{"operation":"document","citation":"CPF 320075027H","title":"EXPRESS HOLDINGS (USA), LLC — Corrective Action Order","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2007-09-13","effective_on":null,"summary":"CLOSED corrective action order.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075027h.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075027h.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320075027h","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320075027H","body":"Corrective Action Order involving EXPRESS HOLDINGS (USA), LLC. The dataset does not identify a cited regulation for this case. The case was opened on 2007-09-13 and is reported as closed as of 2011-01-26. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320075027H_CAO_09132007.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_CAO_09132007.pdf\n\n320075027h_cao_09132007_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027h_cao_09132007_text.pdf\n\n320075027H_Closure Letter_01262011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Closure%20Letter_01262011.pdf\n\n320075027H_Closure Letter_01262011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Closure%20Letter_01262011_text.pdf\n\n320075027H_Decision on CAO_03172008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Decision%20on%20CAO_03172008.pdf\n\n320075027h_decision on cao_03172008_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027h_decision%20on%20cao_03172008_text.pdf\n\n320075027H_Decision on Petition for Reconsideration_06162010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Decision%20on%20Petition%20for%20Reconsideration_06162010.pdf\n\n320075027H_Decision on Petition for Reconsideration_06162010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Decision%20on%20Petition%20for%20Reconsideration_06162010_text.pdf\n\n320075027H_Petition for Reconsideration_04072008.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320075027H/320075027H_Petition%20for%20Reconsideration_04072008.pdf\n\n320075027H_Decision on Petition for Reconsideration_06162010_text.pdf\n\nJUN 16 2010\nMr. David DeVeau\nVice President, General Counsel\nGas Pipeline Operations & Engineering\nKinder Morgan, Inc.\nOne Allen Center, Suite 1000\n500 Dallas Street\nHouston, TX 77002\nRE: CPF No. 3-2007-5027H\nDear Mr. DeVeau:\nI am writing in response to your April 7, 2008 letter, entitled “Petition for Reconsideration.\n”\nThis Petition was submitted following a March 17, 2008 Post-Hearing Decision (Decision)\ncontinuing the Corrective Action Order (CAO) that the Pipeline and Hazardous Materials Safety\nAdministration (PHMSA) issued on September 13, 2007. In the Petition, Kinder Morgan\nPipelines (USA), Inc., formerly known as Terasen Pipelines (USA), Inc. as operator of the Platte\nPipeline Company (Petitioner or Platte), states that, “[I]t was and remains Platte’s position that a\nhazardous condition did not exist at the time of the issuance of the CAO.”1 Petitioner requests\nthat “PHMSA rescind the ‘hazardous’ finding contained in the CAO, either by withdrawing the\nCAO itself or converting the CAO to a Consent Order.”2\nBefore responding to your request, I note that your letter presumes that Petitioner has the right to\nfile a petition for reconsideration in this case. However, the Pipeline Safety Laws do not afford\nyou such a right.\n3\nNonetheless, I will address your concerns as a matter of discretion.\n1 Petition for Reconsideration in the Matter of Terasen Pipelines (USA), Inc. CPF No. 3-2007-5027H.\n2 Id at 2.\n3\nThe authority relied upon in your letter, 49 C.F.R. § 190.215, states, in relevant part, that “[a] respondent may\npetition the Associate Administrator, OPS for reconsideration of a final order issued under § 190.213.” I note that\nonly “enforcement proceedings commenced under § 190.207”—i.e., those proceedings that “begin[]” when “a\nRegional Director . . . serv[es] a notice of probable violation on a person charging that person with a probable\nviolation of 49 U.S.C. 60101 et seq. or any regulation or order issued thereunder”\n—result in a final order issued\nunder § 190.213. As this proceeding commenced under 49 C.F.R. § 190.233(b) when the Director, Central Region,\nOPS, served your company with a CAO after he found that Platte Pipeline was a hazardous facility, and I issued my\nDecision in support of that finding under 49 C.F.R. § 190.233, the right to seek reconsideration under 49 C.F.R. §\n190.215 is not applicable.