{"operation":"document","citation":"CPF 220106007","title":"TPM, INC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2010-12-22","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.410(a)(2)(i), 195.420(c), 195.583.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220106007.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220106007.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220106007","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220106007","body":"Notice of Probable Violation involving TPM, INC. PHMSA's enforcement data identifies the cited regulations as 195.410(a)(2)(i),  195.420(c),  195.583. The case was opened on 2010-12-22 and is reported as closed as of 2012-11-29. Proposed civil penalty: $74,600. Assessed civil penalty: $63,410. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220106007_Decision on Petition for Reconsideration_10122012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_Decision%20on%20Petition%20for%20Reconsideration_10122012.pdf\n\n220106007_Decision on Petition for Reconsideration_10122012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_Decision%20on%20Petition%20for%20Reconsideration_10122012_text.pdf\n\n220106007_Final Order_02222012  .pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_Final%20Order_02222012%20%20.pdf\n\n220106007_Final Order_02222012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_Final%20Order_02222012_text.pdf\n\n220106007_NOPV PCP_12222010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_NOPV%20PCP_12222010.pdf\n\n220106007_NOPV PCP_12222010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_NOPV%20PCP_12222010_text.pdf\n\n220106007_Operator response_01112011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220106007/220106007_Operator%20response_01112011.pdf\n\n220106007_Final Order_02222012  .pdf\n\nU.S. Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Avenue SE\nWashington. DC 20590\nFEB 2 2 2012\nMr. Larry F. Clynch\nChairman\nTPM, Incorporated\nP.O. Box 486\nAlpharetta, Georgia 30009-0486\nRe: CPF No. 2-2010-6007\nDear Mr. Clynch:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $74,600. The penalty payment terms are set forth in\nthe Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\n~:.Jeffrey D. Wie\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Wayne Lemoi, Director, Southern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline\nSafety, OPS\nMs. Joy Terral, Terminal Manager, TPM, Incorporated, 2455 North Second Street,\nMemphis, TN 38127\nCERTIFIED MAIL- RETURN RECEIPT REQUESTED [71791000164203235296]\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\nIn the Matter of\nTPM, Incorporated,\n)\n)\n)\n)\n)\nRespondent.\n)\n___________________________ )\nCPF No. 2-2010-6007\nFINAL ORDER\nOn October 19-21, 2010, 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 TPM, Incorporated\n(TPM or Respondent), at the Lucy Woodstock Marine Terminal in Memphis, Tennessee. TPM\nis an independent consulting firm that provides a full range of operations and management\nservices for liquid pipeline and terminal facilities. 1 TPM operates a 9.1-mile anhydrous\nammonia pipeline and pumping station at the Lucy Woodstock\"Marine Terminal on behalf of the\npipeline's owner, E.l. DuPont de Nemours and Company.\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated December 22, 2010, a Notice of Probable Violation and Proposed\nCivil Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding\nthat TPM had committed various violations of 49 C.F.R Part 195 and proposed assessing a civil\npenalty of $74,600 for the alleged violations.\nTPM responded to the Notice by letter dated January 11, 2011 (Response). The company\ncontested one of the allegations of violation, provided an explanation of its actions, and\nrequested that the proposed civil penalty be eliminated. Respondent did not request a hearing\nand therefore has waived its right to one.\nFINDINGS 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)(i), which states:\n1 TPM, Inc., http://www.tpm-clynch.com (last visited 2/6/12); Port of Memphis, http://www.portofmemphis.com\n(last visited 1/23112).\n\n\n\n2\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) The word \"Warning,\" \"Caution,\" or \"Danger\" followed by the\nwords \"Petroleum (or the name of the hazardous liquid transported)\nPipeline,\" or \"Carbon Dioxide Pipeline,\" all of which, except for markers\nin heavily developed urban areas, must be in letters at least 1 inch (25\nmillimeters) high with an approximate stroke of 'l4 inch (6.4\nmillimeters) ....\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(i) by failing to place and\nmaintain line markers over its buried pipeline that properly named the hazardous liquid being\ntransported. Specifically, the Notice alleged that TPM's line markers falsely used the word\n\"Petroleum\" to identify the product being transported, when, in fact, the product was anhydrous\nammonia, a hazardous liquid that is neither petroleum nor a petroleum product? PHMSA\nsubmitted photos of the line markers in question as part of the Violation Report?