{"operation":"document","citation":"CPF 120155017","title":"MIPC LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2015-09-29","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(a), 195.452(h)(2), 195.452(h)(4)(i).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155017.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155017.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120155017","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120155017","body":"Notice of Probable Violation involving MIPC LLC. PHMSA's enforcement data identifies the cited regulations as 195.432(a),  195.452(h)(2),  195.452(h)(4)(i). The case was opened on 2015-09-29 and is reported as closed as of 2017-04-06. Proposed civil penalty: $110,300. Assessed civil penalty: $108,900. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120155017_Closure Letter_04062017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_Closure%20Letter_04062017.pdf\n\n120155017_Closure Letter_04062017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_Closure%20Letter_04062017_text.pdf\n\n120155017_Final Order_12022016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_Final%20Order_12022016.pdf\n\n120155017_Final Order_12022016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_Final%20Order_12022016_text.pdf\n\n120155017_NOPV_PCP_PCO_09292015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_NOPV_PCP_PCO_09292015.pdf\n\n120155017_NOPV_PCP_PCO_09292015_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_NOPV_PCP_PCO_09292015_text.pdf\n\n120155017_Operator Response to Notice_10292015.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120155017/120155017_Operator%20Response%20to%20Notice_10292015.pdf\n\n120155017_Closure Letter_04062017_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nApril 6, 2017\nMr. Peter Pirog\nVice President & General Manager\nMIPC, LLC\n920 Cherry Tree Road\nAston, PA 19014\nCPF 1-2015-5017\nDear Mr. Pirog:\nOn September 29, 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nissued to MIPC, LLC’s (MIPC) an NOPV and Proposed Compliance Order. A Final Order (FO)\nwas issued on December 2, 2016. The FO withdrew one of the allegations of violation, made other\nfindings of violation, assessed a reduced civil penalty of $108,900.00, and specified actions that\nneeded to be taken by MIPC to comply with the pipeline safety regulations.\nMIPC paid the Civil Penalty on December 9, 2016; and addressed the compliance order in a letter\nsubmitted to PHMSA on February 8, 2017. Based on our review of the documentation you\nprovided and confirmation of payment of the civil penalty, it has been determined that you have\ncomplied with the terms of this Order.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nRobert Burrough\nActing Director, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120155017_Final Order_12022016_text.pdf\n\nDecember 2, 2016\nMr. Jeff Warmann\nPresident and CEO\nMonroe Energy, LLC\n920 Cherry Tree Road\nAston, Pennsylvania 19014\nRe: CPF No. 1-2015-5017\nDear Mr. Warmann:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nMIPC, LLC. It withdraws one of the allegations of violation, makes other findings of violation,\nassesses a reduced civil penalty of $108,900, and specifies actions that need to be taken by MIPC\nto comply with the pipeline safety regulations. The penalty payment terms are set forth in the\nFinal Order. When the civil penalty has been paid and the terms of the compliance order\ncompleted, as determined by the Director, Eastern Region, this enforcement action will be\nclosed. Service of the Final Order by certified mail is deemed effective upon the date of mailing,\nor as otherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nAlan K. Mayberry\nActing Associate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Byron Coy, P.E., Director, Eastern Region, OPS\nMr. Peter Pirog, VP and General Manager, MIPC, LLC, 920 Cherry Tree Road, Aston,\nPennsylvania 19014\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____________________________________\n)\nIn the Matter of )\n)\nMIPC, LLC, ) CPF No. 1-2015-5017\na subsidiary of Monroe Energy, LLC, )\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom April 21st through April 25th, 2014, pursuant to 49 U.S.C. § 60117, a representative of the\nPipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety\n(OPS), conducted an on-site pipeline safety inspection of the facilities and records of Monroe\nInterstate Pipeline Company, LLC (MIPC or Respondent) in Aston, Pennsylvania. MIPC, a\nsubsidiary of Monroe Energy, LLC, owns and operates a hazardous liquid storage and\ndistribution network that includes 51.25 miles of pipeline, two tank farms, one truck terminal and\n25 breakout tanks with a total tankage capacity of nearly 2.8 million barrels.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated September 29, 2015, a Notice of Probable Violation, Proposed Civil Penalty, and\nProposed Compliance Order (Notice). In accordance with 49 C.F.R. § 190.207, the Notice\nproposed finding that MIPC had violated 49 C.F.R. §§ 195.432 and 195.452 and proposed\nassessing a civil penalty of $110,300 for the alleged violations. The Notice also proposed\nordering Respondent to take certain measures to correct one of the alleged violations.