{"operation":"document","citation":"CPF 220126011","title":"CITGO PETROLEUM CORPORATION (TERMINALS) — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2012-05-25","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.505(h), 195.573(e), 195.575(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-220126011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-220126011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-220126011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/220126011","body":"Notice of Probable Violation involving CITGO PETROLEUM CORPORATION (TERMINALS). PHMSA's enforcement data identifies the cited regulations as 195.505(h),  195.573(e),  195.575(c). The case was opened on 2012-05-25 and is reported as closed as of 2013-07-25. Proposed civil penalty: $42,300. Assessed civil penalty: $42,300. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n220126011_closure letter_07252013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_closure%20letter_07252013.pdf\n\n220126011_closure letter_07252013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_closure%20letter_07252013_text.pdf\n\n220126011_Decision on Petition_06172013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_Decision%20on%20Petition_06172013.pdf\n\n220126011_Decision on Petition_06172013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_Decision%20on%20Petition_06172013_text.pdf\n\n220126011_Final Order_12312012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_Final%20Order_12312012.pdf\n\n220126011_Final Order_12312012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_Final%20Order_12312012_text.pdf\n\n220126011_nopv_pcp_pco__05252012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_nopv_pcp_pco__05252012.pdf\n\n220126011_nopv_pcp_pco__05252012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_nopv_pcp_pco__05252012_text.pdf\n\n220126011_Operator Response_06212012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220126011/220126011_Operator%20Response_06212012.pdf\n\n220126011_closure letter_07252013_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJuly 25, 2013\nMr. Jim Sanders\nGeneral Manager - Terminal Facilities & Pipeline\nCITGO Petroleum Corporation\n1293 Eldridge Parkway\nHouston, TX 77077-1670\nCPF 2-2012-6011\nDear Mr. Sanders:\nOn December 31, 2012, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA), Office of Pipeline Safety (OPS) issued to CITGO Petroleum Corporation\n(CITGO) a Final Order in the above-referenced case. The Final Order included an assessed\ncivil penalty and a Compliance Order (CO).\nThe OPS Southern Region received CITGO’s written response to the Compliance Order in a\nletter dated March 8, 2013. Two months later on June 17, 2013, OPS issued a Decision\ndenying CITGO’s Petition for Reconsideration.\nBased on our review of CITGO’s response and our confirmation that CITGO has paid the\ncivil penalties, we have determined that CITGO has complied with the terms of the Final\nOrder. This case is now closed and no further action is necessary with respect to the matters\ninvolved in this case.\nPlease be advised that this letter refers only to the above referenced order (CPF 2-2012-6011)\nand not to any other OPS cases, if any.\nThank you for your cooperation in this matter.\nSincerely,\nWayne T. Lemoi\nDirector, Office of Pipeline Safety\nPHMSA Southern Region\n\n220126011_Final Order_12312012_text.pdf\n\nDECEMBER 31, 2012\nMr. Alejandro Granado\nChairman, President, and CEO\nCITGO Petroleum Corporation\n1293 Eldridge Parkway\nHouston, TX 77077-1670\nRe: CPF No. 2-2012-6011\nDear Mr. Granado:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a civil penalty of $42,300, and specifies actions that need to be taken by\nCITGO Petroleum Corporation to comply with the pipeline safety regulations. The penalty\npayment terms are set forth in the Final Order. When the civil penalty has been paid and the\nterms of the compliance order completed, as determined by the Director, Southern Region, this\nenforcement action will be closed. Service of the Final Order by certified mail is deemed\neffective upon the date of mailing, or as otherwise 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. Gustavo Velasquez, Vice President Supply and Marketing, CITGO\nMr. Bruce Adams, Southeast Regional Terminal Facilities Manager, CITGO\nMr. Wayne T. 