{"operation":"document","citation":"CPF 320031011","title":"GUARDIAN PIPELINE, LLC — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2003-12-17","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.225(a), 192.225(b), 192.241(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320031011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320031011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320031011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320031011","body":"Notice of Probable Violation involving GUARDIAN PIPELINE, LLC. PHMSA's enforcement data identifies the cited regulations as 192.225(a), 192.225(b), 192.241(c). The case was opened on 2003-12-17 and is reported as closed as of 2006-03-13. Proposed civil penalty: $135,000. Assessed civil penalty: $135,000. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320031011_Final Order_02162004.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320031011/320031011_Final%20Order_02162004.pdf\n\nCPF NO 3-2003-1011 PANHANDLE ENERGY.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320031011/CPF%20NO%20%203-2003-1011%20PANHANDLE%20ENERGY.pdf\n\n320031011_Final Order_02162004.pdf\n\n@\nU.S. Deportment\nof Tronsportolion\nPlp€llne ond\nHozordous ltqtedots Sqfety\nAclmini$rqtion\n400 Seventh Stre€1, S.W.\nWashington, D.C. 20590\nFEB 16 ,i ,)\nMr. Richard E. Keyser\nVice President, Operations and Engineering\nPanhandle Energy\n5444 Westheimer Road\nHouston, Texas 77056\nMr. Richard Gielecki\nPresident, Guarciian Pipeiine\n200 South Executive Drive, Suite I 0l\nBrookfi eld, Wisconsin 53005\nRe: CPFNo. 3-2003-1011\nDear Mr. Keyser and Mr. Gielecki:\nEnclosed is the Final Order issued by the Associate Administrator for Pipeline Safety in\nthe above-referenced case. It makes findings of violation and assesses a civil penalty of\n$135,000. The penalty payment terms are set forth in the Final Order. This enforcement\naction closes automatically upon payment. Your receipt of the Final Order constitutes service\nunder49 C.F.R. $ 190.5.\nSincerely,\nA*- [tz---\n\\ / f\nJames Reynolds\nPipeline Compliance Registry\nOffice of Pipeline Safety\nEnclosure\nCEUIEIED T44IL-._-RETURN RECEIPT REOUESTED\n\n\n\nDEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAF'ETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nGuardian Pipeline\nand\nPanhandle Energy,\nRespondents\n)\n)\n)\n)\n)\n)\n)\n)\n\\\nCPF No. 3-2003-10ll\nFINAL ORDER\non various dates throughout July, August, and october 2002, pursuantto 49 u.s.c. $ 60117,\nrepresentatives of the Office of Pipeline Safety (OPS) conducted an on-site pipeline safety\ninspection of the \"Guardian Pipeline\" facilities and records in Illinois and Wisconsin. As a result\nof the inspection, the Director, Central Region, OPS, issued to Panhandle Energy, by letter dated\nDecember 17,2003, a Notice of Probable Violation and Proposed Civil Penalty (Notice). In\naccordance with 49 C.F.R. $ 190.201\n,\nthe Notice proposed finding that Panhandle Energy had\ncommitted violations of 49 C.F.R. Part 192 and proposed assessing a civil penalty of $135,000\nfor the alleged violations. The Notice also warned Panhandle Energy to take appropriate\ncorrective action.\nPanhandle Energy responded to the Notice by letter dated January 7\n, 2004, explaining that it\nbelieved Guardian Pipeline should be served with the Notice. Guardian Pipeline subsequently\nresponded on January 29, 2004, stating that it had received a copy of the notice on or about\nJanuary 7,2004 from Panhandle Energy. Guardian Pipeline concurred in Panhandle Energy's\nresponse.and explained the organizational relationship between Panhandle Energy and Guardian\nPipeline.' At the time of the inspection, Panhandle Energy was a subsidiary of CMS Gas\nTransmission Company (CMS). CMS was one of three companies that held a partnership\ninterest in Guardian Pipeline. Panhandle Energy, through its subsidiary relationship with CMS,\nwas assigned to handle operational aspects of the pipeline. However, the pipeline was owned by\nthe Guardian Pipeline partnership. As the pipeline safety laws are applicable to the operator,\nPanhandle Energy, and the owner, Guardian Pipeline, of this pipeline at the time of the\ninspection, in accordance with 49 U.S.C. $ 60102, both Guardian Pipeline and Panhandle Energy\n(Respondents) may be held jointly and severably liable for the violations alleged in the Notice.