{"operation":"document","citation":"CPF 220115009","title":"PRODUCTS (SE) PIPE LINE CORPORATION — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-10-20","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.406(a)(2), 195.410(a)(1).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220115009.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220115009.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220115009","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220115009","body":"Notice of Probable Violation involving PRODUCTS (SE) PIPE LINE CORPORATION. PHMSA's enforcement data identifies the cited regulations as 195.406(a)(2),  195.410(a)(1). The case was opened on 2011-10-20 and is reported as closed as of 2013-05-01. Proposed civil penalty: $21,200. Assessed civil penalty: $0. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220115009_closure letter_05012013_.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_closure%20letter_05012013_.pdf\n\n220115009_closure letter_05012013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_closure%20letter_05012013_text.pdf\n\n220115009_Final Order_02282013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_Final%20Order_02282013.pdf\n\n220115009_Final Order_02282013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_Final%20Order_02282013_text.pdf\n\n220115009_NOPV PCP PCO_10202011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_NOPV%20PCP%20PCO_10202011.pdf\n\n220115009_NOPV_PCP_PCO_10202011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_NOPV_PCP_PCO_10202011_text.pdf\n\n220115009_Operator_Response_Notice_11302011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220115009/220115009_Operator_Response_Notice_11302011.pdf\n\n220115009_closure letter_05012013_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMay 1, 2013\nMr. Wayne Simmons\nVice President, Operations\nProducts Pipelines\nPlantation Pipe Line Company\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 1000\nHouston, TX 77002\nCPF 2-2011-5009\nDear Mr. Simmons:\nOn February 28, 2013, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS) issued to Plantation Pipe Line Company (PPL) a\nFinal Order in the above-referenced case. The Order included a Compliance Order. OPS\nwithdrew the proposed civil penalty.\nThe Compliance Order required PPL to “... prepare a plan to confirm the maximum operating\npressure (MOP) of the Bremen-Knoxville Line (Line 8KX)...” The intent was that PPL must\nnot operate its Line 8KX above an MOP of 1440 psig without an approved plan from the\nDirector of the OPS Southern Region.\nThe OPS Southern Region received your correspondence dated April 24, 2013, in which you\nstated PPL’s intent to maintain the MOP of Line 8KX at 1440 psig. You further stated,\n“Should it be necessary to increase the MOP in the future, KM [PPL] will develop a plan and\nsubmit it to the Director, Southern Region as required by the Order.”\nYour actions make the plan required by the Compliance Order moot at this point. Therefore,\nwe have closed this case with the understanding (as stated in your letter) that Line 8KX will\noperate at an MOP of 1440 psig or less and that PPL will develop a plan and submit it to the\nDirector, OPS Southern Region as required by the Compliance Order if the need to raise the\nMOP above 1440 psig occurs at any time in the future. That is, the terms of the Compliance\nOrder survive this case closure for PPL [KM] or any future operator of the pipeline.\n\n\n\nThank you for your cooperation in this matter.\nSincerely,\nWayne T. Lemoi\nDirector, Office of Pipeline Safety\nPHMSA Southern Region\n\n220115009_NOPV PCP PCO_10202011.pdf\n\nof Transportatior\nJ.S. Deparimen\n233 Peachtree Street Ste. 600\nAtlanta, GA 30303\nPipeline and\nAdministration\nHazardous Materials Safely\nNOTICE OF PROBABLE VIOLATION\nPROPOSED CIVIL PENALTY\nand\nPROPOSED COMPLIANCE ORDER\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nOctober 20, 2011\nMr. Ron McClain\nVice President\nPlantation Pipe Line Company\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 100\nHouston, TX 770022\nCPF 2-2011-5009\nDear Mr. McClain:\nOn August 15-18, 2011, a representative of the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) pursuant to Chapter 601 of 49 United States Code inspected the\nPlantation Pipe Line Company (PPL) refined petroleum products pipeline from Bremen,\nGeorgia, to Knoxville, Tennessee (Line 8KX). PPL is a subsidiary of Kinder Morgan Energy\nPartners, L.P.