\n.\n\n\n\nPetitioner supports its contention that no hazardous condition existed by reminding PHMSA of\nits full cooperation with PHMSA following the September 6, 2007 release. This is an argument\nthat, as Platte states, was also raised in its Request for Hearing submission and in its Post-\nHearing Submittal. I thoroughly addressed this in the Decision and Petitioner has not provided\nany justification for amending it. Furthermore, Petitioner has failed to specify any new evidence\nor analysis that was not raised at the hearing held on November 9, 2007, or in Petitioner’s post-\nhearing submission. Therefore, there is no basis upon which to reconsider the Decision.\nFurthermore, Platte stated that it was filing the petition “solely to preserve Respondent’s rights in\nthe event that the parties do not ultimately reach a satisfactory resolution.” PHMSA and Platte\nhave since agreed upon a return-to-service plan that has been implemented by the company.\nTherefore, it appears that Petitioner no longer has an interest in pursuing this Petition for\nReconsideration.\nAfter considering all the evidence, I hereby deny Platte’s Petition for Reconsideration.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\ncc: Mr. David Barrett, Director, Central Region, PHMSA\nRobert Hogfoss and Catherine D. Little, Hunton & Williams LLP\nBank of America Plaza, Suite 4100\n600 Peachtree Street, NE, Atlanta, GA 30308-2216\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED [7009 1410 0000 2472 2537]\n2\n\n320075027H_Closure Letter_01262011_text.pdf\n\nCERTIFIED MAIL – RETURN RECEIPT REQUESTED\nJanuary 26, 2011\nMr. Hugh Harden\nVice President, Operations and Engineering\nKinder Morgan Pipelines (USA), Inc.\nSuite 2700 - 300\n5th Avenue SW\nCalgary, Alberta, Canada\nT2P - 5J2\nCPF 3-2007-5027H\nDear Mr. Harden:\nOn September 13, 2007, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) issued a Corrective Action Order (Order) to Terasen Pipelines (USA), Inc. in the\nabove-referenced case. This Order included requirements to take corrective actions on your\npipeline. Based upon our field monitoring of the corrective actions taken and a review of the\ndocumentation you provided, it has been determined that you complied with the terms of the\nOrder.\nAccordingly, this case is now closed and no further action is contemplated with respect to the\nmatters involved in this case. Thank you for your cooperation in this matter.\nSincerely,\nDavid Barrett\nDirector, Central Region\nPipeline and Hazardous Materials Safety Administration\n\n320075027h_decision on cao_03172008_text.pdf\n\nU S Department\nof Transportation\nPipeline and Hazardous\nMaterials Safety\nAdministration\n1200 New Jersey Ave S E\nWashington DC 20590\nVIA CERTIFIED MAIL AND FACSIMILE TO: 403 514-6441\nDavid DeVeau, Esq.\nVice President, Deputy General Counsel\nPlatte Pipeline\nKinder Morgan Pipelines (USA), Inc.\nOne Allen Center, Suite 1000\n500 Dallas\nHouston, TX 77002\nRe: CPF No. 3-2007-5027H\nDear Mr. DeVeau:\nEnclosed is the Post-Hearing Decision Continuing the Corrective Action Order issued in the\nabove-referenced case. This docmnent is being served by certified mail and facsimile, Your\nreceipt of the enclosed document constitutes service of the docinnent, the terms and conditions of\nwhich are effective upon receipt.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Ivan Huntoon, Director, Central Region, OPS\nRobert Hogfoss, Esq. ,\nHunton k, Williams\n\n\n\nU. S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, DC 20590\nIn the Matter of\nKinder Morgan Pipelines (USA), Inc.\n(formerly Terasen Pipelines (USA), Inc. ) )\nRespondent.