{"operation":"document","citation":"CPF 120175007","title":"BUCKEYE PARTNERS, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2017-03-16","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.410(a)(2)(ii), 195.434.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175007.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175007.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120175007","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120175007","body":"Notice of Probable Violation involving BUCKEYE PARTNERS, LP. PHMSA's enforcement data identifies the cited regulations as 195.410(a)(2)(ii),  195.434. The case was opened on 2017-03-16 and is reported as closed as of 2018-04-24. Proposed civil penalty: $77,000. Assessed civil penalty: $36,600. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120175007_Final Order_04122018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175007/120175007_Final%20Order_04122018.pdf\n\n120175007_Final Order_04122018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175007/120175007_Final%20Order_04122018_text.pdf\n\n120175007_NOPV PCP_03162017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175007/120175007_NOPV%20PCP_03162017.pdf\n\n120175007_NOPV PCP_03162017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175007/120175007_NOPV%20PCP_03162017_text.pdf\n\n120175007_Operator Response to Notice_04122017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120175007/120175007_Operator%20Response%20to%20Notice_04122017.pdf\n\n120175007_Final Order_04122018_text.pdf\n\nApril 12, 2018\nMr. Clark C. Smith\nChairman, President and Chief Executive Officer\nBuckeye Partners, LP\nFive TEK Park\n9999 Hamilton Boulevard\nBreinigsville, PA 18031\nRe: CPF No. 1-2017-5007\nDear Mr. Smith:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of\nthe allegations of violation, makes one other finding of violation, and assesses a reduced civil\npenalty of $36,600. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon receipt of payment. Service of the Final Order by\ncertified mail is effective upon the 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 Burrough, Director, Eastern Region, Office of Pipeline Safety, PHMSA\nMr. Scott Collier, VP, Performance Assurance & Asset Integrity\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 )\nBuckeye Partners, LP, ) CPF No. 1-2017-5007\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn October 11-14, 2016, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Buckeye Partners,\nLP’s (Buckeye or Respondent) Everglades Pipeline and associated facilities in Florida. Buckeye\nowns and operates roughly 6,000 miles of underground pipelines, which include approximately\n509 breakout tanks, serving approximately 110 delivery locations. These pipelines\ntransport liquid petroleum products, including gasoline, jet fuel, diesel fuel, heating oil, and\nkerosene from major supply sources to terminals and airports located within end-use markets.1\nThe Everglades Pipeline runs from Port Everglades, Florida (Port Everglades Facility), to Miami\nInternational Airport (Miami Terminal), a distance of approximately 36 miles.2 The pipeline\ntransports Jet A aviation fuel to the Miami International Airport and has an extension to the Fort\nLauderdale Hollywood International Airport.3 Since 1986, the Everglades Pipeline has been\nowned and operated by Everglades Pipeline Company, LP, an indirect wholly-owned subsidiary\nof Buckeye.4\nAs a result of the inspection, the Acting Director, Eastern Region, OPS (Director), issued to\nRespondent, by letter dated March 16, 2017, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that\nBuckeye had violated 49 C.F.R. §§ 195.410 and 195.434 and proposed assessing a civil penalty\nof $77,000 for the alleged violations.\n1 http://www.buckeye.com/BusinessOperations/PipelineTransportationOperations/tabid/584/Default.aspx (last\nvisited on December 7, 2017).\n2 Letter from Thomas Scott Collier to Robert Burrough, dated April 12 2017 (Response).\n3 Id.\n4 Id.\n\n\n\nCPF No. 1-2017-5007\nPage 2\nBuckeye responded to the Notice by letter dated April 12, 2017 (Response). The company\ncontested the allegations of violation, offered additional information in response to the Notice,\nand requested that the proposed civil penalty be withdrawn in light of the additional information\npresented. Respondent did not request a hearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii), which states:\n§ 195.410 Line markers.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall place and maintain line markers over each buried pipeline in\naccordance with the following:\n(1) …\n(2) The marker must state at least the following on a background of\nsharply contrasting color:\n(i) …\n(ii) The name of the operator and a telephone number (including area\ncode) where the operator can be reached at all times.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(ii) by failing to maintain\nline markers over each buried pipeline. Specifically, the Notice alleged that Buckeye did not\ninclude the correct name of the operator on 13 line markers along the Everglades Pipeline right-\nof-way (ROW). According to the Notice, the PHMSA inspector observed that the markers stated\nin part: “Everglades Pipeline Co., L.P. Warning Petroleum Pipeline before excavating or in\nemergency call Everglades Pipeline Co., L.P. Port Everglades….” The Notice alleged that the\nname of the operator, as listed in the National Pipeline Registry, was “Buckeye Partners, LP,”\nnot “Everglades Pipeline Co., LP,” and should have been the name shown on the line markers.