{"operation":"document","citation":"CPF 320105006","title":"BUCKEYE PARTNERS, LP — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2010-04-14","effective_on":null,"summary":"CLOSED notice of probable violation citing 195.401(b), 195.402(a), 195.505(a), 195.505(b), 195.52(a)(3).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320105006.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320105006.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320105006","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320105006","body":"Notice of Probable Violation involving BUCKEYE PARTNERS, LP. PHMSA's enforcement data identifies the cited regulations as 195.401(b),  195.402(a),  195.505(a),  195.505(b),  195.52(a)(3). The case was opened on 2010-04-14 and is reported as closed as of 2016-06-02. Proposed civil penalty: $481,800. Assessed civil penalty: $402,500. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320105006_Closure Letter_06022016.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Closure%20Letter_06022016.pdf\n\n320105006_Closure Letter_06022016_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Closure%20Letter_06022016_text.pdf\n\n320105006_Decision on Petition_08012013.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Decision%20on%20Petition_08012013.pdf\n\n320105006_Decision on Petition_08012013_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Decision%20on%20Petition_08012013_text.pdf\n\n320105006_Final Order_11192012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Final%20Order_11192012.pdf\n\n320105006_Final Order_11192012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Final%20Order_11192012_text.pdf\n\n320105006_NOPV PCP PCO_04142010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_NOPV%20PCP%20PCO_04142010.pdf\n\n320105006_NOPV PCP PCO_04142010_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_NOPV%20PCP%20PCO_04142010_text.pdf\n\n320105006_Operator Response to NOPV PCP PCO_05122010.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320105006/320105006_Operator%20Response%20to%20NOPV%20PCP%20PCO_05122010.pdf\n\n320105006_Decision on Petition_08012013_text.pdf\n\nAUGUST 1, 2013\nMr. Clark Smith\nPresident & Chief Executive Officer\nBuckeye Partners, LP\nOne Greenway Plaza\nSuite 600\nHouston, TX 77046\nRe: CPF No. 3-2010-5006\nDear Mr. Smith:\nEnclosed please find the Decision on the Petition for Reconsideration filed by Buckeye Partners,\nLP, in the above-referenced case. It denies your Petition and affirms the Final Order without\nmodification. Service of the Decision by certified mail is deemed effective upon the date of\nmailing, 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: Robert E. Hogfoss, Esq., Counsel for Buckeye Partners, LP, Hunton & Williams,\nBank of America Plaza, 600 Peachtree Street, N.E., Suite 4100, Atlanta, Georgia\n30308\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. David Barrett, Director, Central Region, 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, DC 20590\n____________________________________\nIn the Matter of )\nBuckeye Partners, LP, ) CPF No. 3-2010-5006\n)\n)\n)\nPetitioner. )\n____________________________________)\nDECISION ON PETITION FOR RECONSIDERATION\nOn November 19, 2012, the Pipeline and Hazardous Materials Safety Administration (PHMSA),\nOffice of Pipeline Safety (OPS), issued a Final Order in this case to Buckeye Partners, LP\n(Buckeye or Petitioner), finding that Buckeye had committed five violations of the hazardous\nliquid pipeline safety regulations and assessing a total civil penalty of $402,500.1 The Final\nOrder also required Buckeye to take certain corrective measures.\nOn December 10, 2012, Buckeye filed a Petition for Reconsideration (Petition) seeking review\nof Items #1 (timeliness of reporting a release), #4 (covered tasks), and #5 (training on a particular\ncovered task).2 Buckeye requested that PHMSA withdraw all three items or, in the alternative,\nwithdraw Item #1, convert Items #4 and 5 to either a Notice of Amendment or Warning Item,\nand withdraw the associated civil penalty amounts. Buckeye did not dispute the other findings or\ncivil penalty assessments. It is noteworthy that pursuant to the pipeline safety regulations, “[t]he\nfiling of a petition…stays the payment of any civil penalty assessed. However, unless the\nAssociate Administrator, OPS otherwise provides, the order, including any required corrective\naction, is not stayed.”3 To date, Buckeye has not completed the compliance order included in the\nNovember 19, 2012 Final Order.\n1 The assessed civil penalty represented a $79,300 reduction from the proposed civil penalty amount.