# GENESIS PIPELINE USA, L.P. — Notice of Probable Violation

- **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:** Not available
- **summary:** CLOSED notice of probable violation citing 195.432, 195.49, 195.561(b), 195.579, 195.589.
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- **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.

Official case documents:

220125004_Final Order_10162012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Final%20Order_10162012.pdf

220125004_Final Order_10162012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Final%20Order_10162012_text.pdf

220125004_nopv_pcp_05212012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_nopv_pcp_05212012.pdf

220125004_nopv_pcp_05212012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_nopv_pcp_05212012_text.pdf

220125004_Operator Response_ 06152012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220125004/220125004_Operator%20Response_%2006152012.pdf

220125004_Final Order_10162012_text.pdf

OCTOBER 16, 2012
Mr. Mike Moore
Vice President Pipelines and Trucking Operations
Genesis Pipeline USA, L.P.
919 Milam, Suite 2100
Houston, Texas 77002-5417
Re: CPF No. 2-2012-5004
Dear Mr. Moore:
Enclosed please find the Final Order issued in the above-referenced case. It makes findings of
violation and assesses a civil penalty of $12,500. The penalty payment terms are set forth in the
Final Order. This enforcement action closes automatically upon receipt of payment. Service of
the Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise
provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Jeffrey D. Wiese
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. Wayne Lemoi, Director, Southern Region, PHMSA
Mr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS
CERTIFIED MAIL - RETURN RECEIPT REQUESTED



U.S. DEPARTMENT OF TRANSPORTATION
PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION
OFFICE OF PIPELINE SAFETY
WASHINGTON, D.C. 20590
____________________________________
)
In the Matter of )
)
Genesis Pipeline USA, L.P., ) CPF No. 2-2012-5004
)
Respondent. )
___________________________________ )
FINAL ORDER
Between November 2, 2011 to February 16, 2012, pursuant to 49 U.S.C. § 60117, a
representative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office
of Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the written
operations and maintenance (O&M) procedures, facilities, and records of Genesis Pipeline USA,
L.P. (Genesis or Respondent) in Alabama. Genesis’ pipeline system in Alabama and Florida
consists of 100 miles that transport both trucked and field produced crude oil into several
terminals, including Shell's Mobile, Alabama refinery.
1
As a result of the inspection, the Director, Southern Region, OPS (Director), issued to
Respondent, by letter dated May 21, 2012, a Notice of Probable Violation and Proposed Civil
Penalty (Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance
with 49 C.F.R. § 190.207, the Notice proposed finding that Genesis had committed various
violations of 49 C.F.R. § Part 195 and proposed assessing a civil penalty of $12,500 for one
probable violation and a warning for four probable violations. The warning items required no
further action, but warned the operator to correct the probable violation.
Genesis responded to the Notice by letter to PHMSA dated June 15, 2012 (Response). The
company did not contest the allegations but provided information concerning corrective actions it
has taken in response to the Notice. Respondent did not request a hearing and therefore has
waived its right to one.
In its Response, Genesis did not contest the allegation in the Notice that it violated 49 C.F.R.
FINDING OF VIOLATION
1 See http://genesisenergy.com/index.cfm?md=pagebuilder&tmp=home&pid=80&pnid=29&nid=113 (last accessed
Sept. 26, 2012).