\nIn its Response, the company did not contest the allegation of violation. TPM acknowledged\nthat it was fully aware that the purpose of the regulation was to identify a pipeline's location and\nto provide guidance for first responders, but that it had been concerned about identifying the\nproduct in the line \"due to continued drug related production in this area.\"4 TPM argued that the\nproposed penalty should be waived, for the reasons discussed more fully in the \"Assessment of\nPenalty\" section below.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.410(a)(2)(i) by failing to place and maintain line markers over its buried\npipeline that properly named the hazardous liquid being transported.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.420(c), which states:\n§ 195.420 Valve maintenance.\n(a) ....\n(c) Each operator shall provide protection for each valve from\nunauthorized operation and from vandalism.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.420(c) by failing to provide\nprotection for each block valve on its pipeline from unauthorized operation and vandalism.\nSpecifically, the Notice alleged that Respondent failed to secure the valve chain on block valve\n2 For definitions of the terms \"petroleum\" and \"petroleum products,\" see 49 C.F.R. § 195.2.\n3 Pipeline Safety Violation Report (January 3, 2011) (Violation Report), Attachment A.\n4 Response at 1.\n\n\n\n3\n#1 and the gate lock on block valve #4, leaving them unprotected from operation by\nunauthorized parties and from vandalism. PHMSA alleged that the chain and gate lock had only\nbeen positioned to appear locked but that, when tested, were actually unlocked.\nIn its Response, TPM admitted that \"during the field inspection two locks were found to be\nunsecured.\" 5 Respondent acknowledged that the valve chain on block valve #1 and the gate lock\nat block valve #4 both appeared to be locked but the mechanical catches did not fully engage.\nTPM argued, however, that the penalty should be waived because of its past performance history\nand for other reasons, as discussed more fully below.\nThe regulation requires that an operator provide \"protection for each valve from unauthorized\noperation and from vandalism\" at all times. Accordingly, based upon a review of all of the\nevidence, I find that Respondent violated 49 C.F.R. § 195.420(c) by failing to provide protection\nfor each block valve from unauthorized operation and from vandalism.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.583, which states:\n§ 195.583 What must I do to monitor atmospheric corrosion control?\n(a) You must inspect each pipeline or portion of pipeline that is\nexposed to the atmosphere for evidence of atmospheric corrosiOn, as\nfollows:\nIf the pipeline is located: Onshore ................... Offshore ................... Then the frequency of inspection is:\nAt least once every 3 calendar years, but\nwith intervals not exceeding 39 months.\nAt least once each calendar year, but\nwith intervals not exceeding 15 months.\n(b) During inspections you must give particular attention to pipe at soil-\nto-air interfaces, under thermal insulation, under disbonded coatings, at\npipe supports, in splash zones, at deck penetrations, and in spans over\nwater.\n(c) If you find atmospheric corrosion during an inspection, you must\nprovide protection against the corrosion as required by § 195.581.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.583 by failing to inspect each\npipeline or portion of pipeline exposed to the atmosphere for evidence of atmospheric corrosion.\nSpecifically, the Notice alleged that TPM had been unable to provide adequate documentation to\ndemonstrate that full atmospheric corrosion control inspections had been completed on all of its\n5 Response at 2.\n\n\n\n4\nabove-ground valves. PHMSA further asserted that when documentation was eventually\nprovided, it lacked sufficient detail to show that Respondent had properly inspected the condition\nof the pipe at soil-to-air interfaces, under thermal insulation, under dis bonded coatings, and at\npipe supports, as required by the regulation.6\nTPM argued that it had in fact performed atmospheric corrosion checks along the system, as\nrequired by 49 C.P.R.§ i95.583. The company contended that its block valve sites and meter\nskids had been painted in 2010 and current records had been maintained on its semi-annual\nmainline valve and station reports. The company stated, in response to PHMSA's request for a\ndetailed report, that it had also developed a new form to be used to document future inspections.