\nAs a result of the inspection, it appears that PPL has committed probable violations of the\nPipeline Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and\nthe probable violations are:\n1. §195.406 Maximum Operating Pressure (MOP).\n(a) Except for surge pressures and other variations from normal operations, no\noperator may operate a pipeline at a pressure that exceeds any of the following:\n...(2) The design pressure of any other component on the pipeline.\nPPL did not properly establish the maximum operating pressure (MOP) of the Bremen-\nKnoxville Line (Line 8KX) because the MOP provided by PPL at the time of the\ninspection exceeded the design pressure of pipeline components.\n\n\n\nPPL established the MOP for the above-referenced pipeline as 1,480 psig. During the\nPHMSA field inspection, the inspector observed that mainline valves throughout the\nsystem had design MOPs of 1,440 psig (per the manufacturer's ID plates). Photos of\nmanufacturer's ID plates, stating a design MOP of 1,440 psig were taken at a\nrepresentative valve.\n2. 8195.410 Right-of-Way Markers\n(a) Except as provided in paragraph (b) of this section, each operator shall place and\nmaintain line markers over each buried pipeline in accordance with the\nfollowing:\n(1) Markers must be located at each public road crossing, at each railroad crossing,\nand in sufficient number along the remainder of each buried line so that its\nlocation is accurately known\nPPL did not place line markers in sufficient number along the buried pipeline so that its\nlocation was accurately known.\nRight-of-way (ROW) markers were missing, damaged, or not visible at several locations.\nDuring the inspection, the inspector observed that there were no line markers along the\nROW at the Southern Railroad crossing. Furthermore, line markers were not in sufficient -\nnumbers to adequately identify the location of the pipeline upstream or downstream of\nLittle Armuchee Creek or upstream or downstream of Highway 11 (County Road 331).\nProposed Civil Penalty\nUnder 49 United States Code, § 60122, you are subject to a civil penalty not to exceed\n$100,000 for each violation for each day the violation persists up to a maximum of\n$1,000,000 for any related series of violations. The Compliance Officer has reviewed the\ncircumstances and supporting documentation involved in the above probable violations and\nhas recommended that you be preliminarily assessed a civil penalty of $21,200 as follows:\nItem number\nPENALTY\n$21,200\nWarning Items\nWith respect to item 2 we have reviewed the circumstances and supporting documents\ninvolved in this case and have decided not to conduct additional enforcement action or\npenalty assessment proceedings at this time. We advise you to promptly correct this item. Be\nadvised that failure to do so may result in Plantation Pipe Line Company being subject to\nadditional enforcement action.\nProposed Compliance Order\nWith respect to item 1, pursuant to 49 United States Code § 60118, the Pipeline and\nHazardous Materials Safety Administration proposes to issue a Compliance Order to\nPlantation Pipe Line Company. Please refer to the Proposed Compliance Order, which is\nenclosed and made a part of this Notice.\n2\n\n\n\nResponse to this Notice\nEnclosed as part of this Notice is a document entitled Response Options for Pipeline\nOperators in Compliance Proceedings. Please refer to this document and note the response\noptions. Be advised that all material you submit in response to this enforcement action is\nsubject to being made publicly available. If you believe that any portion of your responsive\nmaterial qualifies for confidential treatment under 5 U.S.C. 552(b), along with the complete\noriginal document you must provide a second copy of the document with the portions you\nbelieve qualify for confidential treatment redacted and an explanation of why you believe the\nredacted information qualifies for confidential treatment under 5 U.S.C. 552(b). If you do not\nrespond within 30 days of receipt of this Notice, this constitutes a waiver of your right to\ncontest the allegations in this Notice and authorizes the Associate Administrator for Pipeline\nSafety to find facts as alleged in this Notice without further notice to you and to issue a Final\nOrder.\nIn your correspondence on this matter, please refer to CPF 2-2011-5009 and for each\ndocument you submit, please provide a copy in electronic format whenever possible.