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____________________________________\n)\nIn the Matter of )\n)\nCITGO Petroleum Corporation, ) CPF No. 2-2012-6011\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nFrom March 28-30, 2012, 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 CITGO Petroleum\nCorporation (CITGO or Respondent) near Fort Lauderdale, Florida. The subject of the\ninspection was CITGO’s 1.2-mile, 8-inch Line 123A, which transports hazardous liquids from\nCITGO’s Port Everglades Terminal to the Fort Lauderdale-Hollywood International Airport.\nAs a result of the inspection, the Director, Southern Region, OPS (Director), issued to\nRespondent, by letter dated May 25, 2012, a Notice of Probable Violation, Proposed Civil\nPenalty, and Proposed Compliance Order (Notice).1 In accordance with 49 C.F.R. § 190.207,\nthe Notice proposed finding that CITGO had violated 49 C.F.R. §§ 195.505, 195.573 and\n195.575 and proposed assessing a civil penalty of $42,300 for the alleged violations. The Notice\nalso proposed ordering Respondent to take certain measures to correct the alleged violations.\nCITGO responded to the Notice by letter dated June 21, 2012 (Response). CITGO contested two\nof the allegations, did not contest one, and offered additional information in response to the\nNotice. Respondent did not request a hearing and 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. § 195.505(h), which states:\n1 The Notice was addressed to “CITGO Petroleum Corporation (Terminals).”\n\n\n\n2\n§ 195.505 Qualification program.\nEach operator shall have and follow a written qualification program.\nThe program shall include provisions to:\n(a) . . . .\n(h) After December 16, 2004, provide training, as appropriate, to\nensure that individuals performing covered tasks have the necessary\nknowledge and skills to perform the tasks in a manner that ensures the safe\noperation of pipeline facilities;\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.505(h) by failing to provide\ntraining, as appropriate, to ensure that individuals performing covered tasks have the necessary\nknowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline\nfacilities. Specifically, the Notice alleged that CITGO records showed that a particular employee\nwas qualified to perform its operator qualification (OQ) Covered Task 17 – Provide Temporary\nMarking of Buried Pipeline Prior to Excavation. Step 5 of Sub-task 17.1 (Locate Line) called for\nthe inspector to check the operation of the locating equipment. When the PHMSA inspector\nasked the employee to demonstrate this step, he stated that he had never performed Step 5 and\nhad never been trained to operate line locating equipment.2\nIn its Response, CITGO contested the allegation, arguing that the employee in question did not\nhave the training to perform this step of the task and that therefore he was never asked to locate\nlines where the use of line locating equipment was necessary. CITGO submitted the Operator\nQualification Evaluation Form for this employee, which showed that the task of “Check locating\nequipment operation” was not applicable.3 CITGO stated that this employee was qualified to\nperform other tasks relating to line location, but not this particular sub-task.\nHowever, other CITGO records showed that this particular employee had indeed been evaluated\nfor Covered Task 17, specifically including sub-task 17.1, and was deemed qualified to perform\nit.\n4 In addition, the employee stated that when he is at an excavation site, he simply indicates to\nthe excavator where the pipeline is using maps and permanent line markers instead of locating\nequipment, and that he requires hand digging and mandatory on-site CITGO inspection anytime\nexcavation is to be performed near the pipeline. This conflicts with CITGO’s claim that this\nparticular employee is not sent to perform line-location tasks.\nAccordingly, after considering all of the evidence, I find that this particular CITGO employee\nhad, in fact, been qualified to perform Covered Task 17.1 and that he did perform such task for\nRespondent. I further find that CITGO violated 49 C.F.R. § 195.505(h) by failing to provide\ntraining, as appropriate, to ensure that this individual had the necessary knowledge and skills to\n2 In its Response, CITGO stated that “Check locating equipment operation” was actually Step 6 of Task 17.1.\nHowever, the evidence shows that “Check locating equipment operation” is listed as Step 6 on the “Operator\nQualification Evaluation Form” but as Step 5 on the CITGO “Standard for Covered Task 17.” See Response,\nAttachment A, and Violation Report, Evidence for Violation 1. It is undisputed that the alleged violation related to\nthe function of checking the operation of locating equipment.