\n)\n)\n)\n, )\n)\n)\nCPF No. 3-2007-5027H\nPOST-HEARING DECISION CONTINUING\nCORRECTIVE ACTION ORDER\nOn September 13, 2007, the Associate Administrator for Pipeline Safety, Pipeline 4 Hazardous\nMaterials Safety Administration (\"PHMSA\"), issued a Corrective Action Order (\"CAO\"), under\nauthority of 49 U. S. C. $ 60112, finding that continued operation by Terasen Pipelines (USA),\nInc. (\" Respondent\" or \"Kinder Morgan\" )' of certain segments of the Platte Pipeline system\ncontaining Kaiser single-submerged arc welded (\"SSAW\") pipe between Casper, Wyoming, and\nWood River, Illinois, would be hazardous to life, property, and the environment unless certain\ncorrective measures were taken. The CAO specified ten immediate corrective actions that the\nRespondent was required to take in order to address the hazardous conditions. The CAO further\nfound that the failure to issue the CAO expeditiously would likely result in serious harm to life,\nproperty, or the environment.\nBac round\nThe CAO in this case was issued in response to a September 6, 2007 failure that resulted in the\nrelease of approximately 3, 843 barrels of crude oil near the town of Bellflower, Missouri. The\ncrude oil shot high into the air as it leaked from the pipeline; photographs of the release site\nshowed surrounding trees and the surface and banks of a nearby pond coated with oil. Three\nhomes within one-half mile of the site were evacuated as a precautionary measure. The release\noccurred on one of five segments of the Platte Pipeline consisting of Kaiser SSAW pipe\nmanufactured in 1952.\n' The Corrective Action Order was issued to Terasen Pipelines (USA), Inc. . Kmder Morgan Pipelines (USA), Inc.\nresponded to the CAO, stating that \"Terasen Pipelmes (USA) Inc, now known as Kmder Morgan Pipelines (USA),\n\"\nInc.\n,\nwas the operator of the Platte Pipeline system.\n\n\n\nFollowing the issuance of the CAO on September 13, 2007, the Respondent, by letter dated\nSeptember 24, requested a hearing in order to contest the CAO. On that same date, Respondent\nsubmitted two documents entitled, \"Response to the Corrective Action Order\" and \"Statement of\nthe Issues. \" In these documents, the Respondent opposed the \"hazardous\" finding in the CAO\non the ground that the Respondent had voluntarily agreed, prior to issuance of the CAO, to\nreduce the operating pressure of the line and to perform certain testing and failure analysis. The\nRespondent also argued that PHMSA violated its duty of fairness to the Respondent because it\nhad issued the CAO without formal notice and opportunity for a hearing.\nAn informal administrative hearing was subsequently held in Kansas City, Missouri, on\nNovember 9, 2007, with Ms. Amelia Samaras, Esq. ,\nof the Office of Chief Counsel, PHMSA,\nserving as the presiding official. Both the Respondent and the Central Region, PHMSA, were\nrepresented by counsel and presented evidence in support of their respective positions regarding\nthe validity of the issuance of the CAO, At the hearing, the Respondent did not dispute\nPHMSA's technical conclusions with regard to the hazardous condition of the Kaiser SSAW\nsegments of the Platte Pipeline at the time of the release. However, the Respondent reiterated the\narguments presented in its pre-hearing submissions and raised concerns about the implications\nthat a hazardous finding might have for Kinder Morgan outside of its relationship with PHMSA.\nIn lieu of receiving a prompt decision by the presiding official, the Respondent requested\npermission to file a post-hearing submission. The presiding official granted the request and the\nRespondent filed a post-hearing submission on December 5, 2007.\nIn its post-hearing submission, the Respondent reiterated its position that the issuance of the\nCAO was improper because any potential hazard that may have existed on the Platte Pipeline at\nthe time of the accident on September 6, 2007 had been abated by the time the CAO was issued\non September 13 and that no hazardous condition existed as of the November 9 hearing date.