\nSincerely,\nPHMSA Southern Region\nEnclosures: Proposed Compliance Order\nResponse Options for Pipeline Operators in Compliance Proceedings\n\n\n\nPROPOSED COMPLIANCE ORDER\nPursuant to 49 United States Code § 60118, the Pipeline and Hazardous Materials Safety\nCompliance Order incorporating the following remedial requirements to ensure the\nAdministration (PHMSA) proposes to issue to Plantation Pipe Line Company (PPL) a\n1. In regard to Item Number 1 of the Notice pertaining to the failure of PPL to properly\n\"Line 8KX), PPL must prepare a plan to properly establish the MOP of the reference‹\nestablish the maximum operating pressure (MOP) of the Bremen-Knoxville Line\npipe line within 120 days of the receipt of this Order. The plan must meet the regulations\nin $195.406.\n2. PPL must submit the plan described in Item 1 above to the Director, PHMSA Southern\nRegion for review and approval not later than 60 days after the receipt of this Order.\n3. It is requested (not mandated) that PPL maintain documentation of the safety\nimprovement costs associated with fulfilling this Compliance Order and submit the total\nto Wayne T. Lemoi, Director, Southern Region, Pipeline and Hazardous Materials Safety\nAdministration. It is requested that these costs be reported in two categories: 1)-total cost\nassociated with preparation/revision of plans, procedures, studies and analyses, and 2)\ntotal cost associated with replacements, additions, and other changes to pipeline\ninfrastructure.\n4.\n\n220115009_closure letter_05012013_.pdf\n\nU.S. Department\n233 Peachtree Street Ste. 600\nof Transportation\nAtlanta, GA 30303\nPipeline and\nAdministration\nHazardous Materials Safety\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nMay 1, 2013\nMr. Wayne Simmons\nVice President, Operations\nProducts Pipelines\nPlantation Pipe Line Company\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 1000\nHouston, TX 77002\nCPF 2-2011-5009\nDear Mr. Simmons:\nOn February 28, 2013, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS) issued to Plantation Pipe Line Company (PPL) a\nFinal Order in the above-referenced case. The Order included a Compliance Order. OPS\nwithdrew the proposed civil penalty.\nThe Compliance Order required PPL to \"... prepare a plan to confirm the maximum operating\npressure (MOP) of the Bremen-Knoxville Line (Line 8KX)... \" The intent was that PPL must\nnot operate its Line 8KX above an MOP of 1440 psig without an approved plan from the\nDirector of the OPS Southern Region.\nThe OPS Southern Region received your correspondence dated April 24, 2013, in which you\nstated PPL's intent to maintain the MOP of Line 8KX at 1440 psig. You further stated,\n\"Should it be necessary to increase the MOP in the future, KM [PPL] will develop a plan and\nsubmit it to the Director, Southern Region as required by the Order.\"\nYour actions make the plan required by the Compliance Order moot at this point. Therefore,\nwe have closed this case with the understanding (as stated in your letter) that Line 8K X will\noperate at an MOP of 1440 psig or less and that PPL will develop a plan and submit it to the\nDirector, OPS Southern Region as required by the Compliance Order if the need to raise the\nMOP above 1440 psig occurs at any time in the future. That is, the terms of the Compliance\nOrder survive this case closure for PPL [KM] or any future operator of the pipeline.\n\n\n\nThank you for your cooperation in this matter.\nSincerely,\nDirector, Office of Pipeline Safety\nPHMSA Southern Region\n\n220115009_Final Order_02282013_text.pdf\n\nFEBRUARY 28, 2013\nMr. Ron McClain\nVice President, Operations\nPlantation Pipe Line Company\nKinder Morgan Energy Partners, L.P.\n500 Dallas Street, Suite 1000\nHouston, TX 770022\nRe: CPF No. 2-2011-5009\nDear Mr. McClain:\nPlease find enclosed the Final Order issued in the above-referenced case. It makes a finding of\nviolation and specifies actions that need to be taken by Plantation Pipe Line Company to comply\nwith the pipeline safety regulations. The Final Order withdraws the proposed civil penalty.