# MID - VALLEY PIPELINE CO — Notice of Probable Violation

- **operation:** document
- **citation:** CPF 220175003
- **title:** MID - VALLEY PIPELINE CO — Notice of Probable Violation
- **source type:** enforcement
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** historical
- **official:** true
- **published on:** 2017-05-03
- **effective on:** Not available
- **summary:** CLOSED notice of probable violation citing 195.412(a).
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- **source url:** https://primis.phmsa.dot.gov/enforcement-data/case/220175003
**body:**

Notice of Probable Violation involving MID - VALLEY PIPELINE CO. PHMSA's enforcement data identifies the cited regulation as 195.412(a). The case was opened on 2017-05-03 and is reported as closed as of 2019-05-15. Proposed civil penalty: $88,400. Assessed civil penalty: $23,500. Open the official case record for notices, responses, orders, and the latest status.

Official case documents:

220175003_Final Order_05032019.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175003/220175003_Final%20Order_05032019.pdf

220175003_Final Order_05032019_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175003/220175003_Final%20Order_05032019_text.pdf

220175003_NOPV PCP_05032017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175003/220175003_NOPV%20PCP_05032017.pdf

220175003_NOPV PCP_05032017_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175003/220175003_NOPV%20PCP_05032017_text.pdf

220175003_Operator Response to Notice_06122017.pdf: https://primis.phmsa.dot.gov/enforcement-documents/220175003/220175003_Operator%20Response%20to%20Notice_06122017.pdf

220175003_Final Order_05032019_text.pdf

May 3, 2019
Mr. Kelcy Warren, Chairman
Energy Transfer Partners, LP
8111 Westchester Drive
Dallas, Texas 75225
Re: CPF No. 2-2017-5003
Dear Mr. Warren:
Enclosed please find the Final Order issued in the above-referenced case to your subsidiary,
Mid-Valley Pipeline Company. It makes one finding of violation and assesses a reduced civil
penalty of $23,500. 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 effective upon the date of mailing, as provided under 49 C.F.R. § 190.5.
Thank you for your cooperation in this matter.
Sincerely,
Alan K. Mayberry
Associate Administrator
for Pipeline Safety
Enclosure
cc: Mr. James A. Urisko, Director, Southern Region, Office of Pipeline Safety, PHMSA
Mr. Gary MacDonald, President, Mid-Valley Pipeline Company, 1 Fluor Daniel Drive,
Building A, Level 3, Sugar Land, Texas 77478
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 )
Mid-Valley Pipeline Company, ) CPF No. 2-2017-5003
a subsidiary of Energy Transfer Partners, LP, )
)
)
)
Respondent. )
________________________________________________)
FINAL ORDER
From August 15 through 19, 2016, pursuant to 49 U.S.C. § 60117, representatives of the Pipeline
and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS),
conducted an on-site pipeline safety inspection of Mid-Valley Pipeline Company’s (MVPL)
pipeline facilities in Mississippi and Tennessee and records at the company’s Oxford,
Mississippi office. MVPL owns a 1,103-mile crude-oil pipeline running from Longview, Texas,
to Samarian, Michigan (the Mid-Valley Pipeline). The Mid-Valley Pipeline is operated by
Energy Transfer Partners, LP.1
As a result of the inspection, the Director, Southern Region, OPS (Director), issued to MVPL, by
letter dated May 3, 2017, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In
accordance with 49 C.F.R. § 190.207, the Notice proposed finding that MVPL had violated 49
C.F.R. § 195.412 and proposed assessing a civil penalty of $88,400 for the alleged violation.
After requesting and receiving an extension of time, Sunoco Pipeline, LP (SPLP), responded to
the Notice on behalf of MVPL, by letter dated June 12, 2017 (Response).2 The company
contested the allegation, offered additional information in response to the Notice, and requested
that the proposed civil penalty be reduced or eliminated. Respondent did not request a hearing
and therefore has waived its right to one. For purposes of this Order, the terms “MVPL,” SPLP,”
and “Respondent” shall be used interchangeably.
FINDING OF VIOLATION
The Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:
1 At the time of the PHMSA inspection, the Mid-Valley Pipeline was operated by Sunoco Pipeline, LP, a wholly-
owned subsidiary of Sunoco Logistics Partners, LP. See, Sunoco Logistics Partners, LP 2016 Form 10-K, available
at, http://www.sunocologistics.com/SiteData/docs/10K2016Fin/b9174876261d8ab4/10-K;%202016%20-
%20Final.pdf (last accessed May 21, 2018). On April 28, 2017, Sunoco Logistics Partners, LP and Energy Transfer
Partners merged, with the resulting company being known as Energy Transfer Partners, LP. See, Energy Transfer,
Company Information, website, available at http://www.sunocologistics.com/Investors/Company-Information/32/
(last accessed March 4, 2019).
2 As of the date of the Response, SPLP had merged with Energy Transfer Partners, LP.



