{"operation":"document","citation":"CPF 120145005","title":"SUNOCO PIPELINE L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2014-10-02","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.573(e).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120145005.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120145005.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120145005","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120145005","body":"Notice of Probable Violation involving SUNOCO PIPELINE L.P.. PHMSA's enforcement data identifies the cited regulation as 195.573(e). The case was opened on 2014-10-02 and is reported as closed as of 2016-01-27. Proposed civil penalty: $29,500. Assessed civil penalty: $22,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120145005_Final Order_01132016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_Final%20Order_01132016.pdf\n\n120145005_Final Order_01132016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_Final%20Order_01132016_text.pdf\n\n120145005_NOPV_PCP_10022014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_NOPV_PCP_10022014.pdf\n\n120145005_NOPV_PCP_10022014_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_NOPV_PCP_10022014_text.pdf\n\n120145005_Operator Response to Notice_10312014.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_Operator%20Response%20to%20Notice_10312014.pdf\n\n120145005_Operator_Additional_Information_Response to Notice_02272015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120145005/120145005_Operator_Additional_Information_Response%20to%20Notice_02272015.pdf\n\n120145005_Final Order_01132016_text.pdf\n\nJanuary 13, 2016\nMr. Michael J. Hennigan\nPresident\nSunoco Logistics Partners Operations, LP\n1818 Market Street, Suite 1500\nPhiladelphia, PA 19103\nRe: CPF No. 1-2014-5005\nDear Mr. Hennigan:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nSunoco Pipeline, LP. It makes one finding of violation and assesses a reduced civil penalty of\n$22,300. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. Service of the Final Order by certified mail is\ndeemed effective upon the date of mailing, or as otherwise 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. Byron Coy, P.E., Director, PHMSA Eastern Region, OPS\nMr. David Chalson, Senior Vice President of Operations, Sunoco Pipeline, LP, 4041\nMarket Street, Aston, Pennsylvania 19014\nMs. Kathleen Shea-Bailey, Counsel to Sunoco Pipeline, LP, 3807 Westchester Pike,\nNewtown Square, Pennsylvania 19073\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 )\n)\n)\nSunoco Pipeline, LP, a subsidiary of Sunoco Logistics Partners Operations, LP, )\n)\nRespondent. )\n_____________________________________________________ )\n) CPF No. 1-2014-5005\nFINAL ORDER\nDuring the weeks of April 1 and April 8, 2013, pursuant to 49 U.S.C. § 60117, a representative\nof the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline\nSafety (OPS), conducted an inspection of the procedures and records of Sunoco Pipeline, LP\n(Sunoco or Respondent), at its facilities in Icedale, Pennsylvania. Sunoco, a subsidiary of\nSunoco Logistics Partners Operations, LP, operates more than 7,500 miles of liquid pipelines\nacross the United States.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated October 2, 2014, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that Sunoco had\nviolated 49 C.F.R. § 195.573 and assessing a civil penalty of $29,500 for the alleged violation.\nRespondent responded to the Notice by letter dated October 31, 2014 (Response). Sunoco\ncontested the allegation of violation, offered information in response to the Notice, and requested\nthat the proposed civil penalty be reduced or eliminated. On February 27, 2015, Respondent sent\nan additional response to PHMSA (Second Response), offering additional information in support\nof its arguments contesting the allegation. Respondent did not request a hearing and therefore\nhas waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n1 Sunoco Logistics Partners Operations LP website: http://www.sunocologistics.com/Public-Awareness/26/ (last\nvisited September 22, 2015); Bloomberg Business, Company Overview of Sunoco Pipeline LP. website:\nhttp://www.sunocologistics.com/Public-Awareness/26/ (last visited September 22, 2015).\n\n\n\nCPF No. 1-2014-5005\nPage 2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) Protected pipelines. You must do the following to determine\nwhether cathodic protection required by this subpart complies with\n§ 195.571: …\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe regulation further references 49 C.F.R. § 195.401(b), which states:\n§ 195.401 General requirements.