# NATIONAL FUEL GAS SUPPLY CORP — Notice of Probable Violation

- **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:** Not available
- **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.

Official case documents:

120161005_Closure Letter_07102020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Closure%20Letter_07102020.pdf

120161005_Closure Letter_07102020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Closure%20Letter_07102020_text.pdf

120161005_Decision on Petition for Reconsideration_11152019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Decision%20on%20Petition%20for%20Reconsideration_11152019.pdf

120161005_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

120161005_Final Order_04182019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Final%20Order_04182019.pdf

120161005_Final Order_04182019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Final%20Order_04182019_text.pdf

120161005_NOPV PCP PCO_08042016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_NOPV%20PCP%20PCO_08042016.pdf

120161005_NOPV PCP PCO_08042016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_NOPV%20PCP%20PCO_08042016_text.pdf

120161005_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

120161005_Operator Post-Hearing Submissions_06122017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120161005/120161005_Operator%20Post-Hearing%20Submissions_06122017.pdf

120161005_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

120161005_NOPV PCP PCO_08042016_text.pdf

NOTICE OF PROBABLE VIOLATION
PROPOSED CIVIL PENALTY
and
PROPOSED COMPLIANCE ORDER
OVERNIGHT EXPRESS DELIVERY
August 04, 2016
David Bauer
President, National Fuel Gas Supply Corp.
6363 Main Street
Williamsville, NY 14221
CPF 1-2016-1005
Dear Mr. Bauer:
On March 6, 2015, representatives of the New York State Department of Public Service
(NYDPS), acting as agents for the Pipeline and Hazardous Materials Safety Administration
(PHMSA) pursuant to Chapter 601 of 49 United States Code, responded to and conducted an
investigation into an incident that occurred on the regulator on the start gas line for the
compressors at the National Fuel Gas Supply Corporation’s (NFG) Beech Hill Compressor
Station, located in the town of Wellsville, NY 14895, approximately 55 miles west of Corning,
NY in a rural, wooded area.
On March 5, 2015, at 17:54 (EST), a regulator failed on the start gas line for the compressors at
the NFG Beech Hill Compressor Station. The failure caused an increase in pressure in the piping
downstream of the regulator from 175 psig to 341 psig. The downstream piping had a maximum
allowable operating pressure (MAOP) of 300 psig.
A rupture disc relief device, rated at 311 psig, burst and natural gas was released into the
atmosphere through the vent stack. The gas discharged up the side of the M&R building into the
eave, located approximately ten feet above the top of the vent piping, and ignited. NFG
personnel responded to a call from a neighbor, and activated the Emergency Shutdown System;
the fire was extinguished.
The regulator was replaced, and the station was back in service on March 6, 2015.