\nRespondent's evidence concerning its efforts to improve the company's inspection forms after\nthe PHMSA inspection are not relevant to a determination of whether or not Respondent was in\ncompliance at the time of the inspection. The company failed to present adequate documentation\nof completed atmospheric corrosion control inspections on all above-ground valves. The form\nused by TPM to document valve inspections had a space to indicate if atmospheric corrosion had\nbeen found, but did not show whether full atmospheric corrosion surveys had actually been\nperformed.7 The form provided only a general mention of atmospheric corrosion, with no\nindication as to whether \"particular attention\" was given to the vulnerable areas enumerated in\n§ 195.583(b).\nPHMSA's regulations require that an operator inspect each pipeline for evidence of atmospheric\ncorrosion, and to pay particular attention to certain areas of the pipe that are particularly\nsusceptible to atmospheric corrosion. Upon consideration of all of the evidence, I find that the\ncompany failed to demonstrate that it had completed atmospheric corrosion control inspections\non all above-ground valves and that it paid particular attention to those areas most susceptible to\natmospheric corrosion. In the absence of evidence on Respondent's forms showing that these\nareas received specific attention, PHMSA is unable to verify whether complete atmospheric\ncorrosion surveys were actually performed. Accordingly, based upon a review of all of the\nevidence, I find that Respondent violated 49 C.P.R. § 195.583 by failing to perform atmospheric\ncorrosion inspections of on all portions of its pipeline system exposed to the atmosphere.\nThese findings of violation will be considered prior offenses in any subsequent enforcement\naction taken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under\n6 Violation Report, Attachment C, Semi-Annual Mainline Block Valve Report, at l.\n7 Respondent's Semi-Annual Block Valve Report, dated April 14, 2010, showed a list of \"Code of Valve\nConditions,\" with various conditions that an inspector might find in the course of valve inspections. On this form\nwas Condition No. 6, which stated, \"Atmospheric condition- Is there corrosion or does it need painting?\" For all of\nthe valves on Respondent's Line #l Ammonia that were inspected, no response was provided to this question. /d.\n\n\n\n5\n49 U.S.C. § 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; the Respondent's\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $74,600 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $35,000 for Respondent's violation of\n49 C.F.R. § 195.410, for failing to place and maintain line markers over its buried pipeline that\nproperly named the hazardous liquid being transported. Respondent did not contest the\nallegation but requested a waiver of the proposed penalty based upon its past DOT operational\nperformance and the amount of funds it was spending for security improvements to its anhydrous\nammonia pipeline system. TPM advised that it was in the process of completing installation of a\n$100,000 security system at block valve# 5 to provide 24/7 surveillance of the site. TPM also\ncontended it had received guidance from other government agencies to replace the phrase\n\"anhydrous ammonia\" on its line markers with alternative language that did not reveal the\ncontents of the product being transported.\nI am unconvinced by Respondent's arguments. TPM was fully aware of this agency's explicit\nrequirement that all operators identify the nature of the product being transported in their lines.\nIn fact, in June 2006, Respondent petitioned PHMSA for a special permit to replace the words\n\"anhydrous ammonia\" on its pipeline markers with the words \"chemical pipeline. \" On March\n20, 2008, PHMSA denied the permit, fully explaining its reasons. TPM chose not to appeal that\nfinal agency action; but appears to have simply ignored both the requirements of §195.410 and\nthe agency's denial of the special permit application and proceeded to put misleading\ninformation on its line markers.\nThe potential risk of harm to first responders who could be misled by the false signage in this\ncase is substantial. Emergency personnel responding to a petroleum release are not likely to\nwear the same protective gear required for an anhydrous ammonia release. While it may be\nunderstandable that the company did not want potential criminals and vandals to know that it\nwas transporting anhydrous ammonia, the solution the company chose was not only\ninappropriate but dangerous, given the volatile and hazardous nature of the product being\ntransported. Rather than violate pipeline safety regulations, Respondent could have considered\ninstalling other measures such as motion detector lights, motion detector alarms, security patrols,\nand/or video surveillance. Respondent has not presented any information to justify its failure to\ncomply with the regulation. The nature, circumstances, and gravity of Respondent's violation\nsupport the proposed civil penalty.\n8 TPM Waiver Request (June 12, 2006), Docket# PHMSA-2007-28019, available at\nhttp://www.regulations.gov/#!searchResults;a=PHMSA;dkt=N;cp=C;sd=true;rpp=lO;po=O;dktid=PHMSA-2007-\n28019. .\n\n\n\n6\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $35,000 for violation of 49 C.F.R. § 195.410(a)(2)(i).