CPF No. 2-2017-5003
Page 2
Item 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.412(a), which states:
§ 195.412 Inspection of rights-of-way and crossings under navigable
waters.
(a) Each operator shall, at intervals not exceeding 3 weeks, but at least
26 times each calendar year, inspect the surface conditions on or adjacent
to each pipeline right-of-way. Methods of inspection include walking,
driving, flying or other appropriate means of traversing the right-of-way.
The Notice alleged that Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect the
surface conditions on or adjacent to each pipeline right-of-way. Specifically, the Notice alleged
that Respondent used aerial patrols to inspect its pipeline right-of-way (ROW), but that at the
time of the PHMSA inspection, several portions of the company’s ROW in Mississippi and
Tennessee were found to be so overgrown with trees and vegetation that the surface condition of
the ROW was not visible enough to yield an adequate inspection from the air. The Notice
alleged that the following four locations on the pipeline ROW had excessive growth and tree
canopy blocking aerial visibility of the surface conditions:
1) Aerial Marker 327;
2) 3) 4) Bibbs Road crossing between Block Valve 339 and Aerial Marker 352;
Highway 7 road crossing at Mile Post (MP) 373.842; and
Danko Lane at MP 560.262.
In its Response, SPLP contested the alleged violation and argued that it should be withdrawn and
the proposed penalty either be reduced or eliminated. Specifically, it presented four distinct
defenses. First, Respondent argued that PHMSA had inappropriately applied requirements that
went beyond the language of § 195.412, thus violating the requirements of due process and the
Administrative Procedure Act (APA). Second, SPLP argued that PHMSA appeared “to impose a
subjective ground-level visibility requirement into § 195.412 and relies on insufficient evidence
to try to demonstrate that SPLP failed to meet this additional requirement.” Third, it alleged that
“the documentation demonstrates that SPLP was in compliance with § 195.412” and submitted
aerial right-of-way patrol reports “as conclusive evidence of compliance.” Fourth, it contended
that the proposed penalty was “unjustified and excessive.”3
Analysis
I will first address Respondent’s three defenses aimed at the substantive issues surrounding the
violation itself. I will then address its fourth defense, dealing with the proposed penalty, in the
“Assessment of Penalty” section below.
SPLP’s first argument is that PHMSA violated the company’s due process rights and the APA by
initiating an enforcement action based on “additional requirements” that go beyond the explicit
language of § 195.412, and that form “the sole basis for enforcement.”4 Specifically, the
company contends that the regulation only requires an operator to “inspect” the surface
conditions of its ROW, not that it clear or maintain its ROW to any particular standard.
3 Response, at 1.
4 Id.