\nRespondent's counsel stated, \"As discussed at the Hearing, Platte respectfully submits that a\nhazardous condition did not exist at the time of issuance of the CAO, and it clearly does not exist\nat present. \" The Respondent also argued that PHMSA's issuance of the CAO conflicted with\nPHMSA's performance-based regulatory scheme and that it was fundamentally unfair for\nPHMSA to issue the CAO without notice and hearing. The following decision is divided into\nthree sections: Part I discusses the initial hazardous facility finding in the CAO; Part II discusses\nthe continuation of the hazardous facility finding; and Part III discusses the Respondent's other\narguments raised in opposition to the CAO.\nI. CAO Hazardous Facili Findin\n49 U. S. C. $ 60112(a) requires that in making a finding that a facility is or would be \"hazardous\nto life, property, or the environment, \" PHMSA must consider, if relevant, \"the characteristics of\nthe pipe. . . including the age, manufacture, physical properties, and method of manufacturing,\nconstructing or assembling. . .\n\" At the hearing, PHMSA presented the following evidence in\nsupport of its determination in the CAO that the facility would be hazardous unless certain\ncorrective actions were taken.\n' Letter from Robert Hogfoss at Ameha Samaras, PHMSA, dated December 5, 2007, at 3.\n\n\n\nA. Environmental Severity of the Bellflower Accident\nPHMSA produced evidence at the hearing regarding the natme and extent of the crude oil release\nnear Bellflower, Missouri. The crude released from the ruptured pipeline flowed into an adjacent\npond, coating the surface of the pond and the pond's banks. The environmental impacts of the\nspill appear to have been limited to fish and other species dependent upon the pond. From the\nevidence, it is clear that the release could have caused much greater environmental impacts and\npublic safety risks had it not been contained by the pond.\nB. Failure History of Kaiser SSAW Segments along the Platte Pipeline\nPhotographs taken at the Bellflower release site revealed that the pipe ruptured along the seam\nweld. Kaiser SSAW pipe is known to have a seam weld lack of fusion (\"LOF\") defect. LOF\ndefects exist where the pipe metal and the weld metal fail to combine or fuse completely during\nthe manufacturing process. This defect results from poor welding technique. Kaiser SSAW\nweld metal is also known to have low toughness. ' When material with low toughness is\nsubjected to pressure fluctuations, tiny cracks and striations form in the material. These cracks\nand stations are known as \"fatigue damage. \" The combination of the LOF defect and low\ntoughness have made the Kaiser SSAW segments of the Platte Pipeline particularly susceptible\nto failure.\nPHMSA presented the following evidence detailing the failure history of Kaiser SSAW pipe\nsegments along the Platte Pipeline:\n~ The Platte Pipeline was subject to a \"Hazardous Facility Order\" from 1992 to 1996\nfollowing a seam weld failure that occurred on Kaiser SSAW pipe on January 9, 1992\nnear Salisbury, Missouri. Fom thousand one hundred barrels of crude oil were\nreleased into the environment. The failure resulted from the combination of a LOF\nseam weld defect and low toughness. Hydrostatic testing following the 1992 release\nresulted in four more failures of SSAW Kaiser pipe, each along the seam weld.\n~ On February 1, 2006, a leak was discovered 0. 5 miles downstream from the Casper\nStation on Kaiser SSAW pipe. Fifty barrels of product were released.\n' See photos attached to CAO (CPF No 3-2007-5027H).\nHazardous Facility Order Case File No 32502-H, Platte Pipeline Failure Analysis by DnV (Feb 27 1992), figure\n24.\n\"Mechanical Properties of Eight Pipe Sections from the Platte 22\" System, S F. Biagiotti (Intracompany\nCorrespondence) (December 22, 1992) (\" Evaluation of the toughness data reveals two important observations First,\nthe SSAW seam welded pipe has weld toughness properties significantly different from the base pipe properties\nSecond, the seam toughness values of the SSAW pipe are extremely low at temperatures below 80'F. \")\nSee also, Corrective Action Order, CPF 3-2007-5027H (September 13, 2007) at 3.\n' Hazardous Facility Order. CPF 32502-H (January 24, 1992)\n\n\n\n~ Laboratory analysis revealed that the cause of the release was the same LOF seam\nweld defect. This seam weld defect grew as a result of fatigue damage that was\nfacilitated by material with low toughness.