2
Part 195, as follows:
Item 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.561(b), which states:
§ 195.561 – When must I inspect pipe coating used for external corrosion
control?
(a) You must inspect all external pipe coating required by §195.557 just prior
to lowering the pipe into the ditch or submerging the pipe.
(b) You must repair any coating damage discovered.
The Notice alleged that Respondent violated 49 C.F.R. § 195.561(b) by failing to properly repair
coating damage discovered near Mile Post 24.239 on its Frisco City to I-65 Jct. pipeline.
Specifically, the Notice alleged that a coating repair product designed for repairing coating
defects of up to 2mm in diameter was used to repair coating defects larger than 2mm in diameter.
Respondent did not contest this allegation of violation. Accordingly, based upon a review of all
of the evidence, I find that Respondent violated 49 C.F.R. § 195.561(b) by failing to properly
repair coating damage discovered near Mile Post 24.239 on its Frisco City to I-65 pipeline.
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative 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.2
49 U.S.C. § 60122 and 49 C.F.R. § 190.225 require that, in determining the amount of a civil
penalty, I consider the following criteria: the nature, circumstances, and gravity of the violation,
including adverse impact on the environment; the degree of Respondent’s culpability; the history
of Respondent’s prior offenses; the Respondent’s ability to pay the penalty and any effect that
the penalty may have on its ability to continue doing business; and the good faith of Respondent
in attempting to comply with the pipeline safety regulations. In addition, I may consider the
economic benefit gained from the violation without any reduction because of subsequent
damages, and such other matters as justice may require. The Notice proposed a total civil
penalty of $12,500 for the violation cited above.
Item 3: The Notice proposed a civil penalty of $12,500 for Respondent’s violation of 49 C.F.R.
§ 195.561(b), for failing to properly repair coating damage discovered near Mile Post 24.239 on
its Frisco City to I-65 pipeline. Genesis neither contested the allegation nor presented any
evidence or argument justifying a reduction in the proposed penalty. With respect to the nature
and gravity of this violation, the proper repair of pipe coating damage is a key part of protecting
against external corrosion. I acknowledge that Respondent is re-training its technicians on the
2 Effective January 3, 2012, the maximum administrative civil penalties for violations of the federal pipeline safety
regulations were doubled to $200,000 per violation with a maximum of $2,000,000 for a related series of violations
(The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pub. L. 112-90)). Because the violations
in this case occurred prior to the increase, the higher maximums do not apply.



3
application and repair of coatings, but this does not diminish its culpability at the time of the
violation or constitute a good faith effort to comply prior to the violation. Accordingly, having
reviewed the record and considered the assessment criteria, I assess Respondent a civil penalty of
$12,500 for violation of 49 C.F.R. § 195.561(b).
Payment of the civil penalty must be made within 20 days of service. Federal regulations
(49 C.F.R. § 89.21(b)(3)) require such payment to 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 269039, Oklahoma City, Oklahoma 73125. The
Financial Operations Division telephone number is (405) 954-8893.
Failure to pay the $12,500 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
those same authorities, a late penalty charge of six percent (6%) 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 district
court of the United States.
WARNING ITEMS
With respect to Items 1, 2, 4, and 5, the Notice alleged probable violations of Part 195 but did
not propose a civil penalty or compliance order for these items. Therefore, these are considered
to be warning items. The warnings were for:
49 C.F.R. § 195.49 (Item 1) ─ Respondent’s alleged failure to accurately
complete its Annual Reports for calendar years 2009 and 2010 because it
incorrectly reported the mileage of its Part 195 regulated pipelines, the mileage of
its pipeline segments that could affect an HCA, and its number of breakout tanks;
49 C.F.R. § 195.432 (Item 2) ─ Respondent’s alleged failure to properly perform
the required API Standard 653 (API 653) visual external inspection of a 30,000
barrel breakout tank (No. 2138) at Jay Station within five years of the previous
API 653 inspection in 2006 using an “authorized inspector;”
49 C.F.R. § 195.579 (Item 4) ─ Respondent’s alleged failure to inspect the
internal surface of pipe that was removed from the I-65 Junction in 2010 for
internal corrosion; and
49 C.F.R. § 195.589 (Item 5) ─ Respondent’s alleged failure to adequately
maintain corrosion control records for coupon monitoring in calendar year 2011.



4
Genesis presented information in its Response showing that it had taken certain actions to
address the cited items. If OPS finds a violation of these items, Respondent may be subject to
future enforcement action.
The terms and conditions of this Final Order are effective upon service in accordance with
49 C.F.R. § 190.5.
___________________________________ __________________________
Jeffrey D. Wiese Date Issued
Associate Administrator
for Pipeline Safety
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