1-2016-1005
There were no evacuations, injuries, deaths, or extensive property damage associated with this
incident. The estimated natural gas product loss was reported to be 12,400 thousand cubic feet
(MCF). Estimated incident costs were reported in excess of $42,000.
NFG notified the National Response Center (NRC Report #1109781) on March 6, 2015, at 09:11
(EST).
On March 23, 2015, NFG submitted DOT Form F 7100.2 for the incident (Incident Report).
The Incident Report described the incident as a regulator malfunction, raising downstream
pressure above the set point causing a relief rupture disc to burst, thereby allowing natural gas to
vent. In the Incident Report, NFG indicated that the rupture disc burst at 17:54 (EST) on March
5, 2015. The fire was reported at 05:04 (EST) on March 6, 2015. The estimated pressure at the
point and time of the incident was given as 300 psig. The apparent cause of the incident was
given as equipment failure.
As a result of the investigation, it appears that you have committed probable violations of the
Pipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the
probable violations are:
1. §192.169 Compressor stations: Pressure limiting devices
(a) Each compressor station must have pressure relief or other suitable protective
devices of sufficient capacity and sensitivity to ensure that the maximum allowable
operating pressure of the station piping and equipment is not exceeded by more
than 10 percent.
NFG failed to ensure that each compressor station had pressure relief or other suitable protective
devices of sufficient capacity and sensitivity to ensure that the maximum allowable operating
pressure of the station piping and equipment was not exceeded by more than 10
percent. Specifically, NFG exceeded the maximum allowable operating pressure on its start gas
line at the Beech Hill Compressor Station by more than 10 percent.
On March 5, 2015, a pressure regulator controlling the gas pressure in the start line and the
pressure in the line downstream of the failed regulator reached 341 psig. The MAOP of this line
is 300 psig, and the maximum pressure allowed during a pressure relieving event is 330
psig. The pressure exceeded the maximum allowed by §192.169(a) by 11 psig.
Evidence for this probable violation includes the NFG-submitted DOT Form F 7100.2 part H, the
manufacturer’s rupture disc information, and NFG Supervisory Control and Data Acquisition
(SCADA) logs that showed the pressure in the start gas line exceeded 330 psig at approximately
17:45 (EST) on March 5, 2015.
2. §192.169 Compressor stations: Pressure limiting devices.
(b) Each vent line that exhausts gas from the pressure relief valves of a compressor
station must extend to a location where the gas may be discharged without hazard.
NFG failed to ensure that each vent line that exhausts gas from the pressure relief valves of a
compressor station extends to a location where the gas may be discharged without hazard.
On March 5, 2015, a rupture disc relief device burst, and natural gas was released to the
atmosphere through the vent stack. The gas discharged up the side of the M&R building into the
eave of the building, located approximately ten feet above the top of the vent piping. The force
of this gas flow peeled back the steel flashing from the side of the building. Subsequently, the
gas ignited.
120161005_NOPV PCP PCO_08042016 Page 2 of 6



1-2016-1005
Thus, NFG failed to ensure that each vent line that exhausts gas from the pressure relief valves of
a compressor station extends to a location where the gas may be discharged without hazard.
Evidence for this probable violation includes NYSDPS photographs of the relief stack, NFG
submitted DOT Form F 7100.2, and maps showing the incident location.
3. §192.617 Investigation of failures
Each operator shall establish procedures for analyzing accidents and failures,
including the selection of samples of the failed facility or equipment for laboratory
examination, where appropriate, for the purpose of determining the causes of the
failure and minimizing the possibility of a recurrence.
NFG’s procedures for analyzing accidents and failures failed to include details on how to
determine the causes of the failure, and how to minimize the possibility of a recurrence.
During the failure investigation, NYSDPS reviewed NFG Procedure Section 11.5 Investigation
of Failures, dated 01-13. The procedure states in part that, “All necessary precautions shall be
taken to eliminate a recurrence or similar failure.” The procedure does not provide direction for
determining the root cause of the failure, or direction on how to minimize the possibility of a
recurrence, such as:
1. What is the process for performing the root cause analysis?
2. What is the process for minimizing the possibility of a recurrence?
3. What it the make-up of the investigation team (individual)?
4. What are the qualifications of the personnel on the team?
5. What is the extent of the investigation / how is it determined?
6. What documentation is required?
7. Who is responsible for approving conclusions reached by the investigation team?
8. How are lessons learned applied to other similar facilities?
NFG placed the line back in service without correcting the vent issue that resulted in the fire.
4. §192.605 Procedural manual for operations, maintenance, and emergencies
(a) General. Each operator shall prepare and follow for each pipeline, a manual of
written procedures for conducting operations and maintenance activities and for
emergency response. For transmission lines, the manual must also include
procedures for handling abnormal operations. This manual must be reviewed and
updated by the operator at intervals not exceeding 15 months, but at least one each
calendar year. This manual must be prepared before operations of a pipeline
system commence. Appropriate parts of the manual must be kept at locations
where operations and maintenance activities are conducted.
NFG failed to follow, for each pipeline, a manual of written procedures for emergency
response. Specifically, NFG failed to notify the NRC of a regulator failure and fire, requiring an
emergency shut down of the station within the required time frame, as specified in NFG
Procedure Section 11.5 Paragraph 11.5.1, dated 07/13.
NFG’s Procedure Section 11.5 Department of Transportation Notification Procedures And
Federal Energy Regulatory Commission, paragraph 11.5.1 Incidents, states in part that:
120161005_NOPV PCP PCO_08042016 Page 3 of 6



