{"operation":"document","citation":"CPF 120191001","title":"ROVER PIPELINE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2019-05-31","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.241(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-120191001.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-120191001.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-120191001","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/120191001","body":"Notice of Probable Violation involving ROVER PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulation as 192.241(c). The case was opened on 2019-05-31 and is reported as closed as of 2020-06-17. Proposed civil penalty: $143,000. Assessed civil penalty: $50,200. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n120191001_Final Order_05182020.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_Final%20Order_05182020.pdf\n\n120191001_Final Order_05182020_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_Final%20Order_05182020_text.pdf\n\n120191001_NOPV PCP_05312019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_NOPV%20PCP_05312019.pdf\n\n120191001_NOPV PCP_05312019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_NOPV%20PCP_05312019_text.pdf\n\n120191001_Operator Post-Hearing Submission_12092019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_Operator%20Post-Hearing%20Submission_12092019.pdf\n\n120191001_Operator Pre-Hearing Submission_10282019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_Operator%20Pre-Hearing%20Submission_10282019.pdf\n\n120191001_Operator Response to Notice and Request for Hearing_07122019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_Operator%20Response%20to%20Notice%20and%20Request%20for%20Hearing_07122019.pdf\n\n120191001_PHC Hearing Scheduled_10012019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_PHC%20Hearing%20Scheduled_10012019.pdf\n\n120191001_PHC Hearing Scheduled_10012019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/120191001/120191001_PHC%20Hearing%20Scheduled_10012019_text.pdf\n\n120191001_PHC Hearing Scheduled_10012019_text.pdf\n\nOctober 1, 2019\nVIA CERTIFIED MAIL AND EMAIL TO: catherine.little@troutman.com and\nrobert.burrough@dot.gov\nMs. Catherine D. Little, Esq.\nCounsel for Rover Pipeline, LLC\nTroutman Sanders, LLP\n600 Peachtree Street, NE, Suite 3000\nAtlanta, Georgia 30308\nMr. Robert Burrough\nDirector, Eastern Region\nPipeline and Hazardous Materials Safety Administration\n820 Bear Tavern Road, Suite 103\nWest Trenton, New Jersey 08628\nRe: Notice of Hearing, Rover Pipeline, LLC\nCPF No. 1-2019-1001\nDear Ms. Little and Mr. Burrough:\nIn accordance with 49 C.F.R. § 190.211, an informal hearing will be held regarding the Notice of\nProbable Violation and Proposed Civil Penalty issued to Rover Pipeline, LLC, by the Office of\nPipeline Safety in the above-referenced matter. The hearing will take place November 7, 2019,\nbeginning at 1:00 p.m. Eastern Time.\nThe hearing will be at the PHMSA Eastern Region office, 820 Bear Tavern Road, Suite 103, West\nTrenton, New Jersey 08628. Upon arrival at the building, attendees will be required to present\nphoto identification to security personnel. A contact phone number for the day of the hearing is\n(609) 989-2171.\nAt least 10 calendar days prior to the hearing (or by October 28, 2019), both parties must submit\nand exchange any additional written materials they intend to present at the hearing and a list of\nattendees. This information should be provided electronically. Materials not submitted by this date\nmay be excluded. If you have any questions, please do not hesitate to call me at (202) 366-9093.\nSincerely,\nLarry White\nPresiding Official\n\n\n\nCPF No. 1-2019-1001\nPage 2\ncc: Mr. Joe Perez, Senior Vice President, E&C Services Support, Rover Pipeline, LLC, 1300\nMain Street, Houston, Texas 77002\nMs. Ajoke Agboola, Counsel, Eastern Region, Office of Pipeline Safety, PHMSA\n\n120191001_Final Order_05182020_text.pdf\n\nMay 18, 2020\nVIA ELECTRONIC MAIL TO: kelcy.warren@energytransfer.com\nMr. Kelcy L. Warren\nChairman and Chief Executive Officer\nEnergy Transfer, LP\n8111 Westchester Drive\nDallas, Texas 75225\nRe: CPF No. 1-2019-1001\nDear Mr. Warren:\nEnclosed please find the Final Order issued in the above-referenced case to your subsidiary,\nRover Pipeline, LLC. It makes a finding of violation and assesses a reduced civil penalty of\n$50,200. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. Service of the Final Order by electronic mail is\neffective upon the date of transmission 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. Joe Perez, Senior Vice President, E&C Services Support, Rover Pipeline, LLC,\njoseph.perez@energytransfer.com\nMs. Catherine D. Little, Counsel, Troutman Sanders LLP, catherine.little@troutman.com\nCONFIRMATION OF 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 )\nRover Pipeline, LLC, ) CPF No. 1-2019-1001\na subsidiary of Energy Transfer, LP, )\n)\n)\n)\nRespondent. )\n_______________________________________)\nFINAL ORDER\nOn various dates between January 25 and June 18, 2018, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of a pipeline\nconstruction project (the Rover Pipeline Project) undertaken by Rover Pipeline, LLC (Rover or\nRespondent) in Ohio and West Virginia. Rover Pipeline, LLC is a subsidiary of Energy\nTransfer, LP (Energy Transfer) which operates the 713-mile natural gas pipeline, portions of\nwhich were under construction at the time of the inspection. The pipeline is designed to\ntransport natural gas from the Marcellus and Utica Shale areas where it is produced across parts\nof Ohio, West Virginia, and Pennsylvania.1\nAs a result of the inspection, the Director, Eastern Region, OPS (Director), issued to Respondent,\nby letter dated May 31, 2019, 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 Rover had\nviolated 49 C.F.R. § 192.241(c) and proposed assessing a civil penalty of $143,000 for the\nalleged violation.