CPF No. 2-2017-5003
Page 3
According to SPLP, the key is “what § 195.412 does not require – there is no explicit clearing or
maintenance requirement contained in § 195.412 (let alone a frequency of maintenance nor an
objective measure of success or guidance document provided by PHMSA).” Additionally, SPLP
argues that PHMSA has not provided any “guidance document” that gives the regulated
community “fair notice” of PHMSA’s position that “an operator can somehow predict PHMSA’s
opinion of whether a clearing can be seen from a flyover solely by relying on a ground level
visit.”5
SPLP is correct that governmental agencies cannot violate an operator’s right of due process by
depriving it of property without providing a minimum level of “fair notice” as to what may
constitute a violation of law. “Due process requires that parties receive fair notice before being
deprived of property …. In the absence of notice—for example, where the regulation is not
sufficiently clear to warn a party about what is expected of it—an agency may not deprive a
party of property by imposing civil or criminal liability.” Gen. Elec. Co. v. U.S. EPA, 53 F.3d
1324, 1328-29 (D.C. Cir. 1995) (citations omitted) (internal quotation marks omitted). See also,
United States v. Chrysler Corp., 158 F.3d 1350, 1354 (D.C. Cir. 1998); Trinity Broad, of Fla.,
Inc. v. FCC, 211 F.3d 618, 628 (D.C. Cir. 2000).
In the current matter, however, PHMSA has sought only to enforce the express terms of a
regulation first promulgated in 1981. Section 195.412(a) states that each operator is required to
inspect the surface conditions on or adjacent to each pipeline ROW at intervals not exceeding 3
weeks, but at least 26 times each calendar year. The operator is given the option to select any
“appropriate means of traversing the right-of-way,” such as “walking, driving, [or] flying.”
Furthermore, published enforcement decisions from PHMSA have provided ample notice to the
regulated community that the agency interprets § 195.412(a) to mean that operators must
“regularly inspect the surface conditions of their pipeline rights-of-way, by appropriate means,
in order to detect encroachments and various other threats to the integrity of their facilities.”6
Therefore, if an operator cannot view surface conditions using aerial patrols, then common sense
dictates that aerial patrols are not an “appropriate” means of achieving compliance with
§ 195.412(a).7
PHMSA has interpreted this regulation consistently through a series of published final orders,
finding that if dense vegetation or overgrowth obstructs an operator’s view of its ROW surface
condition from the air, then the operator cannot meet the requirements of the regulation.8 For
5 Id.
6 See Nustar Energy, LP, CPF No. 3-2007-5002, Final Order (issued Feb. 5, 2009) (emphasis in original). Available
at https://primis.phmsa.dot.gov/comm/reports/enforce/FOCPEvent opid 0.html?nocache=5590.
7 See Plains Pipeline, LP, CPF No. 4-2016-5015, Final Order (issued Mar. 7, 2018). Available at
https://primis.phmsa.dot.gov/comm/reports/enforce/FOCPEvent opid 0.html?nocache=5590.
8 PHMSA has issued numerous final orders applying this same standard. E.g., Texas Eastern Pipeline Products
Company, CPF No. 2-2005-5013, Final Order (issued April 13, 2006); Marathon Pipeline, LLC, CPF. No. 3-2007-
5024, Final Order (issued Nov. 7, 2008); Nustar Energy, LP (f/k/a Valero, LP, CPF No. 3-2007-5002, Final Order
(issued Feb. 5, 2009); ExxonMobil Pipeline Company, CPF No. 5-2011-5003, Final Order (issued Nov. 2, 2011);
Enterprise Products Operating, LLC, CPF No. 1-2012-5001, Final Order (issued Oct. 9, 2012); Buckeye Partners,
LP, CPF No. 1-2013-5003, Final Order (issued June 10, 2013); Plains Pipeline, LP, CPF No. 4-2016-5015, Final
Order (issued Mar. 7, 2018). Available at
https://primis.phmsa.dot.gov/comm/reports/enforce/FOCPEvent opid 0.html?nocache=5590.



CPF No. 2-2017-5003
Page 4
example, in a case with facts very similar to those in the present case, PHMSA found that
“[r]elying solely on aerial patrols is inappropriate in areas where such overgrowth prevented
Valero from observing surface conditions and potential damage to its facilities or encroachments
to its rights-of-way. Respondent could have used ground patrols as an additional method of
inspection but elected not to do so.”9 Finally, while not legally binding, PHMSA has issued
other guidance stating that “[i]t is the position of the Department that, if visual aerial inspections
are used by the operator to meet the requirements of [195.412], the rights-of-way must be kept
clear of brush and trees.”10 Therefore, based on the foregoing, I find Respondent’s argument that
its due process rights and the requirements of the APA were violated lacks merit.
With regard to SPLP’s second argument, the company contends that PHMSA has attempted in
this case to “impose a subjective ground-level visibility requirement into §195.412 and relies on
insufficient evidence to try to demonstrate that SPLP failed to meet this additional
requirement.”11 I disagree. The record demonstrates that the OPS inspector personally observed
and photographed conditions at four locations along MVPL’s ROW showing that there was such
excessive undergrowth and tree canopy that the surface condition of the ROW could not be
observed from the air. I have reviewed the photographic evidence provided by the OPS
inspector and find these photographs do indeed show that the four locations on Respondent's
ROW were covered in dense overgrowth and excessive tree canopy.
12 It is evident, from
viewing the photographs, that there was no clear line-of-sight from the air to the surface of the
ROW. Accordingly, by relying solely on aerial patrols in these specific areas, Respondent could
not inspect surface conditions along its ROW.
Finally, SPLP submitted aerial ROW patrol reports from 2014, 2015, and 2016 through August
15, 2016, to demonstrate compliance with § 195.412. While the records demonstrate that SPLP
did indeed conduct aerial patrols within the requisite intervals, they are not relevant to the
allegation that Respondent could not have inspected the surface conditions at these four locations
by the use of aerial patrols.
Accordingly, after considering all of the evidence and the legal issues presented, I find that
Respondent violated 49 C.F.R. § 195.412(a) by failing to inspect the surface conditions on or
adjacent to its ROW where trees and vegetation on the ROW precluded a proper inspection of
the pipeline surface conditions by aerial patrol.
This finding of violation will be considered a prior offense in any subsequent enforcement action
taken against Respondent.
9 Nustar Energy, LP (f/k/a Valero, L.P.), CPF No. 3-2007-5002, Final Order (issued Feb. 5, 2009). Available at
https://primis.phmsa.dot.gov/comm/reports/enforce/FOCPEvent opid 0.html?nocache=5590.
10 The Honorable Jerry F. Costello, Response to Request for Interpretation, [PI-95-015] (May 28, 1991).
11 Response, at 1.
12 Pipeline Safety Violation Report (Violation Report) (May 3, 2017), at Exhibit A (on file with PHMSA).