\n2 Pursuant to 49 C.F.R. § 190.215, a petition must be received no later than 20 days after service of the final order\nupon the respondent. Service is defined as being complete upon mailing. See 49 C.F.R. § 190.5. The Final Order\nwas mailed on or around November 19, 2012. The petition was received on December 11, 2012, 22 days after\nservice was completed. Buckeye stated in its Petition that the Final Order was received on November 26, 2012, and\ntherefore the December 10, 2012 Petition was timely. A review of the certified mail tracking database on the United\nStates Postal Service website confirms that the Final Order was indeed received on November 26, 2012, and\ntherefore the December 10, 2012 Petition is timely.\n3 See 49 C.F.R. § 190.215(d).\n\n\n\n2\nSection 190.215 provides that a respondent may petition the Associate Administrator for\nreconsideration of a final order. It states that the Associate Administrator will not consider\nrepetitious information, arguments, or petitions, but may consider additional facts or arguments,\nprovided the respondent submits a valid reason why such information was not presented prior to\nissuance of the final order. This rule allows a respondent to present information or arguments\nthat were unavailable or unknown prior to issuance of the final order, and gives PHMSA an\nopportunity to correct any errors. The Associate Administrator may grant or deny, in whole or in\npart, a petition for reconsideration without further proceedings, or may request additional\ninformation, data, and comment as deemed appropriate.\nItem 1: Finding of Violation of § 195.52\nPetition\nIn the Final Order, PHMSA stated that Buckeye failed to provide telephonic notice to the\nNational Response Center (NRC) at the earliest practicable moment, or within 1-2 hours,\nfollowing the company’s discovery of a release of 85 barrels of gasoline. Buckeye notified the\nNRC 15 hours after the release occurred. PHMSA held that this was a violation of § 195.52. In\nits Petition, Buckeye objected to this finding, arguing: (1) that the pipeline safety regulations do\nnot explicitly require an operator to report a release within 1-2 hours and therefore Item #1 is not\na violation; (2) that Buckeye did in fact report the release within 1-2 hours of discovering that the\nrelease was reportable; and (3) that PHMSA’s rulemaking and enforcement cases have not\nconsistently supported the 1-2 hour interpretation.\nAnalysis\nPetitions for reconsideration provide a vehicle for respondents to submit evidence not previously\navailable during the proceeding. As stated above, the Associate Administrator does not consider\nrepetitious information but may consider additional facts or arguments, provided that the\nrespondent submits a valid reason why such information was not presented prior to issuance of\nthe final order. Buckeye has not provided any additional documents or arguments in its Petition\nthat were not previously reviewed. All of the evidence and arguments that Buckeye relies on in\nits Petition were previously submitted in the Response, Post-Hearing Brief, and at the hearing.\nBuckeye’s argument that PHMSA cannot enforce its interpretation of “earliest practicable\nmoment” is unpersuasive. First, courts have held that an agency can formulate requirements\nthrough enforcement decisions. An agency is “not precluded from announcing new principles in\nan adjudicative proceeding.”4 Federal courts have held that an order issued in an adjudicatory\nproceeding is not subject to the notice and comment procedures of the Administrative Procedure\nAct.5 PHMSA can and does develop such interpretations in its enforcement decisions, just as\n4 NLRB v. Bell Aerospace Co., 416 U.S. 267, 292-94 (1974) (finding that prior case law dictates that the agency is\n\"not precluded from announcing new principles in an adjudicative proceeding and that the choice between\nrulemaking and adjudication lies in the first instance within the [agency's] discretion\") (citing SEC v. Chenery\nCorp., 332 U.S. 194,202 (1947) and NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969)).\n5 R/T 182, LLC v. FAA, 519 F.3d 307, 310 (6th Cir. 2008) (emphasis added).\n\n\n\n3\ncourts routinely apply statutes in civil and criminal enforcement decisions.6 Second, PHMSA\nhas consistently found that “earliest practicable moment” means between 1-2 hours. As\nmentioned in the Final Order, this particular interpretation dates back to at least 1971, when the\nagency stated that “in most cases this telephonic report can and should be made within one to\ntwo hours after discovery…”7 Numerous enforcement cases have reinforced the agency’s\nposition on the reporting requirement.8 In the referenced cases, operators exceeded the required\ntime frame from just a few hours to more than 24. In addition, as discussed in the Final Order in\nthis proceeding, PHMSA has addressed the reporting requirements in a 1991 Alert Notice and a\n2002 Advisory Bulletin.9\nContrary to Buckeye’s argument in its Response, Post-Hearing Brief, and now in the Petition, the\nword “discovery” means discovery of the release itself, not the discovery or acknowledgment\nthat the accident meets the reporting requirements listed in the regulation. This point was\ndiscussed at length in the Final Order on pages 2 and 3:\nPHMSA has applied this interpretation in various enforcement actions and\nfound that “discovery” relates to the actual release, not to the realization that\nan incident has resulted in circumstances (e.g. property damage) that renders\nthe release reportable.10\nFurthermore, the rationale for this position was summarized in detail:\nThe reason for this interpretation is both logical and practical. In Enstar\nNatural Gas Company, PHMSA stated that “[i]f the regulation were read to\n6 See In the Matter of ANR Pipeline Company, Final Order, CPF No. 3-2007-1006 (available at\nwww.phmsa.dot.gov/pipeline/enforcement).