{"operation":"document","citation":"CPF 320111011","title":"ANR PIPELINE CO — Notice of Probable Violation","source_type":"enforcement","agency":"Pipeline and Hazardous Materials Safety Administration","status":"historical","official":true,"published_on":"2011-07-27","effective_on":null,"summary":"CLOSED notice of probable violation citing 191.23(a)(1), 191.23(a)(8).","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111011.json","markdown":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111011.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-enforcement-320111011","source_url":"https://primis.phmsa.dot.gov/enforcement-data/case/320111011","body":"Notice of Probable Violation involving ANR PIPELINE CO. PHMSA's enforcement data identifies the cited regulations as 191.23(a)(1),  191.23(a)(8). The case was opened on 2011-07-27 and is reported as closed as of 2013-01-17. Proposed civil penalty: $53,700. Assessed civil penalty: $33,100. Open the official case record for notices, responses, orders, and the latest status.\n\nOfficial case documents:\n\n320111011_Final Order_12312012.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111011/320111011_Final%20Order_12312012.pdf\n\n320111011_Final Order_12312012_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111011/320111011_Final%20Order_12312012_text.pdf\n\n320111011_NOPV PCP_07272011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111011/320111011_NOPV%20PCP_07272011.pdf\n\n320111011_NOPV PCP_07272011_text.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111011/320111011_NOPV%20PCP_07272011_text.pdf\n\n320111011_Operator Response to NOPV PCP_08242011.pdf: https://primis.phmsa.dot.gov/enforcement-documents/320111011/320111011_Operator%20Response%20to%20NOPV%20PCP_08242011.pdf\n\n320111011_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. 3-2011-1011\nDear Mr. Beasley:\nEnclosed please find the Final Order issued in the above-referenced case. It withdraws one of\nthe allegations of violation, makes one finding of violation, and assesses a civil penalty of\n$33,100. The penalty payment terms are set forth in the Final Order. This enforcement action\ncloses automatically upon receipt of payment. Service of the Final Order by certified mail is\ndeemed effective upon the date of mailing, 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: 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. 3-2011-1011\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 27, 2011, a Notice of Probable Violation and Proposed Civil Penalty\n(Notice). In accordance with 49 C.F.R. § 190.207, the Notice proposed finding that ANR had\nviolated 49 C.F.R. § 191.23 and proposed assessing a civil penalty of $53,700 for the alleged\nviolations.\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 did not contest the allegations of violation for Item 1 but provided an\nexplanation of its actions and requested that the proposed civil penalty be reduced. With respect\nto Item 2, Respondent did not contest the underlying facts but argued that the facts as alleged in\nthe Notice did not constitute a violation. Respondent did not request a formal hearing and\ntherefore has waived its right to one.\n\n\n\n2\nFINDINGS OF VIOLATION\nThe Notice alleged that Respondent violated 49 C.F.R. Part 191, as follows:\nItem 1: The Notice alleged that Respondent violated 49 C.F.R. § 191.23(a)(1), which states in\nrelevant part:\n§ 191.23 Reporting safety-related conditions.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall report in accordance with §191.25 the existence of any of the\nfollowing safety-related conditions involving facilities in service:\n(1) In the case of a pipeline (other than an LNG facility) that operates\nat a hoop stress of 20 percent or more of its specified minimum yield\nstrength, general corrosion that has reduced the wall thickness to less than\nthat required for the maximum allowable operating pressure, and localized\ncorrosion pitting to a degree where leakage might result.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.23(a)(1) by failing to report to\nPHMSA as required in accordance with the reporting requirements of § 191.25 the existence of\nlocalized corrosion pitting of a degree where leakage might have resulted. Specifically, the\nNotice alleged that on June 12, 2008, ANR completed an in-line inspection (ILI) of its 24 inch\ndiameter 0-100 Line from New Windsor, IL to Sandwich, IL. The Notice further alleged that\nRespondent received the preliminary report from the inspection on June 23, 2008, and\ndiscovered the 82 percent deep external corrosion anomaly on June 25, 2008. The Notice\nconcluded that this anomaly was indicative of corrosion pitting to a degree where leakage might\nresult, citing 49 C.F.R. 192.933(d) (referencing ASME/ANSI B31G and AGA Pipeline Research\nCommittee Project PR-3-805), and that the reporting requirement was not excepted under\n§191.23(b)(3) because the anomaly was located within the right-of-way of an active road. The\nNotice finally alleged that Respondent excavated and repaired the anomaly, which was\nultimately measured to be 90 percent deep, on August 11, 2008, but that Respondent never sent a\nsafety-related condition report to PHMSA.