\nMIPC responded to the Notice by letter dated October 29, 2015 (Response). The company\ncontested only one of the allegations, offered additional information in response to the Notice,\nand requested that the proposed civil penalty be reduced.\nRespondent did not request a hearing and therefore has waived its right to one.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n1 See, About MIPC, http://www.monroepipeline.com/mipc/about-mipc/ (last visited August 22, 2016).\n\n\n\nCPF No. 1-2015-5017\nPage 2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i), which states,\nin relevant part:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues.?...\n(4) Special requirements for scheduling remediation—\n(i) Immediate repair conditions. An operator’s evaluation and\nremediation schedule must provide for immediate repair conditions. To\nmaintain safety, an operator must temporarily reduce operating pressure or\nshut down the pipeline until the operator completes the repair of these\nconditions. An operator must calculate the temporary reduction in operating\npressure using the formula in Section 451.6.2.2(b) of ANSI/ASME B31.4\n(incorporated by reference, see § 195.3). An operator must treat the\nfollowing conditions as immediate repair conditions:…2\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(4)(i) by failing to\ntemporarily reduce operating pressure or shut down the pipeline until the operator completes the\nrepair of immediate repair conditions within a High Consequence Area (HCA)3 or that could\naffect a HCA. Specifically, the Notice alleged that at the time of the PHMSA inspection, MIPC\nprovided a copy of its integrity management plan and corresponding records, including the in-\nline inspection (ILI) assessment data for Lines 208/308, completed on November 27, 2012, and\nLine 408, completed on December 3, 2012. According to the Notice, three immediate repairs\nwere subsequently identified and repaired as follows:\n(a) For Line 408, one immediate repair was discovered on August 27, 2013, and repaired two\ndays later on August 29, 2013.\n2 The quoted language is the version of § 195.452(h)(4)(i) that was in effect at the time of the alleged violation.\nThe current version of 195.452(h)(4)(i), updated on March 11, 2015, reads as follows:\n(i) Immediate repair conditions. An operator’s evaluation and remediation schedule\nmust provide for immediate repair conditions. To maintain safety, an operator must\ntemporarily reduce the operating pressure or shut down the pipeline until the operator\ncompletes the repair of these conditions. An operator must calculate the temporary\nreduction in operating pressure using the formulas referenced in paragraph (h)(4)(i)(B) of\nthis section. If no suitable remaining strength calculation method can be identified, an\noperator must implement a minimum 20 percent or greater operating pressure reduction,\nbased on actual operating pressure for two months prior to the date of inspection, until the\nanomaly is repaired. An operator must treat the following conditions as immediate repair\nconditions:…\n3 Pursuant to 49 C.F.R. 195.450, a “High Consequence Area” means:\n(1) A commercially navigable waterway, which means a waterway where a substantial\nlikelihood of commercial navigation exists;\n(2) A high population area, which means an urbanized area, as defined and delineated\nby the Census Bureau, that contains 50,000 or more people and has a population density of\nat least 1,000 people per square mile;\n(3) A other populated area, which means a place, as defined and delineated by the\nCensus Bureau that contains a concentrated population, such as an incorporated or\nunincorporated city, town, village, or other designated residential or commercial area; or\n(4) An unusually sensitive area, as defined in § 195.6.\n\n\n\nCPF No. 1-2015-5017\nPage 3\n(b) For Lines 208/308, two immediate repairs were identified on September 30, 2013. Defect\nnumber 38289 was repaired seven days later, on October 7, 2013, and defect number\n112749 was repaired nine days later, on October 9, 2013.\nIn its Response, MIPC contested Item 1(a), stating that Line 408 was idle at the time of\ndiscovery of the condition on August 27, 2013, due to scheduled downtime. The line was\nrepaired two days later on August 29, 2013, with no pressure reduction, and was restarted as\nplanned on August 30, 2013. To support its argument, MIPC provided the pressure trend data\nfor Line 408, covering the period from August 26, 2013, through August 30, 2013, as\ndocumentation that the pipeline was in fact idle when the immediate-repair condition was\nidentified and repaired. MIPC did not contest Item 1(b) relating to Lines 208/308.\nAccordingly, based upon a review of all of the evidence and the recommendation of the Eastern\nRegion, OPS, I hereby withdraw Item 1(a). As for Item 1(b), I find that Respondent violated 49\nC.F.R. § 195.452(h)(4)(i) by failing to temporarily reduce operating pressure or shut down Lines\n208/308 until the operator completed the repairs of the two identified immediate repair\nconditions.