\n7 See PI-71-011, located at http://www.phmsa.dot.gov/pipeline/regs/interps.\n8 In the Matter of Public Service Company of New Mexico, Final Order, CPF No. 44003 (March 2, 1998); In the\nMatter of Hunt Refining Company, Final Order, CPF No. 2-2005-5002 (November 15, 2005); In the Matter of\nAmerigas Propane, L.P., Final Order, CPF No. 57702 (October 20, 2005); In the Matter of Chevron Pipe Line\nCompany, Final Order, CPF No. 4-2002-5013 (March 15, 2004); In the Matter of Belle Fourche Pipeline Company,\nCPF No. 52514 (April 28, 1998).\n9 See ALN 91-01 and ADB-02-04, located at http://phmsa.dot.gov/pipeline/regs/advisory-bulletin. In its Petition,\nBuckeye makes reference to the statutory mandates of the Pipeline Safety, Regulatory Certainty, and Job Creation\nAct of 2011, signed into law on January 3, 2012. As noted in PHMSA’s January 30, 2013 Advisory Bulletin on\nreporting requirements, PHMSA is required by this statute to issue a proposed rule to revise telephonic reporting\nrequirements to require notification not later than one hour following the time of confirmed discovery. See\n“Pipeline Safety: Accident and Incident Notification Time Limit,” 78 Fed. Reg. 6402 (January 30, 2013) (citing The\nPipeline Safety, Regulatory Certainty, and Job Creation Act of 2011). In referencing this new statutory mandate,\nBuckeye attempts to argue that the agency should not enforce the existing reporting requirement until these new\nregulations are issued. Obviously, the regulatory mandate created by the 2011 legislation does not affect the\nBuckeye case, as the May 2005 release predates the statute by almost seven years. The existing reporting\nrequirements of 1-2 hours have been enforced for decades. The new mandate from Congress seeks to tighten the\nreporting deadline even more than exists under the current regulation by requiring releases to be reported within one\nhour and has no bearing on this case.\n10 Final Order, at 3 (citing In the Matter of Enstar Natural Gas Company, CPF No. 52016 (May 14, 1997)).\n\n\n\n4\nmean at the earliest practicable moment following discovery of the cause of\nthe incident, the operator would never be required to report an incident until\nthe cause of the incident was definitely determined.”11 In addition, PHMSA\nhas stated that “[t]he delay to reporting caused by an operator waiting until it\ndefinitely decides an event meets the reporting criteria would frustrate a\nfundamental purpose of the regulation, which is to give OPS and other\nagencies the earliest opportunity to assess whether an immediate response to\na pipeline incident is needed. Therefore, OPS requires pipeline operators to\nreport incidents to the NRC at the earliest practicable moment following\ndiscovery of the incident, even if at the time of reporting there is some\nquestion as to whether reporting will be required.”\nThere are also valid public safety reasons why an operator needs to make a\nNRC report within 1-2 hours, including PHMSA’s need for immediate\ninformation to determine whether the line or facility should be shut down.\nPHMSA must evaluate the cause of a release as soon as possible, not after\nthe evidence is stale. 12\nEnstar is not the only case that supports this position; PHMSA has issued numerous decisions in\nagreement on this point. The agency stated In the Matter of the City of Richmond, Virginia, that\n“…OPS interprets “discovery” to mean discovery of the incident itself, not discovery that the\nreporting criteria have been met…[t]his gives OPS and other Federal and state agencies the\nability to assess whether an immediate response to a pipeline incident is needed.”13\nIn support of its Petition, Buckeye argued that there was no need for a federal response in this\ncase, so therefore the rationale that PHMSA needs operators to report releases within 1-2 hours\nfor public safety reasons did not apply here. The decision to roll out a federal response and\naccident investigation is the agency’s decision, not the operator’s, and is necessitated upon\nproper reporting of a release. If an operator waits 15 hours to report a release of 85 barrels, as\noccurred in this case, then PHMSA is delayed by 15 hours from initiating its accident\ninvestigation, should it find a need to do so.