\n3 Response, Attachment A.\n4 Violation Report, Exhibit A.\n\n\n\n3\nperform the tasks in a manner that ensured the safe operation of pipeline facilities.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.573(e), which states:\n§ 195.573 What must I do to monitor external corrosion control?\n(a) . . . .\n(e) Corrective action. You must correct any identified deficiency in\ncorrosion control as required by § 195.401(b). However, if the deficiency\ninvolves a pipeline in an integrity management program under § 195.452,\nyou must correct the deficiency as required by § 195.452(h).\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.573(e) by failing to correct\nidentified deficiencies in corrosion control as required by § 195.401(b). Specifically, the Notice\nalleged that CITGO failed to install electrical test leads at four locations as recommended by an\nApril 2010 pipeline casing survey report.\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. § 195.573(e) by failing to correct\nidentified deficiencies in corrosion control as required by § 195.401(b).\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.575(c), which states:\n§ 195.575 Which facilities must I electrically isolate and what\ninspections, tests, and safeguards are required?\n(a) . . . .\n(c) You must inspect and electrically test each electrical isolation to\nassure the isolation is adequate.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.575(c) by failing to inspect and\nelectrically test each electrical isolation to assure the isolation is adequate. Specifically, the\nNotice alleged that from January 1, 2007, to March 30, 2012, CITGO did not test the electrical\nisolations at the four locations on Line 123A where it had not installed test leads, as discussed in\nItem 2 above.\nIn its Response, CITGO argued that this allegation of violation was redundant to the allegation in\nItem 2 discussed above, because the company could not have performed electrical isolation tests\nunless the test leads had been installed.5 Because the company could not perform these tests\nwithout the test leads required by Item 2, CITGO argued that citing the company for the failure\nto conduct the tests was inequitable.\nI disagree. The two regulations in question have different requirements: one requires corrective\naction in response to identified deficiencies in corrosion control, while the other requires testing\nof each electrical isolation. The failure to take corrective action by installing test leads does not\nexempt the company from the requirement to test each isolation. In addition, while the\n5 Response at 2.\n\n\n\n4\ninstallation of electrical test leads would have provided one method for CITGO to conduct the\ntests required by § 195.575(c), other methods could be used. For example, CITGO could have\ntested the electrical isolation using a probe bar connected to the casing and a reeled wire\nconnected to the nearest electrically-accessible pipe.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that\nRespondent violated 49 C.F.R. § 195.575(c) by failing to inspect and electrically test each\nelectrical isolation to assure the isolation is adequate.\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$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any\nrelated series of violations.6 In determining the amount of a civil penalty under\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; and any effect\nthat the penalty may have on its ability to continue doing business; and the good faith of\nRespondent in attempting to comply with the pipeline safety regulations. In addition, I may\nconsider the economic benefit gained from the violation without any reduction because of\nsubsequent damages, and such other matters as justice may require. The Notice proposed a total\ncivil penalty of $42,300 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $13,700 for Respondent’s violation of\n49 C.F.R. § 195.505(h), for failing to provide training, as appropriate, to ensure that individuals\nperforming covered tasks have the necessary knowledge and skills to perform the tasks in a\nmanner that ensures the safe operation of pipeline facilities. Respondent contested the allegation\nof violation, but I found that CITGO failed to provide training to ensure that a particular\ncompany employee could perform all of the sub-tasks associated with a particular covered task.