{"operation":"document","citation":"CPF 120161005","title":"NATIONAL FUEL GAS SUPPLY CORP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2016-08-04","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.169(a), 192.169(b), 192.605(a), 192.617.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120161005.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120161005.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120161005","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120161005","body":"Notice of Probable Violation involving NATIONAL FUEL GAS SUPPLY CORP. PHMSA's enforcement data identifies the cited regulations as 192.169(a),  192.169(b),  192.605(a),  192.617. The case was opened on 2016-08-04 and is reported as closed as of 2020-07-10. Proposed civil penalty: $202,900. Assessed civil penalty: $53,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120161005_Closure Letter_07102020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Closure%20Letter_07102020.pdf\n\n120161005_Closure Letter_07102020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Closure%20Letter_07102020_text.pdf\n\n120161005_Decision on Petition for Reconsideration_11152019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Decision%20on%20Petition%20for%20Reconsideration_11152019.pdf\n\n120161005_Decision on Petition for Reconsideration_11152019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Decision%20on%20Petition%20for%20Reconsideration_11152019_text.pdf\n\n120161005_Final Order_04182019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Final%20Order_04182019.pdf\n\n120161005_Final Order_04182019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Final%20Order_04182019_text.pdf\n\n120161005_NOPV PCP PCO_08042016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_NOPV%20PCP%20PCO_08042016.pdf\n\n120161005_NOPV PCP PCO_08042016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_NOPV%20PCP%20PCO_08042016_text.pdf\n\n120161005_Operator Petition for Reconsideration and Request for Stay_05092019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Operator%20Petition%20for%20Reconsideration%20and%20Request%20for%20Stay_05092019.pdf\n\n120161005_Operator Post-Hearing Submissions_06122017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Operator%20Post-Hearing%20Submissions_06122017.pdf\n\n120161005_Operator Response to Notice  And Request for Hearing_09302016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Operator%20Response%20to%20Notice%20%20And%20Request%20for%20Hearing_09302016.pdf\n\n120161005_NOPV PCP PCO_08042016_text.pdf\n\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nOVERNIGHT EXPRESS DELIVERY\nAugust 04, 2016\nDavid Bauer\nPresident, National Fuel Gas Supply Corp.\n6363 Main Street\nWilliamsville, NY 14221\nCPF 1-2016-1005\nDear Mr. Bauer:\nOn March 6, 2015, representatives of the New York State Department of Public Service\n(NYDPS), acting as agents for the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) pursuant to Chapter 601 of 49 United States Code, responded to and conducted an\ninvestigation into an incident that occurred on the regulator on the start gas line for the\ncompressors at the National Fuel Gas Supply Corporation’s (NFG) Beech Hill Compressor\nStation, located in the town of Wellsville, NY 14895, approximately 55 miles west of Corning,\nNY in a rural, wooded area.\nOn March 5, 2015, at 17:54 (EST), a regulator failed on the start gas line for the compressors at\nthe NFG Beech Hill Compressor Station. The failure caused an increase in pressure in the piping\ndownstream of the regulator from 175 psig to 341 psig. The downstream piping had a maximum\nallowable operating pressure (MAOP) of 300 psig.\nA rupture disc relief device, rated at 311 psig, burst and natural gas was released into the\natmosphere through the vent stack. The gas discharged up the side of the M&R building into the\neave, located approximately ten feet above the top of the vent piping, and ignited. NFG\npersonnel responded to a call from a neighbor, and activated the Emergency Shutdown System;\nthe fire was extinguished.\nThe regulator was replaced, and the station was back in service on March 6, 2015.\n\n\n\n1-2016-1005\nThere were no evacuations, injuries, deaths, or extensive property damage associated with this\nincident. The estimated natural gas product loss was reported to be 12,400 thousand cubic feet\n(MCF). Estimated incident costs were reported in excess of $42,000.\nNFG notified the National Response Center (NRC Report #1109781) on March 6, 2015, at 09:11\n(EST).\nOn March 23, 2015, NFG submitted DOT Form F 7100.2 for the incident (Incident Report).