\nIn a similar argument, Buckeye contended that the agency’s past rulemaking and enforcement\ncases contradict the Final Order here. Buckeye is referring to a final rule issued in 1994 that\nincreased the property damage threshold for reporting from $5,000 to $50,000.14 As discussed in\nthe rulemaking documents, this Final Rule acknowledged that there was confusion as to which\ncost estimates operators were using to estimate property damage. The agency noted that\noperators were frequently not including the fair market value of lost product when calculating\nproperty damage and therefore the agency amended § 195.52(a)(3). In addition, the agency\ndecided that increasing the property damage threshold from $5,000 to $50,000 would match the\n11 Enstar, at 2.\n12 Final Order, at 3.\n13 In the Matter of the City of Richmond, Virginia, CPF No. 1-2004-0006 (January 12, 2006)\n14 “Regulatory Review: Hazardous Liquid and Carbon Dioxide Pipeline Safety Standards”, 59 FR 33388 (June 28,\n1994).\n\n\n\n5\nexisting Part 192 reporting requirement and eliminate the need to report minor accidents under\n$5,000. I fail to see how these changes, 11 years prior to Buckeye’s accident, support its\nposition. The 2005 release that is the focus of this case involved 85 gallons of spilled product\nand $60,100 in estimated property damage.\nBuckeye also argued in its Petition that the cases used by PHMSA to support its finding in the\nFinal Order were inapposite because they involved natural gas operators; in addition, it argued\nthat PHMSA’s interpretation has not been applied consistently across enforcement cases. In its\nPetition, Buckeye argued that the references to In the Matter of Texas Eastern Transmission\nCorporation, CPF No. 4-2001-1003 (May 5, 2005) and In the Matter of Enstar Natural Gas\nCompany, CPF No. 52016 (May 14, 1997) are inapposite because those matters involved the\nviolation of the natural gas reporting requirement at § 191.5 and not the hazardous liquid\nreporting requirement at § 195.52. Although both cases happen to focus on natural gas pipeline\nrequirements, the language of both regulations is identical. They both require the reporting of\ncertain incidents or releases “at the earliest practicable moment following discovery.” Buckeye\nalso suggested that PHMSA has not enforced this provision consistently. I disagree. As noted\nabove, there have been numerous enforcement cases issued by PHMSA where both gas and\nhazardous liquid operators failed to report a release within 1-2 hours.\nFinally, the fact that the Central Region chose to issue a Notice four years after the inspection\ndoes not bar the agency from taking such action. There is no question that this case was initiated\nwithin the applicable five-year statute of limitations under 28 U.S.C. §2462.\nAccordingly, I find no basis for a withdrawal of this violation or a reduction of the $10,500 civil\npenalty assessed in the Final Order. This item stands as written in the Final Order.\nItem 4: Finding of Violation of § 195.505(a)\nIn the Final Order, PHMSA found that Buckeye failed to include “all necessary covered tasks” in\nits Operator Qualification (OQ) program, in particular, to include delivery operations at regulated\ntank facilities. In its Petition, Buckeye objected to this finding of violation, stating that the\nregulation is vague and PHMSA should be estopped from bringing a violation because this\nspecific facility had been previously inspected without any allegation of a § 195.505(a) violation.\nBuckeye argued that this item should either be withdrawn or converted to a Notice of\nAmendment or Warning Item.\nAnalysis\nBuckeye presented the same arguments in its Petition that it had previously raised in its\nResponse, at the hearing, and in its Post-Hearing Brief. These were all reviewed and analyzed in\nthe Final Order. I specifically discussed Buckeye’s argument regarding the content of the OQ\nregulations:\nSection 195.505(a) requires each operator to have and follow a written\nqualification program that includes provisions to identify covered tasks.\nAlthough Buckeye is correct that many of the requirements of the pipeline\nsafety regulations are performance-based and not prescriptive, this does\n\n\n\n6\nnot mean that performance-based activities should not be included as\n“covered tasks” under an operator’s OQ program. An operator is required\nto identify all of its covered tasks, using the four-part definition set forth in\n§ 195.501(b). Specifically, “a covered task is an activity identified by the\noperator, that: (1) Is performed on a pipeline facility; (2) Is an operations\nand maintenance task; (3) Is performed as a requirement of this part; and\n(4) Affects the operation or integrity of the pipeline.”15 Buckeye’s Task\n412 meets this four-part test. It is performed on a pipeline facility, is an\noperations and maintenance task, is performed as a requirement of\nPart 195,16 and, as evident from the Accident, can affect the operation or\nintegrity of the pipeline. Therefore, Buckeye should have included Task\n412 in its covered task list.17\nI