\n' See letter from Panhandle Energy to Office of Pipeline Safety, January 7, 2004; letter fiom Guardian Pipeline to\nOffice of Pipeline Safety, Ianuary 29,2004. See also Transoipt of Hearing,pages 6-13.\n\n\n\n2\nThe Respondents' concurring responses requested a hearing to contest Probable Violations I (a),\n1(b), I (c), and 2 as alleged in the Notice, as well as to explain the business relationships between\nthe entities, discussed above. The hearing was held on March 23,2004 in Kansas City, Missouri.\nRepresentatives of Guardian Pipeline, CMS, and Panhandle Energy (along with its Trunkline\nGas Company unit) appeared at the hearing.\nF'INDINGS OF VIOLATION\nThe Notice alleged three violations of 49 C.F.R. $ 192.225, regarding welding procedures, as\napplied more generally through the requirement in 49 C.F.R. $ 192.303 that transmission lines be\nconstructed in accordance with comprehensive written specifications or standards.\nProbable Violation l(a) alleged a failure to follow the entirety ofthe procedure established by\nSection A.3.1 of the Appendix to API Standard 1104 (the Appendix) when qualifuing welds on\npipe of .357\" nominal wall thickness. The Appendix may provide an otherwise satisfactory\nmethoci to determine the acceptability of welds in this case, so long as the procedure is fbllowed\ninitsentirety(asrequiredby$$192.225and192.303). TheAppendixrequiredthatbothhigh\nand low values ofgas flow rate be established during the procedure qualification test. At the\nhearing, a representative for Panhandle Energy confirmed that these high and low values were\nnot established, but that the welds at issue were qualified using an altemative method based on a\nsingle midpoint value.2 This alternative method was not contemplated by the Appendix,\nhowever, and thus utilizing this altemative method amounted to a failure to follow the\ncomprehensive written procedures for qualifying the welds established by the Appendix.\nAccordingly, I find that the Respondents violated 49 C.F-.R. gg 192.225 and 192.303.\nProbable Violation 1(b) alleged a failure to qualify a welding procedure, as required by $\n192.225, for use when weiding .514\" nominal wall thickness pipe. API Standard 1104 requires\nrequalification of a welding procedure, even if it is identical in form, whenever that welding\nprocedure will be applied to a pipe that varies more than .125 inches in nominal wall thickness\nfrom the pipe for which the procedure was originally qualified. Generally, nominal wall\nthickness is considered to be the wall thickness that is listed on a pipe's specifications.' The\nevidence in the record indicates that the wall thickness of the .514\" pipe is more than .125\"\ngreater than the .357\" pipe, referenced above, for which the Respondents qualified a procedure.\nThe record indicates that a procedure was used that had been previously qualified for a different\nwall thickness pipe by a different operator. Further, during the hearing, representatives of\nPanhandle Energy and Guardian Pipeline stated that a welding procedure was not qualified for\nuseonthe.514\"pipe. Aecordingly, IfindthattheRespondentsviolated49C.F.R.$$192..225\nand 192.303.\nProbable Violation I (c) alleges a failure to follow, for the .514\" nominal wall thickness pipe, the\nprocedures established by the operator requiring that \"new welding procedures shall be qualified,\nsubmitted to and approved by the Engineer prior to welding on project piping.\" Ihe allegation is\nessentially that the Respondents failed to follow their own procedures. This violation parallels\nProbable Violation 1(b) in that whether a violation took place hinges upon whether the operator\n2. See Transcript, pages 26-28.\n'See, e.g., definition at 49 C.F.R. g 195.2.\n\n\n\n3\nqualified a procedure for welding the .514\" pipe. As established above, the Respondents did not\nhave a qualified procedwe in this instance. Accordingly, I find that the Respondents violated 49\nC.F.R. $$ 192.225 and 192.303.