{"operation":"document","citation":"CPF 120151026","title":"ARLINGTON STORAGE COMPANY LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2015-11-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.705(b), 192.706, 192.709(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120151026.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120151026.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120151026","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120151026","body":"Notice of Probable Violation involving ARLINGTON STORAGE COMPANY LLC. PHMSA's enforcement data identifies the cited regulations as 192.705(b),  192.706,  192.709(c). The case was opened on 2015-11-17 and is reported as closed as of 2017-01-25. Proposed civil penalty: $98,100. Assessed civil penalty: $98,100. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120151026_Final Order_01062017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120151026/120151026_Final%20Order_01062017.pdf\n\n120151026_Final Order_01062017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120151026/120151026_Final%20Order_01062017_text.pdf\n\n120151026_NOPV_ PCP_11172015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120151026/120151026_NOPV_%20PCP_11172015.pdf\n\n120151026_NOPV_ PCP_11172015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120151026/120151026_NOPV_%20PCP_11172015_text.pdf\n\n120151026_Operator Response to Notice_12152015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120151026/120151026_Operator%20Response%20to%20Notice_12152015.pdf\n\n120151026_Final Order_01062017_text.pdf\n\nJanuary 6, 2017\nMr. Robert G. Phillips\nChairman, President and CEO\nCrestwood Midstream Partners, LP\n700 Louisiana Street, Suite 2550\nHouston, TX 77002\nRe: CPF No. 1-2015-1026\nDear Mr. Phillips:\nEnclosed please find the Final Order issued to your subsidiary, Arlington Storage Company,\nLLC, in the above-referenced case. It makes findings of violation and assesses a total civil\npenalty of $98,100. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon receipt of payment. Service of the Final Order by\ncertified mail is deemed effective upon the date of mailing, or as otherwise provided under\n49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Robert Burrough, Acting Regional Director, Eastern Region, PHMSA, OPS\nMs. Alice Ratcliffe, Pipeline Compliance Manager, Arlington Storage Company, LLC,\n801 Cherry Street, Suite 3800, Unit 20, Fort Worth, Texas 76102\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 )\nArlington Storage Company, LLC, )\na subsidiary of Crestwood Midstream Partners, LP, ) )\n)\nRespondent. )\n_______________________________________________ )\nCPF No. 1-2015-1026\nFINAL ORDER\nOn August 17-19, 2015, pursuant to 49 U.S.C. § 60117, a representative of the New York State\nDepartment of Public Service (NYSDPS), acting 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 records and above-ground piping of Arlington Storage\nCompany, LLC (Arlington or Respondent), at the company’s Seneca Lake gas storage facility in\nWatkins Glen, New York. Arlington, a wholly-owned subsidiary of Crestwood Midstream\nPartners, LP (Crestwood), currently controls 1.5 billion cubic feet of natural gas storage in\nupstate New York. Crestwood is a publicly-traded master limited partnership that owns and\noperates midstream assets located primarily in the Marcellus Shale, Bakken Shale, Delaware\nPermian Basin, PRB Niobrara Shale, Barnett Shale, Fayetteville Shale and Haynesville Shale\nareas.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated November 17, 2015, 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 Arlington\nhad committed various violations of 49 C.F.R. Part 192 and assessing a civil penalty of $98,100\nfor the alleged violations.\nCrestwood responded to the Notice on behalf of Arlington, by letter dated December 15, 2015\n(Response). The company did not contest the allegations of violation but offered additional\ninformation in response to the Notice and requested that the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one.\n1 See http://www.crestwoodlp.com/home/default.aspx. Current as of 5/20/2016.\n\n\n\nCPF No. 1-2015-1026\nPage 2\nFINDINGS OF VIOLATION\nRespondent did not contest the following allegations of violation of 49 C.F.R. Part 192:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.705(b), which states:\n§ 192.705 Transmission lines: Patrolling.\n(a) . . .\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\nlocation of\nline\nAt highway and railroad\ncrossings\nAt other places\n1,2 7½ months; but at least twice\neach calendar year\n15 months; but at least\nonce each 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\nfour times each calendar\nyear.