\nRespondent did not offer any other arguments for a reduction or elimination of the proposed\npenalty. The careful administration of all facets of an operator qualification program is critical to\nensuring the safe operation and maintenance of a pipeline system. Accordingly, having reviewed\nthe record and considered the assessment criteria, I assess Respondent a civil penalty of $13,700\nfor violation of 49 C.F.R. § 195.505(h).\nItem 2: The Notice proposed a civil penalty of $14,300 for Respondent’s violation of\n49 C.F.R. § 195.573(e), for failing to correct identified deficiencies in corrosion control as\nrequired by § 195.401(b). Respondent did not contest the allegation and did not offer any\narguments in support of a reduction or elimination of the proposed penalty. Proactive corrosion\n6 The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, Pub. L. No. 112-90, § 2(a)(1), 125 Stat.\n1904, January 3, 2012, increased the civil penalty liability for violating a pipeline safety standard to $200,000 per\nviolation for each day of the violation, up to a maximum of $2,000,000 for any related series of violations.\n\n\n\n5\ncontrol is critical for preventing pipeline accidents that could impact the public, the environment,\nor property. Accordingly, having reviewed the record and considered the assessment criteria, I\nassess Respondent a civil penalty of $14,300 for violation of 49 C.F.R. § 195.573(e).\nItem 3: The Notice proposed a civil penalty of $14,300 for Respondent’s violation of\n49 C.F.R. § 195.575(c), for failing to inspect and electrically test each electrical isolation to\nassure the isolation is adequate. Respondent contested the violation, but did not offer any other\narguments for a reduction or elimination of the proposed penalty. As discussed above, I found\nthat the failure to take corrective action by installing test leads did not exempt the company from\nthe requirement to also test for electrical isolation. The fact that Respondent failed to test\nlocations where encased pipe had existed for years7 suggests that CITGO saw no need to monitor\nsuch areas for potential corrosion. Accordingly, having reviewed the record and considered the\nassessment criteria, I assess Respondent a civil penalty of $14,300 for violation of\n49 C.F.R. § 195.575(c).\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 $42,300.\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 $42,300 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.\nCOMPLIANCE ORDER\nThe Notice proposed a compliance order with respect to Items 1, 2, and 3 in the Notice for\nviolations of 49 C.F.R. §§ 195.505(h), 195.573(e), and 195.575(c), respectively. Under\n49 U.S.C. § 60118(a), each person who engages in the transportation of hazardous liquids or who\nowns or operates a pipeline facility is required to comply with the applicable safety standards\nestablished under chapter 601. Pursuant to the authority of 49 U.S.C. § 60118(b) and 49 C.F.R.\n§ 190.217, Respondent is ordered to take the following actions to ensure compliance with the\npipeline safety regulations applicable to its operations:\n1. The Director has indicated that Respondent has reevaluated all line location\n7 Violation Report at 15.\n\n\n\n6\ncoordinators in the use of line locating equipment. Therefore, with respect to the\nviolation of § 195.505(h) (Item 1), Respondent must, except for the steps required\nof Sub-task 17.1, Locate Line, re-evaluate and train each individual that CITGO\nrequires to be operator qualified to perform OQ covered tasks in accordance with\n§§ 195.505, 195.509, and in accordance with the meaning of the term\n“evaluation” as defined in §195.503.\n2. With respect to the violation of § 195.573(e) (Item 2), Respondent must install\nelectrical test leads at the four pipeline casings on Line 123A, as recommended by\nthe April 2010 pipeline casing survey report prepared by Mesa Corrosion Control,\nInc.\n3. With respect to the violation of § 195.575(c) (Item 3), Respondent must inspect\nand electrically test the following casings on Line 123A to assure electrical\nisolation from the carrier pipe:\n• Station 0+47 to 1+00 (SE 28th Street)\n• Station 53+38 to 54+18 (East of Perimeter Road)\n• Station 55+68 to 56+81 (East Service Road)\n• Station 63+21 to 63+59 (End of Service Road).\n4. CITGO must provide written documentation of completion of the above\ncompliance items to the Director within 60 days of receipt of the Final Order.