{"operation":"document","citation":"CPF 120185012","title":"MIPC LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2018-09-21","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432(b), 195.432(d).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185012.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185012.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120185012","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120185012","body":"Notice of Probable Violation involving MIPC LLC. PHMSA's enforcement data identifies the cited regulations as 195.432(b),  195.432(d). The case was opened on 2018-09-21 and is reported as closed as of 2019-08-08. Proposed civil penalty: $52,100. Assessed civil penalty: $0. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120185012_Final Order_08082019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185012/120185012_Final%20Order_08082019.pdf\n\n120185012_Final Order_08082019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185012/120185012_Final%20Order_08082019_text.pdf\n\n120185012_NOPV PCP_09212018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185012/120185012_NOPV%20PCP_09212018.pdf\n\n120185012_NOPV PCP_09212018_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185012/120185012_NOPV%20PCP_09212018_text.pdf\n\n120185012_Operator Response to Notice_10012018.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120185012/120185012_Operator%20Response%20to%20Notice_10012018.pdf\n\n120185012_Final Order_08082019_text.pdf\n\nAugust 8, 2019\nMr. Jeff Warmann\nPresident and Chief Executive Officer\nMonroe Energy, LLC\n920 Cherry Tree Road\nAston, Pennsylvania 19014\nRe: CPF No. 1-2018-5012\nDear Mr. Warmann:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nMIPC, LLC. It withdraws one of the allegations of violation and makes a finding of violation.\nThis enforcement action is now closed. Service of the Final Order by certified mail is effective\nupon 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. Peter Pirog, Vice President and General Manager, MIPC, LLC, 920 Cherry Tree\nRoad, Aston, Pennsylvania, 19014\nMr. John Bowen, Pipeline Safety Lead, MIPC, LLC, 920 Cherry Tree Road, Aston,\nPennsylvania, 19014\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\nIn the Matter of )\nMIPC, LLC, ) CPF No. 1-2018-5012\na subsidiary of Monroe Energy, LLC, )\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom May 15 through 19, 2017, pursuant to 49 U.S.C. § 60117, a representative of the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nconducted an on-site pipeline safety inspection of the facilities and records of Monroe\nInterstate Pipeline Company, LLC (MIPC or Respondent) in Aston, Pennsylvania. MIPC, a\nsubsidiary of Monroe Energy, LLC, owns and operates a hazardous liquid storage and\ndistribution network that includes 51.25 miles of pipeline, two tank farms, one truck terminal and\n25 breakout tanks with a total tankage capacity of nearly 2.8 million barrels.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated September 21, 2018, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that MIPC, LLC\nhad violated 49 C.F.R. §§ 195.432(b) and (d) and proposed assessing a civil penalty of $52,100\nfor the alleged violations.\nMIPC responded to the Notice by letter dated October 1, 2018 (Response). The company\ncontested the allegations, offered additional information in response to the Notice, and requested\nthat the proposed civil penalty be eliminated. Respondent did not request a hearing and therefore\nhas waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n1 MIPC, LLC website, available at http://www monroepipeline.com/ (last accessed Mar. 4, 2019).\n\n\n\nCPF No. 1-2018-5012\nPage 2\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(d), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a)…\n(d) The intervals of inspection specified by documents referenced in\nparagraphs (b) and (c) of this section begin on May 3, 1999, or on the\noperator's last recorded date of the inspection, whichever is earlier.\nIn addition, Section 195.432(b) states in part: “Each operator must inspect the\nphysical integrity of in-service atmospheric and low-pressure steel above-ground\nbreakout tanks according to API Std 653...”\nAPI 653 also states in section 6.4.2, Inspection Intervals (emphasis added):\n6.4.2.1 Intervals between internal inspections shall be determined by the\ncorrosion rates measured during previous inspections or anticipated based\non experience with tanks in similar service. Normally, bottom corrosion\nrates will control and the inspection interval will be governed by the\nmeasured or anticipated corrosion rates and the calculations for minimum\nrequired thickness of tank bottoms (see 4.4.7). The actual inspection\ninterval shall be set to ensure that the bottom plate minimum thicknesses at\nthe next inspection are not less than the values listed in Table 6-1. In no\ncase, however, shall the internal inspection interval exceed 20 years.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(d) by failing to perform an\ninternal inspection of Chelsea Terminal’s Tank 706 within the maximum time interval required\nby API Standard 653, 3rd edition (incorporated by reference, see § 195.3) (API 653).\nSpecifically, the Notice alleged that MIPC exceeded the API 653 maximum interval of 20 years\nbetween its 1996 and 2017 internal inspections for Tank 706. The dates MIPC performed\ninternal inspections of Tank 706 were December 3, 1996, and February 23, 2017, an inspection\ninterval of 20 years and 83 days.2\nIn its Response, MIPC provided records to show that the tank was taken out of service on\nNovember 10, 2016, in preparation for cleaning and inspection.3 After the inspection was\ncompleted on February 23, 2017, MIPC made the necessary repairs. MIPC then had a third-\nparty contractor conduct a Modification Inspection on May 31, 2017, to verify that all the\nnecessary repairs had been made.4 The tank was then returned to service on June 6, 2017.5\nAlthough MIPC’s tank was empty of product and out of service during the time that an API 653\n2 Pipeline Safety Violation Report (Violation Report), (Sept. 21, 2018) (on file with PHMSA), at 12.