{"operation":"document","citation":"CPF 320111010","title":"ANR PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-07-22","effective_on":null,"summary":"CLOSED notice of probable violation citing 192.477, 192.605(a), 192.709(c).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111010.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111010.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111010","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320111010","body":"Notice of Probable Violation involving ANR PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 192.477,  192.605(a),  192.709(c). The case was opened on 2011-07-22 and is reported as closed as of 2013-01-25. Proposed civil penalty: $52,800. Assessed civil penalty: $52,800. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320111010_Final Order_12312012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111010/320111010_Final%20Order_12312012.pdf\n\n320111010_Final Order_12312012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111010/320111010_Final%20Order_12312012_text.pdf\n\n320111010_NOPV PCP_07222011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111010/320111010_NOPV%20PCP_07222011.pdf\n\n320111010_NOPV PCP_07222011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111010/320111010_NOPV%20PCP_07222011_text.pdf\n\n320111010_Operator Response to NOPV PCP_08242011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111010/320111010_Operator%20Response%20to%20NOPV%20PCP_08242011.pdf\n\n320111010_Final Order_12312012_text.pdf\n\nDECEMBER 31, 2012\nMr. Stephen Beasley\nPresident\nANR Pipeline Company\n717 Texas Street\nHouston, TX 77002\nRe: CPF No. 3-2011-1010\nDear Mr. Beasley:\nEnclosed please find the Final Order issued in the above-referenced case. It makes findings of\nviolation and assesses a civil penalty of $52,800. The penalty payment terms are set forth in the\nFinal Order. This enforcement action closes automatically upon receipt of payment. Service of\nthe Final Order by certified mail is deemed effective upon the date of mailing, or as otherwise\nprovided under 49 C.F.R. § 190.5.\nThank you for your cooperation in this matter.\nSincerely,\nJeffrey D. Wiese\nAssociate Administrator\nfor Pipeline Safety\nEnclosure\ncc: Mr. David Barrett, Director, Central Region, OPS\nMr. Alan Mayberry, Deputy Associate Administrator for Field Operations, OPS\nMr. Vern Meier, Vice President, Field Operations, TransCanada Corporation, 450-1\nStreet, SW, Calgary, Alberta, Canada, T2P 5H1\nMr. Ken Crowl, Manager, U.S. Pipeline Compliance, TransCanada Corporation, 450-1\nStreet, SW, Calgary, Alberta, Canada, T2P 5H1\nMr. Daniel Cerkoney, U.S. Compliance, ANR Pipeline Company, 717 Texas Street,\nHouston, TX, 77002\nCERTIFIED MAIL - RETURN RECEIPT REQUESTED\n\n\n\nU.S. DEPARTMENT OF TRANSPORTATION\nPIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION\nOFFICE OF PIPELINE SAFETY\nWASHINGTON, D.C. 20590\n____________________________________\n)\nIn the Matter of )\n)\nANR Pipeline Company, ) CPF No. 3-2011-1010\n)\nRespondent. )\n____________________________________)\nFINAL ORDER\nOn July 26-30, August 9-13, and September 20-23, 2010, pursuant to 49 U.S.C. § 60117, a\nrepresentative of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office\nof Pipeline Safety (OPS), conducted an on-site pipeline safety inspection of the facilities and\nrecords of ANR Pipeline Company (ANR or Respondent), a subsidiary of TransCanada\nCorporation, at its gas integrity management facility in Calgary, Alberta, Canada. ANR delivers\nnatural gas primarily to customers in the Midwest through 10,600 miles of pipeline.\nAs a result of the inspection, the Director, Central Region, OPS (Director), issued to Respondent,\nby letter dated July 22, 2011, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice), which also included a warning pursuant to 49 C.F.R. § 190.205. In accordance with\n49 C.F.R. § 190.207, the Notice proposed finding that ANR had violated of 49 C.F.R. § 192.477\nand proposed assessing a civil penalty of $52,800 for the alleged violation. The warning items\nrequired no further action, but warned the operator to correct the probable violations.\nANR responded to the Notice by letter dated August 24, 2011 (Response), requesting an\ninformal conference to respond to the allegations. ANR and OPS personnel met in Kansas City\non January 31, 2012, to allow ANR to provide more information about its position. Following\nthe informal conference, ANR provided a letter dated February 14, 2012 (Closing), detailing its\nposition. The company contested the allegation and offered additional information in response to\nthe Notice. Respondent did not request a hearing and therefore has waived its right to one.