{"operation":"document","citation":"CPF 220125004","title":"GENESIS PIPELINE USA, L.P. — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-05-21","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.432, 195.49, 195.561(b), 195.579, 195.589.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220125004.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220125004.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220125004","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220125004","body":"Notice of Probable Violation involving GENESIS PIPELINE USA, L.P.. PHMSA's enforcement data identifies the cited regulations as 195.432,  195.49,  195.561(b),  195.579,  195.589. The case was opened on 2012-05-21 and is reported as closed as of 2012-10-16. Proposed civil penalty: $12,500. Assessed civil penalty: $12,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220125004_Final Order_10162012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Final%20Order_10162012.pdf\n\n220125004_Final Order_10162012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Final%20Order_10162012_text.pdf\n\n220125004_nopv_pcp_05212012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_nopv_pcp_05212012.pdf\n\n220125004_nopv_pcp_05212012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_nopv_pcp_05212012_text.pdf\n\n220125004_Operator Response_ 06152012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Operator%20Response_%2006152012.pdf\n\n220125004_Final Order_10162012_text.pdf\n\nOCTOBER 16, 2012\nMr. Mike Moore\nVice President Pipelines and Trucking Operations\nGenesis Pipeline USA, L.P.\n919 Milam, Suite 2100\nHouston, Texas 77002-5417\nRe: CPF No. 2-2012-5004\nDear Mr. Moore:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $12,500. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided 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, PHMSA\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____________________________________\n)\nIn the Matter of )\n)\nGenesis Pipeline USA, L.P., ) CPF No. 2-2012-5004\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nBetween November 2, 2011 to February 16, 2012, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the written\noperations and maintenance (O&M) procedures, facilities, and records of Genesis Pipeline USA,\nL.P. (Genesis or Respondent) in Alabama. Genesis’ pipeline system in Alabama and Florida\nconsists of 100 miles that transport both trucked and field produced crude oil into several\nterminals, including Shell's Mobile, Alabama refinery.\n1\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated May 21, 2012, a Notice of Probable Violation and Proposed Civil\nPenalty (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance\nwith 49 C.F.R. § 190.207, the Notice proposed finding that Genesis had committed various\nviolations of 49 C.F.R. § Part 195 and proposed assessing a civil penalty of $12,500 for one\nprobable violation and a warning for four probable violations. The warning items required no\nfurther action, but warned the operator to correct the probable violation.\nGenesis responded to the Notice by letter to PHMSA dated June 15, 2012 (Response). The\ncompany did not contest the allegations but provided information concerning corrective actions it\nhas taken in response to the Notice. Respondent did not request a hearing and therefore has\nwaived its right to one.\nIn its Response, Genesis did not contest the allegation in the Notice that it violated 49 C.F.R.\nFINDING OF VIOLATION\n1 See http://genesisenergy.com/index.cfm?md=pagebuilder&tmp=home&pid=80&pnid=29&nid=113 (last accessed\nSept. 26, 2012).\n\n\n\n2\nPart 195, as follows:\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.561(b), which states:\n§ 195.561 – When must I inspect pipe coating used for external corrosion\ncontrol?\n(a) You must inspect all external pipe coating required by §195.557 just prior\nto lowering the pipe into the ditch or submerging the pipe.\n(b) You must repair any coating damage discovered.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.561(b) by failing to properly repair\ncoating damage discovered near Mile Post 24.239 on its Frisco City to I-65 Jct. pipeline.\nSpecifically, the Notice alleged that a coating repair product designed for repairing coating\ndefects of up to 2mm in diameter was used to repair coating defects larger than 2mm in diameter.\nRespondent did not contest this allegation of violation. Accordingly, based upon a review of all\nof the evidence, I find that Respondent violated 49 C.F.R. § 195.561(b) by failing to properly\nrepair coating damage discovered near Mile Post 24.239 on its Frisco City to I-65 pipeline.\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.2\n49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a civil\npenalty, I 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. The Notice proposed a total civil\npenalty of $12,500 for the violation cited above.\nItem 3: The Notice proposed a civil penalty of $12,500 for Respondent’s violation of 49 C.F.R.\n§ 195.561(b), for failing to properly repair coating damage discovered near Mile Post 24.239 on\nits Frisco City to I-65 pipeline. Genesis neither contested the allegation nor presented any\nevidence or argument justifying a reduction in the proposed penalty. With respect to the nature\nand gravity of this violation, the proper repair of pipe coating damage is a key part of protecting\nagainst external corrosion. I acknowledge that Respondent is re-training its technicians on the\n2 Effective January 3, 2012, the maximum administrative civil penalties for violations of the federal pipeline safety\nregulations were doubled to $200,000 per violation with a maximum of $2,000,000 for a related series of violations\n(The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pub. L. 112-90)). Because the violations\nin this case occurred prior to the increase, the higher maximums do not apply.\n\n\n\n3\napplication and repair of coatings, but this does not diminish its culpability at the time of the\nviolation or constitute a good faith effort to comply prior to the violation. Accordingly, having\nreviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of\n$12,500 for violation of 49 C.F.R. § 195.561(b).\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 $12,500 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.\nWARNING ITEMS\nWith respect to Items 1, 2, 4, and 5, the Notice alleged probable violations of Part 195 but did\nnot propose a civil penalty or compliance order for these items. Therefore, these are considered\nto be warning items. The warnings were for:\n49 C.F.R. § 195.49 (Item 1) ─ Respondent’s alleged failure to accurately\ncomplete its Annual Reports for calendar years 2009 and 2010 because it\nincorrectly reported the mileage of its Part 195 regulated pipelines, the mileage of\nits pipeline segments that could affect an HCA, and its number of breakout tanks;\n49 C.F.R. § 195.432 (Item 2) ─ Respondent’s alleged failure to properly perform\nthe required API Standard 653 (API 653) visual external inspection of a 30,000\nbarrel breakout tank (No. 2138) at Jay Station within five years of the previous\nAPI 653 inspection in 2006 using an “authorized inspector;”\n49 C.F.R. § 195.579 (Item 4) ─ Respondent’s alleged failure to inspect the\ninternal surface of pipe that was removed from the I-65 Junction in 2010 for\ninternal corrosion; and\n49 C.F.R. § 195.589 (Item 5) ─ Respondent’s alleged failure to adequately\nmaintain corrosion control records for coupon monitoring in calendar year 2011.\n\n\n\n4\nGenesis presented information in its Response showing that it had taken certain actions to\naddress the cited items. If OPS finds a violation of these items, Respondent may be subject to\nfuture enforcement action.\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":10377}