\n(a) …\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non Integrity management repairs. Whenever an operator\ndiscovers any condition that could adversely affect the safe operation of its\npipeline system, it must correct the condition within a reasonable time.\nHowever, if the condition is of such a nature that it presents an immediate\nhazard to persons or property, the operator may not operate the affected\npart of the system until it has corrected the unsafe condition.\n(2) Integrity management repairs. When an operator discovers a\ncondition on a pipeline cover under § 195.452, the operator must correct\nthe condition as prescribed in § 195.452(h).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to correct\nidentified deficiencies in corrosion control within a reasonable time, as required by\n§ 195.401(b)(1). Specifically, the Notice alleged that Sunoco failed to act within a reasonable\ntime to correct identified deficiencies in corrosion control at test stations 7636+69 and 7245+00\nof Unit 3241 near Greensburg, Pennsylvania (Unit 3241).\nAccording to PHMSA, the cathodic protection at these stations was deficient because it did not\nmeet the requirements set out in § 195.571, which requires that cathodic protection (CP) must\nmeet the applicable criteria contained in paragraph 6.2 of National Association of Corrosion\nEngineers, International (NACE) Standard Practice (SP) 0169.2 To meet the CP criteria\ndelineated under NACE SP 0169 and more fully described in the Notice, the records for stations\n2 See 49 C.F.R. § 195.571, which states:\n§ 195.571 What criteria must I use to determine the adequacy of cathodic\nprotection?\nCathodic protection required by this subpart must comply with one or more of the\napplicable criteria and other considerations for cathodic protection contained in\nparagraphs 6.2 and 6.3 of NACE SP 0169 (incorporated by reference, see § 195.3).\n\n\n\nCPF No. 1-2014-5005\nPage 3\n7245+00 and 7636+69 had to show pipe-to-soil readings of at least minus .85V.3 However, the\nrecords for station 7245+00 taken from 12/28/2010 to 12/16/2012 allegedly showed pipe-to-soil\nreadings of below minus .85V, and records for station 7636+69 taken from 9/30/2010 to\n2/1/2012 showed pipe-to-soil readings of below minus .85V.4 Further, as detailed below, for\nstation 7245+00 these deficiencies were first noticed on November 20, 2009, but were not\npermanently corrected until December 17, 2012.5\nIn its Response, Sunoco acknowledged that the readings were low at both test stations during the\ntime periods alleged in the Notice, but made several arguments as to why Respondent should not\nbe found in violation of § 195.573(e). First, Respondent claimed that it had undertaken two\nengineering evaluations, as allowed under the company’s own procedures, to determine\nalternative measures to correct the identified corrosion deficiencies.6 Sunoco also claimed that\nthese evaluations were aimed at determining both temporary and long-term solutions.7\nRespondent asserted that these actions included installing a temporary bond on Unit 3241 to\nprovide cathodic protection from an adjacent system, and also implementing a long-term\nimprovement plan for this unit.8 Sunoco conceded, however, that it removed the temporary bond\nafter 10 months to accommodate a close interval survey and that this bond remained\ndisconnected because it was depriving another area of sufficient cathodic protection current.9\nSunoco also claimed that in December 2012 it installed and energized a new rectifier and ground\nbed to permanently correct the identified deficiencies.10 Sunoco asserted that such actions were\nin conformance with its own procedure for monitoring corrosion control and taking remedial\nactions to correct the deficiencies at stations 7245+00 and 7636+69 before the next scheduled\ntest interval, “unless an engineering evaluation determines alternative measures to be adequate\n(emphasis added). [Sunoco] did just that by evaluating alternative measures while also working\non remedial action….”and by conducting an engineering evaluation that showed the alternative\nmeasures it took would correct the identified deficiencies.11\nOn February 27, 2015, Respondent sent a Second Response, adding additional information as to\nwhy the Notice and the associated penalty should be withdrawn. The company presented a\n3 See NACE SP 0169, Paragraph 6.2\n4 See Notice of Probably Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice) at 2.