1-2016-1005
“A. At the earliest practicable moment and not later than one hour following discovery,
notice shall be given in accordance with Paragraph (B) of this section for any release of
gas that:
1. 2. Caused a death, or personal injury necessitating in-patient hospitalization.
Estimated property damage of $50,000 or more, including loss to the operator and
others, or both, but excluding cost of gas lost.
3. Unintentional estimated gas loss of three million cubic feet or more. Engineering
Services should be contacted to calculate gas loss.
4. Any event that in the judgment of the operator was significant, even though it did
not meet the above criteria.”
B. Each notice required by Section (A) will be made by telephone to the
Superintendent. The Superintendent receiving notice of an incident will contact the
National Response Center at 1-800-424-8802. Department of Transportation ("DOT")
notification through the National Response Center ("NRC") is required and should be
made within one hour of confirmed discovery by the Superintendent for any reportable
incident. The local field or station foreman will prepare a draft report on form PHMSA-
F-7100.2, which must also be sent to the Superintendent within 5 days of the incident.”
On March 6, 2015 at 05:19 (EST), NFG’s Station Manager responded to the Beech Hill
Compressor Station, and activated the Emergency Shut Down system. In the afternoon,
NYSDPS Staff interviewed the Station Manager. The Station Manager stated that after he
ensured that the shutdown was successful, he began to make notification calls to NFG personnel,
including Gas Control and the Superintendent. He approximated that these calls were made
around 06:00 (EST). NFG notified the NRC at 09:11 (EST).
This exceeds the reporting requirement in NFG’s procedures by 2 hours and 11 minutes.
Proposed Civil Penalty
Under 49 United States Code, § 60122, you are subject to a civil penalty not to exceed $200,000
per violation per day the violation persists up to a maximum of $2,000,000 for a related series of
violations. For violations occurring prior to January 4, 2012, the maximum penalty may not
exceed $100,000 per violation per day, with a maximum penalty not to exceed $1,000,000 for a
related series of violations. The Compliance Officer has reviewed the circumstances and
supporting documentation involved in the above probable violations and has recommended that
you be preliminarily assessed a civil penalty of $202,900 as follows:
Item number PENALTY
1 $31,600
2 $149,700
3 $21,600
Warning Items
With respect to Item 4, we have reviewed the circumstances and supporting documents involved
in this case, and have decided not to conduct additional enforcement action or penalty
assessment proceedings at this time. We advise you to promptly correct this item. Failure to do
so may result in additional enforcement action.
120161005_NOPV PCP PCO_08042016 Page 4 of 6



1-2016-1005
Proposed Compliance Order
With respect to Items 2 and 3 pursuant to 49 United States Code § 60118, PHMSA proposes to
issue a Compliance Order to NFG. Please refer to the Proposed Compliance Order, which is
enclosed and made a part of this Notice.
Response to this Notice
Enclosed as part of this Notice is a document entitled Response Options for Pipeline Operators
in Compliance Proceedings. Please refer to this document and note the response options. All
material you submit in response to this enforcement action may be made publicly available. If
you believe that any portion of your responsive material qualifies for confidential treatment
under 5 U.S.C. 552(b), along with the complete original document, you must provide a second
copy of the document with the portions you believe qualify for confidential treatment redacted,
and an explanation of why you believe the redacted information qualifies for confidential
treatment under 5 U.S.C. 552(b). Not responding within 30 days of receipt of this Notice
constitutes a waiver of your right to contest the allegations in this Notice, and authorizes the
Associate Administrator for Pipeline Safety to find facts as alleged in this Notice without further
notice to you and to issue a Final Order.
Please submit all correspondence in this matter to Byron Coy, PE, Director, PHMSA Eastern
Region, 820 Bear Tavern Road, Suite 103, W. Trenton, NJ 08628. Please refer to CPF 1-2016-
1005 on each document you submit and please, whenever possible, provide a signed PDF copy
in electronic format. Smaller files may be emailed to Byron.Coy@dot.gov. Larger files should
be sent on a CD accompanied by the original paper copy to the Eastern Region Office.
Additionally, if you choose to respond to this (or any other case), please ensure that any response
letter pertains solely to one CPF case number.
Sincerely,
Byron Coy, PE
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration
Cc: Mr. Kevin Speicher, NYSDPS
Enclosures: Proposed Compliance Order
Response Options for Pipeline Operators in Compliance Proceedings
120161005_NOPV PCP PCO_08042016 Page 5 of 6