\nWhen the terms of the compliance order have been completed, as determined by the Director,\nSouthern Region, this enforcement action will be closed. Service of the Final Order by certified\nmail is effective upon the date of mailing as provided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ms. Catherine D. Little, Hunton & Williams LLP, Bank of America Plaza, Suite 4100\n600 Peachtree Street, N.E., Atlanta, GA 30308\nMr. Wayne Lemoi, Director, Southern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\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 )\nPlantation Pipe Line Company, ) CPF No. 2-2011-5009\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nOn August 15–18, 2011, 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 Bremen-Knoxville pipeline (Line 8KX)\noperated by Plantation Pipe Line Company (Plantation or Respondent). Plantation is a\nsubsidiary of Kinder Morgan Energy Partners, L.P. and operates approximately 3,100 miles of\npipeline transporting refined petroleum products from Louisiana to the Washington, D.C. area.1\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued a Notice of\nProbable Violation, Proposed Civil Penalty, and Proposed Compliance Order (Notice) to\nRespondent by letter dated October 20, 2011. In accordance with 49 C.F.R. § 190.207, the\nNotice alleged that Plantation violated 49 C.F.R. § 195.406 and proposed a civil penalty of\n$21,200 for the alleged violation. The Notice further proposed certain corrective action to\nremediate the alleged violation. The Notice included an additional warning item.\nPlantation responded to the Notice by letter dated November 30, 2011. Respondent contested the\nalleged violation and requested a hearing. On June 18, 2012, Respondent submitted pre-hearing\nmaterials that included additional evidence. In accordance with 49 C.F.R. § 190.211, a hearing\nwas held on June 27, 2012, in Atlanta, Georgia, before the Presiding Official from the Office of\nChief Counsel, PHMSA. After the hearing, Respondent provided a post-hearing submission\ndated July 27, 2012.\nFINDING OF VIOLATION\nThe Notice alleged in Item 1 that Respondent violated 49 C.F.R. § 195.406(a)(2), which states:\n1 This information is reported by Plantation for calendar year 2011 pursuant to 49 C.F.R. § 195.49.\n\n\n\n2\n§ 195.406 Maximum operating pressure.\n(a) Except for surge pressures and other variations from normal\noperations, no operator may operate a pipeline at a pressure that exceeds\nany of the following . . .\n(2) The design pressure of any other component of the pipeline.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.406(a)(2) by operating its pipeline\nat a pressure that exceeded the design pressure of a component of the pipeline. Specifically, the\nNotice alleged that Respondent operated the Bremen-Knoxville pipeline (Line 8KX) with a\nmaximum operating pressure (MOP) of 1480 psig even though several mainline valves on the\npipeline had a design pressure of only 1440 psig.\nIn its written submissions and at the hearing, Respondent acknowledged that the five mainline\nvalves at issue were purchased in 1985 with an original design pressure of 1440 psig established\nby the manufacturer. Respondent contended, however, that it had established an independent\ndesign pressure of 1480 psig in 1989, as permitted by a regulatory interpretation issued by\nPHMSA’s predecessor agency in 1981. Respondent produced company records and consensus\nstandards from 1988 and 1989 to support its contention that it had used standard ANSI B16.5\n(1981), which listed a design pressure rating of 1480 psig for these types of valves, and then\nverified that the valves could be safely operated at 1480 psig by performing a hydrostatic test.\nRespondent produced a written plan for the test it had prepared in 1988, which Respondent\nexplained was intended to support a modification of MOP to 1480 psig. According to\nRespondent, the written plan demonstrated that Plantation “utilized sound engineering principles\nin relying on the recognized consensus standard ANSI B16.5 for the appropriate pressure rating\nof the Class 600 flanged fittings, in order to develop the parameters of the hydrotest.”2 In May\n2012, Respondent communicated by email with the manufacturer of the valves and received\nconfirmation that the valves are “suitable for 1480 psig service.”3 Notwithstanding its belief that\nMOP never exceeded design pressure, Respondent agreed to reduce MOP to 1440 psig pending\nthe outcome of this proceeding.