\n5. It is requested that CITGO maintain documentation of the safety improvements\ncosts associated with fulfilling this Compliance Order and submit the total to the\nDirector. It is requested that these costs be reported in two categories; 1) total\ncost associated with preparation/revision of plans, procedures, studies; and\nanalyses, and 2) total cost associated with replacements, additions, and other\nchanges to pipeline infrastructure.\nThe Director may grant an extension of time to comply with any of the required items upon a\nwritten request timely submitted by the Respondent and demonstrating good cause for an\nextension.\nFailure to comply with this Order may result in the administrative assessment of civil penalties\nnot to exceed $100,000 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.\nUnder 49 C.F.R. § 190.215, Respondent has a 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, 2nd 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 this Final Order by\nthe Respondent, provided they contain a brief statement of the 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. Unless the Associate Administrator, upon request, grants a stay, all\n\n\n\n7\nother 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\n\n220126011_Decision on Petition_06172013_text.pdf\n\nJUNE 17, 2013\nMr. Alejandro Granado\nChairman, President, and CEO\nCITGO Petroleum Corporation\n1293 Eldridge Parkway\nHouston, TX 77077-1670\nRe: CPF No. 2-2012-6011\nDear Mr. Granado:\nEnclosed please find the Decision issued by PHMSA on the Petition for Reconsideration filed by\nCITGO Petroleum Corporation in the above-referenced case. For the reasons set forth in the\nDecision, the petition is denied. Payment of the civil penalty of $13,700 is due within 20 days of\nservice. When the civil penalty has been paid and the terms of the compliance order completed,\nas determined by the Director, Southern Region, Office of Pipeline Safety, PHMSA, this\nenforcement action will be closed.\nService of this decision by certified mail is deemed effective upon date of mailing, or as\notherwise provided under 49 C.F.R. § 190.5. Thank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. Jim Sanders, General Manager Terminal Facilities & Pipeline, CITGO\nMr. Gustavo Velasquez, Vice President Supply and Marketing, CITGO\nMr. Bruce Adams, Southeast Regional Terminal Facilities Manager, CITGO\nMr. Wayne T. Lemoi, Director, Southern Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [INSERT RECEIPT NO.]\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 )\nCITGO Petroleum Corporation, ) CPF No. 2-2012-6011\n)\n)\n)\nPetitioner. )\n_________________________________________ )\nDECISION ON PETITION FOR RECONSIDERATION\nOn December 31, 2012, pursuant to 49 U.S.C. § 60118 and 49 C.F.R. § 190.213, the Pipeline\nand Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),\nissued a Final Order in this proceeding, finding that CITGO Petroleum Corporation (CITGO or\nPetitioner) had committed various violations of 49 C.F.R Part 195. These findings of violation\narose from an on-site pipeline safety inspection of the facilities and records of CITGO Petroleum\nCorporation (CITGO or Respondent) near Fort Lauderdale, Florida. The subject of the\ninspection was CITGO’s 1.2-mile, 8-inch Line 123A, which transports hazardous liquids from\nCITGO’s Port Everglades Terminal to the Fort Lauderdale-Hollywood International Airport.\nThe Director, Southern Region, OPS (Director), issued a Notice of Probable Violation, Proposed\nCivil Penalty, and Proposed Compliance Order (Notice) by letter dated May 25, 2012.1 In\naccordance with 49 C.F.R. § 190.207, the Notice proposed finding that CITGO had violated 49\nC.F.R. §§ 195.505, 195.573 and 195.575 and proposed assessing a civil penalty of $42,300 for\nthe alleged violations. The Notice also proposed ordering CITGO to take certain measures to\ncorrect the alleged violations. CITGO responded to the Notice by letter dated June 21, 2012\n(Response). CITGO contested two of the allegations, did not contest one, and offered additional\ninformation in response to the Notice. Respondent did not request a hearing.\nThe Final Order made findings of violation, assessed a total civil penalty of $42,300, and\nspecified actions that needed to be taken by CITGO to comply with the pipeline safety\nregulations (Compliance Order).