CPF No. 2-2017-5003
Page 5
ASSESSMENT OF PENALTY
Under 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed
$200,000 per violation for each day of the violation, up to a maximum of $2,000,000 for any
related series of violations.13 In determining the amount of a civil penalty under 49 U.S.C.
§ 60122 and 49 C.F.R. § 190.225, I must 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; 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 $88,400 for the violations cited above.
Item 1: The Notice proposed a civil penalty of $88,400 for Respondent’s violation of 49 C.F.R.
§ 195.412(a), for failing to inspect the surface conditions on or adjacent to its ROW where trees
and excessive vegetation precluded inspection of the pipeline surface conditions by aerial patrol.
In its Response, SPLP contended that “the proposed penalty is unjustified and excessive.”14
Specifically, SPLP argued that PHMSA had erroneously applied the penalty assessment criteria
for gravity and culpability, resulting in a proposed civil penalty that was higher than warranted.
With regard to gravity, the Violation Report alleged the next-to-the-lowest level of gravity for
the violation, i.e., that the “[p]robable violation occurred in areas that are not in [a High
Consequence Area (HCA)] or not in an HCA ‘could affect’ segment.”15 SPLP argued that
PHMSA should have selected the lowest level of gravity, i.e., that the probable violation
occurred outside an HCA but “pipeline safety was minimally affected.” In support of its
argument, SPLP first reiterated its contention that operator personnel did not note excessive
vegetation growth as obstructing the pipeline ROW and that all inspections were performed at
the requisite intervals. Second, SPLP asserted that its ROW inspections at these locations, when
considered in conjunction with its public-awareness and damage-prevention programs and
computerized leak-detection program, provided for the overall safe operation of the pipeline.
Third, SPLP stated that there were no accidents, releases or other events that occurred on this
segment, presumably showing that no harm had resulted from its aerial inspection program.16
This penalty criterion, however, is not dependent on whether any actual harm occurred as a result
of the violation. On the contrary, it recognizes that the areas in which the violation occurred are
not the most environmentally sensitive locations but that the violation still presented a risk of
accident or injury to life, the environment and property. When trees and vegetation overgrowth
prevent a proper inspection of surface conditions along a ROW, an operator may fail to promptly
identify certain activities, including conduct by third parties, that could lead to pipeline damage
13 These amounts are adjusted annually for inflation. See, e.g., Pipeline Safety: Inflation Adjustment of Maximum
Civil Penalties, 82 Fed. Reg. 19325 (April 27, 2017).
14 Response, at 1.
15 Violation Report, at 10.
16 Response, at 5.