\nRover responded to the Notice by letter dated June 21, 2019, as supplemented by letter dated\nJuly 12, 2019 (Response). Respondent contested the allegation and requested a hearing. A\nhearing was subsequently held on November 7, 2019, in West Trenton, New Jersey before a\nPHMSA Presiding Official. At the hearing, Respondent was represented by counsel.\nRespondent provided additional materials prior to the hearing on October 28, 2019 (Pre-hearing\nsubmission), and following the hearing on December 9, 2019 (Post-hearing submission). The\nDirector submitted a post-hearing recommendation on January 6, 2020 (Recommendation).\n1 Pipeline Safety Violation Report (Violation Report), (June 7, 2019) (on file with PHMSA), at 1.\n\n\n\nCPF No. 1-2019-1001\nPage 2\nFINDING 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. § 192.241(c), which states:\n§ 192.241 Inspection and test of welds.\n(a)…\n(c) The acceptability of a weld that is nondestructively tested or visually\ninspected is determined according to the standards in section 9 or Appendix\nA of API Std 1104 (incorporated by reference, see §192.7). Appendix A of\nAPI Std 1104 may not be used to accept cracks.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.241(c) by failing to determine the\nacceptability of nondestructively tested welds according to the standards in section 9 or\nAppendix A of API Std 1104. Specifically, the Notice alleged that Rover failed to identify 33\nwelds that were unacceptable under section 9 of API Std 1104 at the time of the nondestructive\nexamination.2\nIn its Response and at the hearing, Rover explained that as an initial matter, it believed that OPS\nacted inappropriately in issuing the Notice. Respondent explained that OPS had already taken\ncompliance action against Rover in a prior case, CPF No. 1-2018-1018 (the 2018 NOPV). Rover\nstated that the prior case encompassed the specified welding issues that Rover had cooperated\nfully with that proceeding which reached a satisfactory conclusion when the Final Order for that\nproceeding was issued on October 16, 2019. Specifically, Rover stated that:\nRover did not contest the 2018 NOPV and agreed to implement the\nterms of the Proposed Compliance Order, much of which it had already\nimplemented such as re-audit and repair of the 33 welds. The NOPV that\nis the subject of this contested matter was not received until almost 7 months\nlater on June 3, 2019, even though it arises out of the same set of\ninspections, facts, and circumstances as the 2018 NOPV. In fact, the NOPV\nat issue in this challenge involves the same remedial measures undertaken\nto address the weld qualification issues that were the subject of the 2018\nNOPV and which had been completed well in advance of that 2018 NOPV.3\nOPS disagreed and stated that:\nThe Eastern Region was within its rights to allege a violation of the\npipeline safety regulations once Rover informed it that 33 welds were found\nnot to be acceptable under Section 9 of API 1104. Whether this allegation\nwas included in CPF 1-2018-1018 or CPF 1-2019-1001 is immaterial.\nUltimately, the instant case is distinct from prior enforcement actions\n2 Notice, at 1-2.\n3 Post-hearing submission, at 2.\n\n\n\nCPF No. 1-2019-1001\nPage 3\nrelated to this pipeline project because this case is about passing, burying,\nand placing unacceptable welds in-service, whereas the prior case was not.4\nHaving considered these arguments, Respondent is correct that OPS could have amended the\nNotice in CPF No. 1-2018-1018 prior to issuing the Final Order for that proceeding in October of\n2019. Whether the decision by OPS to issue a second NOPV is impermissible and compels the\ncomplete withdrawal of this case, however, is another question. For example, there were no civil\npenalties assessed in the prior case and therefore no duplication of penalties occurred. In\naddition, the 2018 NOPV cited a different code section, § 192.243(b), that focused on a lack of\nadherence to Rover’s procedures for ensuring the qualifications of its personnel conducting non-\ndestructive examinations. OPS’ decision to issue this case following prior case CPF No. 1-2018-\n1018 did not unfairly prejudice Respondent and was not legally impermissible.