and shut-in to avoid
overpressure, while the other is concerned with monitoring more operational data at all times to
detect abnormal operating conditions. These are separate and distinct requirements. They also
require separate evidence to prove a violation (i.e., procedures for monitoring pressure during
startup vs. procedures for detecting abnormal operating conditions at all stages of operations).
Contrary to Respondent’s assertion, compliance with one regulation does not necessarily result
in compliance with the other. For example, an operator may have the means to monitor pressure,
but not the means to detect abnormal operating conditions by monitoring other parameters. For
these reasons, Items 2 and 3 are appropriately brought as separate violations with individual
penalties. The proposed penalties for Items 2 and 3 do not exceed the statutory limit for each
violation.
The cases cited by Respondent do not require a different conclusion. In Blockburger, the
Supreme Court held that a single act by a criminal defendant was appropriately brought as
separate violations of two different statutes because each statute required proof of an additional
fact the other did not.24 While this was a criminal law decision, PHMSA has found the rationale
in Blockburger to be relevant to determining whether multiple violations of the pipeline safety
regulations are “a related series of violations” subject to the statutory limit of $1,000,000 under
49 U.S.C. § 60122. For example, in Colorado Interstate Gas Co., PHMSA applied “the idea that
separate evidence constitutes separate violations” to determine whether any two or more
violations were “so closely related (i.e., same evidentiary basis) that they are not separate and
should be considered one violation for purposes of applying the $1,000,000 cap for an individual
violation exceeding 10 days in duration.”25 Using this rationale, Items 2 and 3 of the current
23 KMLT Pre-hearing Brief at 3, citing Blockburger v. United States, 284 U.S. 299 (1932) and Burkes Mechanical,
Inc., OSHRC Docket No. 04-475, 2007 WL 2046814 (July 12, 2007).
24 284 U.S. 299, 304 (1932).
25 CPF No. 5-2008-1005, at 12, 2009 WL 5538649 (Nov. 23, 2009).



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proceeding are separate violations of two different regulations because they involve separate
facts and evidence to prove a violation.
Respondent also cited Burkes Mechanical, Inc., an administrative decision by the Occupational
Safety Health Review Commission. In that case, the Commission examined whether two
violations were duplicative by determining whether “the standards cited require the same
abatement measures, or whether abatement of one citation
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