\nThe Incident Report described the incident as a regulator malfunction, raising downstream\npressure above the set point causing a relief rupture disc to burst, thereby allowing natural gas to\nvent. In the Incident Report, NFG indicated that the rupture disc burst at 17:54 (EST) on March\n5, 2015. The fire was reported at 05:04 (EST) on March 6, 2015. The estimated pressure at the\npoint and time of the incident was given as 300 psig. The apparent cause of the incident was\ngiven as equipment failure.\nAs a result of the investigation, it appears that you have committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the\nprobable violations are:\n1. §192.169 Compressor stations: Pressure limiting devices\n(a) Each compressor station must have pressure relief or other suitable protective\ndevices of sufficient capacity and sensitivity to ensure that the maximum allowable\noperating pressure of the station piping and equipment is not exceeded by more\nthan 10 percent.\nNFG failed to ensure that each compressor station had pressure relief or other suitable protective\ndevices of sufficient capacity and sensitivity to ensure that the maximum allowable operating\npressure of the station piping and equipment was not exceeded by more than 10\npercent. Specifically, NFG exceeded the maximum allowable operating pressure on its start gas\nline at the Beech Hill Compressor Station by more than 10 percent.\nOn March 5, 2015, a pressure regulator controlling the gas pressure in the start line and the\npressure in the line downstream of the failed regulator reached 341 psig. The MAOP of this line\nis 300 psig, and the maximum pressure allowed during a pressure relieving event is 330\npsig. The pressure exceeded the maximum allowed by §192.169(a) by 11 psig.\nEvidence for this probable violation includes the NFG-submitted DOT Form F 7100.2 part H, the\nmanufacturer’s rupture disc information, and NFG Supervisory Control and Data Acquisition\n(SCADA) logs that showed the pressure in the start gas line exceeded 330 psig at approximately\n17:45 (EST) on March 5, 2015.\n2. §192.169 Compressor stations: Pressure limiting devices.\n(b) Each vent line that exhausts gas from the pressure relief valves of a compressor\nstation must extend to a location where the gas may be discharged without hazard.\nNFG failed to ensure that each vent line that exhausts gas from the pressure relief valves of a\ncompressor station extends to a location where the gas may be discharged without hazard.\nOn March 5, 2015, a rupture disc relief device burst, and natural gas was released to the\natmosphere through the vent stack. The gas discharged up the side of the M&R building into the\neave of the building, located approximately ten feet above the top of the vent piping. The force\nof this gas flow peeled back the steel flashing from the side of the building. Subsequently, the\ngas ignited.\n120161005_NOPV PCP PCO_08042016 Page 2 of 6\n\n\n\n1-2016-1005\nThus, NFG failed to ensure that each vent line that exhausts gas from the pressure relief valves of\na compressor station extends to a location where the gas may be discharged without hazard.\nEvidence for this probable violation includes NYSDPS photographs of the relief stack, NFG\nsubmitted DOT Form F 7100.2, and maps showing the incident location.\n3. §192.617 Investigation of failures\nEach operator shall establish procedures for analyzing accidents and failures,\nincluding the selection of samples of the failed facility or equipment for laboratory\nexamination, where appropriate, for the purpose of determining the causes of the\nfailure and minimizing the possibility of a recurrence.\nNFG’s procedures for analyzing accidents and failures failed to include details on how to\ndetermine the causes of the failure, and how to minimize the possibility of a recurrence.\nDuring the failure investigation, NYSDPS reviewed NFG Procedure Section 11.5 Investigation\nof Failures, dated 01-13. The procedure states in part that, “All necessary precautions shall be\ntaken to eliminate a recurrence or similar failure.” The procedure does not provide direction for\ndetermining the root cause of the failure, or direction on how to minimize the possibility of a\nrecurrence, such as:\n1. What is the process for performing the root cause analysis?\n2. What is the process for minimizing the possibility of a recurrence?\n3. What it the make-up of the investigation team (individual)?\n4. What are the qualifications of the personnel on the team?\n5. What is the extent of the investigation / how is it determined?\n6. What documentation is required?\n7. Who is responsible for approving conclusions reached by the investigation team?\n8. How are lessons learned applied to other similar facilities?