1-2016-1005
PROPOSED COMPLIANCE ORDER
Pursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) proposes to issue to National Fuel Gas Supply Corporation (NFG) a
Compliance Order incorporating the following remedial requirements to ensure the compliance
of NFG with the pipeline safety regulations:
1. In regard to Item 2 of the Notice pertaining to NFG’s failure to ensure that each vent line
that exhausts gas from pressure relief valves at compressor stations extends to a location
where the gas may be discharged without hazard, for all NFG compressor stations in the
State of New York, NFG must submit documentation demonstrating that all relief vent
lines do (or modify as necessary) relieve to a location where the gas may be discharged
without hazard.
2. In regard to Item 2 of the Notice, NFG will have 180 days after receipt of the Final Order
to submit documentation that all relief devices exhaust gas to a location where the gas
may be discharged without hazard.
3. In regard to Item 3 of the Notice pertaining to NFG’s procedures for analyzing accidents
and failures to include details on how to determine the causes of the failure and how to
minimize the possibility of recurrences, NFG must revise the language of its operations
and maintenance (O&M) procedures to address failure investigation, including a process
for root cause analysis.
4. In regard to Item 3 of the Notice, NFG will have 90 days after receipt of the Final Order
to revise its procedures to address failure analysis and follow-up.
5. It is requested (not mandated) that NFG maintains documentation of the safety
improvement costs associated with fulfilling this Compliance Order and submit the total
to Byron Coy, PE, Director, Eastern Region, Pipeline and Hazardous Materials Safety
Administration. It is requested that these costs be reported in two categories: 1) total cost
associated with preparation/revision of plans, procedures, studies and analyses, and 2)
total cost associated with replacements, additions, and other changes to pipeline
infrastructure.
120161005_NOPV PCP PCO_08042016 Page 6 of 6

120161005_Closure Letter_07102020_text.pdf

OVERNIGHT EXPRESS DELIVERY
July 10, 2020
David Bauer
President
National Fuel Gas Supply Corp.
6363 Main Street
Williamsville, NY 14221
CPF 1-2016-1005
Dear Mr. Bauer:
On April 18, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued
to National Fuel Gas Supply Corp. a Final Order in the above-referenced case. This Order included
a Compliance Order and Civil Penalty assessment. Based on our review of the documentation you
provided, and confirmation of payment of the civil penalty, it has been determined that you have
complied with the terms of this Order.
Accordingly, this case is now closed and no further action is contemplated with respect to the
matters involved in this case. Thank you for your cooperation in this matter.
Sincerely,
Robert Burrough
Director, Eastern Region
Pipeline and Hazardous Materials Safety Administration