\nAt the hearing, OPS acknowledged that under the 1981 interpretation, an operator may establish\nan independent design pressure that is different than the pressure rating established by the\nmanufacturer. After reviewing Respondent’s documentation at the hearing, however, OPS\nopposed Respondent’s claim that it had performed actions necessary to establish an independent\ndesign pressure for the valves in question. Specifically, the Director asserted that Respondent\nhad performed a routine hydrostatic test for purposes of establishing MOP—a test that under the\nregulations was not intended to establish an independent design pressure for the valves.\nThe applicable regulatory requirements are as follows. Section 195.406(a)(2) states that MOP\nmay not exceed the design pressure of any pipeline component, such as a valve. The regulations\n2 Plantation Post-hearing Submission, at 5.\n3 Plantation Post-hearing Submission, Exhibit 3.\n\n\n\n3\nin Part 195, Subpart C (“Design Requirements”), do not specify a precise formula for calculating\ndesign pressure for valves like they do for the design pressure of line pipe.4 Rather, design\nrequirements for valves are contained in § 195.116, which states that each valve must be, among\nother things: of sound engineering design; hydrostatically shell tested and hydrostatically seat\ntested without leakage to at least the requirements set forth in Section 11 of API Standard 6D\n(incorporated by reference, see § 195.3); and marked with the class designation or maximum\nworking pressure to which the valve may be subjected.5\nThe hydrostatic shell and seat tests required by § 195.116 to establish maximum working\npressure, or design pressure, are based on the class and size of the particular valve.6 For\nexample, Section 11 of API Standard 6D (2009) states that the hydrostatic shell test of an eight-\ninch valve must be at least 1.5 times the pressure rating determined in accordance with ASME\nB16.34 (2004) for at least five minutes.\n7 The hydrostatic seat test must be at least 1.1 times the\nrating under ASME B16.34 for at least five minutes. These tests are required to confirm that\neach valve to be installed on a pipeline will be safe to operate at the design pressure established\nby the manufacturer and marked on the valve.8\nAt the hearing, it was not disputed that the manufacturer of the five valves in question had\nhydrostatically shell and seat tested them to the specifications necessary to establish a design\npressure of 1440 psig in accordance with § 195.116. Since the original design pressure of each\nvalve was 1440 psig, § 195.406(a)(2) prohibits MOP from exceeding 1440 psig unless the\noperator had independently established a higher design pressure for the valves.\nIn 1981, PHMSA’s predecessor agency, the Materials Transportation Bureau (MTB) issued a\nwritten interpretation of § 195.406(a)(2) concerning the design pressure of components for\ncalculating MOP. In response to a question about whether the regulation permits operators to\nuse a design pressure that exceeds the pressure rating established by the manufacturer of a valve,\nMTB stated that the manufacturer’s pressure rating is not necessarily an implied limit. The\ninterpretation continued:\nAlthough sound design principles may require that a manufacturer’s\npressure rating and applicable factors in consensus standards be\nconsidered in determining the design pressure of a component, a pipeline\noperator is free under Part 195 to use equally sound principles to derive an\nindependent design pressure.\n4 Under § 195.106, the design pressure for pipe is determined in accordance with the formula: P=(2 St/D )× E × F.\n5 There has been no allegation that Respondent violated § 195.116, but the requirement is relevant to determining\nwhether operating pressure exceeded the design pressure of the valves in question.\n6 Section 11 states that valves must be tested “prior to shipment.”\n7 ASME B16.34 (2004) currently recognizes a pressure rating for Class 600 valves of 1480 psig. At the hearing,\nwitnesses commented that in the 1980s, API Standard 6D rated Class 600 valves at 1440 psig, while other standards\nrated them at 1480 psig. Sometime during the 1990s, API Standard 6D began rating Class 600 valves at 1480 psig.\n8 Sections 195.406(a)(2) and 195.116 have not changed substantively since the 1980s, except that more recent\nversions of API Standard 6D have been incorporated.