\nNFG placed the line back in service without correcting the vent issue that resulted in the fire.\n4. §192.605 Procedural manual for operations, maintenance, and emergencies\n(a) General. Each operator shall prepare and follow for each pipeline, a manual of\nwritten procedures for conducting operations and maintenance activities and for\nemergency response. For transmission lines, the manual must also include\nprocedures for handling abnormal operations. This manual must be reviewed and\nupdated by the operator at intervals not exceeding 15 months, but at least one each\ncalendar year. This manual must be prepared before operations of a pipeline\nsystem commence. Appropriate parts of the manual must be kept at locations\nwhere operations and maintenance activities are conducted.\nNFG failed to follow, for each pipeline, a manual of written procedures for emergency\nresponse. Specifically, NFG failed to notify the NRC of a regulator failure and fire, requiring an\nemergency shut down of the station within the required time frame, as specified in NFG\nProcedure Section 11.5 Paragraph 11.5.1, dated 07/13.\nNFG’s Procedure Section 11.5 Department of Transportation Notification Procedures And\nFederal Energy Regulatory Commission, paragraph 11.5.1 Incidents, states in part that:\n120161005_NOPV PCP PCO_08042016 Page 3 of 6\n\n\n\n1-2016-1005\n“A. At the earliest practicable moment and not later than one hour following discovery,\nnotice shall be given in accordance with Paragraph (B) of this section for any release of\ngas that:\n1. 2. Caused a death, or personal injury necessitating in-patient hospitalization.\nEstimated property damage of $50,000 or more, including loss to the operator and\nothers, or both, but excluding cost of gas lost.\n3. Unintentional estimated gas loss of three million cubic feet or more. Engineering\nServices should be contacted to calculate gas loss.\n4. Any event that in the judgment of the operator was significant, even though it did\nnot meet the above criteria.”\nB. Each notice required by Section (A) will be made by telephone to the\nSuperintendent. The Superintendent receiving notice of an incident will contact the\nNational Response Center at 1-800-424-8802. Department of Transportation (\"DOT\")\nnotification through the National Response Center (\"NRC\") is required and should be\nmade within one hour of confirmed discovery by the Superintendent for any reportable\nincident. The local field or station foreman will prepare a draft report on form PHMSA-\nF-7100.2, which must also be sent to the Superintendent within 5 days of the incident.”\nOn March 6, 2015 at 05:19 (EST), NFG’s Station Manager responded to the Beech Hill\nCompressor Station, and activated the Emergency Shut Down system. In the afternoon,\nNYSDPS Staff interviewed the Station Manager. The Station Manager stated that after he\nensured that the shutdown was successful, he began to make notification calls to NFG personnel,\nincluding Gas Control and the Superintendent. He approximated that these calls were made\naround 06:00 (EST). NFG notified the NRC at 09:11 (EST).\nThis exceeds the reporting requirement in NFG’s procedures by 2 hours and 11 minutes.\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000\nper violation per day the violation persists up to a maximum of $2,000,000 for a related series of\nviolations. For violations occurring prior to January 4, 2012, the maximum penalty may not\nexceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a\nrelated series of violations. The Compliance Officer has reviewed the circumstances and\nsupporting documentation involved in the above probable violations and has recommended that\nyou be preliminarily assessed a civil penalty of $202,900 as follows:\nItem number PENALTY\n1 $31,600\n2 $149,700\n3 $21,600\nWarning Items\nWith respect to Item 4, we have reviewed the circumstances and supporting documents involved\nin this case, and have decided not to conduct additional enforcement action or penalty\nassessment proceedings at this time. We advise you to promptly correct this item. Failure to do\nso may result in additional enforcement action.\n120161005_NOPV PCP PCO_08042016 Page 4 of 6\n\n\n\n1-2016-1005\nProposed Compliance Order\nWith respect to Items 2 and 3 pursuant to 49 United States Code § 60118, PHMSA proposes to\nissue a Compliance Order to NFG. Please refer to the Proposed Compliance Order, which is\nenclosed and made a part of this Notice.