120161005_Final Order_04182019_text.pdf

April 18, 2019
Mr. David Bauer
President
National Fuel Gas Supply Corporation
6363 Main Street
Williamsville, NY 14221
Re: CPF No. 1-2016-1005
Dear Mr. Bauer:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation, assesses a reduced civil penalty of $53,200, and specifies actions that need to be taken
by National Fuel Gas Supply Corp. to comply with the pipeline safety regulations. The penalty
payment terms are set forth in the Final Order. When the civil penalty has been paid and the
terms of the compliance order completed, as determined by the Director, Eastern Region, this
enforcement action will be closed. Service of the Final Order by certified mail is effective upon
the date of mailing as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Robert Burroughs, Director, Eastern Region, Office of Pipeline Safety, PHMSA
Ms. Brianne K. Kurdock, Counsel, Babst Calland, 805 15th Street, N.W., Suite 601,
Washington, DC 20005
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
In the Matter of )
National Fuel Gas Supply Corporation, ) )
)
)
Respondent. )
____________________________________)
CPF No. 1-2016-1005
FINAL ORDER
On March 6, 2015, pursuant to 49 U.S.C. § 60117, representatives of the New York State
Department of Public Service, as agents for the Pipeline and Hazardous Materials Safety
Administration (PHMSA), Office of Pipeline Safety (OPS), responded to and investigated an
incident involving the release of natural gas which ignited at the National Fuel Gas Supply
Corporation’s (NFG or Respondent) Beech Hill Compressor Station located in the town of
Wellsville, New York. NFG operates a 2,200-mile pipeline system, which includes 33 storage
fields and 42 compressor stations, from the U.S.–Canadian border at the Niagara River in New
York, into western New York and parts of Pennsylvania.1
As a result of the investigation, the Director, Eastern Region, OPS (Director), issued to
Respondent, by letter dated August 4, 2016, a Notice of Probable Violation, Proposed Civil
Penalty, and Proposed Compliance Order (Notice), which also included a warning pursuant to 49
C.F.R. § 190.205. In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that
NFG had committed three violations of 49 C.F.R. Part 192 and proposed assessing a total civil
penalty of $202,900 for the alleged violations. The Notice also proposed ordering Respondent to
take certain measures to correct two of the alleged violations. The warning item required no
further action, but warned the operator to correct the probable violation or face possible future
enforcement action.
Following a request for an extension of time to respond which was granted, NFG responded to
the Notice by letter dated September 30, 2016 (Response). NFG contested the allegations and
requested a hearing. NFG provided a pre-hearing submission by letter dated May 1, 2017, and a
hearing was subsequently held on May 11, 2017, in West Trenton, New Jersey, before a PHMSA
Presiding Official. At the hearing, which was transcribed, Respondent was represented by
counsel. After the hearing, both parties provided a post-hearing submission on June 12, 2017
(NFG Closing and OPS Closing). The Director provided a recommendation dated August 10,
1 Pipeline Safety Violation Report (Violation Report), (Aug. 4, 2016) (on file with PHMSA), at 1;
https://www nationalfuelgas.com/supply/ (last accessed Nov. 9, 2018).



CPF No. 1-2016-1005
Page 2
2017, and NFG provided a reply to the recommendation dated September 8, 2017.
FINDINGS OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 192.169(a), which states:
§ 192.169 Compressor stations: Pressure limiting devices.
(a) Each compressor station must have pressure relief or
other suitable protective devices of sufficient capacity and
sensitivity to ensure that the maximum allowable operating
pressure of the station piping and equipment is not exceeded by
more than 10 percent.
The Notice alleged that Respondent violated 49 C.F.R. § 192.169(a) by failing to ensure that the
Beech Hill Compressor Station had pressure relief or other suitable protective devices of
sufficient capacity and sensitivity to ensure that the maximum allowable operating pressure
(MAOP) of the station piping and equipment was not exceeded by more than 10 percent.
Specifically, the Notice alleged that the MAOP of a gas line at the station (300 psig) reached 341
psig on March 5, 2015, exceeding the maximum by more than 10 percent.
In its Response and at the hearing, NFG did not contest the fact that the pressure relief device in
question did not have adequate sensitivity to ensure that the MAOP was not exceeded by more
than 10 percent.2 However, Respondent argued that the regulation should be read as two
separate requirements, one for sensitivity and one for capacity, and that OPS must meet the
burden of proof for each.3 NFG further argued that OPS failed to do so with respect to the
capacity requirement and contended that, as a result, this portion of the alleged violation should
be withdrawn and the proposed civil penalty be reduced accordingly.4 OPS disagreed, stating
that the regulation required the device to have both sufficient capacity and sensitivity and the
failure to meet either one of these constituted a violation of the regulation.5
In general, a regulation such as § 192.169(a), which consists of a single sentence, should be read
in its entirety. With respect to NFG’s argument that the alleged violation must be bifurcated and
both lack of capacity and lack of sensitivity must be proven, Respondent cited prior PHMSA
enforcement cases that did not limit PHMSA from issuing multiple citations for violations of
different parts of a regulation.6 In addition to involving very different regulations, however, the
2 Hearing Transcript at 99.
3 NFG Closing at 28.
4 NFG Closing at 29.
5 Hearing Transcript at 99-100.
6 NFG Closing at 28.



