TAMPA BAY PIPELINE CO. — Notice of Probable Violation

party submissionOfficial PDF220056012_Petition For Reconsideration_12212006.pdf#

220056012_Final Order_12012006.pdf, page 1Official PDF@ U.5. Deporlment of Tronsporlotion Pipeline ond Hozordous Moleriots Sofety Administrolion 400 Seventh Street, S,W. Washington, D.C, 20590 DEC - I zrm Mr. Robert L. Rose President Tampa Bay Pipeline Company P.O. Box 35236 Sarasota, Fl,34242 Re: CPF No.2-2005-6012 Dear Mr. Rose: Enclosed is the Final Order issued by the Acting Associate Administrator for Pipeline Safety in the above-referenced case. It makes findings of violation and assesses a civil penalty of $71 ,500. It further finds that you have completed the actions specified in the Notice required to comply with the pipeline safety regulations. When the civil penalty is paid, this enforcement action will be closed. Your receipt of the Final Order constitutes service of that document under 49 C.F.R. € 190.5. Sincerely, tu- James Reynolds Pipeline Compliance Registry PHMSA, Office of Pipeline Safety Enclosure Ms. Lin<ia Daugherty, Director, Souihern Region, OPS; Mr. Glenn I). Howell, General Manager. Tampa Bay Pipeline Company#

220056012_Final Order_12012006.pdf, page 2DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAF'ETY WASHINGTON. D.C. 20590 In the Matter of Tampa Bay Pipeline Company' Respondent ) ) ) ) ) ) ) CPF No.2-2003-6012 FINAL ORDER On May 17-18, 2005, pursuart to 49 U.S.C. $ 60117, representatives of the Pipeline and Hazardous Materials Safety Administration, Office of Pipeline Safety (OPS) conducted an on- site pipeline safety inspection of Respondent's Operator Qualification (OQ) procedwes and records at its Tampa, Florida office. As a result of the inspection, the Director, Southem Region, OPS issued to Respondent, by letter dated September I 3, 2005, a Notice of Probable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice). In accordance with 49 C.F'R. $ 190.207, the Notice proposed finding that Respondent had committed violations of 49 C.F.R. Part I 95 and proposed assessing a civil penalty of $71 ,500 for the alleged violations. The Notice also proposed ordering Respondent to take certain measures to correct the alleged violations. '. Respondent responded to the Notice by letter dated Oclober 7,2005 (Response). Respondent stated that it intended to revise its OQ program in accordance with the Proposed Compliance Order, but requested a hearing regarding the Notice and the Proposed Civil Penalty. The hearing washefdonMarch 25,2006 inAtlanta, Georgia. Afterthishearing,Respondentoffered additional information on April 25,2006. F'INDINGS OF VIOLATION Item I in the Notice alleged that Respondent violated 49 C.F.R. $ 195.505(a) by: A. failing to establish a list identif,ving its OQ "covered tasks" by the applicable deadline of April27,2001; B. failing to include all covered tasks in the list once it was established; and C. failing to review the covered task list using the four-part test with Part 195 operation and maintenance activities.#