\n5 See Respondent’s Response to the Notice (Response) at 4 – 5.\n6 Response at 1 – 2.\n7 Id.\n8 Id.\n9 Id.\n10 Id.\n11 Id.\n\n\n\nCPF No. 1-2014-5005\nPage 4\nchronology of steps it had taken to acquire the easement for an anode ground bed system\ndesigned to provide adequate long-term CP.\n12\nI am aware of Sunoco’s various efforts to correct the identified CP deficiencies at station\n7245+00, as well the arguments presented in both its Response and Second Response. However,\nthe evidence presented by Respondent only confirms that the identified deficiencies were not\ncorrected within a reasonable time.\nLow readings were first identified for station 7245+00 on November 20, 2009.13 The temporary\nbond was installed on January 15, 2010, but then disconnected on December 1, 2010.14 The\ncompany’s own documents show that no other measures, either temporary or permanent, were\nput in place to correct this deficiency until December 17, 2012.15 At this point, over two years\nhad elapsed from the time the temporary bond was disconnected, (and three years after the\ndeficiency was first identified), until the new ground bed and rectifier were energized to\npermanently correct the CP deficiency.\nAs noted above, Respondent argued that it had followed its own internal procedures to address\nthe CP deficiencies. These procedures incorporated language from § 195.401(b), which provides\nthat identified deficiencies should be “corrected within a reasonable period of time.” According\nto Respondent, the term “reasonable period” is undefined both under the regulation and its own\nprocedures.16 Sunoco asserted that it had adhered to § 195.401(b) by requiring corrective action\nto take place prior to the next test interval, or by performing an engineering evaluation to\ndetermine if alternative remediation measures were adequate.17 Respondent specifically noted\nan email, dated February 6, 2014, in which it stated that it had found its alternative remediation\nmeasures to be adequate.18\nSunoco is correct that temporary measures were indeed taken to “maintain and improve” the low\ncathodic protection levels of station 7245+00 while Respondent pursued a permanent solution.\nHowever, while Sunoco claimed an “engineering evaluation” was performed to determine if\nalternative remediation measures were adequate, it has not provided evidence of such an\nevaluation, nor showed how the temporary measures would correct the deficiency. Further, as\nseen above, the temporary measures Sunoco implemented were discontinued two years prior to\npermanent measures being implemented.\n12 See Respondent’s Second Response to the Notice (Second Response) at 1.\n13 Response at 4 – 5.\n14 Id.\n15 Id.\n16 Id. at 1.\n17 Response at 1 – 3.\n18 Notice at 4.\n\n\n\nCPF No. 1-2014-5005\nPage 5\nWhile the phrase “reasonable period of time” in § 195.401(b) is undefined, previous PHMSA\nfinal orders have interpreted the phrase to mean generally no more than 15 months – the\nmaximum time allowed between annual cathodic protection surveys under 49 C.F.R. §\n195.573(a)(1).\n19 As seen above, Respondent noted a cathodic protection deficiency at station\n7245+00 on November 20, 2009, but did not correct this deficiency until over three years later,\non December 17, 2012.\nAccordingly, after considering all of the evidence I find that Respondent violated 49 C.F.R.\n§ 195.573(e), by failing to correct identified deficiencies in corrosion control within a reasonable\ntime, as required by § 195.401(b)(1).20\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$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.21 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $29,500 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $29,500 for Respondent’s violation of 49 C.F.R.\n§ 195.573(e), for failing to correct identified deficiencies in corrosion control within a reasonable\ntime, as required by § 195.401(b). Specifically, I found that Sunoco failed to act within a\nreasonable time to correct identified deficiencies in corrosion control at station 7245+00.\n19 E.g., In the Matter of Colonial Pipeline Company, CPF 2-2008-5005, at 4, 2010 WL 6518285 (July 12, 2010)\n(“PHMSA has generally considered a ‘reasonable time’ to be the maximum time allowed between required annual\ncathodic protection surveys (15 months maximum from the discovery of a deficient survey reading).”).