\nItem 2: The Notice proposed a civil penalty of $25,900, for Respondent's violation of\n49 C.F.R. § 195.420(c), for failing to provide protection for each block valve from unauthorized\noperation and vandalism. As noted above, I found that Respondent had failed to secure the valve\nchain on block valve #1 and the gate lock on block valve #4, leaving them unprotected from\noperation by unauthorized parties and vandalism. Respondent argued that the penalty should be\nwaived, based on its past operational experience with regard to maintenance and pipeline\nintegrity.9 The company acknowledged that two locks were unsecured during the field\ninspection, but suggested that its redundant locks and security measures prevented unauthorized\noperation and vandalism and therefore should serve as mitigation for the proposed penalty: 10\nRespondent's arguments miss the purpose and intent of the regulation, Section 195.420(c) states\nthat each operator must provide protection for each valve from unauthorized operation and\nvandalism. The proper maintenance and security of valves are critical to the safe operation and\nreliability of any hazardous liquid pipeline system. Although it appears that the deficiencies in\nRespondent's protection of its block valves, to date, have not led to any actual incidents\ninvolving unauthorized operation of its pipeline or significant vandalism, the company is obliged\nto take effective measures to address such threats to its system. For example, the unsecured\nblock valve #4 fence gate allowed access to the valve site through an unlocked fence gate and\ncould foster vandalism of the valve.\nWhile the duration of this violation is unknown, the PHMSA inspector discovered the\ndisengaged and unsecured locks himself while performing a field inspection, with the operator\npresent. The gravity of the violation is high due to a combination of several factors, including\nthe increased risk of vandalism through the unlocked gate, the significant threat to the safe\noperation of the pipeline, and the possible harm that could result from a release of anhydrous\nammonia in a High Consequence Area (HCA) near the Mississippi River in Memphis. 11\nWith regard to culpability, TPM was apparently cognizant of the regulatory requirement and\ntook some steps to address the issue but did not achieve compliance. Respondent had locks in\nplace to prevent unauthorized operation of the valve but they were unsecured. The company\npositioned the block valve #1 chain as well as the gate #4lock to appear secured when they\nwere not fully engaged, suggesting that TPM was well aware of the regulatory requirement under\n§ 195.420(c). Although Respondent referenced a concern for drug-related security issues along\nthe pipeline, the company still failed to protect the valves. Respondent's post-violation\ncompliance efforts do not warrant a reduction in the civil penalty.\n9 Response at 2.\n10 TPM contended that multiple valve locks, hardened chain and locked valve boxes were in place to prevent\nunauthorized operation and vandalism of the site and that the valve station was \"within a Homeland Security\nregulated and patrolled site.\" !d.\n11 A \"High Consequence Area\" is an area defined as either a Class 3 location or a Class 4 location under\n49 C.P.R. § 192.5; any area in a Class 1 or Class 2 location where the potential impact radius is greater than 660 feet\n(200 meters) and the area within a potential impact circle contains 20 or more buildings intended for human\noccupancy; or as further det1ned in 49 C.P.R. § 192. 903. See Violation Report at I.\n\n\n\n7\nAccordingly, having reviewed the record and considered the assessment criteria, I assess\nRespondent a civil penalty of $25,900 for violation of 49 C.F.R. § 192.420(c).\nItem 3: The Notice proposed a civil penalty of $13,700 for Respondent's violation of\n49 C.F.R. § 195.583, for failing to provide complete records showing that.it had performed\natmospheric corrosion inspection on all portions of its pipeline system exposed to the\natmosphere. As noted above, I found that TPM failed to demonstrate it had conducted proper\natmospheric corrosion control inspections on all above-ground valves and had performed\ncomplete corrosion surveys. Respondent argued that the penalty should be waived based on its\npast operational history.\nI disagree. Operators are charged with the responsibility to maintain lawful and safe operation of\ntheir systems at all times. In assessing penalties, PHMSA considers an operator's good-faith\nefforts to achieve compliance prior to discovery of a violation, but in this case any such evidence\nis lacking. The duration of the violation here is unknown but the records provided to the\ninspector included years 2007 through 2010. If anything, these records suggest that the company\nfailed to conduct proper inspections for years. The gravity of the violation is further heightened\ndue to the pipeline being located in an HCA. Maintaining a rigorous atmospheric corrosion\ninspection program ensures reasonable promptness in the detection of all surface conditions that\ncould affect the safe operation of the pipeline.