CPF No. 1-2016-1005
Page 3
cases cited by Respondent do not establish the proposition that a regulation having multiple
conjunctive requirements requires proof that the operator failed to meet every aspect of them.
To the contrary, they are examples of cases where an operator was cited more than once under
the same code section for violating multiple requirements.
The purpose of the regulation at issue is to prevent significant overpressure events which can
damage the pipe and risk failure. As OPS correctly noted, “A device with sufficient capacity but
insufficient sensitivity cannot prevent an initial pressure increase above 110 percent MAOP,
while a device with sufficient sensitivity but insufficient capacity cannot adequately relieve
overpressure after the device is triggered.”7 NFG acknowledged that the MAOP was exceeded
by more than 10 percent and did not contest the fact that the pressure relief device in question did
not have adequate sensitivity to ensure that the MAOP was not exceeded by more than 10
percent. Accordingly, after considering all of the evidence and the legal issues presented, I find
that Respondent violated 49 C.F.R. § 192.169(a) by failing to ensure that the Beech Hill
Compressor Station had pressure relief or other suitable protective devices of sufficient capacity
and sensitivity to ensure that the MAOP of the station piping and equipment was not exceeded
by more than 10 percent. To the extent that Respondent’s argument is relevant to the assessment
of a civil penalty, it will be addressed in the Assessment of Penalty section below.
Item 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.169(b), which states:
§ 192.169 Compressor stations: Pressure limiting devices.
(a)…
(b) Each vent line that exhausts gas from the pressure relief
valves of a compressor station must extend to a location where
the gas may be discharged without hazard.
The Notice alleged that Respondent violated 49 C.F.R. § 192.169(b) by failing to ensure that
each vent line that exhausts gas from the pressure relief valves of a compressor station extended
to a location where the gas may be discharged without hazard. Specifically, the Notice alleged
that the vent line that exhausts gas at the Beech Hill Compressor Station discharged gas up the
side of the M&R building into the eaves located approximately ten feet above the top of the vent
piping, and that gas was discharged with a force that peeled back the steel flashing on the
building and that the gas subsequently ignited.
In its Response and at the hearing, NFG stated that there was no regulatory requirement that all
such vent stacks must clear the roof line and any finding that § 192.169(b) involves a height
requirement would be arbitrary and capricious.8 NFG stated that the stack had been in place for
36 years and no prior inspections including one only eight months prior to the incident had
identified a concern with the stack.9 NFG stated that the stack was not near a walkway, the
7 OPS Closing at 3.
8 NFG Pre-hearing Submittal at 20.
9 Hearing Transcript at 19-21.