220056012_Final Order_12012006.pdf, page 3Respondent did not contest allegations B or C. With respect to A, the allegation that Respondent failed to establish a list identifying its OQ covered tasks by the applicable deadline, Respondent stated at the hearing that it had written a "redbook framework" for developing an OQ program prior to Aprll27,2001, but acknowledged that this document was actually an outline of only a few pages that merely reiterated the OQ regulations in Subpart G of C.F.R. Part 195. Therefore, Respondent was unable to document that it had an OQ program for its pipeline system completed and in place by April 27,2001 when required. Respondent then stated that it had reason to believe that it had generated a covered task list in December of 2002 and offered a CD that it claimed showed that these tasks were saved on its computer between December 11,2002 and January 2,2003. Respondent's claim, however, contradicts a slatement made by Respondent's own OQ Plan Administrator to OPS at the time of the inspection that the covered task list was not completed until 2005 after it was received from a sister company. Moreover, these dates are still substantially later than the Aprrl27,2001 deadline set forth in the relevant regulation. Respondeni faile<i to produce any verifiable contemporaneous documentation or other persuasive evidence to show that it had established a list identiffing its OQ covered tasks by Apil27 , 2O0l when required. Accordingly, I find that Respondent violated $ 195.505(a) as described in the Notice. Item2 in the Notice alleged that Respondent violated 49 C.F.R. $ 195.505(b) by failing to have OQ provisions in place to ensure that contractor individuals performing covered tasks on its pipeline were qualified, and failing to include provisions for the use of training to qualify or re- qualify individuals to perform covered tasks. Respondent did not contest this item. Accordingly, I find that Respondent violated $ 195.505(b) as more fully described in the Notice. Item 3 in the Notice alleged that Respondent violated 49 C.F.R. $ 195.505(b) by failing to have OQ provisions in place to ensure that individuals performing covered tasks on its pipeline were qualified to recognizc and react to abnormal operating conditions (AOCs). At the hearing, Respondent repeated its statement that it had written a "redbook framework" for developing an OQ program prior to the April 27,2001 deadline. Respondent, however, failed to demonstrate that it had an OQ program addressing the requirements associated with AOCs in place when required. Accordingly, I find that Respondent violated $ 195.505(b) as described in the Notice. Item 4 in the Notice alleged that Respondent violated 49 C.F.R. $ 195.505(c) by failing to have OQ provisions in place to ensure that any covered task performed by an individual who is not qualified is done only ifdirected and observed by an individual that is qualified. Respondent did not contest this item. Accordingly, I find that Respclndent violated $ 195.505(c) as more fully described in the Notice. Item 5 in the Notice alleged that Respondent violated 49 C.F.R. $ 195.505(d) by failing to have OQ provisions in place to evaluate an individual whose performance of a covered task may have contributed to an accident. Respondent did not contest this item. Accordingly, I irnd that Respondent violated $ 195.505(d) as more fully described in the Notice.#

220056012_Final Order_12012006.pdf, page 4Item 6 in the Notice alleged that Respondent violated 49 C.F.R. g 195.505(e) by failing to have OQ provisions in place to evaluate an individual for the purpose of determining whether the individual is no longer qualifi.ed to perform a covered task. Respondent did not contest this item. Accordingly, I find that Respondent violated $ 195.505(e) as more fully described in the Notice. Item 7 in the Notice alleged that Respondent violated 49 C.F.R- $ 195.505(0 by failing to have OQ provisions in place to identiff and communicate changes that affect covered tasks to individuals performing tlrose covered tasks. Respondent did not contest this item. Accordingly, I find that Respondent violated $ 195.505(f) as more fully described in the Notice. Item 8 in the Notice alleged that Respondent violated 49 C.F.R. g 195.505(9) by failing to have OQ provisions in place identifying the re-evaluation intervals for covered tasks. In its post- hearing submittal, Respondent asserted that "The TBPL management had elected to do re- evaluations every five years; therefore, re-evaluation was not required until Decemb et,20A7." This response, ho'wever, does not demonstrate that re-evaluatiorr intervals had been established when required, much less document any supporting justifications for interval length. Respondent failed to demonstrate that it had an OQ program addressing the re-evaluation intervals !n place when required. Accordingly, I find that Respondent violated g 195.505(g) as described in the Notice. Item 9 in the Notice alleged that Respondent violated 49 C.F.R. g 195.507 by: A. failing to maintain qualification records including the dates of current qualification; B. failing to maintain qualification records identifying the covered tasks of each individual; C. failing to maintain qualification records including the qualilication methods and criteria; and D. failing to maintain qualification records for contractor individuals who had performed covered tasks on the pipeline. Respondent did not contest allegations B or C. With respect to A, the allegation that Respondent failed to maintain qualification records including the dates of current qualification, Respondent acknowledged that these records contained no dates. With respect to D, the allegation that Respondent failed to maintain qualification records for contractor individuals who had performed covered tasks on the pipeline, Respondent acknowledged that at the time, it failed to produce any records that would have demonstrated that contractor individuals had been qualified on tasks they performed on its pipeline prior to performing them. Accordingly, I find that Respondent violated $ 195.507 by failing to maintain the specified records during the relevant time period. Item 10 in the Notice alleged that Respondent violated 49 C.F.R. $ 195.509 by failing to have an OQ program completed and in place by April 2l ,2001. Respondent again relied on its argument that it had a "redbook framework" in place by the April 27,2001 deadline. Once again, however, Respondent conceded that this document was actually an outline of only a few pages that merely reiterated the OQ regulations in Subpart G of C.F.R. Part 195^ Respondent failed to produce any verifiable contemporaneous documentation or other persuasive evidence to show#