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.705(b) by failing to conduct patrols\nof the company’s Seneca West Pipeline at the required frequency. Specifically, the Notice\nalleged that Arlington’s patrolling records and procedures for highway and railroad crossings\nfrom 2013 through 2015 showed Arlington had failed to conduct four patrols at the required\nfrequency. According to the Notice, the patrols in Class 1 and 2 locations that had been\nconducted on June 4, 2014 and April 13, 2015 exceeded the code requirement by 16 and 85 days,\nrespectively. In addition, the patrols in Class 3 areas that had been conducted on June 11, 2014\nand January 21, 2015 exceeded the code requirement by 74 and 47 days, respectively.\nIn its Response, Arlington did not contest the allegations of violation but requested mitigation of\nthe proposed penalty for several reasons. These arguments will be discussed in the “Assessment\nof Penalty” section below. Accordingly, after considering all of the evidence, I find that\nRespondent violated 49 C.F.R. § 192.705(b) by failing to conduct patrols on the Seneca West\nPipeline at the required frequency.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.706, which states, in\nrelevant part:\n§ 192.706 Transmission lines: Leakage surveys.\nLeakage surveys of a transmission line must be conducted at intervals\nnot exceeding 15 months, but at least once each calendar year. However,\n\n\n\nCPF No. 1-2015-1026\nPage 3\nin the case of a transmission line which transports gas in conformity with §\n192.625 without an odor or odorant, leakage surveys using leak detector\nequipment must be conducted –\n(a) In Class 3 locations, at intervals not exceeding 7½ months, but at\nleast twice each calendar year; . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.706 by failing to conduct leakage\nsurveys on the Seneca West Pipeline at the required frequency. Specifically, the Notice alleged\nthat Arlington’s leak-survey records and procedures for highway and railroad crossings from\n2013 through 2015 showed Arlington had failed to conduct patrols at the required frequency on\ntwo occasions. The Class 3 leak surveys performed on June 11, 2014 allegedly exceeded the\ndeadline by 23 days and only one survey, instead of two, had been conducted in calendar year\n2014.\nIn its Response, Arlington did not contest the allegations of violation, but requested mitigation of\nthe proposed penalty for several reasons. These arguments will be discussed in the “Assessment\nof Penalty” section below. Accordingly, after considering all of the evidence, I find that\nRespondent violated 49 C.F.R. § 192.706 by failing to conduct leakage surveys on the Seneca\nWest Pipeline at the required frequency.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.709, which states, in\nrelevant part:\n§ 192.709 Transmission lines: Record keeping.\nEach operator shall maintain the following records for transmission\nlines for the periods specified:\n(a) …\n(c) A record of each patrol, survey, inspection, and test required by\nsubparts L and M of this part must be retained for at least 5 years or until\nthe next patrol, survey, inspection, or test is completed, whichever is longer.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.709 by failing to keep records of\neach inspection and test required by subparts L and M of Part 192 for at least five years or until\nthe next inspection or test is completed, whichever is longer. Specifically, the Notice alleged\nthat Arlington did not have records showing that each transmission-line valve for the Seneca\nWest Pipeline that might be required during an emergency was inspected and partially operated\nat intervals not exceeding 15 months, but at least once each calendar year.2 During the NYSDPS\ninspection conducted on August 17, 2015, Arlington personnel stated that valve-inspection\nrecords for 2014 were missing and could not be located.\nIn its Response, Arlington did not contest the allegations of violation, but requested mitigation of\nthe proposed penalty for several reasons. These arguments will be discussed in the “Assessment\nof Penalty” section below. Accordingly, after considering all of the evidence, I find that\n2 Required under 49 C.F.R. § 192.745(a).\n\n\n\nCPF No. 1-2015-1026\nPage 4\nRespondent violated 49 C.F.R. § 192.709 by failing to keep records of each inspection and test\nrequired by subparts L and M of Part 192 for at least five years or until the next inspection or test\nis completed, whichever is longer.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken 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. 