\n~ A log submitted by the Respondent showed at least 12 other failures of Kaiser SSAW\npipe due to LOF seam weld defects. Each of these failures occurred during normal\noperation of the pipeline (i. e. not during testing) and released product into the\nenvironment.\n~ Approximately 15 other seam weld failures occurred during hydrostatic testing of\nKaiser SSAW pipe between 1972 and the present. '\nThis failure history demonstrates the pervasive nature of seam weld defects on the Kaiser SSAW\nsegments of the Platte Pipeline.\nC. Current Condition of Kaiser SSAW Pipe Segments Along Platte Pipeline\nAt the hearing, PHMSA also presented the following evidence of In-Line Inspection (ILI) data\nthat revealed the general condition of Kaiser SSAW seam weld on the Platte Pipeline:\n~ In 1998, the Respondent conducted Seam Weld Anomaly Detection testing with a\nTransverse Flux Inspection ILI Tool. Based on analysis of the data collected during\ntesting, the Respondent conducted 55 repairs to address LOF seam weld anomalies\ndetected on Kaiser SSAW pipe.\n~ In 2006, the Respondent reprocessed the data from the 1998 Seam Weld Anomaly\nDetection testing. The re-analysis revealed 20 new seam weld anomalies on Kaiser\nSSAW pipe. The Respondent selected 15 of the seam weld anomalies for repair. \"\n~ In 2006, the Respondent conducted ILI testing using an ultrasonic crack detection\ntool. Twelve of the 17 anomalies selected for repair were related to seam weld\nproblems. '\n~ Since 1996, seven separate ILI tools were run through the pipe joint that failed near\nBellflower, Missouri on September 6, 2007.\n' Metallurgical Report. Failure Analysis of February 1, 2006 leak of Platte Pipelme at Joint 740\nPlatte Pipehne Company, Kaiser Pipe Failure (11/16/2007)\n' Id\n\" \"Listing of Seam Weld Anomaly Repairs based on 1998 Transverse Flux Inspection Tool (TFI) ILI Tool \"\n' \"Listing of Seam Weld Anomalies exammed based on 2006 re-processing of the 1998 TFI data. \"\n\n\n\nThe fact that failures have continued to occur on this pipeline, even after the completion of\nmultiple in-line inspections and at least 72 repairs, demonstrates that the use of in-line inspection\ntools has not been fully successful in locating all of the anomalies due to pervasive seam weld\ndefects. In consideration of this known failure and repair history of the Kaiser SSAW segments,\nthe magnitude of the Bellflower release, and the fact that the September 6 failure appeared to\nhave been caused by the same type of seam weld failure that had occurred in the past, I find that\nissuance of the CAO on September 13, 2007 and PHMSA's determination that the Kaiser SSAW\nsegments of the Platte Pipeline \"would be hazardous to life, property or the environment\" unless\ncertain corrective actions were taken, was reasonable and proper.\nII. Continuation of CAO\nAt the hearing, PHMSA presented the findings of Kinder Morgan's own metallurgical report to\nsupport the agency's argument that the CAO should remain in effect. The report found that the\nrupture along the longitudinal seam weld, like the series of previous failures, was caused by the\ncombination of a LOF defect and fatigue damage that had further weakened the inadequately\nfused seam weld. '\nThe magnified images included in the report discussed three different regions of pipe metal;\nPHMSA regional staff explained each region's role in the failure. ' Region 1, closest to the\ninside diameter of the pipe, exhibited the LOF defect that was present when the pipe was\nmanufactured in 1952. ' Two distinct layers of metal in this region indicated that the metal did\nnot properly fuse during manufacture. Region 2 exhibited fatigue damage in the form of ratchet\nmarks, beach marks, and fatigue striations caused by pressure fluctuations on the low toughness\nmetal. Region 3, closest to the outside diameter, was composed of the remaining metal that held\nthe seam together just prior to failure. ' PHMSA stated that the weakness of Regions 1 and 2\nwas further evidenced by the fact that the rupture occurred at an operating pressure of 1053\npounds per square inch, which was less than the maximum operating pressure of 1098 psi.