\nTPM is fully culpable, insofar as it made only a minimal attempt to comply with the regulation\nand to implement the requirement for comprehensive atmospheric corrosion inspections at the\ncompany's facilities. Respondent has presented no information that would warrant elimination\nor a reduction in the amount of the civil penalty proposed. Accordingly, having reviewed the\nrecord and considered the assessment criteria, I assess Respondent a civil penalty of $13,700 for\nviolation of 49 C.F.R. § 195.583.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $74,600.\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 (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $74,600 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.\n\n\n\n8\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2\"d Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement ofthe issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\nFEB 2 22012\nDate Issued\nr--~~~r:\nAssociate Administrator\nfor Pipeline Safety\n\n220106007_Decision on Petition for Reconsideration_10122012_text.pdf\n\nOCTOBER 12, 2012\nMr. Larry F. Clynch\nChief Executive Officer\nTPM, Incorporated\nP. O. Box 486\nAlpharetta, Georgia 30009-0486\nCPF No. 2-2010-6007\nDear Mr. Clynch:\nEnclosed is my Decision on the Petition for Reconsideration filed by TPM, Incorporated, in the\nabove-referenced case. The Decision grants in part, and denies in part, TPM’s Petition. I\naffirm the findings of violation in the Final Order but grant the Petition in part by reducing the\nassessed penalty to $63,410. The penalty payment terms are set forth in the Final Order. This\nenforcement action closes automatically upon payment. Service of the Final Order by certified\nmail is deemed effective upon the date of mailing, or as otherwise provided under\n49 C.F.R. § 190.5.\nThank you for your cooperation in this matter\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure:\ncc: Mr. Wayne T. Lemoi, Director, Southern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nVIA CERTIFIED 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______________________________\n)\nIn the Matter of )\n)\nTPM, Incorporated, ) CPF No. 2-2010-6007\n)\nRespondent. )\n______________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nOn February 22, 2012, pursuant to 49 U.S.C. § 60122 and 49 C.F.R. § 190.213, the Pipeline and\nHazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), issued a\nFinal Order in this proceeding, finding that TPM, Incorporated (TPM or Petitioner), had\ncommitted three violations of the Pipeline Safety Regulations, codified at 49 C.F.R. Part 195.\nThe Final Order assessed a civil penalty of $74,600 for certain line markers, valve maintenance,\nand atmospheric corrosion control violations.\nOn March 6, 2012, TPM submitted a Petition for Reconsideration (Petition) of the Final Order,\nrequesting that PHMSA reconsider the penalty in light of additional information submitted by\nTPM and because the penalty “would greatly damage our small business and could cause great\ndoubt and difficulty for continuation of a small business.”1 TPM reiterated arguments put\nforward in its Response to the three allegations of violation in the Notice of Probable Violation\nand Proposed Civil Penalty (Notice), namely, that (1) identifying the product being transported\nin the pipeline on line markers had led to an increase in criminal activity, (2) it had indeed\nperformed atmospheric corrosion checks along the system, and (3) its block valve sites and meter\nskids had been painted in 2010, as required by 49 C.F.R. Part 195.2 Petitioner requested that\nPHMSA reduce the total assessed penalty from $74,600 to $3,000.\nOn March 21, 2012, the Office of Chief Counsel, PHMSA, responded to the Petition, noting that\nTPM was seeking relief from the Final Order based upon the claim that the proposed penalty\nwould jeopardize TPM’s ability to continue in business as a going concern. By letters dated May\n9 and July 20, 2012, Petitioner submitted federal corporate income tax returns and other financial\ninformation to support its claim of financial hardship, including a statement that TPM had\nexperienced a significant reduction-in-force since the time of the PHMSA inspection.\n1 Petition at 1.\n2 In the Matter of TPM Pipeline Company, Final Order, dated July 22, 2011, CPF No. 3-2009-5018; Responses\ndated November 19, 2009, February 5, 2010 and March 17, 2010 (collectively, Response).\n\n\n\n2\nFor the reasons set forth below, I affirm the findings of violation in the Final Order but grant the\nPetition in part by reducing the assessed penalty to $63,410, payable in six installments.