\nThe Notice also alleged one violation of 49 C.F.R. $ I 92.241 (c), involving the determination of\nthe acceptability of welds. Probable Violation 2 alleged a failure to use Section 6 of API\nStandard I 104 to evaluatc the acceptability of certain welds. As stated in the Notice, OPS\ninspectors observed records indicating that welds joining pipe of .357\" nominal wall thickness to\npipe of .429\" nominal wall thickness were not evaluated in accordance with Section 6, but\ninstead were evaluated in accordance with the Appendix to API Standard I 104 (the Appendix).\nThe Appendix states, however, that \"fo]nly circumferential welds between pipes of equal\nnominal wall thickness are covered by this Appendix.\" At the hearing, the Respondents and\nOPS staff focused on the meaning of nominal wall thickness, with the Respondents arguing that\n.357\" and .429\" pipe could, in certain circumstances, be considered to have equal wall thickness.\nAs established above, nominal wall thickness is generally construed in terms of the specifications\nlisted for a particular pipe. Thus, since the pipe specifications in the current instance were listed\nat .357\" and .429\" nominal wall thickness, they are of unequal wall thickness and should be\nevaluated under Section 6. Accordingly, I find that the Respondents violated 49 C.F.R. $\n192.241(c\\.\nASSESSMENT OX'PENALTY\nUnder 49 U.S.C. S 60122, Respondent is subject to a civil penalty not to exceed $25,000 per\nviolation for each day of the violation up to a maximum of $500,000 for any related series of\nviolations.\" The Notice proposed a total civil penalty of $ I 35,000 for the violations.\n49 U.S.C. S 60122 and 49 C.F.R. $ 190.225 require that, in determining the amount of the civil\npenalty, I consider the following criteria: nature, circumstances, and gravity of the violation,\ndegree of the Respondents' culpability, history of the Respondents' prior offenses, the\nRespondents' ability to pay the penalty, good faith by the Respondents in attempting to achieve\ncompliance, the effect on the Respondents' ability to continue in business, and such other matters\nas j ustice may require.\nAll of the violations in this case involve aspects of the welding of pipeline joints during the\nconstruction of a new pipeline. Strong, sound welds are critical to the structural integrity of a\npipeline. The failure of even one weld can lead to a ruptue that could have dire consequences\nfor nearby persons or the environment: Hence, while the failure to properly evaluate the\nsoundness of welds or to properly qualify a welding procedure may seem like mere procedural\noversights, the implications may be severe. Fortunately, in the present case, after OPS inspectors\npointed out these oversights, the operator properly reevaluated welds and qualified valid welding\nprocedures where necessary. This is greatly to the Respondents' benefit, as their workers reacted\nto OPS inspectors' concerns promptly and before ever receiving the Notice. The Respondents'\ngood faith efforts to eorreot the issrres idcntifierl were noted rn the Notice and thr-rs considerecl- in\no The Pipeline Safety Improvement Act of 2002, Pub. L. No. 107-355, $ S(bXl), I l6 Stat. 2992, increased civil\nliability for violation of federal pipeline safety standards to $ I 00,000 per violation for each day of the violation up to\na maximum of$ 1,000,000 for any rclated series of violations.\n\n\n\na!\ncalculating the proposed penalty.\nHaving reviewed the record and considered the assessment criteria, I assess the Respondents a\ntotal civil penalty of $135,000. The Respondents have the ability to pay this penalty without\nadversely affecting their ability to continue in business. The penalty is attributed jointly and\nfully to both the owner and operator of the pipeline, thus either respondent may pay the full\npenalty or they may apportion the penalty among them.\nPaynent of the civil penalty must be made within 20 days of service. Federal regulations (49\nC.F.R. $ 89.21(bX3) require this payment be made by wire transfer, through the Federal\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\nrnstructi