\nFurthermore, PHMSA pointed out that the seam weld anomaly resulting in the Bellflower seam\nweld rupture had not been repaired as a result of the previous ILI testing, PHMSA argued that\nthe metallurgical report suggested that other seam weld anomalies might still exist but remain\nundetected or unrepaired. If such anomalies did exist, they would have also been subject to\npressure fluctuations that could have further weakened the seam weld by causing fatigue damage\nin the weld metal. '\nPHMSA also addressed the Respondent's argument that the company's voluntary pressure\nreduction cured any hazardous condition that may have existed at the time of the rupture.\n\" Final Report, Kmder Morgan Pipehnes, Factual Metallurgical Report: Failure Analysis of Rupture on 20-mch\nDiameter Platte Pipelme at MP 858 23, Bellflower, Missouri [hereinafter, Kinder Morgan Final Report], Figure 34\n' PHMSA November 9, 2007 CAO hearmg power point and oral presentation.\n' Final Report, supra note 20\n' Final Report, supra note 20, at Figure 34\n\"Assessment History of Kaiser Pipe seams on the Platte Pipehne Prior to September 6, 2007\n\n\n\nPHMSA cited the Respondent's own investigative report, entitled \"Evaluation of the\nEffectiveness of Pressure Reduction on the Platte Pipeline, \" prepared in accordance with\nRequired Corrective Action Item 4 of the CAO, which states, \"Our most conservative analysis\nindicates that if a defect was undetected and just on the verge of failing at the pre-incident\nmaximum operating pressure, it could enlarge to the point where it may fail at the reduced\no eratin ressure in an estimated 1. 8 years\" (emphasis added). PHMSA emphasized that this\nfinding confirms that the pressure reduction alone did not fully address the hazards posed by the\nKaiser SSAW segments of the Platte Pipeline,\nIn summary, the foregoing evidence, as presented at the hearing and in PHMSA's Response to\nKinder Morgan Statement of the Issues, demonstrates that Kaiser SSAW segments of the Platte\nPipeline continued to pose a hazard to life, property, and the environment unless certain\ncorrective actions are taken. 49 U. S. C. $ 60112(a).\nIII. Res ondent's Other Ob'ections to Issuance of the CAO\nAlthough the Respondent did not dispute the technical analysis that PHMSA presented in\nsupport of its issuance of the CAO, it did raise a number of other objections to the agency's\nissuance of the CAO on September 13, 2007. Each of Respondent's objections is addressed\nbelow as follows:\nA. Issuance of CAO Not Necessary\nAs noted above, the Respondent has argued that issuance of the CAO was unnecessary because\nthe Respondent had agreed to undertake certain pressure reductions and pipe analysis after the\naccident but before the CAO had been issued. The Respondent suggested that its cooperation\ndemonstrated that a legal order was not necessary because PHMSA and Kinder Morgan had\nshown that they could work together cooperatively to address safety issues. In response,\nPHMSA officials noted that they appreciated the Respondent's cooperation and willingness after\nthe accident to address the risks that Kaiser SSAW pipe posed to life, property, and the\nenvironment. However, under the Federal Pipeline Safety Law, the Secretary of Transportation\n\"shall ordev the operator of the facility to take necessary corrective action\" if [s]he determines\nthat a pipeline facility is or would be hazardous to life, property or the environment. 49 U. S. C. $\n60112 (emphasis added).\nThe use of a CAO, an administrative tool bestowed upon PHMSA by Congress, provides an\nenforceable, systematic, and predictable process for managing conditions that could endanger\npublic health, safety, or the environment. Even though an operator may agree or disagree with\nthe issuance of the CAO, the order provides an appropriate means of ensuring immediate\ncompliance with measures that the Secretary believes are needed to protect the public while still\nallowing the Respondent to challenge the findings and compliance terms within a reasonable\ntime. U. S. C. ) 60119 and 49 C. F. R. $ 190. 