\nStandard of Review\nA respondent is afforded the right to petition the Associate Administrator for reconsideration of a\nFinal Order. However, that right does not constitute an appeal or an opportunity to seek a de\nnovo review of the record. Instead, it is a venue for presenting the Associate Administrator with\ninformation that was not previously available or requesting that any errors in the Final Order be\ncorrected. Requests for consideration of additional facts or arguments must be supported by a\nstatement of reasons as to why those facts or arguments were not presented prior to the issuance\nof the Final Order. Repetitious information or arguments will not be considered.3\nAnalysis\nIn its Petition, TPM did not submit any new arguments but reiterated the arguments and\nexplanations made in its Response. The Petitioner also submitted articles on the theft of\nanhydrous ammonia, a chart showing dates of attempted breaches of its facility, and invoices for\npaint purchased to use on block valve sites and meter skids exposed to the atmosphere and\nsusceptible to atmospheric corrosion.4\nIn Item 1 of the Final Order, I found that TPM had failed to place and maintain line markers over\nits buried pipeline that properly named the hazardous liquid being transported. TPM’s line\nmarkers used the word “Petroleum” to identify the product being transported, when, in fact, the\nproduct was anhydrous ammonia, a hazardous liquid that is neither petroleum nor a petroleum\nproduct. Petitioner was fully aware of this agency’s explicit requirement that all operators\nidentify the nature of the product being transported in their lines. In fact, in June 2006,5\nRespondent petitioned PHMSA for a special permit to replace the words “anhydrous ammonia”\non its pipeline markers with the words “chemical pipeline.” On March 20, 2008, PHMSA\ndenied the permit application, fully explaining its reasons. TPM chose not to appeal that final\nagency action but appears to have simply ignored both the requirements of § 195.410 and the\nagency’s denial of the special permit application and proceeded to put misleading information on\nits line markers.\nIn Item 2 of the Final Order, I found that Petitioner had failed to provide protection for each\nblock valve on its pipeline from unauthorized operation and vandalism. TPM failed to secure the\nvalve chain on block valve #1 and the gate lock on block valve #4, leaving them unprotected\n3 49 C.F.R. § 190.215(c).\n4 Atmospheric corrosion occurs on a pipeline when moisture from the air, along with contaminates, comes into\ncontact with the exposed metal.\n5 TPM Waiver Request (June 12, 2006), Docket # PHMSA-2007-28019, available at\nhttp://www.regulations.gov/#!searchResults;a=PHMSA;dkt=N;cp=C;sd=true;rpp=10;po=0;dktid=PHMSA-2007-\n28019.\n\n\n\n3\nfrom operation by unauthorized parties and from vandalism. The gravity of the violation was\nsubstantial due to a combination of factors, including the increased risk of vandalism via the\nunlocked gate, the significant threat to the safe operation of the pipeline, and the possible harm\nthat could result from a release of anhydrous ammonia in a High Consequence Area near the\nMississippi River in Memphis.\nIn Item 3 of the Final Order, I found that TPM had failed to demonstrate it had conducted proper\natmospheric corrosion control inspections on all of its above-ground valves and that it had\nperformed complete corrosion surveys. While Petitioner submitted an invoice for paint, it does\nnot constitute evidence that contradicts the Final Order. I find no basis to conclude that TPM\nperformed the atmospheric corrosion control inspections on all portions of its pipeline system\nexposed to the atmosphere.\nConclusion\nBased on a review of the record and the information provided in the Petition, I find, pursuant to\n49 C.F.R. § 109.215(c), that TPM’s petition is repetitious. Consequently, there is no need to\nconsider the additional information and arguments presented in the Petition relating to the\nfindings of violation in the Final Order. Notwithstanding such finding, I have considered all the\ninformation and arguments submitted by Petitioner and find no basis to reconsider or alter the\nfindings of violation in the Final Order. Therefore, I deny the Petition and affirm the findings of\nviolation set forth in the Final Order.\nAs for TPM’s contention that it is a small business and that the assessed civil penalty would\nadversely impact its ability to remain in business, a review of the record and financial documents\nsubmitted by TPM reveals that Petitioner has other streams of revenue. However, I agree that\nPetitioner is a small business and accept that it has experienced a reduction-in-force from 12 full-\ntime employees to two full-time and two part-time employees. Therefore, after review of the\nrecord and consideration of the assessment criteria, I assess TPM a reduced civil penalty of\n$63,410.