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; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $98,100 for the violations cited above.\nAs noted above, Respondent did not contest any of the allegations of violation but requested\nmitigation of all three proposed penalties for several reasons. First, Arlington argued that it was\ngoing through a merger process at the time of the violations and that there were “changes in\nphilosophy, leadership and responsibility that ultimately contributed to delays and confusion.”3\nSecond, the company pointed out that the untimely death of a “seasoned supervisor only three (3)\nmonths before the August 2015 inspection, created a void of regulatory and compliance\nknowledge which furthered confusion for employees.”4\nThird, Arlington argued that there were a number of other key personnel losses that led to\ndeficiencies in the timeliness of certain periodic activities and record keeping that would not\nhave otherwise occurred. Fourth, the company argued that Crestwood had taken affirmative\nsteps to address a number of deficiencies as a result of the NYSDPS inspections and had even\ncreated a U.S. Department of Transportation (DOT) Compliance Team to oversee the company’s\ncompliance regime.\nWhile PHMSA acknowledges that compliance lapses may sometimes occur during changes in\nmanagement or personnel, applauds Arlington’s recent efforts to improve compliance, and\nunderstands Crestwood’s commitment to the highest level of safety, I am not convinced that any\nof these factors justifies a reduction in the proposed penalties in this particular case. If anything,\nchanges in ownership and personnel are precisely the sorts of events that routinely occur with\nmany pipeline operators and should be anticipated so that no safety violations occur during such\n3 Response, at 1.\n4 Id.\n\n\n\nCPF No. 1-2015-1026\nPage 5\nchanges. As for the creation of a new DOT Compliance Team and other measures taken by\nCrestwood to improve compliance, these are laudable efforts but ones that any prudent operator\nwould be expected to take in the wake of PHMSA or NYSDPS inspections and notices of\nviolation.\nEach of the proposed penalties are discussed more specifically below.\nItem 1: The Notice proposed a civil penalty of $42,100 for Respondent’s violation of 49 C.F.R.\n§ 192.705(b), for failing to conduct patrols of the Seneca West Pipeline at the required\nfrequency. As discussed above, I found that Arlington violated § 192.705(b) and that the\ncompany’s general arguments for mitigation of the proposed penalty were unpersuasive. This\nviolation involved a failure to conduct necessary patrolling of Respondent’s pipeline facilities in\na High Consequence Area (HCA), where an accident could potentially affect populated or\nenvironmentally sensitive areas. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $42,100 for violation of 49 C.F.R.\n§ 192.705(b).\nItem 2: The Notice proposed a civil penalty of $39,900 for Respondent’s violation of 49 C.F.R.\n§ 192.706, for failing to conduct leak surveys on the Seneca West Pipeline at the required\nfrequency. As discussed above, I found that Arlington violated § 192.706 and that the\ncompany’s arguments for mitigation of the proposed penalty were unpersuasive. This violation\ninvolved a failure to conduct leakage surveys of Respondent’s pipeline facilities in an HCA,\nwhere an accident could potentially affect populated or environmentally sensitive areas.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $39,900 for violation of 49 C.F.R. § 192.706.\nItem 3: The Notice proposed a civil penalty of $16,100 for Respondent’s violation of 49 C.F.R.\n§ 192.709, for failing to keep records of each inspection and test required by subparts L and M of\nPart 192 for at least five years or until the next test is completed, whichever is longer. As\ndiscussed above, I found that Arlington violated § 192.709 and that the company’s arguments for\nmitigation of the proposed penalty were unpersuasive. This violation involved a failure to keep\nproper records of inspections and tests performed in HCAs, where an accident could potentially\naffect populated or environmentally sensitive areas. Accordingly, having reviewed the record\nand considered the assessment criteria, I assess Respondent a civil penalty of $16,100 for\nviolation of 49 C.F.R. § 192.709.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $98,100.\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\nMonroney Aeronautical Center, 6500 S. MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\n\n\n\nCPF No. 1-2015-1026\nPage 6\nFailure to pay the $98,100 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.\nJanuary 6, 2017\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":17861}