also addressed Buckeye’s estoppel argument:\nI also find no merit in Buckeye’s argument that since OPS did not find a\nviolation in 2004, it is somehow estopped from asserting a probable\nviolation following a failure and subsequent inspection. Buckeye was\nrequired to have a covered task list for tasks that met the four-part test by\nApril 27, 2001. If another inspection in another region chose not to cite a\nviolation at that time, it does not eliminate Buckeye’s responsibility to be\nin compliance with the code. Since Buckeye must identify covered tasks\nin its OQ program and failed to include Task 412, which meets the\ndefinition of a covered task in § 195.501(a), I find that Buckeye violated\n§ 195.505(a) and the proposed compliance order is appropriate.18\nFinally, Buckeye contended that this item should have been a Notice of Amendment and that the\nonly reason this violation was included in the Notice of Probable Violation was to serve as a\npredicate for Item #5. In the Final Order, I discussed in detail how § 195.505 violations are not\nnecessarily handled by a Notice of Amendment, stating that a review of past enforcement cases\ndemonstrates that § 195.505(a) violations have been addressed by civil penalties, compliance\norders, or both. The fact that this item did not have a civil penalty has no bearing on the fact that\nItem #5 did. They are separate violations and PHMSA has the discretion to select the most\nappropriate enforcement tool to address them.\nI find no support for Buckeye’s request to either withdraw or convert this Item. This item stands\nas written in the Final Order.\n15 See 49 C.F.R. § 195.501(b).\n16 Each operator is required under § 195.505 to scrutinize its own unique system to identify all those activities\nperformed on its system that meet the four-part definition of a “covered task” and to develop a proper qualification\nprocess for each one. In this case, Buckeye was required under § 195.402(c) to have and follow procedures for\nstarting up and shutting down all parts of its system and for controlling receipt and delivery of product. Task 412\nwas one of Buckeye’s own procedures to meet this requirement.\n17 Final Order, at 6.\n18 Final Order, at 7.\n\n\n\n7\nItem 5: Finding of Violation of § 195.505(b)\nIn its Petition, Buckeye argued that Item #5 should be withdrawn for two reasons. First, the\nregulation itself was vague. Second, the underlying violation (Item #4) had no civil penalty, so it\nwould be inappropriate to issue one for this item. I do not agree.\nThe fact that the agency did not issue a civil penalty for Item #4 does not have any bearing on\nthis Item. As discussed earlier, the decision to assess a civil penalty or a compliance order is a\ndiscretionary enforcement decision based on the facts and evidence constituting each allegation.\nEach item in a Notice of Probable Violation is separate and stands on its own evidence. Buckeye\nwas cited in Item #5 for a violation of § 195.505(b)— to ensure through evaluation that\nindividuals performing covered tasks are qualified. Considering that the May 5, 2005 accident\ninvolved a release of 85 barrels during delivery operations, that the local operator on scene was\nnot trained in delivery operations, and that Buckeye could not produce delivery-operations\nqualification records, I believe the assessed civil penalty for this item is appropriate. Having not\nfound any of these arguments persuasive to withdraw Item #5, this item will remain as written in\nthe Final Order.19\nConclusion\nBased on a review of the record and the information provided in the Petition, I hereby deny the\nPetition and affirm the Final Order without modification, for the reasons set forth above.\nPayment of the $402,500 civil penalty must be made within 20 days of service of this Decision.\nThe payment instructions were set forth in detail in the Final Order. Failure to pay the $402,500\ncivil penalty will result in accrual of interest at the current annual rate in accordance with\n31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23. Pursuant to those same authorities,\na late penalty charge of six percent (6%) per annum will be charged if payment is not made\nwithin 110 days of service. Furthermore, failure to pay the civil penalty may result in referral of\nthe matter to the Attorney General for appropriate action in a United States District Court.\nIn addition, the Petitioner is reminded that the Compliance Order was not stayed by the filing of\nthe Petition and should have been completed within the timelines listed in the Final Order. If\nPetitioner should need an extension, it can file such a request with the Director, Central Region.\nThis Decision is the final administrative action in this proceeding.\n_____________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety\n19 Buckeye argues in Section I of its Petition that Item # 5 should be converted to Notices of Amendment or\nWarning Items but provides no further detail in Section C of its Petition.