\n20 As for the second allegation of violation, that Sunoco failed to correct identified CP deficiencies at station\n7636+69, I am not convinced that there is sufficient evidence to prove that the company failed to take action within\na reasonable time. This is because Sunoco has presented evidence showing that the readings between 2010 and\n2012 were inconsistent. On 9/30/10, the pipe-to-soil survey was observed to be -0.84V; on 12/28/10, a follow-up\nsurvey showed a reading of -0.95V; on 10/12/11, the reading was -0.73V; and on 2/1/13, the reading was-0.89V.\n21 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.\n1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per\nviolation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.\n\n\n\nCPF No. 1-2014-5005\nPage 6\nRespondent contends that the proposed penalty should either be eliminated or reduced\nsubstantially because Sunoco made a good-faith effort to comply with § 195.573(e). Sunoco\nnotes our previous decision in Kinder Morgan Liquids Terminals, LLC, which held that a\nproposed civil penalty may be reduced due to the actions an operator has taken in good faith to\ncomply with a regulation.\n22 Sunoco maintains it undertook good-faith efforts to comply with §\n195.573(e) by undertaking two engineering evaluations to determine alternative measures to\ncorrect the identified corrosion deficiencies, first installing a temporary bond at station 7245+00,\nand then taking steps to implement a long-term improvement plan through the acquisition of an\neasement to install an anode ground bed system.23\nAfter reviewing Respondent’s arguments, I find the civil penalty proposed in the Notice should\nbe reduced. While still responsible for having violated § 195.573(e), Sunoco’s took significant\nsteps to comply with the regulation but failed to achieve compliance for reasons that were partly\noutside of its control. Specifically, the company not only took action to install a temporary bond\nfor station 7245+00, but it also experienced delays from the property owner of the location where\nthe new ground bed needed to be installed.24\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a reduced civil penalty of $22,300.\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 (AMK-325), Federal Aviation Administration, Mike\n22 In the Matter of Kinder Morgan Liquids Terminals LLC., CPF No. 1-2011-5001, at 10, 2012 WL 6184429 (Oct.\n17, 2012) (“PHMSA does not generally find cause to reduce a civil penalty for corrective actions taken after the\noperator has already been notified of the deficiency through a compliance inspection by OPS, because operators are\nexpected to bring their facilities into compliance with the regulations, particularly when an issue has been brought to\nthe operator’s attention by the agency. Rather, PHMSA generally considers evidence of good faith to be those\nactions taken by the operator as a deliberate attempt to comply with the regulation prior to when the violation\noccurred.”); see also In the Matter of Belle Fourche Pipeline Co., CPF No. 5-2009-5042, at 19, 2011 WL 700607\n(Nov. 21, 2011) (“Fourth, BFPL [Belle Fourche Pipeline Co.] argued that the Violation Report included no evidence\nof the degree of culpability, but rather stated simply that the company was ‘culpable’ because it had knowledge of\nthe regulation. In prior final orders, I have found that when evaluating an operator’s culpability, I determine the\nextent to which the company deserves the blame for the violation that occurred. In this case, as the operator of the\npipeline facility, BFPL is responsible for compliance and therefore is culpable for these violations of the pipeline\nsafety regulations. I find no reason to determine there is any lesser degree of culpability on the part of Respondent\nfor these violations.”). Respondent also notes Belle Fourche Pipeline Co., which shows that when evaluating an\noperator’s culpability, PHMSA considers the extent to which the operator deserves the blame for the violation that\noccurred. Sunoco asserts the proposed penalty should be eliminated or reduced, as with regards to culpability, its\npersonal were aware of the regulation violated and took steps to correct this deficiency – but simply could not do so\nwithin a reasonable period of time\n23 Response at 1 – 2; Second Response at 1.\n24 Second Response at 2 – 11.\n\n\n\nCPF No. 1-2014-5005\nPage 7\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $22,300 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.\nUnder 49 C.F.R. § 190.243, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.243. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":22029}