221. In this case, the ongoing mandatory provisions\nof the CAO also ensure that the Respondent is legally obliged to take necessary corrective\nactions in addition to the voluntary pressure reduction and that are responsive to new information\nthat is gained about the condition of the pipeline in the months following the accident.\nI do not mean to minimize the importance of Kinder Morgan's willingness to take prompt action\nfollowing the Bellflower incident to address the risks posed by the Kaiser SSAW segments.\n\n\n\nNevertheless, PHMSA has a duty to the public to ensure pipeline safety. In this case, where the\nagency had determined that the facility would be hazardous if certain corrective actions were not\ntaken, I believe it acted reasonably to prevent the likelihood of serious harm to life, property, and\nthe environment. Furthermore, the Respondent's own analysis demonstrated that the pressure\nreduction in place at the time of the CAO did not cure the hazardous condition caused by the\nLOF seam weld defect and fatigue damage.\nB. PHMSA's Performance-Based Regulatory Scheme Inconsistent With\nIssuance of a CAO\nDuring the hearing and in its post-hearing submission, the Respondent also argued that \"[i]t\nwould be inconsistent for the Agency to promulgate performance based regulations intended to\npredict and avoid pipeline failures, but then insist that activities meeting those goals are\ninsufficient to dispel a finding of hazardous condition. \" It is true that PHMSA has adopted a\nlargely performance-based regulatory scheme. This program is premised on a risk-based\napproach that encourages pipeline operators to focus on the issues and risks most relevant to\ntheir facilities. CAOs serve to complement the agency's performance-based regulatory approach\nwhen a release or other circumstances demonstrate that a facility is or would be hazardous to life,\nproperty or the environment if immediate corrective actions were not taken.\nGiven the pervasive nature of the LOF defects and the failure history of the Kaiser SSAW\nsegments in this case, in-line inspections had clearly proven insufficient to ensure the safety of\nthe line, Accordingly, in consideration of all the circumstances surrounding the Bellflower\naccident, PHMSA determined that more aggressive measures were needed to protect life,\nproperty and the environment and issued the CAO. I find that issuance of the CAO on\nSeptember 13, 2007 constituted a reasonable and prudent response to a serious accident that was\nconsistent with the agency's overall performance-based regulatory approach.\nC. Possible Collateral Harm to Respondent\nDuring the hearing and in its post-hearing submission, the Respondent further argued that the\n\"hazardous\" finding in the CAO might have implications for the company outside of its\nrelationship with PHMSA that could cause collateral harm to the Respondent. PHMSA\nresponded that the agency takes what it considers to be a reasonable and prudent approach to the\nissuance of CAOs, regardless of their potential impact on private litigation, public relations, or\nother matters outside the purview of PHMSA's public responsibilities. Because available\ninformation in this case indicated that the failure likely involved pervasive problems with the\nKaiser SSAW segments of the Platte Pipeline, PHMSA properly concluded that a CAO was\nnecessary for the protection of life, property, and the environment. I would remind the\nRespondent that the issuance of a CAO in this case does not constitute a finding of violation,\ncarries no civil penalties, and ensures that Kaiser SSAW segments of the Platte Pipeline will\nreceive additional regulatory oversight so that safety problems on the line are properly addressed.\nD. Issuance of CAO Violated Due Process\nFinally, the Respondent has argued that issuance of the CAO without formal notice and an\nopportunity for a hearing violated its constitutional right of due process and cited TVA v.\nWhitman, 336 F. 3d 1236 (11'\" Cir. 2003), in support.\n\n\n\nThe Respondent quoted that court as stating, \"One of the most fundamental tenets of justice or\nfairness for an administrative agency is to allow a respondent an opportunity to address\nallegations and issues presented by an administrative order, especially where the respondent may\nbe subject to significant sanctions for failure to comply. \" Id. at 1258.