\n\n320105006_Closure Letter_06022016_text.pdf\n\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\nJune 2, 2016\nMr. Clark Smith\nPresident & Chief Executive Officer\nBuckeye Partners, LP\nOne Greenway Plaza\nSuite 600\nHouston, TX 77046\nRE: CPF 3-2010-5006\nDear Mr. Smith:\nOn November 19, 2012, the Pipeline and Hazardous Materials Safety Administration\n(PHMSA) issued to Buckeye Partners, LP, a Final Order in the above-referenced case. This\nOrder included a Compliance Order and Civil Penalty assessment. Based on our review of the\ndocumentation you provided and confirmation of payment of the civil penalty, it has been\ndetermined that you have complied with the terms of this Order.\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,\nAllan C. Beshore\nDirector, Central Region, OPS\nPipeline and Hazardous Materials Safety Administration\ncc: Mr. Thomas (Scott) Collier\n\n320105006_Final Order_11192012_text.pdf\n\nNOVEMBER 19, 2012\nMr. Clark Smith\nPresident & Chief Executive Officer\nBuckeye Partners, LP\nOne Greenway Plaza\nSuite 600\nHouston, TX 77046\nRe: CPF No. 3-2010-5006\nDear Mr. Smith:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation, assesses a reduced civil penalty of $402,500, and specifies actions that need to be\ntaken by Buckeye Partners, LP, to comply with the pipeline safety regulations. When the civil\npenalty has been paid and the terms of the compliance order completed, as determined by the\nDirector, Central Region, this enforcement action will be closed. Service of the Final Order by\ncertified mail is deemed effective upon the date of mailing, or as otherwise provided under\n49 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. Thomas (Scott) Collier, Vice President, Buckeye Partners LP – 5 TEK Park, 9999\nHamilton Boulevard, Breinigsville, PA 18031\nRobert E. Hogfoss, Esq., Counsel for Buckeye Partners, LP, Hunton & Williams -\nBank of America Plaza - 600 Peachtree Street, N.E., Suite 4100, Atlanta, Georgia\n30308\nMr. Dave Barrett, Director, Central 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, DC 20590\n____________________________________\nIn the Matter of )\nBuckeye Partners, LP, ) CPF No. 3-2010-5006\n)\n)\n)\nRespondent. )\n___________________________________ )\nFINAL ORDER\nPursuant to 49 U.S.C. § 60117, on May 6, 2005, a representative of the Pipeline and Hazardous\nMaterials Safety Administration (PHMSA), Office of Pipeline Safety (OPS), conducted an\ninvestigation of an overfill incident that occurred on May 5, 2005, at Tank #133, a facility\noperated by Buckeye Partners, LP (Buckeye or Respondent), in East Chicago, Indiana\n(Accident). Buckeye owns and operates petroleum refined-products pipelines and facilities in\nthe Northeast and Upper Midwest, including 6,000 miles of pipelines and 100 liquid petroleum\nproducts terminals.1\nAs a result of the investigation and a follow-up inspection in 2008, the Director, Central Region,\nOPS (Director), issued to Respondent, by letter dated April 14, 2010, a Notice of Probable\nViolation, Proposed Civil Penalty and Proposed Compliance Order (Notice). In accordance with\n49 C.F.R. § 190.207, the Notice proposed finding that Respondent had committed several\nviolations of 49 C.F.R. Part 195 and assessing a civil penalty of $481,800 for the alleged\nviolations. The Notice also proposed ordering Respondent to take certain measures to correct\none of the alleged violations.\nBuckeye responded to the Notice by letter dated May 12, 2010 (Response). The company\ncontested the items in the Notice and requested that the proposed civil penalty be reduced or\nrescinded. A hearing was subsequently held on November 18, 2010, in Kansas City, Missouri,\nwith an attorney from the Office of Chief Counsel, PHMSA, presiding. At the hearing,\nRespondent was represented by counsel. After the hearing, counsel for Buckeye provided a post-\nhearing statement for the record, by letter dated December 3, 2010 (Closing).\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 195, as follows:\n1 See http://www.buckeye.com/BusinessOperations/tabid/56/Default.aspx (last accessed July 30, 2012).\n\n\n\n2\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 195.52(a)(3), which states:\n§ 195.52 Telephonic notice of certain accidents.\n(a) At the earliest practicable moment following discovery of a\nrelease of the hazardous liquid or carbon dioxide transported resulting in\nan event described in § 195.50, the operator of the system shall give\nnotice, in accordance with paragraph (b) of this section, of any failure that:\n(1) . . .\n(3) Caused estimated property damage, including cost of cleanup and\nrecovery, value of lost product, and damage to the property of the operator\nor others, or both, exceeding $50,000; . . . .