\nPursuant to 49 C.F.R. § 190.215, a respondent may petition PHMSA for reconsideration of a\nfinal order. PHMSA does not consider repetitious information, arguments, or petitions, but may\nconsider additional facts or arguments, provided that the respondent submits a valid reason why\nsuch information was not presented prior to issuance of the final order. PHMSA may grant or\ndeny, in whole or in part, a petition for reconsideration without further proceedings, or may\n1 The Notice was addressed to “CITGO Petroleum Corporation (Terminals).”\n\n\n\n2\nrequest additional information, data, and comment as deemed appropriate. The filing of a\npetition stays the payment of any civil penalty assessed, but does not stay any required corrective\naction.\nOn February 12, 2013, CITGO submitted a Petition for Reconsideration (Petition) of the Final\nOrder, contesting the finding of violation of Item 1 of the Final Order and requesting a review of\nthe associated civil penalty and compliance order. CITGO did not contest the findings of\nviolation or associated civil penalties for Items 2 and 3 of the Final Order. CITGO paid the civil\npenalties for Items 2 and 3 on January 22, 2013.\nDiscussion\nIn its Petition, CITGO contested the finding of violation in the Final Order related to Item 1, and\nrequested that the associated civil penalty and compliance order be rescinded.2 As discussed\nbelow, I affirm the decision, penalty, and compliance order in the Final Order associated with\nItem 1.\nThe Final Order found that CITGO had violated 49 C.F.R. § 195.505(h) by failing to provide\ntraining, as appropriate, to ensure that individuals performing covered tasks have the necessary\nknowledge and skills to perform the tasks in a manner that ensures the safe operation of pipeline\nfacilities. Specifically, the Final Order found that CITGO records showed that a particular\nemployee was qualified to perform its operator qualification (OQ) Covered Task 17 – Provide\nTemporary Marking of Buried Pipeline Prior to Excavation, but that this employee was not\ntrained to complete the steps of Sub-task 17.1 (Locate Line) which involved the use of line\nlocating equipment.\nIn its Petition, CITGO noted that § 195.505\n“does not mandate any specific set of procedures that a pipeline operator… is\nrequired either to develop from a qualifications perspective or to implement by\nway of a training program m. Instead, the regulation gives pipeline operators the\nlatitude necessary to both qualify and train their employees in a manner that is\nappropriate under the unique circumstances of each facility to ensure that the\npipeline is safely operated and maintained.”3\nCITGO stated that it believed that the finding in Item 1 of the Final Order was due to a\nmisunderstanding of the training materials that PHMSA reviewed during the inspection. To\nreview the CITGO OQ program, the PHMSA inspector used a document entitled “Consortium\non Operator Qualifications Covered Task Procedures” (COOQ). The COOQ included the use of\nline locating equipment as step 5 of Sub-Task 17.1. CITGO stated that the COOQ is an industry-\nrelated “best practice” guide that delineates steps that are typically recommended for locating\nand marking buried pipelines, but that it does not delineate the requirements for CITGO’s line\nlocators. CITGO stated that its “internal process” does not require that persons locating buried\npipelines use this equipment.4\n2 Petition at 1.\n3 Id. at 2.\n4 Id.\n\n\n\n3\nIn its Petition, CITGO argued that the use of line locating equipment was not a required part of\nits covered Sub-task 17.1 (Locate Line). CITGO stated that there are three industry-accepted\nmethods of locating a pipeline: using maps or other documentation, using electronic locating\nequipment, or using a metal probe bar.5 According to CITGO, their records showed that this\nemployee was qualified in Subtask 17.1, but his evaluation form for this subtask showed that two\nsteps of this task (“Check locating equipment operation” and “Determine the line location and\ndepth”) were “not applicable.”6 CITGO argued that the employee in question was qualified to\nperform the “Locate Line” sub-task using the two methods that did not involve the use of line\nlocating equipment, and that therefore CITGO’s records showing that he was operator qualified\nfor this task were accurate.