CPF No. 1-2016-1005
Page 4
building was not combustible, there was no overhang, and no prior inspection had identified a
concern.10 NFG further argued that PHMSA did not prove that the vent stack design caused the
fire. Finally, Respondent argued that even if the stack design was inconsistent with the
regulation, the applicable five-year statute of limitations had long since run and it could not be
penalized for the violation.11
With respect to NFG’s argument that there was no prescriptive code requirement that all vent
stacks must clear the roof line, it does not necessarily follow that no violation occurred. The
regulation at issue is a performance-based regulation. In this case, in light of all the factors that
go into vent stack design, the designers may have proceeded on the assumption that a discharge
from this vent stack would not cause a hazard.12 There is no question, however, that the
discharge in this instance through this stack did cause a hazard. If a design used by an operator
fails to meet a performance standard, yet that operator could not be cited, it would render the
standard virtually meaningless. Therefore, I cannot accept NFG’s argument that the failure to
achieve the performance deemed to be acceptable under § 192.169(b) does not equate to failure
to meet the regulatory requirement. As for Respondent’s argument that under § 192.169(b)
PHMSA was required to prove that the vent stack design caused the ignition, I disagree. The
failure to adequately vent gas away from a gas facility such as a compressor station presents a
hazard regardless of the source of the ignition when an incident involves ignition.
With respect to NFG’s argument that the stack had been in place for many years and no prior
inspection had resulted in a citation does not negate the non-compliance.13 It is well established
that the absence of a citation in a prior inspection does not guarantee that a future inspection or
accident investigation might allege a violation.14
Accordingly, after considering all of the evidence and the legal issues presented, I find that
Respondent violated 49 C.F.R. § 192.169(b) by failing to ensure that each vent line that exhausts
gas from the pressure relief valves of a compressor station extended to a location where the gas
may be discharged without hazard. Respondent’s argument concerning whether it could be
penalized for this violation given the applicable statute of limitations is addressed in the
Assessment of Penalty section below.
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 192.617, which states:
§ 192.617 Investigation of failures.
Each operator shall establish procedures for analyzing
10 Hearing Transcript at 23-25.
11 NFG Closing at 2-3.
12 Hearing Transcript at 23-24.
13 In some circumstances, this argument may be relevant to mitigating a civil penalty assessment if one were
involved.
14 See ConocoPhillips Pipeline Co., Final Order, CPF No. 3-2005-5015, 2010 WL 6531628, at 2 (Sept. 13, 2010).



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accidents and failures, including the selection of samples of
the failed facility or equipment for laboratory examination,
where appropriate, for the purpose of determining the
causes of the failure and minimizing the possibility of a
recurrence.
The Notice alleged that Respondent violated 49 C.F.R. § 192.617 by failing to have procedures
for analyzing accidents and failures that included details on how to determine the causes of the
failure and minimizing the possibility of a recurrence. Specifically, the Notice alleged that
NFG’s Procedure Section 11.5.4, Investigation of Failures, stated in relevant part that “All
necessary precautions shall be taken to eliminate a recurrence or similar failure.” but the
procedures did not function to ensure the root cause of the incident was identified and the
possibility of recurrence was minimized.
In its Response and at the hearing, NFG explained that its personnel had completed a “Gas
System Reliability Report” (SRR) pursuant to Procedure Section 5.1.1 which involved producing
a description of the failure and the remedial steps subsequently taken before returning the line to
service including replacing the failed regulator.15 OPS noted that Section 11.5.4 did not contain
a cross-reference to Section 5.1.1.16
While Section 11.5.4 did briefly mention reviewing the operating conditions at the time of a
failure and the possible use of lab analysis to determine the cause of failure for “blowouts,” OPS
is correct that basic failure analysis implementation steps were absent and Section 11.5.4 did not
cross-reference the SRR report provision. Moreover, while NFG stated that it later evaluated its
other compressor stations for venting hazards, there was nothing in Section 11.5.4 to ensure
responsibility for documenting this process by a qualified individual having responsibility for
approving any decisions made or actions taken.17 It appears that no documentation of NFG’s
evaluation of its other compressor stations for the possible presence of the root cause of the
Beech Hill incident—which was not identified before that line was placed back into service—
was provided, illustrating the importance of having such procedures to meet the requirement of
ensuring the possibility of recurrence is minimized.
NFG’s argument that it completed the SRR and replaced the regulator does not negate the failure
to meet the requirements of § 192.617 by failing to have procedures for analyzing accidents and
failures that included details on how to determine the causes of the failure and minimizing the
possibility of a recurrence. Accordingly, after considering all of the evidence and the legal
issues presented, I find that Respondent violated 49 C.F.R. § 192.617 by failing to have
procedures for analyzing accidents and failures that included details on how to determine the
causes of the failure and minimizing the possibility of a recurrence.
These findings of violation will be considered prior offenses in any subsequent enforcement
15 NFG Closing at 19.
16 Hearing Transcript at 75.
17 NFG Closing at 20.