\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline Operators\nin Compliance Proceedings. Please refer to this document and note the response options. All\nmaterial you submit in response to this enforcement action may be made publicly available. If\nyou believe that any portion of your responsive material qualifies for confidential treatment\nunder 5 U.S.C. 552(b), along with the complete original document, you must provide a second\ncopy of the document with the portions you believe qualify for confidential treatment redacted,\nand an explanation of why you believe the redacted information qualifies for confidential\ntreatment under 5 U.S.C. 552(b). Not responding within 30 days of receipt of this Notice\nconstitutes a waiver of your right to contest the allegations in this Notice, and authorizes the\nAssociate Administrator for Pipeline Safety to find facts as alleged in this Notice without further\nnotice to you and to issue a Final Order.\nPlease submit all correspondence in this matter to Byron Coy, PE, Director, PHMSA Eastern\nRegion, 820 Bear Tavern Road, Suite 103, W. Trenton, NJ 08628. Please refer to CPF 1-2016-\n1005 on each document you submit and please, whenever possible, provide a signed PDF copy\nin electronic format. Smaller files may be emailed to Byron.Coy@dot.gov. Larger files should\nbe sent on a CD accompanied by the original paper copy to the Eastern Region Office.\nAdditionally, if you choose to respond to this (or any other case), please ensure that any response\nletter pertains solely to one CPF case number.\nSincerely,\nByron Coy, PE\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\nCc: Mr. Kevin Speicher, NYSDPS\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n120161005_NOPV PCP PCO_08042016 Page 5 of 6\n\n\n\n1-2016-1005\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) proposes to issue to National Fuel Gas Supply Corporation (NFG) a\nCompliance Order incorporating the following remedial requirements to ensure the compliance\nof NFG with the pipeline safety regulations:\n1. In regard to Item 2 of the Notice pertaining to NFG’s failure to ensure that each vent line\nthat exhausts gas from pressure relief valves at compressor stations extends to a location\nwhere the gas may be discharged without hazard, for all NFG compressor stations in the\nState of New York, NFG must submit documentation demonstrating that all relief vent\nlines do (or modify as necessary) relieve to a location where the gas may be discharged\nwithout hazard.\n2. In regard to Item 2 of the Notice, NFG will have 180 days after receipt of the Final Order\nto submit documentation that all relief devices exhaust gas to a location where the gas\nmay be discharged without hazard.\n3. In regard to Item 3 of the Notice pertaining to NFG’s procedures for analyzing accidents\nand failures to include details on how to determine the causes of the failure and how to\nminimize the possibility of recurrences, NFG must revise the language of its operations\nand maintenance (O&M) procedures to address failure investigation, including a process\nfor root cause analysis.\n4. In regard to Item 3 of the Notice, NFG will have 90 days after receipt of the Final Order\nto revise its procedures to address failure analysis and follow-up.\n5. It is requested (not mandated) that NFG maintains documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total\nto Byron Coy, PE, Director, Eastern Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: 1) total cost\nassociated with preparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions, and other changes to pipeline\ninfrastructure.\n120161005_NOPV PCP PCO_08042016 Page 6 of 6\n\n120161005_Closure Letter_07102020_text.pdf\n\nOVERNIGHT EXPRESS DELIVERY\nJuly 10, 2020\nDavid Bauer\nPresident\nNational Fuel Gas Supply Corp.\n6363 Main Street\nWilliamsville, NY 14221\nCPF 1-2016-1005\nDear Mr. Bauer:\nOn April 18, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued\nto National Fuel Gas Supply Corp. a Final Order in the above-referenced case. This Order included\na Compliance Order and Civil Penalty assessment. 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\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n\n120161005_Final Order_04182019_text.pdf\n\nApril 18, 2019\nMr. David Bauer\nPresident\nNational Fuel Gas Supply Corporation\n6363 Main Street\nWilliamsville, NY 14221\nRe: CPF No. 1-2016-1005\nDear Mr. Bauer:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $53,200, and specifies actions that need to be taken\nby National Fuel Gas Supply Corp. to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Eastern Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is effective upon\nthe date of mailing as provided under 49 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 Burroughs, Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMs. Brianne K. Kurdock, Counsel, Babst Calland, 805 15th Street, N.W., Suite 601,\nWashington, DC 20005\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 )\nNational Fuel Gas Supply Corporation, ) )\n)\n)\nRespondent. )\n____________________________________)\nCPF No. 1-2016-1005\nFINAL ORDER\nOn March 6, 2015, pursuant to 49 U.S.C. § 60117, representatives of the New York State\nDepartment of Public Service, as agents for the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA), Office of Pipeline Safety (OPS), responded to and investigated an\nincident involving the release of natural gas which ignited at the National Fuel Gas Supply\nCorporation’s (NFG or Respondent) Beech Hill Compressor Station located in the town of\nWellsville, New York. NFG operates a 2,200-mile pipeline system, which includes 33 storage\nfields and 42 compressor stations, from the U.S.–Canadian border at the Niagara River in New\nYork, into western New York and parts of Pennsylvania.1\nAs a result of the investigation, the Director, Eastern Region, OPS (Director), issued to\nRespondent, by letter dated August 4, 2016, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49\nC.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nNFG had committed three violations of 49 C.F.R. Part 192 and proposed assessing a total civil\npenalty of $202,900 for the alleged violations. The Notice also proposed ordering Respondent to\ntake certain measures to correct two of the alleged violations. The warning item required no\nfurther action, but warned the operator to correct the probable violation or face possible future\nenforcement action.\nFollowing a request for an extension of time to respond which was granted, NFG responded to\nthe Notice by letter dated September 30, 2016 (Response). NFG contested the allegations and\nrequested a hearing. NFG provided a pre-hearing submission by letter dated May 1, 2017, and a\nhearing was subsequently held on May 11, 2017, in West Trenton, New Jersey, before a PHMSA\nPresiding Official. At the hearing, which was transcribed, Respondent was represented by\ncounsel. After the hearing, both parties provided a post-hearing submission on June 12, 2017\n(NFG Closing and OPS Closing). The Director provided a recommendation dated August 10,\n1 Pipeline Safety Violation Report (Violation Report), (Aug. 4, 2016) (on file with PHMSA), at 1;\nhttps://www nationalfuelgas.com/supply/ (last accessed Nov. 9, 2018).\n\n\n\nCPF No. 1-2016-1005\nPage 2\n2017, and NFG provided a reply to the recommendation dated September 8, 2017.\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.169(a), which states:\n§ 192.169 Compressor stations: Pressure limiting devices.\n(a) Each compressor station must have pressure relief or\nother suitable protective devices of sufficient capacity and\nsensitivity to ensure that the maximum allowable operating\npressure of the station piping and equipment is not exceeded by\nmore than 10 percent.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.169(a) by failing to ensure that the\nBeech Hill Compressor Station had pressure relief or other suitable protective devices of\nsufficient capacity and sensitivity to ensure that the maximum allowable operating pressure\n(MAOP) of the station piping and equipment was not exceeded by more than 10 percent.\nSpecifically, the Notice alleged that the MAOP of a gas line at the station (300 psig) reached 341\npsig on March 5, 2015, exceeding the maximum by more than 10 percent.\nIn its Response and at the hearing, NFG did not contest the fact that the pressure relief device in\nquestion did not have adequate sensitivity to ensure that the MAOP was not exceeded by more\nthan 10 percent.2 However, Respondent argued that the regulation should be read as two\nseparate requirements, one for sensitivity and one for capacity, and that OPS must meet the\nburden of proof for each.3 NFG further argued that OPS failed to do so with respect to the\ncapacity requirement and contended that, as a result, this portion of the alleged violation should\nbe withdrawn and the proposed civil penalty be reduced accordingly.4 OPS disagreed, stating\nthat the regulation required the device to have both sufficient capacity and sensitivity and the\nfailure to meet either one of these constituted a violation of the regulation.5\nIn general, a regulation such as § 192.169(a), which consists of a single sentence, should be read\nin its entirety. With respect to NFG’s argument that the alleged violation must be bifurcated and\nboth lack of capacity and lack of sensitivity must be proven, Respondent cited prior PHMSA\nenforcement cases that did not limit PHMSA from issuing multiple citations for violations of\ndifferent parts of a regulation.6 In addition to involving very different regulations, however, the\n2 Hearing Transcript at 99.\n3 NFG Closing at 28.