\nIn its Closing, ANR did not contest the finding of violation as alleged in the Notice.\nAccordingly, after considering all of the evidence I find that Respondent violated 49 C.F.R.\n§ 191.23(a)(1) by failing to report as a safety-related condition the existence of localized\ncorrosion pitting of a degree where leakage might have resulted.\nThis finding of violation will be considered a prior offense in any subsequent enforcement action\ntaken against Respondent.\nItem 2: The Notice alleged that Respondent violated 49 C.F.R. § 191.23(a)(8), which states in\nrelevant part:\n§ 191.23 Reporting safety-related conditions.\n(a) Except as provided in paragraph (b) of this section, each operator\nshall report in accordance with §191.25 the existence of any of the\n\n\n\n3\nfollowing safety-related conditions involving facilities in service:\n(1) . . . .\n(8) Any safety-related condition that could lead to an imminent hazard\nand causes (either directly or indirectly by remedial action of the\noperator), for purposes other than abandonment, a 20 percent or more\nreduction in operating pressure or shutdown of operation of a pipeline or\nan LNG facility that contains or processes gas or LNG.\nThe Notice alleged that Respondent violated 49 C.F.R. § 191.23(a)(8) by failing to report a\nsafety-related condition that could have led to an imminent hazard and caused a 20 percent or\nmore reduction in operating pressure. Specifically, the Notice alleged that ANR completed an\nILI of its 42 inches diameter 2-100 Line from MP 874.8 to MP 931.7 on May 24, 2007, receiving\nthe vendor’s report on July 23, 2007, and that ANR discovered a deformation indication which\nrequired remediation within one year pursuant to 49 C.F.R. § 192.933(d)(2) on August 6, 2007.\nThe Notice alleged that ANR did not repair the deformation within the one-year time limit, but\nthat ANR did not reduce the operating pressure until September 19, 2008. The Notice alleged\nthat since the deformation was located within 220 yards of a building intended for human\noccupancy, ANR’s failure to submit a report to PHMSA regarding the pressure reduction\nviolated § 191.23(a)(8). The Notice finally alleged that ANR excavated and remediated the\ndeformation on October 9, 2008.\nIn its Closing, ANR did not contest the factual allegations contained in the Notice, but argued\nthat it had no duty to report because it did not “discover” the safety-related condition until it was\nexcavated on October 9, 2008. ANR cited 49 C.F.R. § 191.23(b)(4), which states that an\noperator is not required to file a report for a safety-related condition if it is corrected by repair or\nreplacement before the deadline for filing the safety-related condition report.1 ANR asserted that\nit discovered and repaired the defect on the same day, October 9, 2008, obviating the need to file\na safety-related condition report. ANR’s argument rests on PHMSA’s previous statement that a\nsafety-related condition is “discovered” when:\nan operator's representative has adequate information from which to conclude the\nprobable existence of a reportable condition. An operator would have adequate\ninformation for each anomaly that is physically examined. Absent physical\nexamination, discovery may occur after the data are calibrated if the “adequate\ninformation” test is met. However, the adequacy of the information that pig data\nprovide about anomalous conditions is contingent on a concurrent indication from\na number of factors from which an operator could conclude the probable existence\nof a reportable condition. Among these are the sophistication of the pig being\nused, the reliability of the data, the accuracy of data interpretation, and any other\nfactors known by the operator relative to the condition of the pipeline.2\n1 The deadline is five working days after the day a representative of the operator first determines that the condition\nexists, but not later than ten working days after the day a representative of the operator discovers the condition.\n49 C.F.R. § 191.25(a).\n2 Transportation of Gas and Hazardous Liquids by Pipeline; Reporting Safety-Related Conditions; Discovery of\nConditions by Smart Pigs; Enforcement Rules, Final Rule, 54 Fed. Reg. 32342, 32343 (Aug. 7, 1989).\n\n\n\n4\nANR asserted that its ILI data alone was not sufficient to determine if the detected deformation\nqualified as a safety-related condition. ANR argued that only excavation provided adequate\ninformation from which it could conclude the probable existence of a reportable condition.