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2), which states:\n§ 195.452 Pipeline integrity management in high consequence areas.\n(h) What actions must an operator take to address integrity issues?—\n(1) General. An operator must take prompt action to address all\nanomalous conditions the operator discovers through the integrity\nassessment or information analysis. In addressing all conditions, an operator\nmust evaluate all anomalous conditions and remediate those that could\nreduce a pipeline’s integrity. . .\n(2) Discovery of condition. Discovery of a condition occurs when an\noperator has adequate information about the condition to determine that the\ncondition presents a potential threat to the integrity of the pipeline. An\noperator must promptly, but no later than 180 days after an integrity\nassessment, obtain sufficient information about a condition to make that\ndetermination, unless the operator can demonstrate that the 180-day period\nis impracticable.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.452(h)(2) by failing to promptly\nobtain sufficient information about a condition to make a determination whether it presented a\nthreat to the integrity of the pipeline within an HCA or in an area that could affect an HCA.\nSpecifically, the Notice alleged that the PHMSA inspector reviewed MIPC’s integrity\nmanagement plan and corresponding records, including a handwritten list of pipelines showing\nwhen the ILI tool runs had been completed for Lines 208/308 and 408, which were November\n27, 2012 and December 3, 2012, respectively.\nIn addition, the Notice alleged that MIPC provided PHMSA with two emails from the ILI\ncontractor indicating when discovery of the anomalies was made. In these emails, the ILI\ncontractor interpreted the data from the ILI tool runs. One email for Line 408 was dated August\n\n\n\nCPF No. 1-2015-5017\nPage 4\n27, 2013, and the second email for Lines 208/308 was dated September 30, 2013. MIPC’s\nMaintenance Lead stated that these emails were considered to be the company’s official\ndiscovery of repair conditions for Lines 208/308 and 408.\nBased on this information, the discovery of the anomalies for Line 408 occurred 267 days after\nthe ILI tool run and for Lines 208/308 occurred 307 days after the ILI tool run. As such,\nRespondent exceeded the 180-day maximum time period permitted under § 195.452(h)(2) to\ndetermine whether the anomalies presented a potential integrity threat.\nIn its Response, MIPC did not contest this allegation of violation. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.452(h)(2) by\nfailing to promptly obtain sufficient information about a condition to make a determination\nwhether it presented a threat to the integrity of Lines 208/308 and 408.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(a), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) Except for breakout tanks inspected under paragraphs (b) and (c) of\nthis section, each operator shall, at intervals not exceeding 15 months, but at\nleast once each calendar year, inspect each in-service breakout tank.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(a) by failing to inspect each in-\nservice breakout tank at intervals not exceeding 15 months. Specifically, the Notice alleged that\nthe PHMSA inspector reviewed the procedures and records related to the inspection of in-service\nbreakout tanks, including F-37: Aboveground Tanks (In-Service), in MIPC’s operations and\nmaintenance manual. In particular, Section 2 of that procedure instructed Respondent to use the\ncompany’s Form A (Annual Tank Inspection Form) to record the information from the annual\ntank inspection.\nAccording to the Notice, the PHMSA inspector reviewed the annual tank inspection forms from\n2012 and 2013 for 12 breakout tanks. Upon review, the PHMSA inspector noted that all 12\ntanks were inspected on March 15, 2012; however, none were subsequently inspected until\nSeptember 23, 2013. Based on this information, Respondent allegedly exceeded the 15-month\ninspection interval requirement of § 195.432(a), as all the 2013 inspections were due to occur no\nlater than June 15, 2013.\nIn its Response, MIPC did not contest this allegation of violation. Accordingly, based upon a\nreview of all of the evidence, I find that Respondent violated 49 C.F.R. § 195.432(a) by failing to\ninspect 12 of its in-service breakout tanks at an interval not exceeding 15 months.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\n\n\n\nCPF No. 1-2015-5017\nPage 5\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.4 The Notice proposed a total civil penalty of $110,300 for the\nviolations cited above.\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; and any effect that the penalty may have on its ability to continue\ndoing business; and the good faith of Respondent in attempting to comply with the pipeline\nsafety regulations. In addition, I may consider the economic benefit gained from the violation\nwithout any reduction because of subsequent damages, and such other matters as justice may\nrequire.