\n4 NFG Closing at 29.\n5 Hearing Transcript at 99-100.\n6 NFG Closing at 28.\n\n\n\nCPF No. 1-2016-1005\nPage 3\ncases cited by Respondent do not establish the proposition that a regulation having multiple\nconjunctive requirements requires proof that the operator failed to meet every aspect of them.\nTo the contrary, they are examples of cases where an operator was cited more than once under\nthe same code section for violating multiple requirements.\nThe purpose of the regulation at issue is to prevent significant overpressure events which can\ndamage the pipe and risk failure. As OPS correctly noted, “A device with sufficient capacity but\ninsufficient sensitivity cannot prevent an initial pressure increase above 110 percent MAOP,\nwhile a device with sufficient sensitivity but insufficient capacity cannot adequately relieve\noverpressure after the device is triggered.”7 NFG acknowledged that the MAOP was exceeded\nby more than 10 percent and did not contest the fact that the pressure relief device in question did\nnot have adequate sensitivity to ensure that the MAOP was not exceeded by more than 10\npercent. Accordingly, after considering all of the evidence and the legal issues presented, I find\nthat Respondent violated 49 C.F.R. § 192.169(a) by failing to ensure that the Beech Hill\nCompressor Station had pressure relief or other suitable protective devices of sufficient capacity\nand sensitivity to ensure that the MAOP of the station piping and equipment was not exceeded\nby more than 10 percent. To the extent that Respondent’s argument is relevant to the assessment\nof a civil penalty, it will be addressed in the Assessment of Penalty section below.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.169(b), which states:\n§ 192.169 Compressor stations: Pressure limiting devices.\n(a)…\n(b) Each vent line that exhausts gas from the pressure relief\nvalves of a compressor station must extend to a location where\nthe gas may be discharged without hazard.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.169(b) by failing to ensure that\neach vent line that exhausts gas from the pressure relief valves of a compressor station extended\nto a location where the gas may be discharged without hazard. Specifically, the Notice alleged\nthat the vent line that exhausts gas at the Beech Hill Compressor Station discharged gas up the\nside of the M&R building into the eaves located approximately ten feet above the top of the vent\npiping, and that gas was discharged with a force that peeled back the steel flashing on the\nbuilding and that the gas subsequently ignited.\nIn its Response and at the hearing, NFG stated that there was no regulatory requirement that all\nsuch vent stacks must clear the roof line and any finding that § 192.169(b) involves a height\nrequirement would be arbitrary and capricious.8 NFG stated that the stack had been in place for\n36 years and no prior inspections including one only eight months prior to the incident had\nidentified a concern with the stack.9 NFG stated that the stack was not near a walkway, the\n7 OPS Closing at 3.\n8 NFG Pre-hearing Submittal at 20.\n9 Hearing Transcript at 19-21.\n\n\n\nCPF No. 1-2016-1005\nPage 4\nbuilding was not combustible, there was no overhang, and no prior inspection had identified a\nconcern.10 NFG further argued that PHMSA did not prove that the vent stack design caused the\nfire. Finally, Respondent argued that even if the stack design was inconsistent with the\nregulation, the applicable five-year statute of limitations had long since run and it could not be\npenalized for the violation.11\nWith respect to NFG’s argument that there was no prescriptive code requirement that all vent\nstacks must clear the roof line, it does not necessarily follow that no violation occurred. The\nregulation at issue is a performance-based regulation. In this case, in light of all the factors that\ngo into vent stack design, the designers may have proceeded on the assumption that a discharge\nfrom this vent stack would not cause a hazard.12 There is no question, however, that the\ndischarge in this instance through this stack did cause a hazard. If a design used by an operator\nfails to meet a performance standard, yet that operator could not be cited, it would render the\nstandard virtually meaningless. Therefore, I cannot accept NFG’s argument that the failure to\nachieve the performance deemed to be acceptable under § 192.169(b) does not equate to failure\nto meet the regulatory requirement. As for Respondent’s argument that under § 192.169(b)\nPHMSA was required to prove that the vent stack design caused the ignition, I disagree. The\nfailure to adequately vent gas away from a gas facility such as a compressor station presents a\nhazard regardless of the source of the ignition when an incident involves ignition.