\n3 Response, at 2.\n4 Response, at 4-12.\n5 Response, at 2.\n\n\n\nCPF No. 1-2018-5012\nPage 3\ninspection was required, this does not alleviate MIPC’s regulatory obligation. An API 653\ninspection was not completed to determine the condition of the tank until February 23, 2017, an\ninspection interval of 20 years and 83 days. The inspection interval is based on the actual\ninspection completion dates, and not whether the tank was in service.\nAccordingly, after considering all of the evidence, I find that Respondent violated 49 C.F.R.\n§ 195.432(d) by failing to perform an internal inspection of Chelsea Terminal’s Tank 706 within\nthe maximum time interval required by API Standard 653.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nWITHDRAWAL\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.432(b), which states:\n§ 195.432 Inspection of in-service breakout tanks.\n(a) …\n(b) Each operator must inspect the physical integrity of in-service\natmospheric and low-pressure steel above-ground breakout tanks according\nto API Std 653 (except section 6.4.3, Alternative Internal Inspection\nInterval) (incorporated by reference, see § 195.3). However, if structural\nconditions prevent access to the tank bottom, its integrity may be assessed\naccording to a plan included in the operations and maintenance manual\nunder § 195.402(c)(3). The risk-based internal inspection procedures in API\nStd 653, section 6.4.3 cannot be used to determine the internal inspection\ninterval\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.432(b) by failing to maintain\ndocumentation of remedial actions resulting from internal breakout-tank inspections required by\nAPI 653. Specifically, the Notice alleged that MIPC records of internal tank inspections of the\nbreakout tanks at its Chelsea Terminal indicated that internal inspections were completed on\nFebruary 23, 2017, for Tank 706 and on June 19, 2013, for Tank 707. PHMSA requested\nrecords of the subsequent remedial actions resulting from the recommendations and suggestions\nmade in the inspection reports; however, MIPC was unable to produce records of the repairs in\naccordance with the inspection report recommendations.6\nIn its Response, MIPC contested Item 1, stating that MIPC had a third-party contractor conduct a\nModification Inspection on May 31, 2017, to verify that all necessary repairs had been made.7\n6 Violation Report, at 5.\n7 Response, at 1.\n\n\n\nCPF No. 1-2018-5012\nPage 4\nMIPC provided the Modification Inspection report for Tank 706, confirming that the\nrepairs/alterations that had been completed.8 For Tank 707, MIPC presented repairs/alterations\ndone based on invoices, associated purchase order, non-destructive testing records, and a written\nletter in lieu of a report from the inspection company reviewing the completion of repairs based\non the inspection company’s out-of-service report dated June 19, 2013.9\nAccordingly, based upon a review of all of the evidence and the recommendation of the Director,\nI find that MIPC complied with the requirements in § 195.432(b) and hereby withdraw Item 1.\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.10 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; any effect that\nthe penalty may have on its ability to continue doing business; and the good faith of Respondent\nin attempting to comply with the pipeline safety regulations. In addition, I may consider the\neconomic benefit gained from the violation without any reduction because of subsequent\ndamages, and such other matters as justice may require. The Notice proposed a total civil\npenalty of $52,100 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $24,500 for Respondent’s violation of 49 C.F.R.\n§ 195.432(b), for failing to maintain documentation of remedial actions resulting from internal\nbreakout tank inspections required by API Std 653. Having withdrawn this Item above, the\nassociated penalty is also withdrawn.\nItem 2: The Notice proposed a civil penalty of $27,600 for Respondent’s violation of 49 C.F.R.\n§ 195.432(d), for failing to perform an internal inspection of Chelsea Terminal’s Tank 706\nwithin the maximum time interval required by API Standard 653. MIPC performed internal\ninspections of Tank 706 on December 3, 1996, and then on February 23, 2017, an inspection\ninterval of 20 years and 83 days. MIPC requested that the penalty be eliminated and explained\nthat the reason it missed the deadline for inspecting Tank 706 was because the tank was empty\nwhile it was cleaned and prepared for inspection.11 The tank was then inspected along with the\ncompletion of certain repair work.\n8 Response, at 4-12.\n9 Response, at 14-23.\n10 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223; Revisions to Civil Penalty Amounts,\n83 Fed. Reg. 60732, 60744 (Nov. 27, 2018).\n11 Response, at 2.\n\n\n\nCPF No. 1-2018-5012\nPage 5\nUpon reviewing the criteria for determining penalties, I find that there is justification for\nlowering MIPC’s Culpability from “[t]he operator failed to comply with a requirement that was\nclearly applicable” to “[a]fter the operator found the non-compliance, the operator took\ndocumented action to address the cause of the non-compliance, and corrected the non-\ncompliance before PHMSA learned of the violation.” While there is no question that MIPC’s\ninternal inspection of Tank 706 was 83 days late, MIPC has provided justification for the delay,\nand the tank was inspected before PHMSA’s inspection in May 2017. I also find that, in\nconsideration of MIPC’s efforts to achieve compliance and the reduction in risk resulting from\nremoving the tank from service prior to the inspection due date, MIPC has provided a reasonable\njustification for its non-compliance, and therefore should receive credit for Good Faith.\nAccordingly, having reviewed the record and considered the assessment criteria, I have\ndetermined that the penalty for MIPC’s violation of 49 C.F.R. § 195.432(d) should be\neliminated.\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.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\nAugust 8, 2019\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":14239}