\nThe Petition further argued that a CITGO manager conducted an informal survey of seven other\npipeline operators in the area, and that four of them responded that they believed “that it was\npermissible to have a ‘not applicable’ evaluation if the step for which that evaluation was\nassociated was not essential to safely carrying out the task or sub-task.”7\nCITGO did not provide any evidence of its internal process, an alternative document governing\nits OQ program, or different criteria for OQ covered tasks. CITGO’s “Operator Qualification\nEvaluation Form,” and the COOQ document on which the CITGO form appears to be based,\nlisted “Check line locating equipment” as a step for the OQ covered sub-task 17.1, “Locate\nLine.” The documents did not specify that use of electronic line locating equipment was optional\nor non-essential. Other CITGO records showed that this particular employee had indeed been\nevaluated for Covered Task 17, specifically including sub-task 17.1, and was deemed qualified to\nperform it, and there was no indication on these records that the use of line location equipment\nwas optional.8 Further, although other pipeline operators may believe it is permissible to have a\n“not applicable” evaluation of a subtask, CITGO’s procedures did not specify that with respect to\nSub-task 17.1.\nThe Petition noted that “the COOQ is only one of the manuals and guidelines CITGO uses in\ndeveloping procedures that are to be followed by its personnel in their activities on and around\nthe pipeline.”9 CITGO described its use of the Common Ground Alliance’s (CGA) Best\nPractices document in the development of the company’s Operations Manual, and noted that the\nCGA document delineates best practices for line locators, but that “there is no reference to the\nmandatory use of electronic line locating equipment for this task.” CITGO may follow CGA\nBest Practices but its COOQ document did not specify that the use of electronic line locating\nequipment was optional.\nCITGO noted that, though this employee had not been trained to use line locating equipment, he\nwas “nonetheless trained and competent to locate and mark the lines in accordance with\n5 Id. at 2-3.\n6 Violation Report, Exhibit A.\n7 Petition at 3.\n8 Violation Report, Exhibit A.\n9 Petition at 4.\n\n\n\n4\nCITGO’s best practice procedures.”10 CITGO argues that the employee’s work performance\ndemonstrates that he was “fully qualified for this task,” and noted that he had responded to\nmultiple requests from third parties to locate this particular line running between CITGO’s\nterminal at Port Everglades and the Fort Lauderdale Airport, and that the line had never been\ndamaged following his line location.\nCompliance with the company’s best practice procedures does not equate to compliance with the\nwritten OQ program. The issue at hand is not whether there are other acceptable and effective\nmethods for locating a pipeline. The issue is whether CITGO’s OQ program required an\nindividual qualified in this task to be able to use line locating equipment. COOQ Covered Task\n17, Subtask 17.1 (Locate Line), includes steps involving the use of line locating equipment.\nTherefore, to be fully qualified in this subtask, an individual must be qualified to complete these\nsteps. CITGO’s records showed that the employee in question was qualified in Subtask 17.1, but\nhe was not trained to perform all of the steps of this subtask as written in the OQ program. The\nfact that he had successfully located this particular pipeline on multiple occasions does not mean\nhe was “fully qualified” in each of the steps of the CITGO OQ covered task of “Locate Line.”\nFor these reasons, CITGO’s petition on this Item is denied. CITGO did not offer any other\narguments for a reduction of the civil penalty or a change to the compliance order. Therefore,\nthe compliance order and the assessed civil penalty of $13,700 stand.\nConclusion\nBased on a review of the record and for the reasons stated above, the Petition is denied. Payment\nin full of the civil penalty of $13,700 is now due and must be made within 20 days of service.\nFailure to pay the $13,700 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.\nFederal regulations (49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer\nthrough the Federal Reserve Communications System (Fedwire), to the account of the U.S.\nTreasury. Questions concerning wire transfers should be directed to: Financial Operations\nDivision (AMZ-341), Federal Aviation Administration, Mike Monroney Aeronautical Center,\nP.O. Box 269039, Oklahoma City, Oklahoma 73125. The Financial Operations Division\ntelephone number is (405) 954-8893.\nThis decision is the final administrative action in this proceeding.\n_______________________________ _____________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n10 Id. at 5.","truncated":false,"body_characters":35077}