\nWith respect to NFG’s argument that the stack had been in place for many years and no prior\ninspection had resulted in a citation does not negate the non-compliance.13 It is well established\nthat the absence of a citation in a prior inspection does not guarantee that a future inspection or\naccident investigation might allege a violation.14\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 192.169(b) by failing to ensure that each vent line that exhausts\ngas from the pressure relief valves of a compressor station extended to a location where the gas\nmay be discharged without hazard. Respondent’s argument concerning whether it could be\npenalized for this violation given the applicable statute of limitations is addressed in the\nAssessment of Penalty section below.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.617, which states:\n§ 192.617 Investigation of failures.\nEach operator shall establish procedures for analyzing\n10 Hearing Transcript at 23-25.\n11 NFG Closing at 2-3.\n12 Hearing Transcript at 23-24.\n13 In some circumstances, this argument may be relevant to mitigating a civil penalty assessment if one were\ninvolved.\n14 See ConocoPhillips Pipeline Co., Final Order, CPF No. 3-2005-5015, 2010 WL 6531628, at 2 (Sept. 13, 2010).\n\n\n\nCPF No. 1-2016-1005\nPage 5\naccidents and failures, including the selection of samples of\nthe failed facility or equipment for laboratory examination,\nwhere appropriate, for the purpose of determining the\ncauses of the failure and minimizing the possibility of a\nrecurrence.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.617 by failing to have procedures\nfor analyzing accidents and failures that included details on how to determine the causes of the\nfailure and minimizing the possibility of a recurrence. Specifically, the Notice alleged that\nNFG’s Procedure Section 11.5.4, Investigation of Failures, stated in relevant part that “All\nnecessary precautions shall be taken to eliminate a recurrence or similar failure.” but the\nprocedures did not function to ensure the root cause of the incident was identified and the\npossibility of recurrence was minimized.\nIn its Response and at the hearing, NFG explained that its personnel had completed a “Gas\nSystem Reliability Report” (SRR) pursuant to Procedure Section 5.1.1 which involved producing\na description of the failure and the remedial steps subsequently taken before returning the line to\nservice including replacing the failed regulator.15 OPS noted that Section 11.5.4 did not contain\na cross-reference to Section 5.1.1.16\nWhile Section 11.5.4 did briefly mention reviewing the operating conditions at the time of a\nfailure and the possible use of lab analysis to determine the cause of failure for “blowouts,” OPS\nis correct that basic failure analysis implementation steps were absent and Section 11.5.4 did not\ncross-reference the SRR report provision. Moreover, while NFG stated that it later evaluated its\nother compressor stations for venting hazards, there was nothing in Section 11.5.4 to ensure\nresponsibility for documenting this process by a qualified individual having responsibility for\napproving any decisions made or actions taken.17 It appears that no documentation of NFG’s\nevaluation of its other compressor stations for the possible presence of the root cause of the\nBeech Hill incident—which was not identified before that line was placed back into service—\nwas provided, illustrating the importance of having such procedures to meet the requirement of\nensuring the possibility of recurrence is minimized.\nNFG’s argument that it completed the SRR and replaced the regulator does not negate the failure\nto meet the requirements of § 192.617 by failing to have procedures for analyzing accidents and\nfailures that included details on how to determine the causes of the failure and minimizing the\npossibility of a recurrence. Accordingly, after considering all of the evidence and the legal\nissues presented, I find that Respondent violated 49 C.F.R. § 192.617 by failing to have\nprocedures for analyzing accidents and failures that included details on how to determine the\ncauses of the failure and minimizing the possibility of a recurrence.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\n15 NFG Closing at 19.\n16 Hearing Transcript at 75.\n17 NFG Closing at 20.\n\n\n\nCPF No. 1-2016-1005\nPage 6\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.18\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; any effect that the penalty may have on 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. The Notice proposed a total civil penalty of $202,900 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $31,600 for Respondent’s violation of 49 C.F.R.