220056012_Final Order_12012006.pdf, page 5that it had a complete oQ program in place by April 27,2001 when required.r Accordingly, I find that Respondent violated g 195.509 as described in the Notice. These findings ofviolation will be considered prior offenses in any subsequent enforcement action taken against Respondent. ASSESSMENT OF'PENALTY Under 49 U.S.C. $ 60122, Respondent is subject to a civil penalty not to exceed $100,000 per violation for each day of the violation up to a maximum of $1,000,000 for any related series of violations. 49 U.S.C. g 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil penalty, I consider the following criteria: nature, circumstances, and gravity of the violation, degree cfRespondent's culpability, history ofRespondent's prior offenses, Respondent's ability to pay the penalty, good faith by Respondent in attempting to achieve coqpliance, the effect on Respondent's ability to continue in business, and such other matters as justice may require. With respect to Item 1.A, the Notice proposed a civil penalty of $5,000 for Respondent's failure to establish a list identifuing its OQ covered tasks by the applicable deadline of April 27,2001 ln accordance with $ 195.505(a). Having a complete OQ program in place to ensure that individuals performing covered tasks are properly qualified is an important part of pipeline safety. Respondent's pipeline system is located in urban and suburban areas and the consequences ofany errors that cause or conftibute to a release from the pipeline could be serious. Establishing the covered tasks on a given pipeline system is akey step in developing any OQ progam because in order to assess the effectiveness ofan operator's process for establishing that an individual is qualified to perform a given task, that task and its criteria must be available to compare against the individual's previous evaluations and qualifications. Respondent has presented no information that would warant a reduction in the civil penalty amormt proposed in the Notice for this violation. Accordingly, having reviewed the record and considered lhe assessment criteria, I assess Respondent a civil penalty of$5,000 for its violation of$ 195.505(a). With respect to Item 3, the Notice proposed a civil penalty of $5,000 for Respondent's failure to have OQ provisions to ensure that individuals performing covered tasks were qualified to recognize and react to abnormal operating conditions in accordance with $ 195.505(b). Having a complete OQ program in place to ensure that individuals performing covered tasks are properly qualified is an important part of pipeline safety. Respondent's pipeline system is located in urban and suburban areas and the consequences of any errors that cause or contribute to a release from the pipeline could be serious. Respondent has presented no information that would warrant a reduction in the 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 ' Respondent failed to make this showing at the time of the inspection and again failed to make this showing during the hearing. Respondent did submit an undated copy of the OQ plan that it ultimately developed with its post- hearing materials, but this plan was not in place during the relevant time period of April 27,200]..#

220056012_Final Order_12012006.pdf, page 6penalty of$5,000 for its violation ofg 195.505(b). With respect to Item 8, the Notice proposed a civil penalty of $4,500 for Respondent's failure to have OQ provisions identifoing the re-evaluation intervals for covered tasks in accordance with $ 195.505(9). Having a complete OQ program in place to ensure that individuals performing covered tasks are properly qualified is an important part ofpipeline safety, Respondent's pipeline system is located in urban and suburban areas and the consequences ofany errors that cause or contribute to a release from the pipeline could be serious. Respondent has presented no information that would warrant a reduction in the civil penalty amount proposed in the Notice for this violation. Accordingly, having reviewed the record and considered the assessment cdteria, I assess Respondent a civil penalty of $4,500 for its violation of $ I 95.505(9). With respect to Item 9.A, the Notice proposed a civil penalty of $4,500 for Respondent's failure to maintain qualification records including the dates of current qualification in accordance with $ 195.507. Having a complete OQ program in place to ensure that individuais performing covered tasks are properly qualified is an important part ofpipeline safety. Violations of recordkeeping requirements are serious because in the absence of complete and reliable records, neither a pipeline operator nor OPS can properly evaluate and oversee the effectiveness ofa safety program. Respondent has presented no information that would warrant a reduction in the 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$4,500 for its violation of$ 195.507. With respect to Item 9.D, the Notice proposed a civil penalty of $2,500 for Respondent's failure to maintain qualification records for contractor individuals who had performed covered tasks on the pipeline in accordance with $ 195.507. Having a complete OQ program in place to ensure that individuals performing covered tasks are properly qualified is an important part of pipeline safety. Violations of recordkeeping requirements are serious because in the absence of complete and reliable records, neither a pipeline operator nor OPS can properly evaluate and oversee lhe effectiveness of a safety program. Respondent has presented no information that would warrant a reduction in the civil penalty amount proposed in the Nofice for this violation. Accordingly, having reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of $2,500 for its violation of $ 195.507. With respect to Item 10, the Notice proposed a civil penalty of $50,000 for Respondent's failure to have an OQ program in place by April 27 ,2001 in accordance with $ 195.509. Having a complete OQ program in place to ensure that individuals performing coveied tasks are properly qualified is an important part of pipeline safety. Respondent's pipeline system is located in urban and suburban areas and the consequences of any errors that cause or contribute to a release from the pipeline could be serious. Respondent has presented no information that would warrant a reduction in the 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 $50,000 for its violation of $ 195.509.#