\nItem 1: The Notice proposed a civil penalty of $46,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(h)(4)(i), for failing to temporarily reduce operating pressure or shut down the pipeline\nuntil MIPC had completed the repair of immediate-repair conditions. Respondent did not contest\nthis allegation of violation for Lines 208/308 (Item 1(b)), but did contest it for Line 408 (Item\n1(a)). As discussed above, I found that there was insufficient evidence to find that MIPC\nviolated § 195.452(h)(4)(i) for the anomalies discovered on Line 408 because the line was idle at\nthe time. Therefore, the penalty for Item 1 should be reduced accordingly.\nI have reviewed the assessment criteria and the penalty that was initially proposed for this Item.\nWhile withdrawal of Item 1(a) does reduce the number of instances of violation, it does not\nproportionately reduce the gravity of the overall Item, which was based largely on the significant\nthreat posed by the prolonged operation of Lines 208/308 in a high-risk area without being\nrepaired or the operating pressure being reduced. Also, Respondent provided no credible\njustification for its failure to respond promptly to this known integrity threat. Therefore, after\nreviewing Respondent’s arguments and the evidence of record, I assess Respondent a reduced\ncivil penalty of $44,600 for violation of 49 C.F.R. § 195.452(h)(4)(i).\nItem 2: The Notice proposed a civil penalty of $46,000 for Respondent’s violation of 49 C.F.R.\n§ 195.452(h)(2), for failing to promptly obtain sufficient information about a condition to make a\ndetermination whether it presented a threat to the integrity of the pipeline within an HCA or an\narea that could affect an HCA. MIPC neither contested this Item nor provided any explanation\nfor its delay in discovering the anomalies. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $46,000 for violation of\n49 C.F.R. § 195.452(h)(2).\nItem 3: The Notice proposed a civil penalty of $18,300 for Respondent’s violation of 49 C.F.R.\n§ 195.432(a), for failing to inspect each in-service breakout tank at intervals not exceeding 15\n4 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. 1-2015-5017\nPage 6\nmonths. MIPC neither contested the allegation nor presented any evidence or argument\njustifying a reduction in the proposed penalty. Accordingly, having reviewed the record and\nconsidered the assessment criteria, I assess Respondent a civil penalty of $18,300 for violation of\n49 C.F.R. § 195.432(a).\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 $108,900.\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, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $108,900 civil penalty will result in accrual of interest at the current annual\nrate in 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to the violation of § 195.452(h)(4)(i) (Item\n1(b)). Under 49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous\nliquids or who owns or operates a pipeline facility is required to comply with the applicable\nsafety standards established under chapter 601. Pursuant to the authority of 49 U.S.C.\n§ 60118(b) and 49 C.F.R. § 190.217, Respondent is ordered to take the following actions to\nensure compliance with the pipeline safety regulations applicable to its operations:\n1. With respect to the violation of § 195.452(h)(4)(i) (Item 1(b)), Respondent must\nrevise its integrity management plan and procedures to address the pressure-\nreduction or pipeline shut-down requirements of § 195.452(h)(4)(i).\n2. MIPC must submit the revised IMP procedures stipulated in Item 1 of this\nCompliance Order to the Region Director within 90 days of receipt of this Final\nOrder.\n3. Finally, pursuant to the authority of 49 U.S.C. 60118(b) and 49 C.F.R. 190.217,\nRespondent is requested (not mandated) to maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit\nthe total to Byron Coy, PE, Director, Eastern Region, PHMSA. It is requested\nthat these costs be reported in two categories: 1) total cost associated with\n\n\n\nCPF No. 1-2015-5017\nPage 7\npreparation/revision of plans, procedures, studies and analyses; and 2) total cost\nassociated with replacements, additions and other changes to pipeline\ninfrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States. Under 49 C.F.R.\n§ 190.243, Respondent has a right to submit a Petition for Reconsideration of this Final Order.\nThe petition must be sent to: Associate Administrator, Office of Pipeline Safety, PHMSA, 1200\nNew Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to\nthe Office of Chief Counsel, PHMSA, at the same address. PHMSA will accept petitions\nreceived no later than 20 days after receipt of service of this Final Order by the Respondent,\nprovided they contain a brief statement of the issue(s) and meet all other requirements of 49\nC.F.R. § 190.243. The filing of a petition automatically stays the payment of any civil penalty\nassessed. Unless the Associate Administrator, upon request, grants a stay, all other terms and\nconditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nDecember 2, 2016\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nActing Associate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":23502}