\nWhile the $63,410 civil penalty assessed in the Final Order is now due, I hereby order that the\npenalty may be paid in six installments. The first payment of $10,570 is due on or before\nNovember 1, 2012, with the remaining five equal installments of $10,568 being due and payable\non the first day of each succeeding month. The payment instructions were set forth in detail in\nthe Final Order. Federal regulations (49 C.F.R. § 89.21(b)(3)) require that all payments be made\nby wire transfer, through the Federal Reserve Communications System (Fedwire), to the account\nof the U.S. Treasury. Detailed instructions are contained in the enclosure. Questions concerning\nwire transfers should be directed to: Financial Operations Division (AMZ-341), Federal Aviation\nAdministration, Mike Monroney Aeronautical Center, P.O. Box 269039, Oklahoma City, OK\n73125; (405) 954-8893.\nFailure to pay the $63,410 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. Failure to pay\nthe civil penalty may result in referral of the matter to the Attorney General for appropriate\naction in a district court of the United States.\n\n\n\n4\nThis Decision on Reconsideration is the final administrative action in this proceeding.\n___________________________________ _________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n\n220106007_Final Order_02222012_text.pdf\n\nFEB 22 2012\nMr. Larry F. Clynch\nChairman\nTPM, Incorporated\nP.O. Box 486\nAlpharetta, Georgia 30009-0486\nRe: CPF No. 2-2010-6007\nDear Mr. Clynch:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $74,600. The penalty payment terms are set forth in\nthe Final Order. This enforcement action closes automatically upon receipt of payment.\nService of the Final Order by certified mail is deemed effective upon the date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Wayne Lemoi, Director, Southern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, Pipeline\nSafety, OPS\nMs. Joy Terral, Terminal Manager, TPM, Incorporated, 2455 North Second Street,\nMemphis, TN 38127\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED [71791000164203235296]\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 )\nTPM, Incorporated, ) CPF No. 2-2010-6007\n)\n)\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn October 19-21, 2010, 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 TPM, Incorporated\n(TPM or Respondent), at the Lucy Woodstock Marine Terminal in Memphis, Tennessee. TPM\nis an independent consulting firm that provides a full range of operations and management\nservices for liquid pipeline and terminal facilities.\nammonia pipeline and pumping station at the Lucy Woodstock Marine Terminal on behalf of the\npipeline’s owner, E.I. Du Pont de Nemours and Company.\n1 TPM operates a 9.1-mile anhydrous\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated December 22, 2010, a Notice of Probable Violation and Proposed\nCivil Penalty (Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding\nthat TPM had committed various violations of 49 C.F.R Part 195 and proposed assessing a civil\npenalty of $74,600 for the alleged violations.\nTPM responded to the Notice by letter dated January 11, 2011 (Response). The company\ncontested one of the allegations of violation, provided an explanation of its actions, and\nrequested that the proposed civil penalty be eliminated. Respondent did not request a hearing\nand therefore has waived its right to one.\nFINDINGS 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)(i), which states:\n1 TPM, Inc., http://www.tpm-clynch.com (last visited 2/6/12); Port of Memphis, http://www.portofmemphis.com\n(last visited 1/23/12).\n\n\n\n2\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) The word “Warning,” “Caution,” or “Danger” followed by the\nwords “Petroleum (or the name of the hazardous liquid transported)\nPipeline,” or “Carbon Dioxide Pipeline,” all of which, except for markers\nin heavily developed urban areas, must be in letters at least 1 inch (25\nmillimeters) high with an approximate stroke of ¼ inch (6.4\nmillimeters)….\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.410(a)(2)(i) by failing to place and\nmaintain line markers over its buried pipeline that properly named the hazardous liquid being\ntransported. Specifically, the Notice alleged that TPM’s line markers falsely used the word\n“Petroleum” to identify the product being transported, when, in fact, the product was anhydrous\nammonia, a hazardous liquid that is neither petroleum nor a petroleum product.2 PHMSA\nsubmitted photos of the line markers in question as part of the Violation Report.3\nIn its Response, the company did not contest the allegation of violation. TPM acknowledged\nthat it was fully aware that the purpose of the regulation was to identify a pipeline’s location and\nto provide guidance for first responders, but that it had been concerned about identifying the\nproposed penalty should be waived, for the reasons discussed more fully in the “Assessment of\nproduct in the line “due to continued drug related production in this area.”4 TPM argued that the\nPenalty” section below.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.410(a)(2)(i) by failing to place and maintain line markers over its buried\npipeline that properly named the hazardous liqui","truncated":true,"body_characters":58238}