\nUnfortunately, the TVA case does not support Respondent's argument. That case held that a\ncertain procedural provision of the Clean Air Act (\"CAA\")' violated due process because it\nauthorized the EPA Administrator to make findings of violation through \"Administrative\nCompliance Orders\" (\"ACOs\") that could be based upon \"any information available\" to the\nAdministrator without benefit of a hearing. TVA, 336 F. 3d 1236 at 1241 (\" [T]he Administrator\nneed only have a staff report, newspaper clipping, anonymous phone tip, or anything else that\nwould constitute 'any information. '\"); 42 U. S. C. $ 7413(a)(1).\nThe statutory provisions authorizing CAOs and ACOs differ in several key respects. First,\nunlike the CAA, the Federal Pipeline Safety Laws set out various factors that the Administrator\nmust evaluate in making a finding that a facility \"is\" or \"would be\" hazardous. 49 U. S. C. $\n60112(b). Furthermore, unlike ACOs, CAOs do not make findings of violation. Finally, unlike\nCAOs, which address critical, if not emergency, situations, ACOs address the emission of\n\"pollutants in excess of that allowed by EPA regulations or constructing a pollution source\nwithout a permit. \" TVA, 336 F. 3d 1236, 1240; 49 U. S. C. ) 60112(a). Although releasing more\nemissions than permitted impacts human health and the environment, such situations do not\nnecessarily pose imminent threats to human life or the environment. Therefore, the ability of the\nAssociate Administrator to waive the right to hearing prior to the issuance of a CAO in certain\nsituations is balanced by the gravity of the harm that the public faces. The Associate\nAdministrator may only issue a CAO without the opportunity for a hearing where \"failure to\nissue the order expeditiously will result in likely serious harm to life, property, or the\nenvironment. \" 49 U. S. C, ) 60112(e). In any event, 49 U. S. C. $ 60112(e) requires that PHMSA\nprovide an opportunity for a hearing \"as soon as practicable\" after issuance of the CAO, The\nissuance of an ACO carried no such requirement. TVA, 336 F. 3d 1236 at 1241. Therefore, I find\nthat PHMSA's issuance of the CAO without formal notice and opporhmity for a hearing was\njustified under the Federal Pipeline Safety Laws and did not violate due process.\nConclusion\nIn conclusion, I find that PHMSA's hazardous finding and issuance of the CAO on\nSeptember 13, 2007 were appropriate, given the known risks posed by Kaiser SSAW segments\nof the Platte Pipeline. As required by the Federal Pipeline Safety Laws, PHMSA considered a\nvariety of factors related to the pipeline, \"including the age, manufacture, physical properties,\nand method of manufacturing, constructing or assembling. . .\n\" of the pipe, 49 U. S, C. $ 60112(a).\nEven with Respondent's voluntary pressure reduction in place at the time of the issuance of the\nCAO, PHMSA was aware of the pervasive problems and series of failures associated with the\nseam weld defects on the Platte Pipeline system. Under such circumstances, it was reasonable\nfor the agency to determine that certain segments of the pipeline continued to pose a significant\nrisk of failure.\n42 U S. C. $ 7413(a)\n\n\n\nPHMSA's issuance of a CAO before providing Respondent with the opportunity for a hearing\nwas also proper. The Bellflower ruptine revealed that the ILI testing performed by Terasen in\nthe past had not detected all seam weld anomalies, that the Kaiser SSAW segments continued to\npose significant risks, and that a failure to issue a CAO expeditiously would result in likely\nserious harm to life, property, or the environment,\nTherefore, the CAO will remain in effect for Kaiser SSAW segments of the Platte Pipeline until\nPHMSA deems that the corrective actions required under the CAO have been satisfactorily\ncompleted and that the hazardous conditions giving rise to the CAO no longer exist,\nMAR 1 7 20D8\nDate Issued\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":32845}