\nIn its Response, Buckeye contested the alleged violation and noted that the 13 line markers along\nthe Everglades Pipeline ROW listed the name Everglades Pipeline Co., LP (Everglades), an\n“indirect wholly-owned subsidiary of Buckeye.”5 Buckeye further stated that Everglades was\nthe owner of the Everglades Pipeline and the line markers were therefore compliant with 49\nC.F.R. § 195.410(a)(2)(ii), since 49 C.F.R. § 195.2 defines “operator” to mean either the\n“owner” or “operator” of a pipeline facility, including parent entities or subsidiaries.6\n5 Response, at 1. Notwithstanding its assertion that Item 1 of the Notice was issued in error, Buckeye produced\npictures showing that it placed new stickers on all markers along the Everglades Pipeline ROW with Buckeye\nPartners, LP, as the identified operator of the pipeline.\n6 See 49 C.F.R. § 195.2 (defining ‘operator’ as “a person who owns or operates pipeline facilities;” and defining\n‘person’ to include “any individual, firm, join venture, partnership, corporation, association, State, municipality,\ncooperative association, or joint stock association, and includes any trustee, receiver, assignee or personal\nrepresentative thereof”).\n\n\n\nCPF No. 1-2017-5007\nPage 3\nI agree. It is undisputed that Everglades is the owner and operator of the pipeline at issue, and is\nan indirect wholly-owned subsidiary of Buckeye. The regulation at issue permits a pipeline\noperator to include on a line marker the name of the owner or operator of the pipeline.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent did not violate 49 C.F.R. § 195.410, as alleged in the Notice, and therefore withdraw\nItem 1.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.434, which states:\n§ 195.434 Signs.\nEach operator must maintain signs visible to the public around each\npumping station and breakout tank area. Each sign must contain the name\nof the operator and a telephone number (including area code) where the\noperator can be reached at all times.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.434 by failing to maintain signs\nvisible to the public around each pumping station and breakout tank area. Specifically, the\nNotice alleged that Buckeye’s signs at the Port Everglades Facility and Miami Terminal did not\ninclude the name of the operator, and did not include a telephone number where the operator was\nreachable at all times, as required by the regulation. According to the Notice, the signs read: “In\nan emergency phone collect Mr. Belvieu, TX 1-866-514-8380 or Port Everglades, FL 1-800-345-\n0983.” When the PHMSA inspector called one of the numbers, no one answered and a message\ndirected the caller to the other number.\nIn its Response, Buckeye contested the allegation of violation, asserting that its signs at the Port\nEverglades Facility and the Miami Terminal included the name of both the owner and operator\nof the Everglades pipeline, and also included one phone number where the operator could be\nreached at all times.7\nThis is incorrect. To comply with 49 C.F.R. § 195.434, signs at each pumping station and\nbreakout tank area must be visible to the public, contain the name of the operator, and include a\ntelephone number where the operator can be reached at all times. Failure to meet any one of\nthose three requirements constitutes a violation. Buckeye is correct that an operator may comply\nwith the regulation by identifying the name of the operator or the owner on the sign. The\nphotographic evidence in this case, however, shows that Buckeye failed to include the name of\nthe operator on the signs at both the Port Everglades Facility (pump station) and the Miami\nTerminal (pump station and breakout tank).8 Rather, they contained the name of two locations\nwhere Respondent had an office or control center.\nIn addition, the Notice alleged that Buckeye violated 49 C.F.R. § 195.434 because the phone\n7 Response, at 4.\n8 See Pipeline Safety Violation Report (Violation Report) (March 16, 2017) (on file with PHMSA), at Exhibit A-01,\nphotos of line marker and signs, dated October 12-13, 2016.\n\n\n\nCPF No. 1-2017-5007\nPage 4\nnumbers listed on the signs were not ones at which the operator could be reached at all times. In\nits Response, Buckeye stated that the signs contained two numbers, one of which was reachable\nat all times. Buckeye stated that the first number on the signs, for Buckeye's Control Room\nCenter in Texas, was a number where the operator could be reached at all times, but that the\nPHMSA inspector dialed only the second number, which was for the Port Everglades Facility.\nSince the record contains no evidence to rebut Buckeye’s statement that one of the numbers was\nreachable at all times, I withdraw that portion of the allegation.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.434 by failing to maintain signs visible to the public around pumping stations at the Port\nEverglades Facility and the Miami Terminal that contained the name of the operator.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.9 In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $77,000 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $40,400 for Respondent’s alleged violation of\n49 C.F.R. § 195.410(a)(2)(ii), for failing to maintain line markers over each buried pipeline. For\nthe reasons stated above, Item 1 is withdrawn in its entirety. Accordingly, the proposed penalty\nfor Item 1 in the amount of $40,400 is not assessed.\nItem 2: The Notice proposed a civil penalty of $36,600 for Respondent’s violation of 49 C.F.R.