\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.52(a)(3) by failing to provide\ntelephonic notice to the National Response Center (NRC) at the earliest practicable moment\nfollowing the company’s discovery of a release of 85 barrels of gasoline. Specifically, the\nNotice alleged that 15 hours elapsed between the time Buckeye experienced a release at its East\nChicago, Indiana storage tank facility and the time the company finally notified the NRC.\nAt the hearing and in the Response, Buckeye contended that the Accident did not initially meet\nthe notification threshold of § 195.50. Rather, it was only after the Indiana Department of\nEnvironmental Protection (DEP) requested that Buckeye excavate an additional two feet of soil\nwithin the dike area to remove hydrocarbons that Buckeye determined that the clean-up costs\nwould exceed the $50,000 threshold. The operator stated that the Accident occurred in the late\nafternoon and although Buckeye contacted emergency response operators immediately, it was\nnot until the following day that the company met with the DEP and thereafter determined that the\nproperty damage threshold for reporting had been met. Therefore, Buckeye maintained that the\nAccident was reported at the “earliest practicable moment following discovery of a release.”\nAt the hearing, OPS introduced two alert notices, dated April 15, 1991 (ALN-91-01) and\nAugust 30, 2002 (ADB-02-04), which provided guidance to the industry on how the agency\ninterpreted the term “earliest practicable moment.”2 This guidance and the interpretation letters\nthat preceded the bulletins stated that PHMSA considered “earliest practicable moment”\ngenerally to mean one to two hours.3 Since Buckeye notified the NRC approximately 15 hours\nafter discovery of the Accident, OPS argued that Buckeye had not given notice at the earliest\npracticable moment and therefore was in violation of § 195.52(a)(3).\nAnalysis\nPHMSA has consistently interpreted “earliest practicable moment” to mean within one to two\nhours of discovery of a release of hazardous liquid. Beginning in 1997, PHMSA has applied\nthis interpretation in various enforcement actions and found that “discovery” relates to the actual\n2 See ALN-91-01 and ADB-02-04, located at http://phmsa.dot.gov/pipeline/regs/advisory-bulletin.\n3 See PI-71-011, located at http://www.phmsa.dot.gov/pipeline/regs/interps.\n\n\n\n3\nrelease, not to the realization that an incident has resulted in circumstances (e.g., property\ndamage) that render the release reportable.\n4\nThe rationale for this interpretation is both logical and practical. In Enstar Natural Gas\nCompany, PHMSA concluded that “[i]f the regulation were read to mean at the earliest\npracticable moment following discovery of the cause of the incident, the operator would never be\nrequired to report an incident until the cause of the incident was definitely determined.”5 In\naddition, PHMSA has stated that “[t]he delay to reporting caused by an operator waiting until it\ndefinitely decides an event meets the reporting criteria would frustrate a fundamental purpose of\nthe regulation, which is to give OPS and other agencies the earliest opportunity to assess whether\nan immediate response to a pipeline incident is needed. Therefore, OPS requires pipeline\noperators to report incidents to the NRC at the earliest practicable moment following discovery\nof the incident, even if at the time of reporting there is some question as to whether reporting will\nbe required.”6\nThere are also important public safety reasons why an operator needs to make a NRC report\nwithin one to two hours, including PHMSA’s need for immediate information to determine\nwhether a pipeline or facility should be shut down. PHMSA must also evaluate the cause of a\nrelease as soon as possible after the release has been discovered, not after the evidence is stale.\nBased on the information in the record, I find that the release in this case was reportable because\nit exceeded the $50,000 threshold and therefore should have been reported within one to two\nhours of discovery. Instead, Buckeye reported the spill 15 hours after the release. Accordingly, I\nfind that Respondent violated 49 C.F.R. § 195.52(a)(3) by failing to make a telephonic notice to\nthe NRC at the earliest practicable moment following discovery of the release.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 195.401(b), which states:\n§ 195.401 General requirements.\n7\n(a) . . .\n(b) An operator must make repairs on its pipeline system according to\nthe following requirements:\n(1) Non- Integrity Management repairs.\nWhenever an operator discovers any condition that could adversely affect\nthe safe operation of its pipeline system, it shall correct it within a\n4 E.g., In the Matter of Texas Eastern Transmission Corporation, CPF No. 4-2001-1003, at 3 (May 5, 2005), citing\nIn the Matter of Enstar Natural Gas Company, CPF No. 52016 (May 14, 1997).\n5 Enstar, at 2.\n6 Id.