CPF No. 2-2017-5003
Page 6
or to identify an actual release of product. I also reject the argument that because SPLP’s
employees failed to note the existence of excessive vegetation in their patrolling reports, this
should somehow mitigate the penalty. Aerial patrols should alert operators to those situations
where excessive vegetation prevents effective inspections and thereby result in additional
clearing or alternative means of patrolling.
However, I am persuaded, in this particular case, that Respondent’s public-awareness and
damage-prevention programs and computerized leak detection, working in conjunction with the
aerial patrolling conducted pursuant to § 195.412(a), ensured that safety was only minimally
affected. Although these programs and the company’s leak-detection system do not serve as a
substitute for SPLP’s regulatory obligation to visually inspect the surface conditions of its
ROWs, they do serve to complement patrolling by monitoring pipeline integrity and minimizing
the risk of a pipeline failure or product release. I would also note that the locations cited in the
Notice as lacking adequate patrolling are located in areas that are not considered to be
environmentally sensitive HCAs. Finally, while the overgrowth inhibited SPLP’s ability to
inspect the condition of the ROW at these four locations, Respondent did perform the patrols at
the required regulatory intervals for the remainder of the ROW. Considering the totality of these
circumstances, I find that pipeline safety was minimally affected in this case and the penalty
should be reduced.
With respect to culpability, the Violation Report alleged that “[t]he operator made a deliberate
decision not to comply with a requirement that was clearly applicable.”17 SPLP argues there was
no regulatory requirement that was “clearly applicable” in this case. Additionally, Respondent
claims that PHMSA relies solely on the statement of one SPLP employee regarding the
modifications that had been made to the company’s ROW mowing program to support the
proposed penalty. Finally, Respondent argues that the inspections were completed within the
requisite interval and at no time during these inspections did company personnel note excessive
vegetation growth as prohibiting SPLP from adequately inspecting its ROW.18
According to SPLP, PHMSA appeared to be relying on the statements of a single SPLP
employee, i.e., its Operations Supervisor, regarding budget cuts that had been made to the
company’s ROW mowing program. The company argued that PHMSA failed to “connect those
purported statements to a violation of §195.412. Simply stating that funding had decreased does
not demonstrate that funding was insufficient and, once again, §195.412 does not specify any
frequency of right-of-way maintenance. Moreover, at no time did the personnel performing the
inspections note that excess vegetation growth did not allow for adequate inspection of the right-
of-way and all inspections were performed at the prescribed intervals and total number required
per calendar year.”19
I agree with SPLP that the evidence presented by the Southern Region on this Item is insufficient
to prove a deliberate violation of 49 C.F.R. § 195.412. While I suspect that the company’s
failure to clear the overgrowth obscuring its view of the ROW from the air may well have been
due to budget cuts, I find that the Southern Region has failed to meet its burden of proving that
17 Violation Report, at 11.
18 Response, at 5.
19 Id.



CPF No. 2-2017-5003
Page 7
Respondent made a deliberate decision not to comply with a requirement that was clearly
applicable. Instead, I find that SPLP simply failed to comply with a requirement that was clearly
applicable, which represents a lower level of culpability than a deliberate violation and would
therefore justify an additional reduction in the proposed civil penalty for culpability.
Notwithstanding such a reduction, I should emphasize that the diminished culpability still carries
a substantial penalty and does not negate or diminish SPLP’s obligation to inspect the surface
conditions on or adjacent to each pipeline ROW. Effective patrolling is one of the best ways for
a pipeline operator to identify encroachments, third-party damage, and leaks along its ROW that
might not otherwise be detectable and should never be compromised. Accordingly, based upon a
reduction in both the gravity and culpability assessment criteria, as discussed above, I assess
Respondent a reduced civil penalty of $23,500 for the violation of 49 C.F.R. § 195.412.
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 (AMK-325), Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 S MacArthur Blvd, Oklahoma City, Oklahoma 79169.
The Financial Operations Division telephone number is (405) 954-8845.
Failure to pay the $23,500 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.
Under 49 C.F.R. § 190.243, Respondent may submit a Petition for Reconsideration of this Final
Order to the Associate Administrator, Office of Pipeline Safety, PHMSA, 1200 New Jersey
Avenue, SE, East Building, 2nd Floor, Washington, DC 20590, with a copy sent to the Office of
Chief Counsel, PHMSA, at the same address, no later than 20 days after receipt of service of the
Final Order by Respondent. Any petition submitted must contain a brief statement of the issue(s)
and meet all other requirements of 49 C.F.R. § 190.243. The filing of a petition automatically
stays the payment of any civil penalty assessed. The other terms of the order, including any
corrective action, remain in effect unless the Associate Administrator, upon request, grants a
stay. If Respondent submits payment of the civil penalty, the Final Order becomes the final
administrative decision and the right to petition for reconsideration is waived.
The terms and conditions of this Final Order are effective upon service in accordance with 49
C.F.R. § 190.5.
May 3, 2019
___________________________________ __________________________
Alan K. Mayberry Date Issued
Associate Administrator
for Pipeline Safety
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