\n§ 195.434, for failing to maintain signs visible to the public around each pumping station and\nbreakout tank area. As discussed above, I found that Buckeye’s signs at the Port Everglades\nFacility and Miami Terminal did not include the name of the operator, as required by the\nregulation.\nRespondent requested that the proposed penalty be eliminated or reduced, not only because no\nviolation had taken place but because the alleged violations were low-risk items that should\nwarrant, at most, a warning letter, and the company had taken immediate steps to address the\n9 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).\n\n\n\nCPF No. 1-2017-5007\nPage 5\nissues identified during the inspection, long before the Notice was issued. Having reviewed the\nrecord and considered the assessment criteria, I find Respondent’s arguments do not warrant\nelimination or reduction of the proposed penalty for Item 2.\nWith regard to the nature of the violation, OPS noted in the Violation Report that the probable\nviolation concerned a failure to perform activities required by the regulation. Respondent argued\nthat the proposed penalty should be reduced under this factor because the violation was a\ntechnical records violation as opposed to a substantive activities violation.10 I am not persuaded\nby Respondent’s argument. The failure to include the information required by 49 C.F.R.\n§ 195.434 on signs around pump stations and breakout tank areas involves the “activity” of\nplacing and maintaining appropriate signage around a pipeline facility, not record keeping.\nWith regard to circumstances, OPS noted in the Violation Report that PHMSA discovered the\nprobable violation, and that the probable violation was ongoing for more than 10 days.\nRespondent did not challenge this assessment.\nWith regard to gravity, OPS noted in the Violation Report that the probable violation occurred in\nor outside a high consequence area (HCA), but that pipeline safety was minimally affected.\nRespondent did not challenge this assessment, but rather, argued for a reduction in the proposed\npenalty because the violation was a records, or less serious, violation, as opposed to more serious\nviolations where pipeline safety was compromised. I reject this argument for the same reason\nstated above.\nWith regard to culpability, OPS noted in the Violation Report that the operator failed to comply\nwith a requirement that was clearly applicable. Respondent argued that the proposed penalty\nshould be reduced under this factor because it took significant steps to comply with the\nregulations and its interpretation of the regulations was reasonable. Respondent also argued that\nthe proposed penalty should be reduced because PHMSA inspectors had failed to note concerns\nrelated to these same signs during prior inspections from 2010 and 2012.11\nBuckeye’s arguments are unpersuasive. The regulation at issue is clear and applied to the\nemergency signs at issue located at the Port Everglades Facility and Miami Terminal. The\nregulation requires that all signs around pump stations and breakout tank areas must contain the\nname of the operator. The evidence in the record reflects that signs at both the Port Everglades\nFacility and the Miami Terminal did not contain the name of the operator. Buckeye provided no\nexplanation of why the emergency signs at the Port Everglades Facility and Miami Terminal did\nnot contain the name of the operator. Respondent’s noncompliance with a clearly applicable\nregulation is not mitigated because OPS failed to identify concerns about the same signs during\nprior inspections. Finally, the Part E of the Violation Report clearly states that corrective actions\ntaken by an operator after PHMSA has learned of a violation are not considered. Accordingly, a\nreduction in the proposed penalty under this factor is not warranted.\n10 Response, at 5.\n11 Id.\n\n\n\nCPF No. 1-2017-5007\nPage 6\nWith regard to good faith, OPS noted in the Violation Report that the operator did not have a\nreasonable justification for its non-compliance. Respondent’s arguments for a reduction of the\nproposed penalty under this factor are the same as those made under the culpability factor. For\nthe same reasons stated above, a reduction in the proposed penalty is not warranted under this\nfactor.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $36,600 for violation of 49 C.F.R. § 195.434.\nIn summary, having reviewed the record and considered the assessment criteria for the Items\ncited above, I assess Respondent a total civil penalty of $36,600.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMK-325), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.\nThe Financial Operations Division telephone number is (405) 954-8845.\nFailure to pay the $36,600 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nUnder 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final\nOrder to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey\nAvenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of\nChief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of the\nFinal Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically\nstays the payment of any civil penalty assessed. The other terms of the order, including any\ncorrective action, remain in effect unless the Associate Administrator, upon request, grants a\nstay. If Respondent submits payment of the civil penalty, the Final Order becomes the final\nadministrative decision and the right to petition for reconsideration is waived. The terms and\nconditions of this Final Order are effective upon service in accordance with 49 C.F.R. § 190.5.\nApril 12, 2018\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":19741}