\n\n\n\n4\nMTB noted that although there is no regulation explicitly stating the actions required to establish\nan independent design pressure above a manufacturer’s rating, the appropriateness of the tests or\ncalculations used by the operator to determine a safe design pressure would be judged by the\nagency according to “sound engineering principles and practices.” MTB stated further that\n“[i]nclusion of particular principles or practices in a generally recognized consensus standard,\nregardless of whether the document is referenced in Part 195, would be a heavy factor to weigh\nin making a judgment about the appropriateness of an operator’s tests or calculations.”\nAt the hearing, the parties disagreed as to whether Respondent had used “equally sound [design]\nprinciples” in 1989 to establish an independent design pressure for the valves.\nRespondent contended that the regulations in Part 195 are performance-based requirements and\nthat neither the regulation nor the 1981 interpretation define the term “equally sound [design]\nprinciples” for purposes of deriving an independent design pressure. Therefore, Respondent\nargued, the performance-based requirements warrant deferring to the operator’s engineering\njudgment. Respondent contended that it had used sound engineering principles and practices\nconsistent with generally recognized consensus standards in 1989 when it relied on ANSI B16.5,\nwhich listed a pressure rating of 1480 psig for Class 600 flanged valves. Respondent then\nverified the valves could safely be operated at 1480 psig using a hydrostatic test.9\nRespondent also argued against finding that “equally sound [design] principles” means the same\nengineering analyses performed at the time of manufacture. Respondent noted that Section 11 of\nAPI Standard 6D only requires hydrostatic shell and seat testing “prior to shipment” by the\nmanufacturer. Respondent contended that operators are limited in their ability to perform certain\ntesting of valves after installation.\nBased on the evidence that has been presented in the record and at the informal hearing, I agree\nthat when establishing an independent design pressure for valves using “equally sound [design]\nprinciples,” it may not always be possible to employ precisely the same methods required under\n§ 195.116 for establishing the original design pressure prior to shipment. For example, both\nparties at the hearing acknowledged that performing a hydrostatic seat test, with the valves\nempty and in the closed position, may be difficult for valves installed on an operational pipeline.\nNotwithstanding, I find that “equally sound” methods must be as close as practicable to the\nmethods required under the regulation for establishing the original design pressure, unless the\noperator can demonstrate an alternative method provides an equivalent level of safety. This\nconclusion is warranted because the regulations do not permit a lower threshold of safety for\nvalves that will be allowed to operate at a higher pressure than originally intended. As § 195.116\ndemonstrates, operators may not rely solely on the calculations and formulas supporting a\nconsensus standard rating to establish the maximum design pressure of a valve. The applicable\nregulations require further testing of “each valve” to ensure the valve is safe at the rating\nselected.\n9 The hydrostatic test performed in 1989 was with the valves in the open position, also referred to as a shell test.\n\n\n\n5\nIn the present case, it was prudent for Respondent to rely on a consensus standard rating for the\nClass 600 flanged valves. The general suitability of Class 600 valves, as later confirmed by the\nmanufacturer, was certainly relevant to the establishment of an independent design pressure. But\na consensus standard rating is not a sole basis for a valve’s design pressure. Employing “equally\nsound [design] principles” to establish an independent design pressure, Respondent should have,\nat a minimum, performed a hydrostatic shell test of the valves in accordance with design\nrequirements in effect at the time, that is, a hydrostatic test of at least 1.5 times the intended\nrating for at least five minutes.\n10\nThe hydrostatic test performed by Respondent to support a modification of MOP did not reach or\nsustain 1.5 times the rating of 1480 psig, or 2220 psig, for at least five minutes at each valve.\nAccording to the written test plan, the range of proposed test pressures at some locations were at\nor above 2220 psig, but some valves had a proposed test pressure that ranged as low as 1850\npsig, which is only 1.25 times the intended valve rating.11 In addition, documentation submitted\nby Respondent shows that actual test pressure on the valves “ranged between 1970 psig\nminimum to a 2107 psig maximum” for a 12.53-hour period.12 The test performed by\nRespondent was not sufficient to establish an independent design pressure because the\nregulations require, at a minimum, testing of valves to a higher pressure.