\nFINDING OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 192, as follows:\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 192.477, which states:\n\n\n\n2\n§ 192.477 Internal corrosion control: Monitoring.\nIf corrosive gas is being transported, coupons or other suitable means\nmust be used to determine the effectiveness of the steps taken to minimize\ninternal corrosion. Each coupon or other means of monitoring internal\ncorrosion must be checked two times each calendar year, but with\nintervals not exceeding 7 ½ months.\nThe Notice alleged that Respondent violated 49 C.F.R. § 192.477 by failing to check each means\nof monitoring internal corrosion twice each calendar year, but with intervals not exceeding 7 ½\nmonths. Specifically, the Notice alleged that ANR did not check the internal corrosion probe at\nthe Reed City compressor station at the required intervals between October 2008 and November\n2010.\nAccording to the Notice, an 8-inch diameter pipe in the compressor station failed on\nFebruary 16, 2008. ANR’s metallurgical analysis of the leak site determined that the failure was\ndue to internal corrosion, likely due to the collection of liquids in a low spot of the pipeline.1\nANR installed an internal corrosion probe at the failure site after the pipe was replaced on\nOctober 7, 2008. The probe stopped functioning after 18 days.2 The Notice alleged that ANR\ndid not check, repair or replace the probe or use any other means of checking for internal\ncorrosion at this location until November 2010, when a corrosion coupon was installed.\nIn its Closing, ANR argued that this pipeline was not subject to the requirements of § 192.477\nbecause “there was no determination that corrosive gas was being transported.”3 ANR stated\nthat the corrosion probe was being used to monitor for the possibility of internal corrosion, and\nwas not installed as a result of finding a corrosive gas stream. ANR went on to provide what it\ndescribed as a “Plausible Explanation for an Internal Corrosion Leak in a ‘Non-Corrosive’ Gas\nStream,” and provided data which ANR claimed was indicative of “a very low corrosion rate”\nand “low-to-moderate corrosion.”\nANR’s procedures used NACE Standard RP0775-20054 to determine whether mitigative\nmeasures were required when corrosive gas was found, and stated that “[g]as is considered\ncorrosive if the average corrosion or maximum pitting rates are classified as high in accordance\nwith Table 2 of the standard.”5 However, § 192.477 does not provide a minimum level of gas\ncorrosivity which must be found in order for the requirement to apply. It states that a means of\nmonitoring internal corrosion must be used if corrosive gas is being transported. It is irrelevant\nthat the NACE standard did not classify the gas corrosivity in ANR’s pipeline as “high.”\n1 Pipeline Safety Violation Report (Violation Report), (July 22, 2011) (on file with PHMSA), at Exhibit E.\n2 Violation Report at Exhibit C; Closing at 7.\n3 Closing at 6.\n4 National Association of Corrosion Engineers, “Preparation, Installation, Analysis, and Interpretation of Corrosion\nCoupons in Oilfield Operations,” April 7, 2005.\n5 Id.\n\n\n\n3\nANR claimed that the gas was not corrosive, and at the same time acknowledged that the\npipeline was experiencing a low or moderate rate of corrosion. In fact, the internal corrosion\nprobe which collected 18 days of data only confirmed that the gas was corrosive.6 ANR\ninstalled an internal corrosion probe to monitor for corrosion, and then failed to either check it or\nto replace it once it was no longer providing data. Accordingly, after considering all of the\nevidence and the legal issues presented, I find that Respondent violated 49 C.F.R. § 192.477 by\nfailing to check each means of monitoring internal corrosion twice each calendar year, but with\nintervals not exceeding 7 ½ months.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nASSESSMENT OF PENALTY\nUnder 49 U.S.C. § 60122, Respondent is subject to an administrative civil penalty not to exceed\n$100,000 per violation for each day of the violation, up to a maximum of $1,000,000 for any\nrelated series of violations. In determining the amount of a civil penalty under 49 U.S.C.\n§ 60122 and 49 C.F.R. § 190.225, I must consider the following criteria: the nature,\ncircumstances, and gravity of the violation, including adverse impact on the environment; the\ndegree of Respondent’s culpability; the history of Respondent’s prior offenses; the Respondent’s\nability to pay the penalty and any effect that the penalty may have on its ability to continue doing\nbusiness; and the good faith of Respondent in attempting to comply with the pipeline safety\nregulations. In addition, I may consider the economic benefit gained from the violation without\nany reduction because of subsequent damages, and such other matters as justice may require.