\n§ 192.169(a), for failing to ensure that the Beech Hill Compressor Station had pressure relief or\nother suitable protective devices of sufficient capacity and sensitivity to ensure that the MAOP of\nthe station piping and equipment was not exceeded by more than 10 percent. Respondent\ndisagreed with the amount of the proposed civil penalty and questioned whether it was supported\nby the penalty consideration factors in the Pipeline Safety Act and § 190.225 regulations.\nWith respect to the nature and circumstances of NFG’s violation of § 192.169(b), ensuring that\nMAOP is not exceeded by more than 10 percent is a basic code requirement. With respect to the\ngravity of the offense, ensuring that MAOP is not exceeded by more than 10 percent is a key part\nof safety. If overpressure events occur, they can compromise the integrity of piping and\naccelerate the failure of any defects in steel pipe. In this instance, a release of gas and ignition\nwere involved. Notably, however, the gravity factor for this violation was not assigned at a high\nlevel that would correspond to being a causal factor in an accident, but rather at a medium-to-\nlower level.19 With respect to culpability, there were no circumstances beyond Respondent’s\ncontrol that prevented it from complying with the regulation and action was not taken to achieve\ncompliance until after the violation was discovered by OPS. As discussed above, I did not agree\nwith Respondent’s argument that the violation must be bifurcated and lack of capacity and lack\nof sensitivity read as two separate requirements for purposes of finding a violation. For the same\nreasons, I see no justification for a reduction in the civil penalty amount proposed in the Notice\nfor this violation. I further find that the record supports the points assigned for prior offenses and\ngood faith.\nRespondent has presented no information or arguments that would warrant a reduction in the\n18 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum\nCivil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).\n19 Violation Report at 10.\n\n\n\nCPF No. 1-2016-1005\nPage 7\ncivil penalty amount proposed in the Notice for this violation. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $31,600 for\nviolation of 49 C.F.R. § 192.169(a).\nItem 2: The Notice proposed a civil penalty of $149,700 for Respondent’s violation of 49\nC.F.R. § 192.169(b), for failing to ensure that each vent line that exhausts gas from the pressure\nrelief valves of a compressor station extended to a location where the gas may be discharged\nwithout hazard.\nIn its response and at the hearing, NFG argued that under 28 U.S.C. § 2462, PHMSA was time-\nbarred from pursuing “…an action, suit, or proceeding for the enforcement of any civil fine,\npenalty, or forfeiture, pecuniary or otherwise…unless commenced within five years from the\ndate when the claim first accrued…”.20 NFG contended that the claim first accrued when the\nvent stack and the rest of the station were designed and constructed in 1980.21 OPS disagreed\nand argued that under 49 U.S.C. § 60122, a new violation occurred every day that that the Beech\nHill facility was not in compliance. OPS’ argument amounts to the proposition that a violation\nof a design requirement such as § 192.169(a) can be penalized even decades later.\nThe application of the statute of limitations in regulatory proceedings such as this is governed by\n3M Company v. Browner, 17 F.3d 1453, a major D.C. Circuit Court of Appeals case holding that\nthe statute of limitations for regulatory violations generally begins running at the time a violation\noccurs, not the time it was discovered by the government which is often much later. The court\nexplains that the purpose of the statute of limitations, disallowing stale cases where the accused\ncan no longer properly defend itself, would be frustrated if regulated entities remained exposed\nto penalties for decades after a discrete violation occurs.22\nAs applied to most typical pipeline enforcement matters involving ongoing, periodic operating\nand maintenance requirements, OPS would be correct that § 60122 means a new violation occurs\neach day the noncompliance is present and as a result are generally not time barred as long as the\nnoncompliance cited does not extend back more than five years from the commencement of the\ncase.23 This provision, however, only applies if the violation actually repeats itself periodically.\nThe particular violation in this case involves a des","truncated":true,"body_characters":68422}