\nFor the reasons stated above, I decline to find that Respondent established an independent design\npressure of 1480 psig in 1989 for the valves in question. Since the design pressure of each valve\nwas 1440 psig, § 195.406(a)(2) prohibits MOP from exceeding that pressure.\nAccordingly, based upon a review of all of the evidence, I find that Respondent violated\n49 C.F.R. § 195.406(a)(2) by operating its pipeline with an MOP of 1480 psig, which exceeded\nthe design pressure of several valves on the pipeline.\nFor the reasons set forth below, this finding of violation will not be considered a prior offense in\nany subsequent enforcement action 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.13\n10 Section 5.2 of API Standard 6D (1977), incorporated by reference in § 195.116 (1989).\n11 See Plantation Pre-hearing Submission, Exhibit B.\n12 Response, Letter from Milbar Hydro-test Inc. to Plantation dated Aug. 31, 1989.\n13 Subsequent to the inspection in this case, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of\n2011, Pub. L. No. 112-90, § 2(a), 125 Stat. 1905, increased the civil penalty liability for a pipeline safety violation to\n$200,000 per violation for each day up to a maximum of $2,000,000 for a related series of violations\n\n\n\n6\nIn determining the amount of a civil penalty under 49 U.S.C. § 60122 and 49 C.F.R. § 190.225, I\nmust consider the following criteria: the nature, circumstances, and gravity of the violation,\nincluding adverse impact on the environment; the degree of Respondent’s culpability; the history\nof Respondent’s prior offenses; the Respondent’s ability to pay the penalty and 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.\nThe Notice proposed a civil penalty of $21,200 for operating a pipeline at a pressure that\nexceeded the design pressure of a component in violation of § 195.406(a)(2).\nWith regard to the nature, circumstances, and gravity of the violation, operating a pipeline at a\npressure exceeding the design pressure of a valve could potentially result in failure of the valve.\nThis could cause a leak or rupture and escape of hazardous liquids, which threatens persons,\nproperty, and the environment. Fortunately, in this case there is no indication that one of the\nvalves experienced a failure during the period from 1989 to 2011.\nWith regard to culpability and good faith, I find as alleged that Respondent was cognizant of the\nregulatory requirement and made an effort to comply with that requirement by consulting a\nconsensus standard for the rating of Class 600 flanged valves and performing a hydrostatic test\nof the entire pipeline based on that rating.\n14\nWith regard to history of prior offenses, the Violation Report noted that two final orders were\nissued to Respondent in 2009. The company did not assert that the proposed penalty would have\nan effect on its ability to continue doing business.\nUnder other matters as justice may require, I have considered Respondent’s argument that it\nshould not be punished for failing to comply with a definition of sound engineering principles\nthat had not been previously articulated.\nRespondent’s contention that an agency may not announce or clarify regulatory interpretations\nthrough enforcement is rejected. Agencies have discretion to set forth regulatory interpretations\nby rulemaking or by adjudication.15 With respect to the civil penalty in this case, however,\nPHMSA finds it would not be appropriate to penalize Respondent for a violation of a design\nstandard that, while explicit in the regulations for valves at the time of manufacture, was less\nthan clear for valves already installed on an operational pipeline. For example, Section 5.1 of\nAPI Standard 6D (1977), incorporated by reference in § 195.116 (1989), specified that certain\ntesting shall be performed “prior to shipment from the manufacturer’s works.” While it is\n14 See Pipeline Safety Violation Report at 5-6 (Oct. 21, 2011).\n15 NLRB v. Bell Aerospace Co., 416 U.S. 267, 292–94 (1974) (finding that prior case law dictates that the agency is\n“not precluded from announcing new principles in an adjudicative proceeding and that the choice between\nrulemaking and adjudication lies in the first instance within the [agency’s] discretion”) (citing SEC v. Chenery\nCorp., 332 U.S. 194, 202 (1947) and NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969)).