\n7 On August 11, 2010, PHMSA modified the language of § 195.401 to distinguish between non-integrity\nmanagement repairs and integrity management repairs. See “Pipeline Safety: Periodic Updates of Regulatory\nReferences to Technical Standards and Miscellaneous Edits,” 75 FR 48607 (August 11, 2010). The language\nreferenced in this item reflects the current regulation but the text of (b)(1) does not vary from the language that was\nin effect at the time of the inspection and quoted in the Notice.\n\n\n\n4\nreasonable time. However, if the condition is of such a nature that it\npresents an immediate hazard to persons or property, the operator may not\noperate the affected part of the system until it has corrected the unsafe\ncondition.\nThe Notice alleged that Respondent violated 49 C.F.R. § 195.401(b) by failing to correct an\nunsafe condition on its pipeline. Specifically, it alleged that Buckeye continued to fill Tank #133\nat its East Chicago storage tank facility despite the discovery of a condition that presented an\nimmediate hazard to persons or property.\nOn the day of the Accident, Buckeye experienced three different alarms that alerted the operator\nof an imminent hazard (overfilling) on Tank #133, yet company personnel continued filling\noperations. The first alarm occurred an hour before the release. Two subsequent alarms\noccurred but Buckeye continued filling. According to Buckeye’s own Internal Investigation\nReport, its Control Center contacted the local operator after the first alarm, who responded that\nthe alarm was not accurate due to an issue with the electronic gauging of the tank levels.\nBuckeye’s investigation later confirmed that the local operator was incorrect in this assessment\nof the first alarm.8\nIn its Response and at the hearing, Buckeye did not contest this violation but argued that Items 2\nand 3 should be combined. I will address the merits of this argument in the Analysis section of\nItem #3. For the reasons set forth below, I find that Respondent violated\n49 C.F.R. § 195.401(b) by continuing to operate its pipeline system after discovery of a\ncondition that presented an immediate hazard to persons or property.\nItem 3: The Notice alleged that Respondent violated 49 C.F.R. § 195.402(a), which states:\n§ 195.402 Procedural manual for operations, maintenance, and\nemergencies.\n(a) General. Each operator shall prepare and follow for each pipeline\nsystem a manual of written procedures for conducting normal operations\nand maintenance activities and handling abnormal operations and\nemergencies. This manual shall be reviewed at intervals not exceeding 15\nmonths, but at least once each calendar year, and appropriate changes\nmade as necessary to insure the manual is effective. This manual shall be\nprepared before initial operations of a pipeline system commence, and\nappropriate parts shall be kept at locations where operations and\nmaintenance activities are conducted.\nThe Notice alleged that Buckeye failed to follow two of its own written procedures when filling\nTank #133 on May 5, 2005. First, it alleged that the local operator did not accurately confirm\nbatch information from the Control Center when he arrived for the start of his shift and that he\nfailed to compare the available room in the tank to the batch volume, as required by Buckeye’s\nOperating Manual Procedures B-10 Section 2.1 and 2.4.\n8 Pipeline Safety Violation Report (Violation Report), (April 9, 2010) (on file with PHMSA), Exhibit B.\n\n\n\n5\nSecond, the Notice alleged that Buckeye experienced two high level alarms and one “high-high”\nlevel alarm during the filling of Tank #133 and that its procedures required personnel to take\nspecific actions in response to these alarms, including shutting down the incoming stream and\nnotifying the Control Center. OPS alleged that Buckeye personnel failed to follow these\nprocedures in shutting down the incoming stream.\nBuckeye contended at the hearing and in its Closing that although it did not contest that the local\noperator’s actions caused the Accident, Items #2 and #3 should be combined. Buckeye\nmaintained that it should not be charged with two separate violations and civil penalties for a\nsingle instance of operator error.9\nAnalysis\nI have reviewed both the facts and evidence presented by OPS that support Notice Items 2 and 3\nand Buckeye’s opposing evidence and arguments. In Item #2, the Notice alleged that Buckeye\nbecame aware of a condition that presented an immediate hazard to its system but continued\nfilling operations, in direct violation of § 195.401(b). In Item #3, Buckeye personnel failed to\nfollow the company’s own procedures, which required the local operator to confirm batch\ninformation at the start of his shift and to compare the available tank room to the batch volume.\nIn addition, company procedures required the Control Center to shut down the incoming stream\nupon acknowledgment of a “high-high” level alarm. None of these actions took place. Since\nItems 2 and 3 are based on different actions that Buckeye was supposed to take in this situation\nand because the allegations are supported b","truncated":true,"body_characters":84550}