220056012_Final Order_12012006.pdf, page 7Based on the forgoing, having reviewed the record and considered the assessment criteria, I assess Respondent a total civil penalty of $71 ,500. Respondent has the ability to pay this penalty without adversely affecting its ability to continue in business. Payment of the civil penalty must be made within 20 days of service. Federal regulations (49 C.F.R. $ 89.21 (bX3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-300), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893. Failure to pay the $71,500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U.S.C. S 3717,31 C.F.R. $ 901.9 and 49 C.F.R. $ 89.23. Pursuant to those same authorities, a late penalty charge of six percent (6%) per annum will be charged if payment is not made within I l0 days of service. Furthermore, failure to pay the civii penalty may result in referral of lhe matter to the Attorney General for appropriate action in a United States District Court. COMPLIANCE ORDER The Notice proposed a Compliance Order specifying actions to be taken by Respondent to correct the violations. Under 49 U.S.C. $ 601 l8(a), each person who engages in the transportation ofhazardous liquids or who owns or operates a pipeline facility is required to comply with the applicable safety standards established under chapter 601. The Director, Southem Region, OPS, has indicated that Respondent has provided documentation demonstrating that it has now corrected the deficiencies in its OQ program as specified in the Proposed.Compliance Order. Accordingly, since compliance has been achieved with respect to these violations, it is unnecessary to include compliance terms in this Order. Under 49 C.F.R. $ 190.21 5, Respondent has a right to submit a petition for reconsideration of this Final Order. Should Respondent elect to do so, the petition must be received within 20 days of Respondent's receipt of this Final Order and must contain a brief statement of the issue(s). The hling of a petition automatically stays the payment of any civil penalty assessed. However if Respondent submits payment of the civil penalty, the Final Order becomes the final administrative decision and the right to petition for reconsideration is waived, The terms and i+(ons of this Final Order are effective on receipt. nFC - l ,nn.r I L U I I U v o willk iate Administrator for line Safety Date Issued#

220056012_decision on the petition for reconsideration_03312008_text.pdf, page 1Official PDFU S Department of Transportation Pipeline and Hazardous Materials Safety Administration 1200 New Jersey Ave S E Washington DC 20590 M~R3 1 ÃO8 VIA CERTIFIED MAIL — RETURN RECEIPT RE UES TED Mr. Robert L. Rose President Tampa Bay Pipeline Corporation d/b/a Tampa Bay Pipeline Company P. O, Box 35236 Sarasota, FL 34242-5236 Re: CPF No. 2-2005-6012 Dear Mr. Rose: Enclosed is the decision on the petition for reconsideration filed by Tampa Bay Pipeline Company in the above-referenced case. For the reasons specified therein, the petition is denied. Payment of the $71, 500 civil penalty is due within 20 days of service. Your receipt of this decision constitutes service under 49 C. F. R. $ 190. 5. Thank you for your cooperation in this matter Sincerely, Jeffrey D. Wiese Associate Admmistrator for Pipeline Safety Enclosure#