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action taken against Respondent.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.18
In determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I
must consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; any effect that the penalty may have on its ability to continue
doing business; and the good faith of Respondent in attempting to comply with the pipeline
safety regulations. In addition, I may consider the economic benefit gained from the violation
without any reduction because of subsequent damages, and such other matters as justice may
require. The Notice proposed a total civil penalty of $202,900 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $31,600 for Respondent’s violation of 49 C.F.R.
§ 192.169(a), for failing to ensure that the Beech Hill Compressor Station had pressure relief or
other suitable protective devices of sufficient capacity and sensitivity to ensure that the MAOP of
the station piping and equipment was not exceeded by more than 10 percent. Respondent
disagreed with the amount of the proposed civil penalty and questioned whether it was supported
by the penalty consideration factors in the Pipeline Safety Act and § 190.225 regulations.
With respect to the nature and circumstances of NFG’s violation of § 192.169(b), ensuring that
MAOP is not exceeded by more than 10 percent is a basic code requirement. With respect to the
gravity of the offense, ensuring that MAOP is not exceeded by more than 10 percent is a key part
of safety. If overpressure events occur, they can compromise the integrity of piping and
accelerate the failure of any defects in steel pipe. In this instance, a release of gas and ignition
were involved. Notably, however, the gravity factor for this violation was not assigned at a high
level that would correspond to being a causal factor in an accident, but rather at a medium-to-
lower level.19 With respect to culpability, there were no circumstances beyond Respondent’s
control that prevented it from complying with the regulation and action was not taken to achieve
compliance until after the violation was discovered by OPS. As discussed above, I did not agree
with Respondent’s argument that the violation must be bifurcated and lack of capacity and lack
of sensitivity read as two separate requirements for purposes of finding a violation. For the same
reasons, I see no justification for a reduction in the civil penalty amount proposed in the Notice
for this violation. I further find that the record supports the points assigned for prior offenses and
good faith.
Respondent has presented no information or arguments that would warrant a reduction in the
18 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum
Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).
19 Violation Report at 10.



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civil penalty amount proposed in the Notice for this violation. Accordingly, having reviewed the
record and considered the assessment criteria, I assess Respondent a civil penalty of $31,600 for
violation of 49 C.F.R. § 192.169(a).
Item 2: The Notice proposed a civil penalty of $149,700 for Respondent’s violation of 49
C.F.R. § 192.169(b), for failing to ensure that each vent line that exhausts gas from the pressure
relief valves of a compressor station extended to a location where the gas may be discharged
without hazard.
In its response and at the hearing, NFG argued that under 28 U.S.C. § 2462, PHMSA was time-
barred from pursuing “…an action, suit, or proceeding for the enforcement of any civil fine,
penalty, or forfeiture, pecuniary or otherwise…unless commenced within five years from the
date when the claim first accrued…”.20 NFG contended that the claim first accrued when the
vent stack and the rest of the station were designed and constructed in 1980.21 OPS disagreed
and argued that under 49 U.S.C. § 60122, a new violation occurred every day that that the Beech
Hill facility was not in compliance. OPS’ argument amounts to the proposition that a violation
of a design requirement such as § 192.169(a) can be penalized even decades later.
The application of the statute of limitations in regulatory proceedings such as this is governed by
3M Company v. Browner, 17 F.3d 1453, a major D.C. Circuit Court of Appeals case holding that
the statute of limitations for regulatory violations generally begins running at the time a violation
occurs, not the time it was discovered by the government which is often much later. The court
explains that the purpose of the statute of limitations, disallowing stale cases where the accused
can no longer properly defend itself, would be frustrated if regulated entities remained exposed
to penalties for decades after a discrete violation occurs.22
As applied to most typical pipeline enforcement matters involving ongoing, periodic operating
and maintenance requirements, OPS would be correct that § 60122 means a new violation occurs
each day the noncompliance is present and as a result are generally not time barred as long as the
noncompliance cited does not extend back more than five years from the commencement of the
case.23 This provision, however, only applies if the violation actually repeats itself periodically.
The particular violation in this case involves a des
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