\n\n\n\n7\nreasonable to conclude that “equally sound [design] principles” for establishing an independent\ndesign pressure must be as close as practicable to the methods for establishing the original design\npressure to ensure an equivalent level of safety, that requirement was not stated with enough\nclarity in the regulation or the 1981 interpretation to warrant a civil penalty here. The present\ncase appears to be the first instance in which PHMSA has adjudicated this particular issue.\nAccordingly, having reviewed the record and considered the assessment criteria, I withdraw the\nproposed civil penalty. In addition, the violation will not be considered a prior offense in any\nsubsequent enforcement action taken against Respondent.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to the violation cited above. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids by\npipeline or who owns or operates a pipeline facility is required to comply with the applicable\nsafety standards established under chapter 601.\nPursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R. § 190.217, Respondent is\nordered to take the following actions to ensure compliance with the pipeline safety regulations\napplicable to its operations:\n1. Prepare a plan to confirm the maximum operating pressure (MOP) of the Bremen-\nKnoxville Line (Line 8KX), with the actions required by the plan to be completed within\n60 days of the Director’s approval of the plan. The plan must meet applicable pipeline\nsafety requirements in 49 C.F.R. Part 195, including § 195.406.\n2. Submit the plan to the Director, Southern Region, for review and approval within 60 days\nof the receipt of this Order.\n3. Maintain an MOP on Line 8KX that is no higher than 1440 psig unless and until the\nDirector has approved the plan submitted pursuant to this Order and Plantation has\ncompleted actions pursuant to the plan that confirm a higher MOP.\n4. It is requested that Plantation maintain documentation of the safety improvement costs\nassociated with fulfilling this Compliance Order and submit the total to the Director,\nSouthern Region. It is requested that these costs be reported in two categories: (1) total\ncost associated with preparation/revision of plans, procedures, studies and analyses; and\n(2) total cost associated with replacements, additions, and other changes to pipeline\ninfrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by Plantation demonstrating good cause for an extension.\n\n\n\n8\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $200,000 for each violation for each day the violation continues or in referral to the\nAttorney General for appropriate relief in a district court of the United States.\nWARNING ITEM\nWith respect to Item 2, the Notice alleged a probable violation of Part 195 and specifically\nconsidered this to be a warning item. The warning was for:\n49 C.F.R. § 195.410(a)(1) – Respondent’s alleged failure to have line markers over\nburied pipelines at each public road crossing, at each railroad crossing, and in sufficient\nnumber along the remainder of the buried line so that its location is accurately known.\nThe Notice alleged there were no line markers along the right-of-way at the Southern\nRailroad crossing, and markers were not in sufficient numbers to identify the location of\nthe pipeline upstream and downstream of Little Armuchee Creek or Highway 11 (County\nRoad 331).\nIf a violation of this provision is identified in the future, Respondent may be subject to additional\nenforcement.\nUnder 49 C.F.R. § 190.215, Respondent may submit a petition for reconsideration of this Final\nOrder to the Associate Administrator for Pipeline Safety, PHMSA, 1200 New Jersey Avenue SE,\nEast Building, 2nd Floor, Washington, DC 20590, no later than 20 days after receipt of the Final\nOrder by the Respondent. Any petition submitted must contain a brief statement of the issue(s)\nand meet all other requirements of 49 C.F.R. § 190.215. The terms of the order, including the\ncorrective action, remain in effect upon the filing of a petition, unless the Associate\nAdministrator, upon request, grants a stay.\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ ________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":36468}