\nTurning to the merits of the allegation, in its Response and at the hearing, Rover acknowledged\nthat it discovered 33 welds that were not acceptable under Section 9 of API 1104 and required\nremediation. Respondent, however, disagreed that the identification and remediation of these\nwelds amounted to a per se violation of § 192.241(c). Respondent also argued that its review of\nradiographs and ultimate determination that 33 welds were not acceptable under API 1104\nSection 9 involved judgment calls and should not be considered as demonstrations of non-\ncompliance. Respondent explained that it believed the regulations anticipate that some pipeline\nwelds will not be non-destructively tested and thus may not meet the acceptability standards of\nAPI Section 9).5\nAs OPS correctly pointed out, however, this argument ignores the fact that all welds that are\nNDT must meet the acceptability standards of API Section 9. OPS stated:\nIf an operator elects to examine 100% of the welds completed, then the\noperator has elected to confirm that all those welds are free from\nimperfections that might impact pipeline integrity under API Std. 1104. An\noperator cannot insulate itself from a violation of § 192.241 simply because\nit has elected to examine more than the bare-minimum number of welds\nnon-destructively tested pursuant to § 192.243.6\nRespondent also argued that only 13 of the 33 welds had been placed into service and as such the\ninstances of violation at most could be 13, not 33 as OPS suggested.7 During the hearing, OPS\nacknowledged that if an operator were to change its determination of weld acceptability during\nits quality control process ensuring remediation before the pipeline segment was buried and\nplaced in-service, then a violation of § 192.241(c) would not have occurred.8 According to the\n4 Recommendation, at 8.\n5 Post-hearing submission, at 4.\n6 Recommendation, at 4.\n7 Post-hearing submission, at 6.\n8 Hearing transcript, at 37.\n\n\n\nCPF No. 1-2019-1001\nPage 4\nPHMSA’s Pipeline Glossary, “an in-service pipeline is a pipeline that is being used to transport\nnatural gas or hazardous liquid.”9 Therefore, Respondent is correct that merely burying the\nsegment does not constitute placing it in service. In this case, there was no dispute that 13 of the\n33 welds that were not acceptable under Section 9 of API Std 1104 were placed in service.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 192.241(c) by failing to determine the acceptability of 13 of the\n33 specified non-destructively tested welds according to the standards in section 9 or Appendix\nA of API Std. 1104.\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.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 $143,000 for the violation cited above.\nItem 1: The Notice proposed a civil penalty of $143,000 for Respondent’s alleged violation of\n49 C.F.R. § 192.241(c), for failing to determine the acceptability of 33 specified non-\ndestructively tested welds according to the standards in section 9 or Appendix A of API Std.\n1104. With respect to the nature of this violation, the failure to identify unacceptable welds is a\nserious matter. Two of these welds were in the vicinity of the Ohio River. With respect to the\ncircumstances, Respondent already received a credit for self-reporting and I find that the\nmagnitude of this credit is supported by the record. With respect to gravity, as discussed above I\nfound that a violation had occurred with respect to 13 of these 33 welds. Accordingly, the\nnumber of instances of violation has been changed from 33 to 13 resulting in a reduction of the\npenalty.\nWith respect to culpability, OPS acknowledged that Respondent discovered the unacceptable\nwelds and was in the process of repairing or replacing them when it notified PHMSA of the\n9 PHMSA’s website, available at https://primis.phmsa.dot.gov/comm/glossary/index htm#InServicePipeline (last\naccessed May 14, 2020).\n10 These amounts are adjusted annually for inflation. See 49 C.F.R. § 190.223.\n\n\n\nCPF No. 1-2019-1001\nPage 5\nissue. Based on this information, I find that Respondent took documented action to address the\ncause of the non-compliance, and was in the process of correcting the non-compliance before\nOPS learned of the violation. Accordingly, the culpability factor has been modified resulting in\na further reduction of the penalty. With respect to good faith, the unacceptable welds were\nburied and placed in service. Therefore, the record does not support any reduction with respect\nto this factor.\nUnder the applicable penalty considerations, I may also consider other matters as justice may\nrequire. This includes a potential reduction where an operator’s noncompliance was against\nheightened procedures as opposed to the basic requirement in the code. Based on this\ninformation and to help ensure operators are not dis-incentivized from conducting non-\ndestructive testing beyond that which is minimally required, I find that this instance of non-\ncompliance falls within the intent of the credit. Accordingly, the other matters as justice may\nrequire factor has been modified resulting in a further reduction of the penalty.\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a reduced civil penalty of $50,200 for violation of 49 C.F.R. § 192.241(c).\nPayment of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.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 $50,200 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.\nThe terms and conditions of this Final Order are effective upon service in accordance with 49\nC.F.R. § 190.5.\n\n\n\nCPF No. 1-2019-1001\nPage 6\nMay 18, 2020\n___________________________________ __________________________\nAlan K. Mayberry Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":19371}