\nThe Notice proposed a total civil penalty of $52,800 for the violation cited above.\nItem 2: The Notice proposed a civil penalty of $52,800 for Respondent’s violation of 49 C.F.R.\n§ 192.477, for failing to check each means of monitoring internal corrosion twice each calendar\nyear, but with intervals not exceeding 7 ½ months. I found that ANR was transporting corrosive\ngas in this pipeline, and that it failed to check its internal corrosion probe from October 2008 to\nNovember 2010. ANR provided no defenses to the proposed penalty or arguments for\nmitigation. Internal corrosion can cause serious damage to a pipeline’s integrity and can cause\npipeline failures if not carefully monitored and mitigated. ANR experienced a pipeline failure\ndue to internal corrosion, installed a probe to monitor for internal corrosion, and then failed to\ncheck it at the required intervals. The nature, gravity and Respondent’s culpability for the\nviolation warrant the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $52,800 for violation of 49 C.F.R.\n§ 192.477.\nIn summary, having reviewed the record and considered the assessment criteria for each of the\nItems cited above, I assess Respondent a total civil penalty of $52,800.\nPayment of the civil penalty must be made within 20 days of service. Federal regulations\n(49 C.F.R. § 89.21(b)(3)) require such payment to be made by wire transfer through the Federal\n6 Violation Report at Exhibit C; Closing at 8.\n\n\n\n4\nReserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed\ninstructions are contained in the enclosure. Questions concerning wire transfers should be\ndirected to: Financial Operations Division (AMZ-341), Federal Aviation Administration, Mike\nMonroney Aeronautical Center, P.O. Box 269039, Oklahoma City, Oklahoma 73125. The\nFinancial Operations Division telephone number is (405) 954-8893.\nFailure to pay the $52,800 civil penalty will result in accrual of interest at the current annual rate\nin accordance with 31 U.S.C. § 3717, 31 C.F.R. § 901.9 and 49 C.F.R. § 89.23. Pursuant to\nthose same authorities, a late penalty charge of six percent (6%) per annum will be charged if\npayment is not made within 110 days of service. Furthermore, failure to pay the civil penalty\nmay result in referral of the matter to the Attorney General for appropriate action in a district\ncourt of the United States.\nWARNING ITEMS\nWith respect to Items 1 and 3, the Notice alleged probable violations of Part 192 but did not\npropose a civil penalty or compliance order for these items. Therefore, these are considered to\nbe warning items. The warnings were for:\n49 C.F.R. § 192.605 (Item 1) ─ Respondent’s alleged failure to follow its written\nprocedures for grading the atmospheric corrosion condition of the above-ground\npiping at its Menominee meter station; and\n49 C.F.R. § 192.709 (Item 3) ─ Respondent’s alleged failure to maintain\ndocumentation of each patrol, survey, inspection, and test required by subparts L\nand M of Part 192 as required. Specifically, the Notice alleged that ANR did not\nhave adequate inspection records for all emergency valves and emergency shut-\ndown devices in the Cold Springs 1 storage field and Cold Springs compressor\nstation.\nIf OPS finds a violation of any of these items, Respondent may be subject to future\nenforcement action.\nUnder 49 C.F.R. § 190.215, Respondent has the right to submit a Petition for Reconsideration of\nthis Final Order. The petition must be sent to: Associate Administrator, Office of Pipeline\nSafety, PHMSA, 1200 New Jersey Avenue, SE, East Building, 2nd Floor, Washington, DC\n20590, with a copy sent to the Office of Chief Counsel, PHMSA, at the same address. PHMSA\nwill accept petitions received no later than 20 days after receipt of service of the Final Order by\nthe Respondent, provided they contain a brief statement of the issue(s) and meet all other\nrequirements of 49 C.F.R. § 190.215. The filing of a petition automatically stays the payment of\nany civil penalty assessed but does not stay any other provisions of the Final Order, including\nany required corrective actions. If Respondent submits payment of the civil penalty, the Final\nOrder becomes the final administrative decision and the right to petition for reconsideration is\nwaived.\n\n\n\n5\nThe terms and conditions of this Final Order are effective upon service in accordance with\n49 C.F.R. § 190.5.\n___________________________________ __________________________\nJeffrey D. Wiese Date Issued\nAssociate Administrator\nfor Pipeline Safety","truncated":false,"body_characters":13912}