220056012_decision on the petition for reconsideration_03312008_text.pdf, page 2U. S. DEPARTMENT OF TRANSPORTATION PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION OFFICE OF PIPELINE SAFETY WASHINGTON, D. C. 20590 In the Matter of Tampa Bay Pipeline Corporation, ) d/b/a Tampa Bay Pipeline Company, ) ) ) ) ) Petitioner ) CPF No. 2-2005-6012 DECISION ON PETITION FOR RECONSIDERATION On December 1, 2006, pursuant to 49 U. S. C. ) 60112, the Associate Administrator for Pipeline Safety issued a Final Order in this case finding that Tampa Bay Pipeline Corporation, doing business as Tampa Bay Pipeline Company (Tampa Bay or Petitioner); had committed various violations of the hazardous liquid pipeline safety regulations set forth in 49 C. F. R. Part 195. The Final Order assessed a civil penalty in the amount of $71, 500. By letter dated December 21, 2006, pursuant to 49 C, F. R. ) 190, 215, Petitioner filed a petition for reconsideration seeking a reduction or elimination of the civil penalty on the grounds that its payment would constitute a financial hardship on the company. Petitioner did not request reconsideration of the findings of violation. Pursuant to 49 U. S. C. ) 60122 and 49 C. F. R. ) 190. 225, in determining the amount of a civil penalty, I must consider, among other things, an operator's ability to pay the penalty and any effect it may have on the operator's ability to continue doing business. An operator requesting reconsideration of a civil penalty on the grounds that it would constitute a financial hardship has the burden of demonstrating the validity of its claim. The petition filed in this case, however, lacked sufficient evidence of Petitioner's actual financial condition to enable the Pipeline and Hazardous Materials Safety Administration (PHMSA) to evaluate Petitioner's claim of financial hardship. Rather than simply denying the petition without further proceedings, as permitted under 49 C. F. R. ) 190. 215(e), PHMSA requested Petitioner, by letter dated January 26, 2007, to submit its "most recent financial statement" to support its claim. In its response dated February 9, 2007, Petitioner indicated that it did not have separate audited financial information, as the information was contained in a combined statement and the numbers were not broken out. Instead, Petitioner submitted information concerning throughput levels on its pipeline system. By letter dated February 15, 2008, the Office of Chief Counsel again requested that Petitioner submit accurate and reliable information on the financial condition of Tampa Bay, Specifically,#

220056012_decision on the petition for reconsideration_03312008_text.pdf, page 3the letter requested that Tampa Bay provide the most recent auCkted financial statement for Petitioner, or its parent corporation, or other affiliated entity upon which Tampa Bay relies for financing. Petitioner was further advised that a failure to provide such information would be grounds for a denial of its petition. In its response dated March 3, 2008, Petitioner again failed to submit its most recent audited financial statement. Instead, Petitioner provided a one-page table showing the income and expenses of Tampa Bay Pipeline Corporation, as of December 31, 2006. Petitioner indicated the numbers in the table were accurate "to the best of [the company's] knowledge. " The Federal Pipeline Safety Laws (49 U. S. C. ) 60122, et seq) expressly provide that in determining civil money penalties, PHMSA must consider a pipeline operator's ability to pay and whether a proposed penalty will affect an operator's ability to continue doing business. For a petitioner to assert a successful claim of financial hardship, it must provide PHMSA with the means by which the agency can accurately determine the company's true financial condition. This is why the agency requested Petitioner's most recent audited financial statement, which should provide a current, comprehensive, and reliable picture of the company's financial condition, including assets, liabilities, income, expenses, and cash flow. PHMSA has twice given Tampa Bay an opportunity to substantiate its claim of financial hardship but Petitioner has still failed to produce credible evidence. Therefore, the agency has no alternative but to deny the petition for reconsideration. Accordingly, payment in full of the civil penalty assessed in the Final Order ($71, 500) is now due and must be made within 20 days of service. Federal regulations (49 C. F. R. ) 89. 21(b)(3)) require this payment be made by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U. S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center, P. O. Box 25082, Oklahoma City, OK 73125; (405) 954-8893. Failure to pay the $71, 500 civil penalty will result in accrual of interest at the current annual rate in accordance with 31 U. S. C. $ 3717, 31 C. F. R. ( 901, 9, and 49 C. F. R. ( 89. 23. Pursuant to tho'se same authorities, a late penalty charge of six percent (6/o) per annum will be charged if payment is not made within 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of the matter to the Attorney General for appropriate action in a United States District Coiut. This decision on reconsideration is the final administrative action in this proceeding. MAR 3 1 N08 Jeffrey D. Wiese Associate Administrator for Pipeline Safety Date Issued#