\nPHMSA bears the burden of proof as to all elements of the proposed violation, which includes\nproving the date of “discovery” of a safety-related condition. ILI data alone can support a\nfinding of a probable safety-related condition, but only with concurrent information such as “the\nsophistication of the pig being used, the reliability of the data, the accuracy of data interpretation,\nand any other factors known by the operator relative to the condition of the pipeline.”3 The\nevidence in the Violation Report includes only ANR’s Final Response Memo addressing the\nremediation of the dent deformation, but the original data and analysis are not included.4 Based\non the state of technology in 2007, ANR’s argument that the ILI did not provide enough data to\ndetermine the probable existence of a reportable condition without excavation is plausible, and\nthe Violation Report contains no evidence which would rebut ANR’s argument. Therefore, the\nevidence is insufficient to allow me to conclude that ANR could have determined the probable\nexistence of a safety-related condition without excavating the pipeline.\nAccordingly, after considering all of the evidence and the legal issues presented, I find that the\nevidence is insufficient to prove that ANR knew of the probable existence of a safety-related\ncondition based on the ILI data alone. It is important to note that this Final Order does not\nconclude that the ILI data was or was not sufficient to determine the probable existence of a\nsafety-related condition. Rather, the evidence in the record is insufficient to make such a\ndetermination, and PHMSA therefore cannot meet its burden of proving ANR’s knowledge of\nthe probable existence of a safety-related condition based on the ILI survey. Based upon the\nforegoing, I hereby order that this allegation of violation be withdrawn.\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 $53,700 for the violations cited above.\nItem 1: The Notice proposed a civil penalty of $33,100 for Respondent’s violation of 49 C.F.R.\n§ 191.23(a)(1) for failing to report as a safety-related condition the existence of localized\n3 Id.\n4 Pipeline Safety Violation Report (Violation Report), (July 27, 2011) (on file with PHMSA), at Exhibit A.\n\n\n\n5\ncorrosion pitting of a degree where leakage might have resulted. ANR did not contest the\nfinding of violation, but requested a penalty reduction in consideration of the steps it took\nfollowing discovery of the anomaly on June 25, 2008. ANR conducted leakage surveys between\nJune 25, 2008 and August 11, 2008, when the anomaly was repaired, to ensure that the pipe was\nnot already leaking. At the time of its response, ANR stated that it was still attempting to locate\ndocumentation of these leak surveys, but PHMSA has not received this documentation. Even if\nANR had provided proof of its leakage surveys, this action, while prudent, did not address the\nneed to report the safety-related condition to PHMSA. The reporting requirement exists to alert\nPHMSA to safety-related conditions as they arise. Monitoring the condition prior to repair does\nnot obviate an operator’s responsibility to notify PHMSA about the existence of a safety-related\ncondition.\nCongress enacted the reporting requirement to ensure government oversight of safety-related\nconditions that could result in future accidents.5 ANR’s failure to report the existence of the\nsafety-related condition frustrated the essential purpose of the regulation. The ILI indicated\nsignificant corrosion of 82 percent, which ultimately underestimated the actual corrosion amount\nof 90 percent. The immediate steps ANR took to address this corrosion underscores its\nsignificance. Because this safety-related condition fits squarely within the conditions that are\nrequired to be reported promptly, I find that the nature, circumstances, and gravity of the\nviolation support the proposed penalty. Accordingly, having reviewed the record and considered\nthe assessment criteria, I assess Respondent a civil penalty of $33,100 for violation of 49 C.F.R.\n§ 191.23(a)(1).\nItem 2: The Notice proposed a civil penalty of $20,600 for Respondent’s violation of 49 C.F.R.\n§ 191.23(a)(8), for failing to report to PHMSA a defect that led to a 20 percent reduction in\noperating pressure as a safety-related condition. As stated above, I have withdrawn this Item and\ntherefore also withdraw the associated civil penalty of $20,600.\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 $33,100.\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\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 $33,100 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\n5 Reporting Unsafe Conditions on Gas and Hazardous Liquid Pipelines and Liquefied Natural Gas Facilities, Final\nRule, 53 Fed. Reg. 24942, 24943 (July 1, 1988).\n\n\n\n6\ncourt of the United States.\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.\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":18989}